Elme Communities

Welcome to the Elm Community Second Quarter 2025 Earnings Conference Call. As a reminder, today's call is being recorded. At this time, I'd like to turn the call over to Amy Hopkins, Vice President, Investor Relations. Amy, please go ahead.

Good morning, and thank you for joining our Second Quarter Earnings Call. Today's call will be available for replay on the Investors section of our website. Statements made during this call may constitute forward-looking statements that involve known and unknown risks and uncertainties, which may cause actual results to differ materially, and we undertake no duty to update them as actual events unfold. We refer to certain of these risks in our SEC filings. Reconciliations of the GAAP and non-GAAP financial measures discussed on this call are available in our most recent earnings press release and financial supplement, which was distributed yesterday and can be found on the investors' page of our websites. Presenting on the call today will be Paul McDermott, our CEO, Steve Freistadt, our CFO, Tiffany Butcher, our COO, and Drew Hammond, our CAO and treasurer. And with that, I will turn the call over to Paul.

Thanks, Amy. Welcome, everyone, and thank you for joining us this morning. We're pleased to report another solid quarter for Elm. reflecting both the stability of our portfolio and the continued execution of our operating strategy. Our second quarter results are detailed in our earnings release and associated filings. And in addition to discussing our results, I want to spend time today discussing the announcement regarding our strategic alternatives review process. Steve will provide additional financial details about the proposed portfolio sale transaction and future asset sales, and Tiffany will cover our operating trends and initiatives. On Monday, we announced that our Board of Trustees completed the formal evaluation of strategic alternatives that it announced back in February. After an extensive evaluation, we have entered into a definitive agreement to sell a portfolio of 19 assets to Cortland, an Atlanta-based multifamily real estate investment development and management company. At closing, which we currently expect to occur in the fourth quarter following receipt of shareholder approval and satisfaction of other customary closing conditions, Elm will receive from Cortland $1.6 billion in cash subject to certain adjustments. Along with the sale to Cortland, the board has also approved a plan of sale and liquidation to sell our remaining assets. As such, we will be looking for buyers of all Elm's remaining multifamily assets, as well as Watergate 600. This plan of sale and liquidation is also subject to shareholder approval. I want to take a moment to provide some history leading up to this transaction. Over a decade ago, we launched a strategic transformation that streamlined our portfolio from four asset classes into one, including the sale of our office and retail portfolios in 2021. We designed and built a scalable operating platform, internalized multifamily operations, and executed platform initiatives to improve our performance and profitability with the goal of reducing our cost of capital in order to scale our portfolio and further maximize shareholder value. Despite the success we've had in transforming our company into a focused multifamily platform with strong operating capabilities, the current market environment has made it difficult to lower our cost of capital in a way that supports our ability to scale accretively. Our agreement with Cortland and the decision to sell our remaining assets came after a thoughtful and deliberate review process, taking into account the work the company has already undertaken to scale and geographically diversify our portfolio. The review process by our board and advisors was robust. More than 80 potential counterparties were contacted, including pension funds, insurance companies, institutional advisors, financial sponsors, multifamily managers, sovereign wealth funds, family offices, and other public REITs, underpinning its unanimous determination that the combination of the sale of these assets to Cortland and a plan of sale and liquidation is expected to result in the greatest value for shareholders. Importantly for Elm, we anticipate a seamless transition of ownership to Cortland, enabling continuity of operations for both our residents and community team members and continuing our strong legacy of customer service excellence. We expect to prepare and file a preliminary proxy as soon as reasonably practical that will more fully describe the proposed Cortland sale transaction and the proposed plan of sale and liquidation. We intend to convene a special meeting this fall to approve these transactions. The Elm Communities Board has determined that these proposed transactions are in the best interest of our shareholders and unanimously recommends to our shareholders that they approve them. As noted in our announcement, we intend to commence the marketing and sale of our remaining assets in the near future with a view toward completing these asset sales over the next 12 months. This marketing process should kick off in the third quarter, and certain of these asset sales are likely to move forward regardless of the outcome of the shareholder votes on the Cortland transaction and plan and sale of liquidation, subject to the acceptability of pricing and other terms. Our goal, as always, is to maximize value for Elm shareholders. And with that, I'll turn it over to Steve to provide more detail around the shareholder benefits of this transaction and the subsequent sales.