Tricon Residential Inc. Common Shares

Good morning. My name is Emma and I will be your conference operator today. At this time, I would like to welcome everyone to the Tricon Residential's first quarter 2022 analyst conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. I'd now like to hand the conference over to your speaker today, Wojtek Nowak, Managing Director of Capital Markets. Thank you. Please go ahead.

Thank you, Emma. Good morning, everyone. And thank you for joining us to discuss Tricon's first quarter results for the three months ended March 31st, 2022, which were shared in the news release distributed yesterday. I would like to remind you that our remarks and answers to your questions may contain forward-looking statements and information. This information is subject to risks and uncertainties that may cause actual events or results to differ materially. For more information, please refer to our most recent management discussion and analysis and annual information form, which are available on CDAR, EDGAR, and our company website, as well as a quarterly supplemental package on our website. Our remarks also include references to non-GAAP financial measures, which are explained and reconciled in our MD&A. I would like to remind everyone that all figures are being quoted in U.S. dollars, unless otherwise stated, And please note that this call is available by webcast on our website, and a replay will be accessible there following the call. Lastly, please note that during the call, we'll be referring to a slide presentation that you can follow along by joining our webcast, or you can access directly through our website. You can find both the webcast registration and presentation in the Investors section of TriconResidential.com under News and Events. With that, I will turn the call over to Gary Berman, President and CEO of Tricon.

Thank you, Wojtek, and good morning, everyone. We've had a terrific start to 2022, and I'm excited to discuss our Q1 results with you. Let me share with you some of our key takeaways from the quarter on slide two. First, we continue to benefit from the strength of our Sunbelt middle market strategy with insatiable demand for a rental home showing no signs of slowing. Our business has proven to be extremely resilient throughout the pandemic, and we expect it to continue performing well into the future. Second, our growth plan is on track. We grew proportionate NOI by 23% year over year, and we're on pace to acquire 8,000-plus homes this year, with over 1,900 homes acquired this quarter. Third, our single-family rental operations are stronger than ever, with record low turnover, record high occupancy, and solid rent growth. As we expect these trends to continue, we are pleased to announce an increase in our same-home NOI guidance for the year. Next, our fee revenue increased meaningfully year-over-year, while overhead expenses remained stable from Q4 2021. And finally, we achieved all of this while maintaining a flexible balance sheet with minimal near-term maturities and ample liquidity to fund our growth plans. You can see these and other metrics reflected in the summary on slide three. Clearly, our business is booming on all fronts, and we'll dig into the details throughout the call. So let's move to slide four. The public markets are going through a volatile time right now with a lot of uncertainty surrounding inflation, interest rates, and the economy. We intentionally built our SFR business to be defensive and believe it will once again prove itself in the current environment. We think of our business as anti-fragile, after the term coined by the author Nassim Nicholas Taleb. Beyond Taleb's key tenets of resilience and robustness, we expect to thrive under difficult or more volatile conditions for a number of reasons. First, we remain focused on the hard-working middle market demographic. Our resilient resident profile has stable jobs and solid household income of $85,000 with a comfortable rent-to-income ratio of 23%. Second, in this time of hyperinflation, our efficiencies of scale allow us to benefit from the national procurement programs that enable us to save money on parts, appliances, and materials for our homes. Third, as I like to say, the cure for high prices is high prices. As an inflation hedge, we are exposed to both rising market rents as well as rising home prices on our balance sheet. Moreover, our built-in loss to lease at 20% should provide a long runway for rent growth. Likewise, a strong correlation between home prices and rent growth also allows us to consistently acquire homes at 5% to 5.5% cap rates, making our growth strategy sustainable over the longer term. And finally, what I love most about what we do is that we are able to provide essential housing in a supply-constrained housing market. The insatiable demand for a high-quality, professionally managed home speaks for itself. In any given week, we get over 13,000 leads for only 200 homes available. And as mortgage rates surpass 5%, we estimate that the monthly cost of owning a home is 10% to 30% higher than renting a Tricon home. We are not only confident in our outlook, but also believe strongly that single-family rental plays an essential role in addressing the key challenge of America's housing market, namely an acute shortage of housing supply at affordable prices. If managed properly and responsibly, we believe strongly that single-family rental is a noble business because it provides safe, quality housing for American families who either can't afford to buy a home or don't want to at an accessible price point. It also provides residents with a turnkey home and a low-maintenance lifestyle that gives them time back to focus on what's important to them. At Tricon, there is purity in our mission. We truly care about our residents and empower our frontline employees to go above and beyond so that we can provide outstanding customer service. And so as we turn to slide five, I want to provide you some insight into Tricon's decision to selectively engage with media to help spread this message and to shape a positive industry narrative. Our recent interview with 60 Minutes is a case in point. There are several misconceptions about our industry that we aim to address. First, we are not Wall Street. We are a housing provider. We are a people-first company and have many programs in place to better the lives of our residents, including our recently launched Tricon Vantage program designed to enhance the financial well-being of our residents. Our suite of services ranges from educational tools to our credit builder program and other programs to help families buy a home if they so choose. Second, woven right into our company DNA is our long-standing practice of self-governing on renewal rent increases, with annual rent increases for existing residents typically set at rates below market. We want to prioritize our residents' financial security and peace of mind while they're living in a Tricon home. And finally, we're not boxing out first-time homebuyers. Our acquisition program accounts for less than half of 1% of resale volumes in our markets, and we typically buy homes that require renovation to make them more livable. In doing so, we are upgrading the quality of the housing stock and the communities where we own homes. What's driving up housing prices is the overall lack of supply of existing and new homes. In this regard, we are committed to being part of the solution, and we're adding 3,000 new homes to the market by 2024 for our build-to-rent strategy. In short, we are being proactive about solving America's housing challenges, and we see tremendous opportunity for our business to be a platform for doing good. I would now like to pass the presentation over to Sam to discuss our financial results.