Choice Properties Real Estate Investment Trust

Senior Vice President of Finance. Please go ahead.

Thank you. Good morning and welcome to the Choice Properties Q4 2024 conference call. I'm joined here this morning by Rayl Diamond, President and Chief Executive Officer, Mario Barifato, Chief Financial Officer, and Nadia Collins, Chief Operating Officer. Rayl will start the call today by providing a brief recap of our 2020-2024 performance and we'll cover the highlights of the fourth quarter. Now we'll discuss our operational results and development activity, followed by Mario and me, who will conclude the call with a review of our financial results and 2025 outlook before we open the lines for Q&A. 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 conclusions in these four 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 Q4 2024 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 Rael.

Thank you, Erin, and good morning, everyone, and welcome to our Q4 conference call. We are pleased to deliver another solid year of operating and financial results. Our business is strong and we have a proven strategy. Our fourth quarter and full year 2024 performance demonstrate the quality of our necessity-based portfolio and the strength of our platform. In 2024, we once again successfully met a full year earnings outlook. We maintained near full occupancy rates throughout the year and exceeded our same asset cash in our target while delivering on the high end of our FFO growth target. We also ended the year with conservative debt metrics and ample liquidity. Throughout the year, we maintained our market-leading portfolio by completing approximately $425 million in real estate transactions, including around $260 million of acquisitions and $165 million of dispositions. We made significant progress on our development pipeline by adding approximately 300 million of high-quality real estate to our portfolio. This included 1.2 million square feet of space across 14 projects, highlighted by 12 retail intensification projects, a Loblaw industrial ground lease at Caledon Business Park, and our purpose-built rental building, Unity, at Mount Pleasant Village in Brampton, Ontario. Our total investment of approximately $235 million was delivered at an average yield of 7%, resulting in significant NAV creation. Supported by the strength of our 2024 performance, our Board of Trustees has approved our third consecutive annual distribution increase, effective March 2025. This increase demonstrates our commitment to sharing our growth with our unit holders. Turning to our fourth quarter results, our momentum continued in the quarter. We delivered strong operational and financial results and advanced our development pipeline. In addition to operating performance, we completed $80 million in total real estate transactions, which included about $60 million of acquisitions and $20 million of dispositions. Our largest transactions in the quarter were the acquisition of a grocery-anchored retail sense in Ottawa and the acquisition of a 50% interest in a Loblaw Halifax industrial property. The retail center is an 85,000 square foot site anchored by Farm Boy, which is scheduled to move from this location. Choice purchased the asset and has concurrently entered into a 15-year lease with Love Law to backfill the Farm Boy upon their lease expiry in 2027. This eliminates leasing and downtime risk while delivering strong contractual NOI growth. The industrial acquisition in the farm The industrial acquisition is the fourth and final asset in a 50-50 joint venture we announced with Crestpoint last quarter. Choice will manage the portfolio. The property is an approximately 215,000 square foot site with a 15-year lease from Love Law with annual contractual rent steps of 2%. These transactions demonstrate our team's ability to leverage our relationship with Love Law, seizing market opportunities, and highlights the significant advantages of Choices' right of first offer on Loblaw's remaining real estate assets. Before I turn the call over to Niall, I want to touch on market fundamentals across our asset classes and the overall economic environment. Our grocery-agent necessity-based retail portfolio continues to be the largest and most resilient in Canada. Our assets performed exceptionally well throughout 2024, and our national footprint of neighborhood centers delivered rental rate growth comparable to those in core urban areas. We continue to experience high leasing demand with many of our tenants remaining interested in expanding their footprints, particularly in grocery anchored centers. As an example, of both this demand for retail space and the benefits of our strategic relationship with Loblaw, we're in various stages of planning and currently working with Loblaw to build out six new grocery stores across the country. Two are intensifications of existing sites, one of which is currently under active construction. Two are new developments on land we purchased in the fourth quarter, and the remaining two are in planning. In addition, we have nine shoppers drug marts in active development with a significant number of additional sites in different stages of planning, and we expect to continue to capture 25 to 30% of the growth of shoppers drug marts expansion. In industrial, we continue to benefit from untapped rental rate growth as our low-in-place rents adjust to market, evidenced by strong overall leasing spread. Despite rental rate growth moderating in 2024, After several years of robust growth, demand for our high-quality industrial assets remained high as supply in key markets remains limited. Lastly, while our residential assets today represents a small portion of our portfolio, we have long-term conviction in residential as an asset class. We continue to create opportunities and value by advancing our mixed-use residential properties through entitlement process. Overall, our business is in exceptional shape. Looking ahead to 2025, we acknowledge that the geopolitical threats continue to cause overall market volatility. Nevertheless, Troyes' portfolio remains in an enviable position. Our portfolio and platform are built to withstand economic cycles, and our disciplined approach to capital allocation and balance sheet management distinguishes us from our peers and provides us the capacity to continue to pursue growth opportunities. This is Mario's last conference call, and I want to thank him for his leadership and vision, which have guided us over the last 10 years. Mario, we are grateful for your contributions and the legacy you leave behind. You've also ensured a very smooth transition to Aeron, leaving us in very good hands. With that, I'll pass the call over to Niall to discuss our fourth quarter operational results and development activity. Niall?