Canadian Apartment Properties Real Estate Investment Trust

Good morning. Thank you for attending today's Canadian Apartment Properties Brief Third Quarter 2022 Results Conference Call. My name is Alexis, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on the telephone. I would now like to pass the conference over to Mr. David Mills. You may proceed.

Thank you, Alexis, and good morning, everyone. Before we begin, let me remind everyone that the following discussion may include comments that constitute forward-looking statements about expected future events and the financial and operating results of CAPRE. Our actual results may differ materially from these forward-looking statements, as such statements are subject to certain risks and uncertainties. Discussions concerning these risk factors, the forward-looking statements, and the factors and assumptions on which they are based can be found in our regulatory filings, including our annual information form at MD&A, which can be obtained at CDAR.com. I'll now turn things over to Mr. Mark Kenney, President and Chief Executive Officer. Please go ahead, sir.

Thanks, David. Good morning, everyone, and thank you for joining us. Stephen Cove, our Chief Financial Officer, is with me this morning, as is our Chief Investment Officer, Julian Schoenfeld. You may have noticed on our opening slide that we're celebrating our 25th anniversary as a publicly traded REIT. Founded in September 1997, CAPREIT has grown to become Canada's largest REIT with assets exceeding more than $17 billion. I'll have more to say about this significant milestone later in the call. Turning to our results in slide 4, it was another solid quarter for the REIT with revenues and NOIs up on strength and occupancies, higher average monthly rents, and the contributions from our acquisitions over the last 12 months. NFFO was flat primarily due to inflationary cost pressures. Turning to slide five, our results for the first nine months of 2022 remained solid. Again, strong occupancies rising to 98.1% from 97.9% last year. Higher monthly rents and portfolio growth continue to drive increases in revenue and NOI. NOI and NFFO continue to be impacted by the increased costs we are experiencing. Higher maintenance costs, the increase in utilities, and higher realty taxes. We believe such inflationary cost pressures will continue to impact the results over the next few quarters. And we are employing a number of programs to mitigate these inflationary pressures. In May this year, we began purchasing our trust units for cancellation under our approved normal course issuer bid. As of the end of the third quarter, we have purchased approximately 4.4 million units for an aggregate purchase price of $202 million. We believe, given that our units are trading at a significant discount to our net asset value of $56.44 to quarter end, that these purchases are another way we are enhancing long-term value for our unit holders. From an operations perspective, coming out of the pandemic, we are now seeing near-full occupancies and growing revenues across our stabilized portfolio, as shown on slide 6. Occupancies improved again in the third quarter, while net average monthly rents continued to increase. As I mentioned, we are also exploring a number of ways to mitigate inflationary pressures on our cost structure, including fixing our price and transport costs for the natural gas we use, and increasing hydro submetering in our Canadian portfolio. As of quarter end, approximately 65% of the total 59,683 suites in Canada are submetered or directly metered. Additional suites and sites have submetering or direct metering in place that will be assumed by new tenants on turnover. We continue to evaluate implementing submetering in all of our remaining suites and sites. Submetering lowers cost consumption, resulting in a smaller environmental impact, lowering operating expenses and lower inflation exposure. Our leasing and marketing programs continue to generate increasing occupancies In average market rent, as you can see on slide 7, after two years of operating under significant pandemic restrictions, our occupancy continues to strengthen, rising to 98.1% in the third quarter, up from 97.9% last year. You can also see that rents for the total portfolio have risen 3.4% compared to the same time last year. Tenant incentives are continuing to decline to pre-pandemic levels. and we expect a majority of the amortization to be completed by the end of the year. It is interesting to note on slide A the positive trend in rent increases on turnover we are generating since we bottomed out at the height of the pandemic in Q1 last year. Looking ahead, we are experiencing more in-person and online visits, and we expect we will start to see more and higher mark-to-market rent increases in the quarters ahead. I'll now turn things over to Julian to outline how we are repositioning and strengthening our property portfolio.