The RMR Group Inc.

Good day and welcome to the RMR Group Fiscal First Quarter 2022 Earnings 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 touchstone 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 Kordish, Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining RMR's first quarter of fiscal 2022 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, January 28, 2022, and actual results may differ materially from those that we project. 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 margin. 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 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. For the first quarter of fiscal 2022, which ended on December 31st, we reported adjusted net income of 46 cents per share and adjusted EBITDA of $23.3 million. We ended calendar year 2021 with $33.4 billion of assets under management and remain well capitalized with over $181 million of cash and no debt. As we begin calendar year 2022, we are increasingly optimistic about our business. Despite the continued headwinds in certain of our clients, are facing related to COVID-19 variants. Over 87% of the adult population is at least partially vaccinated in the United States. Recent consumer spending has trended higher, and the fourth quarter GDP growth was approximately 7%. Real estate fundamentals are generally healthy and continue to be supported by a strong commercial real estate market, as fourth quarter transaction volumes increased 97% year over year. These trends are influencing the strong fundamentals across the majority of the real estate portfolio that RMR manages. From an operational perspective, our organization continued its focus on delivering high-quality, wellness-focused, and amenity-rich buildings to our tenants. This was evidenced by leasing volumes this quarter that were the highest levels over the last decade, as RMR arranged approximately 4 million square feet of leases for an average term of 8.5 years and with an average gap rent roll-up in excess of 7%. These leasing levels represented an increase of 39% sequentially and a 35% increase over pre-pandemic 2019 comparable period leasing volumes. While the industrial sector remains robust, this quarter's leasing activity was spread broadly across all the real estate sectors we managed. We also remain confident in the future of office and the prospect of increased business travel to fuel increased hospitality and leisure spending in the coming months. Before moving to some of the notable private capital announcements of the quarter, I wanted to first highlight some significant strategic steps taken to best position our client companies for success. As a reminder, we are limited as to what we can discuss this quarter regarding our public clients, as we are reporting results in advance of them. First, despite tracking ahead of its peers on a three-year total return basis throughout most of the year, market volatility in the fourth quarter adversely impacted OPI's total return relative to its peer group, resulting in no incentive fee for calendar year 2021. While we were disappointed, we remain highly encouraged by OPI's three-year total return of 14.4%. which reflects OPI's successful deleveraging in capital recycling initiatives over the last three years. Similarly, ILPT's total return over the past three years was 43.9%, and we are excited to continue utilizing private capital partners to grow this company meaningfully without the need for dilutive equity raises. SVC continues to hit strategic repositioning milestones as the overall economy continues to improve. Earlier this year, SVC announced the expected sale of 68 Senesta hotels in the first quarter of 2022 in order to create a stronger hotel portfolio and enhance overall liquidity. Operationally, Senesta, which assumed management of over 200 SVC-owned hotels in 2021, has produced occupancy, room rate, and rev par metrics that remain on par with its peer set. DHC is in a similar phase of repositioning its business as the company completed over 100 senior living operator transitions and continues to take proactive measures to improve its balance sheet. Following DHC's recent joint venture announcement, which I will discuss in more detail in a moment, the company is currently well capitalized to reduce leverage and invest meaningfully in its portfolio. At both DHC and SVC, we believe the future reinstatement of dividends will significantly help to increase total shareholder returns in the future. Finally, we are pleased with the recent activity at our managed commercial mortgage REIT Seven Hills Realty Trust and continue to believe that the business has attractive long-term prospects. During the fourth quarter, Seven Hills raised its dividends 67% on the heels of another quarter of record originations. And at this pace, we expect they will fully deploy the remaining dry powder by this summer. Seven Hills leverages RMR's best-in-class originations platform that touts a strong, default-free track record, which we believe will enable RMR to raise meaningful capital for this business line moving forward. I'd now like to turn to the more significant developments made within our private capital platform this quarter, starting with our industrial REIT ILPT. The pending $4 billion acquisition of Monmouth Real Estate Investment Corporation is currently expected to close this quarter. This portfolio is comprised of 126 Class A industrial and logistics properties that are largely occupied by tenants whose businesses are driven by e-commerce. As a result, ILPT does not plan to raise common equity to fund this transaction and expects to fund a portion of the acquisition with private capital raised via large institutional joint venture partners. Not only does this transaction grow RMR's assets under management, but also highlights RMR's alignment with our client shareholders by expanding access to capital and growth opportunities with high quality assets. In addition to the pending Monmouth acquisition, ILPT also announced that it contributed six industrial properties to its existing industrial joint venture, for $206 million. This transaction effectively raises equity capital at net asset value versus at a discount at the corporate level for ILPT, which will be used to reduce leverage and fund future growth. Finally, just before the end of the year, DHC announced a $378 million joint venture sale of a 35% equity interest in its two-building life science property in the Seaport District of Boston. DHC acquired this property for $1.1 billion in 2014, and the current valuation of the property is $1.7 billion, underscoring the attractive return on investment achieved in a relatively short period of time. We have repeatedly stated that our ability to further expand our private capital relationships comes from our commercial real estate expertise, operational excellence, and world-class client service. The transactions announced And the fourth quarter collectively raises our private capital assets under management from $1.3 billion to $3.2 billion this quarter, or an increase of 139%. We believe this firmly highlights the organic success RMR has had building out our private capital fundraising capabilities and demonstrates how quickly RMR can scale its business with its current infrastructure. I'll now turn the call over to Matt Jordan, our Chief Financial Officer, who will review our financial results for the quarter.