City Office REIT, Inc.

Good morning and welcome to the City Office REIT Inc second quarter 2023 earnings conference call. At this time all participants are on a listen only mode. A brief question and answer session will follow the formal presentation. To ask a question you may press star then one on your touch tone phone. If you're using a speakerphone please pick up your handset before pressing the keys. To withdraw your question please press star then two. As a reminder this conference call is being recorded. If you require operator assistance, please press star then zero. It is now my pleasure to introduce you to Tony Maretic, the company's Chief Financial Officer, Treasurer and Corporate Secretary. Thank you, Mr. Maretic. You may now begin.

Good morning. Before we begin, I'd like to direct you to our website at cioreit.com where you can view our second quarter earnings press release and supplemental information package. The earnings release and supplemental package both include a reconciliation of non-GAAP measures that will be discussed today to their most directly comparable GAAP financial measures. Certain statements made today that discuss the company's beliefs or expectations or that are not based on historical fact may constitute poor-looking statements within the meaning of the federal securities laws. Although the company believes that these expectations reflected in such poor-looking statements are based upon reasonable assumptions, We give no assurance that these expectations will be achieved. Please see the forelooking statements disclaimer in our second quarter earnings press release and the company's filings of the SEC for factors that could cause material differences between forelooking statements and actual results. The company undertakes no obligation to update any forelooking statements that may be made in the course of this call. I'll review our financial results after Jamie Farrar, our Chief Executive Officer, discusses some of the quarter's operational highlights. I will now turn the call over to Jamie.

good morning and thanks for joining today through the first half of 2023 our portfolio has continued to perform in line with our expectations our second quarter results reflect our focus on steadily progressing leasing as we continue to upgrade in position our premium sunbelt portfolio we believe that this strategy will generate strong future results as we execute on our property level business plan Utilization levels of our properties continue to trend slightly higher throughout the quarter, ending at approximately 61%. In 2022, we experienced an uptick in utilization after Labor Day, and we anticipate that will also be a catalyst for further return to the office policies this year after the summer vacation season. Our focus on driving leasing activity paid off during the quarter after a slow start to the year. During the second quarter, we completed 224,000 square feet of total leasing activity with a healthy 7.2% improvement in renewal cash rents versus the expiring rents. Quarter over quarter, we achieved an increase in occupancy at nine of our properties, maintained occupancy at 11, and experienced a decline at only four assets. As we've mentioned on prior calls, our continued focus is enhancing overall occupancy, particularly at our best assets with the highest rental rates. In that regard, our ready to lease modern spec suites continue to be a driver for leasing activity. We've leased 16,000 square feet of spec suites this year, which is a function of the limited spec suite inventory that we had available. Our expectation is that as we continue to deliver spaces under construction, the spec suite leasing totals will accelerate. As of June 30th, with our recent deliveries, we have 54,000 square feet of built spec suites in our inventory. We also have approximately 31,000 square feet under construction or delivering, and over 69,000 square feet planned to commence construction during the second half of 2023. We focused our new inventory decisions at locations that we believe will be absorbed the fastest. We expect that this program will continue to drive long-term results. Of note, related to property upgrades, during the second quarter, renovations to the park amenity connected to our Circle Point campus in Denver were completed. We led the transformation of the adjacent 2.6-acre park with new hardscaping, landscaping, amenity areas, and outdoor work pods. Accessibility to the park from our buildings was also enhanced, making this incredible garden-like amenity truly integrated with our buildings. The approximately $4 million renovation was completed with funds from a special tax district financing, so we were able to secure these major property improvements without coming out of pocket for the costs. With the park upgrades, the existing tenant lounge, restaurant, and high-end fitness amenity Circle Point is well positioned from a leasing perspective. From a high level point of view, there continue to be headwinds across the commercial real estate industry and in particular the office real estate sector. Nonetheless, we believe our portfolio of premium Sunbelt properties is well positioned to weather these headwinds and outperform. As we move into the second half of the year, we will continue to focus on optimizing our properties to achieve leasing. We will also continue to operate in a strategic and conservative manner to ensure ample liquidity and to provide ourselves with the flexibility to pursue opportunities as they arise. I look forward to providing future updates on our progress and will hand the call over to Tony Maretic to discuss our financial results.