Allied Properties Real Estate Investment Trust

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 and the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I'd now like to turn the conference over to Cecilia Williams, President and CEO. Please go ahead.

Thanks, Regina, and good morning, everyone. Welcome to our Q1 conference call. I'll discuss highlights briefly. Nan will highlight our strong financial position, and JP will outline our high leasing tour activity and provide a summary by urban market. Then we're pleased to answer questions. 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 2023 annual report and our most recent quarterly report. Material assumptions underpinning any forward-looking statements we make include those described under forward-looking statements in our most recent quarterly report. I'll put our Q1 highlights in the context of leasing and portfolio optimization. First, leasing, strong demand continues. I'm encouraged by the high level of tour activity across our portfolio. I'm also encouraged by the ongoing productivity of our portfolio and that renewals were at healthy spreads to in-place rents. It's worth noting that most of these spreads are on rates established at the height of the market in 2018 and 2019. I believe we're at an inflection point and leasing momentum will continue through 2024. Our high user engagement, which manifests through the critical net promoter score, supports our leasing efforts. On to portfolio optimization, development, upgrade, and capital reallocation. Development and upgrade activity is one way we've optimized the portfolio over the past decade. A quick update on this. At 1001 Robert Barasa, 80% of the transformation of grade is complete and open to the public. It's unique space like no other in the city of Montreal. The work to transform specific floors and fulfill leasing requirements for completed deals is ongoing. The second floor in its entirety and space on the 21st floor will be delivered to two users in June. The interior lobby and exterior of the building will be completed in July and August. At 19 Duncan in Toronto, touring for the rental residential suite has commenced and move-ins are expected later this summer. At King Toronto, the 12th level was completed in April and glazing will begin in June. The 16 level structure will be completed by the end of 2025 when fixturing and residential possession will commence. Two units were sold in April at pricing in line with prior estimates. We're very excited to complete this part of King West Village. At M4 in Vancouver, the concrete structure has been topped off and Animalogic will commence occupancy late this year. Another way we've optimized the portfolio is through capital reallocation. We're effectively trading lower quality assets for higher quality assets. What we've achieved so far this year is a great example of this. We're accessing capital from lower yielding, less strategic assets. Specifically, this quarter, We've identified three assets for disposition in Montreal, totaling $77 million of IFRS value, about one-third of our target $200 million. The expressions of interest have exceeded our expectations over the past few weeks, so we're confident that we can hit our target. We're investing that capital in three higher-caliber, more strategic assets, the first being the rental residential component of Telesky. The second being a majority ownership position in one of the most distinctive assets in the country, 400 West Georgia and Vancouver. And third, an increased ownership position in high-quality rental residential and distinctive workspace in 19 Duncan in Toronto. Through the Telesky and 19 Duncan investments, we've also established scale of our urban rental residential portfolio. This is an important complement to our urban office portfolio. playing a similar role to the retail component of our portfolio. The residential density will not only support the retail and commercial components, but also add to the ecosystem. Our urban centers thrive when the concentration of people have access to everything they need in a tight radius. We have the density potential and the operating capability to create our own mixed-use neighborhoods, to create our own demand. We've now recommenced this activity and we have decades of opportunity ahead of us. Focusing on portfolio optimization doesn't make us indifferent to short-term metrics, but we're intensely focused on the long-term implications of what we do. Portfolio optimization will increase the productivity of our urban portfolio, allowing us to improve our already strong financial position and support our distribution while growing cash flow per unit over the medium term. This is what investors expect and want from commercial real estate. Nan will now outline our position of financial strength, which will enable us to execute our strategy.

Thank you, Cecilia. Good morning, everyone. The first quarter of 2024 was in line with our expectations. Our funds from operations per unit for the quarter was $0.578, which was 0.3% lower than the comparable quarter. Adjusted funds from operations per unit for the quarter was 53.7 cents, which was 0.8% higher than the comparable quarter. Same asset NOI of the total portfolio increased by 2.9% over the comparable quarter, while the same asset NOI of the rental portfolio decreased by 2%. On April 1, we closed on the acquisition of 400 West Georgia in Vancouver and increased our ownership interest in 19 Duncan in Toronto. In doing so, we traded non-cash interest income for cash operating income from high-quality assets, which is exactly what we want as owner-operators. While these acquisitions will put temporary upward pressure on our debt metrics in the near term, proceeds from our disposition activity will offset this pressure as they will be allocated to paying down debt. Our planned disposition activity is progressing well, with targeted proceeds of up to $200 million of IFRS value to be realized. At the end of the first quarter, we have more than $730 million in available liquidity. And we are fully committed to maintaining a strong balance sheet and retaining our investment credit rating. I'll now pass the call to JP. Thank you.