Automotive Properties Real Estate Investment Trust

Good morning, ladies and gentlemen, and welcome to Automotive Property REITs' 2026 First Quarter Results Conference Call and Webcast. At this time, all lines are in listen-only mode. Following management's remarks, we will conduct a question-and-answer session. Please be aware that certain information discussed today may be forward-looking in nature. Such forward-looking information reflects the REIT's current views with respect to future events. Any such information is subject to risk uncertainties, and assumptions that cause actual results to differ materially from those projected in the forward-looking information. For more information on the risks, uncertainties, and assumptions relating to forward-looking information, please refer to the REIT's latest MD&A and annual information form, which are available on CDAR+. Management may also refer to certain non-IFRS financial measures. Although the REIT believes These measures provide useful supplemental information about financial performance. They are not recognized measures and do not have standardized meanings under IFRS. Please refer to the latest MD&A for additional information regarding non-IFRS financial measures. This call is being recorded on May 14th, 2026. I would now like to turn the conference over to Milton Lamb, President and CEO. Please go ahead, Mr. Lamb.

That's great. Thank you, John. And good morning, everyone. Thank you for joining us today. With me is Andrew Calra, our Chief Financial Officer. Our strong first quarter performance reflects the positive impact of the 13 property acquisitions we completed in 2025 for an aggregate purchase price of approximately $200 million and the partial contributions of the two additional property acquisitions completed during the quarter. Compared to Q1 of last year, our property rental revenue has increased by 21.7%, cash NOI was up 19%, and AFFO per unit diluted increased to 26.2 cents from 24.7 cents. This represents a record quarterly AFFO per unit amount for APR, demonstrating the positive impact over acquisitions and the embedded growth from contractual, fixed, or CPI-adjusted annual rent increases in our net lease structure. This is further reflected in a reduced AFFO payout ratio of 78.6% in the quarter, even after our 2025 distribution increase. The two acquisitions we completed during the quarter, a full-service Hyundai dealership located in Quebec City, and a Rivian-tenanted sales, delivery, and service facility in Vista, San Diego County, California. Subsequent quarter end on April 7th, we completed our second property acquisition in Southern California consisting of two Penske Automotive dealership properties in Santa Ana in Orange County. The dealerships are situated on parcels of land totaling approximately six acres within the Santa Ana Auto Mall, one of the area's premier dealership corridors. The dealerships include Audi South Coast, a 32,000-square-foot full-service heavy dealership, and South Coast Volkswagen, a 29,000-square-foot full-service VW dealership, both operated by Penske Automotive Group. We expect our acquisitions from last year and to date in 2026 to drive continued growth in our AFFO per unit going forward. At this point, I'd now like to turn it over to Andrew Calra to review our financial results in greater detail.

Andrew. Thanks, Milton, and good morning, everyone. Our property rental revenue for the quarter increased to $29.1 million from $23.9 million in Q1 a year ago, reflecting growth from the properties required during and subsequent to Q1 last year and contractual annual rent increases. Total cash NOI and same property cash NOI for the quarter total $23.8 million and $20.4 million, respectively, representing increases of 19 and 2.1% compared to Q1 last year. Interest expense and other financing charges for the quarter were $7.3 million, an increase of $1.3 million from Q1 last year, reflecting additional debt incurred to fund our acquisitions. Our G&A expenses were $1.6 million for the quarter, an increase of $0.1 million from Q1 last year, and in line with our expectations. Net income and other comprehensive income was $25.3 million, compared to $7.6 million in Q1 last year. The increase is primarily due to higher NOI changes in non-cash fair value adjustments for folks poor investment properties, and interest rate swaps, partially offset by higher interest costs and the change in non-cash fair value adjustments for Class B units and unit-based compensation. AFFO increased by 20.4% and 19.1% respectively compared to Q1 last year, reflecting higher rental revenue from the acquisitions and contractual rent increases. On a per-unit basis, FFO increased to 26.8 cents, diluted up from 25.1 cents in Q1 last year, and AFFO increased to 26.2 cents, up from 24.7 cents. We paid unit holder distribution totaling 20.6 cents per unit in the quarter, representing an AFFO payout ratio of 78.6%. This compares with total distributions of 20.1 cents per unit in Q1 last year for a payout ratio of 81.4%. The decline in our payout ratio despite the increase in our monthly cash distributions effective last year, 2025, demonstrates the positive impact of the properties we acquired and subsequent to Q1 last year and contractual rent increases. The cap rate applicable to our portfolio at 6.75% at quarter end, which was flat compared to 2025 year end, up slightly from 6.7% at the end of Q1 last year. We continue to be proactive with our debt strategy, limit with our exposure to interest rate fluctuation, and enhance our financial flexibility. During the quarter, we entered into floating to fix interest rate swaps within Q1, Facility 3 totaling $45 million for terms of five to seven years at rates between 4.45 and 4.59%. We also increased the amount of the revolving portion of Facility 1 by $25 million, extended the maturity to June 2029 with the same credit spread. At quarter end, we had a debt-to-GVV ratio of 46.3, providing further growth. acquisition capacity. As at March 31st, 2026, 77% of our debt was fixed with a weighted average interest rate of 4.48%, a weighted average interest rate and mortgages remaining of 4.2 years, and a weighted average term maturity of debt of 2.8 years as we continue to increase and extend our credit facilities. As at May 13th, we had approximately $32.5 million of undrawn capacity under our credit facilities. Thirteen unencumbered properties valued at approximately $195.4 million. I'd like to turn the call back to Milton for closing remarks. Thank you very much.