Boardwalk Real Estate Investment Trust

Good afternoon ladies and gentlemen and welcome to the Boardwalk Real Estate Investment Trust second quarter 2023 earnings call. At this time all lines are in a listen only mode. Following the presentation we will conduct a question and answer session. If at any time during the call you require immediate assistance please press star zero for the operator. This call is being recorded on Friday August 11th 2023. I will now turn the conference over to Eric Bowers, Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Julie, and welcome to the BoardWalk REIT 2023 Second Quarter Results Conference Call. With me here today are Sam Kolias, Chief Executive Officer, James Ha, President, and Lisa Smandich, Chief Financial Officer. Please note that this call is being broadly distributed by way of webcast. If you have not already done so, please visit bwalk.com slash investors, where you will find a link to today's presentation, as well as copies of the trust financial statements and MD&A. Starting on slide two, we would like to remind our listeners that certain statements in this call and presentation may be considered forward-looking statements. Although the expectations set forth in such statements are based on reasonable assumptions, Boardwalk's future operation and its actual performance may defer materially from those in any forward-looking statements. Additional information that could cause actual results to defer materially from these statements are detailed in Boardwalk's publicly filed documents. I would like to now turn the call over to Sam Collius.

Thank you, Eric, and welcome everyone to our Q2 2023 conference call. Starting on slide four, our performance with our gap and non-gap measures of FFO per unit profit, net asset value, and unit holder equity, all seeing an increase from the same quarter of the prior year for December 31st, 2022. Slide five, our culture. From our humble beginnings in 1984, our resident members are at the top of our organization. Our leaders put our team first, and our team puts our resident members first. Slide six, Our strategy to create value for our stakeholders begins with our people. We are so grateful for our extraordinary team who continues to innovate and deliver our places, homes for our resident members, where love always lives. In turn, this leads to leading earnings performance, which we believe will continue to result in strong total returns for our stakeholders. Our strategic focuses are significant organic growth, from utilizing our proven team and platform that focuses on operational excellence to optimize NOI growth. When we pair this with the current improvement in apartment rental fundamentals on a solid foundation of some of the most affordable rents in Canada, we are well positioned to continue to accelerate on our organic growth trend. Accretive capital recycling focuses on opportunistic investment into acquisitions, development and investment into our own high-quality existing portfolio with a tactical unit buyback when appropriate. Those opportunistic investments, combined with our operational optimization, have positioned Boardwalk for increasing asset values within Boardwalk's diversified and high-quality multifamily portfolio. Our solid financial foundation provides flexibility on our balance sheet with our growing free cash flow and with CMHC insurance on 96% of our financings, which provides access to low-cost mortgage capital with reduced renewal risk. Slide seven, we are delivering solid growth. Boardwalk's existing exposure to strong rental demand, non-price-controlled markets with record immigration, significant organic growth as Alberta has some of the most affordable rents in the country with limited new supply versus demand from both international and interprovincial migration. Our solid financial foundation and partnership with CMHC allows us to provide some of the most affordable rents in Canada. With rising interest rates, making home ownership more expensive and rising construction costs, all widening the gap between our replacement cost of our assets and our current valuation. Construction levels in our core markets remain low relative to anticipated household formation with record high in-migration into our core Alberta markets. Our largest market, Edmonton, ended last month of July with 14 available units to rent, contributing to our solid performance. Apartment rental fundamentals continue to improve with higher revenues as a result of inflationary adjustments coupled with essentially no new incentives on new and renewing leases. All of our markets have near full occupancy and strong apartment rental fundamentals. Slide 8 shows the significant magnitude and scale on a historic level of all-time record high in migration into our largest region, Alberta, from both interprovincial and international migrants calling Alberta home. This significant migration reflects the affordability that Alberta provides relative to other provinces coupled with higher job vacancies. Slide 9 shows interprovincial migration sources into Alberta for current year 2016 and 2006. Most interprovincial migrants are coming from Ontario and Quebec with a big increase from BC reflecting a migration into more affordable housing in Alberta from higher housing costs in Ontario and BC. Slide 10 shows strong overall employment growth in Alberta, along with how diversified new jobs are helping with the diversification of the Alberta economy. Slide 11 shows some headlines that reflect a diversifying economy for Alberta. Alberta's economy remains strong. In addition, there are many major projects under development in the province of Alberta, which will further promote more job opportunities in the future. Slide 12 shows our large presence in affordable and non-price controlled markets, with Alberta and Saskatchewan representing 62.1 and 10.3% of our portfolio, respectfully. Boardwalk has the highest concentration of non-price controlled apartments amongst our public peers. Boardwalk's current mark-to-market, which includes a reduction of incentives, averages $169 per suite and equates to approximately $66 million of revenue opportunity. Slide 13 shows our high affordability as defined by CMHC in our core Edmonton and Calgary markets with rents well below 30% of median rental household income. To the right of the affordability chart is a graph which shows occupied rents in Alberta are still tracking below both Alberta and Canadian CPI indexed inflation. There remains a significant gap between occupied rents and the change over consumer price index over the last eight years. Boardwalk rents continue to provide exceptional value versus consumer price index over the last eight years. Slide 14 shows the graph on the left which shows significant imbalance between strong demand or in-migration versus supply or new builds with demand or migration accelerating further in our core Edmonton and Calgary marketplaces, far outstripping new supply. To the right, a graph showing how high construction costs remain along with persistent higher interest rates. Slide 15 shows high occupancy as a result of strong apartment rental fundamentals in all our key markets. Move outs versus last year are also dropping as our retention and value proposition increases. It is important to compare same month over previous month last year because of seasonality. Slide 16 shows our key operational metrics with high occupancy, lower incentives, higher occupied rents, resulting in higher revenues for the quarter. Slide 17 shows steady net new and renewal rental rates with our resident friendly centric renewal rate band keeping retention high, our turnover and expenses low. Year over year, we have seen a significant improvement Existing lease spreads or renewals are strategically moderated to keep providing resident-friendly affordable housing options in our core markets while lowering our costs and steadying operational results. A win-win for all stakeholders. Slide 18 shows a 2.3% sequential quarterly revenue gain, an increase from 1.6% previous quarter, as we discussed last quarter, would increase this quarter, reflecting rental market adjustments, higher occupancy, and no more use of incentives on renewals. We'd like to now pass the call on to Lisa Smandich, who will provide us with an overview of our portfolio performance and balance sheet. Lisa?