Choice Properties Real Estate Investment Trust

Good morning and welcome to the Choice Properties Real Estate Investment Trust first quarter 2022 earnings conference call. My name is Chantelle and I'll be your conference operator today. Today's call is being recorded and all lines have been placed on mute. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. I would now like to hand the conference over to your first speaker today, Doris Vaughan, Senior Vice President, General Counsel, and Secretary. Please go ahead.

Thank you. Good morning and welcome to Choice Properties Q1 2022 conference call. I'm joined here this morning by Rail Diamond President and Chief Executive Officer, Mary O'Barrifato, Chief Financial Officer, and Anna Raddick, Executive Vice President, Leasing and Operations. Before we begin today's call, I would like to remind you that by discussing our financial and operating performance and in responding to your questions, we may make forward-looking statements, including statements regarding choice properties objectives, strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, intentions, outlook, and similar statements concerning anticipated future events, results, circumstances, performance, or exceptions that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from the conclusion in these forward-looking statements. Additional information on the material risks that can impact our financial results and estimates and the assumptions that were made in applying and making these statements can be found in the recently filed Q1 2022 financial statements and management discussion and analysis, which are available on our website and on CDAR. I will now turn the call over to Red.

Thank you, Doris, and good morning, everyone. Thank you for taking the time to join our Q1 conference call. We are pleased to report a strong start to the year. Our portfolio and financial position are strong as reflected in our 4.8% increase in net asset value per unit in the quarter. This was driven by continued demand for essential retail, strong industrial market dynamics, and progress in our development pipeline. In addition to our Q1 results, we released our 2021 Environmental, Social, and Governance Report. The report sets out ambitious ESG goals that will guide our activities in the future. We are pleased with the progress we have made in 2021 and look forward to reporting on progress over time. There is much to be done, but we are energized by the challenge. Joining me on today's call is Anna Raddick, who will provide an update on our strong operational results and positive leasing momentum, and Mary Valpata, who will provide an update on our solid financial results. Before they do so, I'll provide an update on our transaction and development activity. Q1 was a significant quarter for Choice. We successfully executed our strategic sale of six office properties to Allied Properties REITs continued our ongoing capital recycling initiatives, and made progress on our active and future development pipeline. Turning to our sale to allied. Last year, we made the strategic decision to focus our time and capital on the opportunities available in our four core business areas. Essential retail, industrial, our growing residential platform, and our robust development pipeline. This meant we'd eventually exit office as an asset class. During the quarter, we entered into a unique transaction to accelerate our exit from office and closed on the sale of six office properties to Allied Properties REIT for consideration of $740 million. As part of the consideration, we received trust units that represent an 8.5% ownership interest in Allied and a $200 million promissory note set to mature at the end of 2023. This exchange was beneficial in many ways. First, we reduced our direct exposure to office to approximately 3.5%. Second, we created financial flexibility as we are able to redeploy the capital from allied units into our core business segments over time and build our residential programs. And finally, we are focusing our efforts on the asset classes where we have scale. This is a significant advantage as it creates operating efficiencies, provides further investment opportunities, and helps us attract top talent. With the closure of this transaction, we'll no longer be reporting office as a standalone asset class. Our operating and reporting will focus on three core segments, being retail, industrial, and finally a new segment, mixed use and residential. We're incredibly pleased with the outcome of this transaction, as it is a win-win transaction for both Choice and Allied. Turning to our development. At the beginning of the year, we purchased our development partner's share, and including buying out an option that they had in each of our recently completed purpose-built rental projects, Liberty House, and the Brixton for $18.7 million and $17.1 million respectively, increasing our total ownership to 50% in each of these assets. Of the consideration paid, approximately 55% relates to the option nullification. In addition, we continue to look for opportunities to intensify our high-quality retail portfolio, and in the quarter, we transferred two commercial projects for approximately 23,000 square feet to income-producing properties. We also made progress on our existing development pipeline and further expanded our future industrial pipeline. Industrial continues to be our strongest performing asset class, and we continue to direct capital to further grow our future industrial pipeline. Since January, we had two significant developments related to our future industrial portfolio. We commence construction at our industrial center development in South Surrey, British Columbia, a new generation logistics facility targeting LEED silver certification upon completion in 2023. This development will deliver 350,000 square feet of high-quality industrial space to a prime industrial node. At current rents, we anticipate a yield of approximately 7.5%. Secondly, in April, we acquired an additional 97-acre parcel of land adjacent to the future industrial sites in Caledon we acquired in 2021, bringing the total future net developable industrial land in this multi-phase industrial park to approximately 380 acres. This additional land was completed at a trusted pricing per acre. Our development partner is currently working through the rezoning approval process for the town of Caledon to permit approximately 5.5 million square feet of future industrial space. Looking ahead, in addition to our future industrial lands, we have 11 development projects representing over 10.5 million square feet in different stages of the rezoning and planning process. This development pipeline provides us with tremendous opportunities in both the near and long term to add high quality assets to our portfolio and create long term value. I'm now going to pass the call over to Anna. Anna?