The RMR Group Inc.

Good day, and welcome to RMR's Fiscal Fourth Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Michael Kodesh. Please go ahead.

Good morning, and thank you for joining RMR's fourth quarter of fiscal 2021 conference call. With me on today's call are President and CEO Adam Portnoy and Chief Financial Officer Matt Jordan. In just a moment, they will provide details about our business and quarterly results, followed by a question and answer session. I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on RMR's beliefs and expectations as of today, November 16, 2021, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, which can be found on our website at www.rmrgroup.com. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we may discuss non-GAAP numbers during this call, including adjusted net income, adjusted earnings per share, adjusted EBITDA, and adjusted EBITDA margins. Reconciliation of net income determined in accordance with U.S. generally accepted accounting principles to adjusted net income, adjusted earnings per share, adjusted EBITDA, and the calculation of adjusted EBITDA margin can be found in our earnings release. And now I would like to turn the call over to Adam.

Thank you, Michael, and thank you all for joining us this morning. I'm pleased to report that RMR finished the fiscal year on a high note as we delivered yet another strong quarter financially. This quarter, we reported adjusted net income of 50 cents per share, which was at the high end of our guidance. It represents a 28% increase on a year-over-year basis. Adjusted EBITDA this quarter was $26.3 million, which represents a 27% increase compared to last year. Subsequent to quarter end, one of our managed clients, ILPT, announced a $4 billion acquisition of Monmouth Real Estate Investment Corporation. Monmouth owns a portfolio of 126 Class A industrial logistics properties that are largely occupied by tenants whose businesses are driven by e-commerce. This acquisition is expected to be immediately accretive to ILPT and will be funded through a combination of joint venture equity and debt. The Monmouth acquisition is the largest single transaction ever announced by an RMR managed company. Not only will the transaction significantly grow RMR's AUM, But it also highlights RMR's alignment with ILPT shareholders. For example, ILPT does not plan to raise common equity to fund this transaction. And equity for this transaction will come from forming a joint venture with institutional private investors. As a result, this transaction also highlights the success RMR has had with building out our private capital fundraising capabilities and demonstrates how quickly RMR can scale its business with the current infrastructure. Our ability to further expand our private capital relationships comes from our commercial real estate expertise, operational excellence, and world-class client service. This quarter, despite the pandemic-related headwinds, our organization again delivered another strong quarter of leasing activity, as we arranged almost 2.9 million square feet of leases on behalf of our clients, an increase of 40% sequentially. More impressively, we arranged over 10.5 million square feet of leasing in fiscal year 2021, which is a 39% increase compared to pre-pandemic levels from fiscal year 2019. Notably, we saw encouraging leasing trends at OPI as tenants increasingly utilized their office space and prospective tenants have started making strategic real estate decisions. At OPI, we arranged 659,000 square feet of leases during the quarter, which is 37% above the trailing 12-month average, and generated a weighted average lease term of almost 11 years. With the Delta variant waning, we are optimistic that demand for office space will remain on a positive trajectory going forward. Much like DHC's $114 million redevelopment of its life science asset, in Torrey Pines, California, which is now 100% leased and expected to generate double-digit cash-on-cash returns, there are also significant redevelopment opportunities in OPI's portfolio as well. We are currently advancing plans to convert OPI's 300,000-square-foot property in Seattle, Washington, to life science use. OPI plans to invest $140 million in redevelopment capital in this project. which is expected to generate stabilized returns in excess of 10%. Turning to DHC. As of today, DHC has entered new management agreements for all communities transitioning from five-star to a diverse group of best-in-class regional operators. We believe DHC is now well positioned to unlock value and improve performance within its senior living portfolio. Operationally this quarter, DHC's shop portfolio is starting to improve from the lows experienced during the COVID-19 pandemic. Specifically, same property shop occupancy from five-star managed communities experienced its second consecutive quarter of occupancy growth, with sales leads increasing 41% sequentially during the quarter and tour volumes also increasing materially in October. We remain optimistic regarding the senior living sector giving these encouraging signs and believe the industry will benefit from a rapidly growing target demographic that will drive demand for senior living in the future. Turning to an update on SVC. SVC continues its repositioning efforts and is in the process of selling 68 hotels in an effort to improve the overall quality of the portfolio, lower leverage, reduce future capital expenditures, and improve liquidity. From an operational perspective, SVC's hotel EBITDA has been positive on a monthly basis since April due to elevated leisure demand, strong performance within its extended stay hotel portfolio, and slowly improving business travel demand. Sonesta, the primary operator of SVC's lodging assets today, is executing on its plans to improve operational performance across the portfolio. For the hotels managed by Synesta, comparable hotel activity this quarter saw average occupancy increase almost three percentage points to 61%, average daily rate increased 12.5%, and REVFAR increased over 18% on a sequential quarter basis. These results were achieved despite disruption in the quarter from the Delta variant. Lastly, RMR Mortgage Trust and Tremont Mortgage Trust completed their merger on September 30th to create Seven Hills Realty Trust. Emerger created a larger, more diversified commercial mortgage REIT with an expanded capital base, improved access to capital, and greater financial strength. With significant dry powder available and expected interest rate increases ahead, Seven Hills' focus on middle market floating rate transitional bridge loans leaves it well positioned in the current environment. This quarter, Seven Hills closed six new loans representing $140 million in originations, which is the highest level of quarterly originations since going public in 2017. Following the $7 per share special dividend in September, RMR ended the quarter with nearly $160 million in cash, and we continue to have no debt. Despite this special dividend, we remain well capitalized to expand our business. In support of this effort, we recently announced the hiring of an in-house resource to establish a capital markets team focused on sourcing private capital from high net worth investors, family offices, targeted registered investment advisors, foundations, and endowments. We look forward to announcing additional progress on our private capital growth initiatives in the coming months. I'll now turn the call over to Matt Jordan, our Chief Financial Officer, who will review our financial results for the quarter.