City Office REIT, Inc.

At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. As a reminder, this conference call is being recorded. If you require operator assistance, please press star, then 0. It is now my pleasure to introduce you to Tony Meretic, the company's Chief Financial Officer, Treasurer, and Corporate Secretary. Thank you, Mr. Meretic. You may begin. Good morning.

Before we begin, I would like to direct you to our website at cioreet.com, where you can view our first 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 forward-looking statements within the meaning of the federal securities laws. While the company believes that these expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved. Please see the forward-looking statements disclaimer in our first quarter earnings press release and the company's filing for the SEC for factors that could cause material differences between forward-looking statements and actual results. The company undertakes no obligation to update any forward-looking statements that may be made in the course of this call. I will 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. I'd like to start with some observations on the office sector fundamentals and then move to the highlights since our last call. Overall, the office sector is trending more towards equilibrium. Both our own tracking and national data reflect an increase in tenant demand. For the first quarter of 2024, JLL reported that 70% of US office markets experienced an increase in tenant demand as compared to the prior quarter. While leasing has not recovered to pre-pandemic levels, active office requirements have increased 28% nationally year over year, according to JLL. On the supply side, the sublease vacancy rate has continued to decline and new sublease additions have dropped off from a year ago. New construction has also essentially ground to a halt with the lowest quarterly volume of new projects breaking ground on record. Also, There's been an increase in conversions or demolition of obsolete buildings and 2023 had the highest volume of buildings converted on record. This dynamic appears to indicate a long runway of net improvements to the supply demand equation, although we expect the pace of improvement to be gradual. We see these trends playing out within our own portfolio. During the quarter, we executed 191,000 square feet of new and renewal leases. Within the 110,000 square feet of new leasing, we executed on two larger leases. At Block 83 in Raleigh, we completed an 11-year, 29,000 square foot lease with a strong financial tenant for the last full floor vacancy. Block 83's best-in-class amenity package and high-end suites continue to attract strong demand. At our FRP Ingenuity Drive property in Orlando, we signed a 10 and a half year, 43,000 square foot lease with a healthcare related tenant. As a result of this and prior new leasing, a healthy 172,000 square feet or 3% of our portfolio has signed leases that will commence in subsequent quarters. Our leasing pipeline continues to be strong with a number of larger potential new tenants evaluating spaces across our portfolio. The trend of shorter term lease renewals in place seems to be gravitating to longer term solutions, which is a positive for the industry. Tony will discuss our revised estimates for our 2024 guidance momentarily. These reflect current discussions with WeWork, who are tenants at two of our properties at quarter end. After engaging in extensive negotiations with the management team at WeWork, we believe we have an agreement in principle that would have them continue in both of our buildings, but with a smaller footprint when they emerge from bankruptcy. This expected outcome has not yet been finalized in a lease amendment. If completed, we would get back one floor at the Terraces in Dallas' Preston Center Submarket early in the third quarter and one floor back at Block 83 in Raleigh in the fourth quarter. The Terraces in Dallas is currently 100% leased and we expect high demand for this 25,000 square foot premium full floor. Similarly, with the recently signed leases at Block 83, 98% of the office component is now leased and therefore we expect high demand for this 28,000 square foot full floor space. The conclusion of these discussions would put an end to the WeWork uncertainty and reduce them to just over 1% of our portfolio. Ultimately, when we have backfilled these spaces, our rent rolls will be further diversified and we expect that would result in a net increase in overall property value. Going forward, as we look to best position ourselves in this environment, we've commenced certain investments that will elevate key assets and help us to grow net operating income. We're fortunate to have the bulk of our overall value invested in leading cities that are primed for continued employment growth. While many of our assets are newer vintage or recently renovated, we have a handful of quality properties that required a refresh to optimally position them. This opportunity aligns with tenant demands and we've already are well underway making these improvements. The first phase of our Pima Center renovation in North Scottsdale is done and we're now constructing the lobby amenity upgrade at the second building, which we expect will conclude by the end of the summer. Our well-located 5090 property in Phoenix's Camelback Corridor has kicked off its renovation construction, and we anticipate it will be completed by the fall. Further, we've now completed the renovation plan for our waterfront city center property in downtown St. Petersburg and initiated construction, which is starting in May, and is expected to conclude by early 2025. And last, we're finalizing plans for an enhancement of 2525 McKinnon in Uptown Dallas, which is scheduled to commence later this year. We anticipate investing approximately $9 million into these four projects, of which we've already spent approximately $2 million at quarter end. At the conclusion of this renovation program, the vast majority of City Office's portfolio value will reside in new or fully renovated properties that are positioned for long-term leasing success and cash flow maximization. We anticipate that leasing execution will be enhanced by these moves, and we are setting ourselves up for a strong 2025 and beyond. With that, I'll hand the call over to Tony to discuss our financial results in more detail.