Choice Properties Real Estate Investment Trust

Good morning and welcome to the Choice Properties Real Estate Investment Trust first quarter 2023 earnings conference call. Today's call is being recorded. After the speaker's remarks, there will be a question and answer session. I would now like to hand the conference over to your first speaker today, Erin Johnston, Vice President of Finance. Please go ahead.

Thank you. Good morning and welcome to the Choice Properties 2021-2023 conference call. I'm joined here this morning by Raelle Diamond, President and Chief Executive Officer, Mario Berrafato, Chief Financial Officer, and Anna Raddick, Chief Operating Officer. Raelle will start the call by providing a brief recap of our first quarter performance and cover the highlights of the quarter. Anna will cover our operating results, followed by Mario, who will conclude the call with a review of our financial results before we open the lines for Q&A. Before we begin today's call, I'd 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, outlooks, 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 conclusions 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 2023 financial statements and management discussion and analysis, which are available on our website and on CDAR. And with that, I will turn the call over to Ram.

Thank you, Erin, and good morning, everyone. We're pleased with our strong start to 2023. Our strong performance is a testament to the quality of our portfolio, the health and resiliency of our tenants, the strength of our balance sheet, and the hard work of our team. In addition to our Q1 results, we released our 2022 Environmental, Social, and Governance Report. We made significant progress in our ESG program in 2022 and are setting the stage for the next phase of our program with key advancements towards fighting climate change and advancing social equity, our two ESG pillars. Our ESG program play an important part of our strategy and we will continue to report on our progress as we execute on our key initiatives. Turning to our Q1 results, we remain at near full occupancy in our retail industrial portfolios with occupancy at 97.7%. our business delivered strong same-asset NRI growth of 4.6%. Our team continued to execute on our strategic framework, and in the quarter, we further strengthened our market-leading portfolio through capital recycling program and took steps to ensure we maintain our industry-leading balance sheet amidst ongoing market volatility. In the first quarter, we completed 268 million of transactions, including $192 million of acquisitions and $76 million of dispositions. In our retail portfolio, we acquired three standalone assets from Loblaw for $99.1 million, which are discussed on our last quarter's conference call. We also acquired a Shoppers Drug Mart and Dollarama anchored retail asset adjacent to an existing choice owned no-for-alls in a strong and growing Durham region for $17.9 million. We also successfully completed the disposition of an Ontario retail asset that was held for sale at the end of 2022 for $23 million. We also added to our industrial portfolio through the acquisition of our development partners' 50% interest in two new generation industrial buildings at Horizon Business Park in Edmonton, Alberta for $32.1 million. The first building was completed in 2022. The second building which has been pre-leased to a global transport and logistics company, is currently under construction and is near completion with occupancy anticipated in the second half of 2023. Choice now owns 100% of the site, comprised of six buildings totaling approximately 1.4 million square feet of GLA. Further adding to our mixed-use development pipeline, we acquired approximately a 1.7-acre parcel at Golden Mile for $23 million in the quarter. This transaction unlocks approximately 2.1 million square feet of additional density for the project and demonstrates the strength of our strategic relationship with Loblaw as the site was acquired through a Loblaw option to purchase. As we continue to focus on selling our remaining office assets, In the quarter, we worked with our JV partner on our two remaining Calgary office assets in a transaction that helped simplify our exit from the office asset class. We successfully sold our 50% ownership interest in one asset for $48.4 million to our partner. In exchange, we received our partner's 50% interest in the other current Calgary office asset and provided a vendor take-back mortgage with a face value of $13.5 million. We now have two office buildings remaining in our portfolio. We are actively marketing the remaining property in Calgary and are under contract to sell our last remaining Atlantic office building located in Dartmouth, Nova Scotia, with closing scheduled by the end of the second quarter of 2023. We also remain focused on continuing to deliver on our development pipeline. During the quarter, we completed several retail intensifications, including a Shoppers Drug Mart, a Dollarama, and two Bank Bands. Our two active residential projects continue to be on track to be completed in the second half of 2023. In our industrial pipeline, we're making progress at our Eastway development site with the installation of off-site services underway. At Choice Caledon Business Park, our teams continue to work through the planning process and our leasing teams are seeing significant tenant interest and are actively working through opportunities. Our 2023 residential deliveries remain on track. In addition to capital recycling, our teams were also proactive on financing in the quarter and continued to take steps to ensure we maintained ample liquidity, raising $737 million in debt capital. It is important to acknowledge that the challenging macroeconomic backdrop is bringing with it some tenant bankruptcies, which have been relatively lost for the last couple of years. But importantly, our exposure to at-risk tenants is very limited. This is not by accident. It is partly a function of us being very disciplined and executing on our capital recycling program. Anna will now discuss progress on backfilling these vacancies as well as our operational results. Anna?