Allied Properties Real Estate Investment Trust

Good morning and welcome to the Allied Properties REIT fourth quarter and year-end 2022 financial results conference call. All participants are now listen-only mode. After the speaker's presentation, we'll conduct a question and answer session. To ask a question, you will need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Michael Emery, Chief Executive Officer. Thank you. Please go ahead, Mr. Emery.

Thank you, Operator, and I'm delighted to be starting this conference call on time, unlike the last conference call. So good morning, everyone, and welcome to our timely conference call. Tom, Cecilia, and Hugh are here with me to discuss Allied's results for the fourth quarter and year-ended December 31, 2022. Nanthony, our incoming CFO, is also with us today we may in the course of this conference call make forward-looking statements about future events or future performance these statements by their nature are subject to risks and uncertainties that may cause actual events or results to differ materially including those risks described under the heading risks and uncertainties in our most recently filed annual information form and in our most recent quarterly report. Material assumptions that underpin any forward-looking statements we make include those assumptions described under forward-looking disclaimer in our most recent quarterly report. Allied's operating performance in 2022 was strong. Our AFFO per unit was up 4% from the prior year, underpinning our 11th consecutive annual distribution increase and providing a takeoff point for our 2023 outlook of low to mid single digit growth in same asset NOI, FFO per unit and AFFO per unit. Cecilia will summarize our financial results. Tom will follow with an overview of leasing and operations. Hugh will provide a development update. And I'll finish with our current thinking about Allied's future. So now over to Cecilia.

Good morning. I'll highlight key operating metrics, our financial position, and progress on ESG. Our operating metrics remain healthy. In our workspace portfolio, we had increasing average in-place net rent per occupied square foot of $23.10, up from Q3 2022 and up 5% from $21.98 a year ago. We also continued to see strong rent growth on renewing space in the quarter, which was 6.1% on an ending to starting basis and 15.6% on an average to average basis. The seemingly contradicting data around leasing activity that we mentioned last quarter materialized more positively than could have been expected. Tom will provide details on that. We're pleased with our financial position. We allocated $264 million of capital in the quarter to revenue enhancing activity and development completions, which is what we'll continue focusing on for the foreseeable future. Assuming we're successful in selling the UDC portfolio, we will allocate a majority of the proceeds to pay off debt, pushing our debt metrics back within our targeted ranges. We do not intend to allocate any capital to discretionary activities, including acquisitions, in the coming year. On to ESG. We're committed to the continuous advancement of our ESG program in 2023. This year, we're continuing to evaluate our possible pathways to net zero carbon and are in the process of finalizing an internal shadow price of carbon. We're also implementing a new process to review the environmental performance of our portfolio on a quarterly basis to more proactively address potential performance deficiency issues of our assets. And we're advancing our physical climate risk assessment framework to include site-specific climate risks and adoption opportunities, progressively expanding this evaluation across our portfolio. We'll continue to disclose our climate-related risks and opportunities against the Task Force on Climate-Related Financial Disclosures, or TCFD, recommendations in our ESG report, which is expected to be released by July of this year. We'll also continue to work to support allied users in achieving our shared ESG goals. We recognize the tremendous potential of our community to advance ESG by learning and working in partnership. Across the country, we're focused on serving our users and completing upgrade and development work to propel operating capabilities. Our team and our operating platform has never been stronger. With that, I'll pass the call to Tom.