CT Real Estate Investment Trust

Good morning. My name is Daniel, and I will be your conference operators today. At this time, I would like to welcome everyone to CTREIT's Q4 2023 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star then 1-1 on your telephone. To withdraw your question, please press star, then 1-1 again. The speakers on the call today are Kevin Salzberg, President and Chief Executive Officer of CTREIT, Jody Spiegel, Senior Vice President, Real Estate of CTREIT, and Leslie Gibson, Chief Financial Officer of CTREIT. Today's discussion may include forward-looking statements. Such statements may be based on management's assumptions and beliefs. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Please see CT Reads Public Filings for a discussion. of these risk factors, which are included in their 2023 MDNA and 2023 AIF, which can be found on CTREIT's website and on CDAR. I would now like to turn the call over to Kevin Salzberg, President and Chief Executive Officer of CTREIT.

Kevin? Thank you, Daniel. Good morning, everyone, and welcome to CTREIT's quarterly investor conference call. Despite a challenging macroeconomic backdrop, CTREIT delivered a solid fourth quarter performance to cap off yet another strong year of consistent and growing results. 2023 was filled with accomplishments, key milestones, and a memorable anniversary, and I'm happy to be able to recap our achievements from the past year with you today. First and foremost, I am very pleased with the strong growth rates that we achieved across our key financial metrics in 2023. For the full year, we achieved a 4.6% increase in net operating income, 2.5% growth in same store NOI, 4.3% growth in same property NOI, and an impressive 4.9% growth in AFFO per unit. These results are a clear demonstration of how the successful execution of our strategy has translated into strong financial performance during the year. This growth in earnings once again contributed to CTREIT's ability to announce yet another increase in its distributions earlier this year or earlier last year, as we have done every year since our initial public offering in 2013. At year-end, our payout ratio on an annual basis stood at 73.4%, a reduction of over 100 basis points relative to year-end 2022. With respect to our portfolio growth, we delivered an impressive 839,000 square feet of new gross leaseable area through our active development pipeline and invested over $150 million. This included our new 350,000 square foot net zero certified distribution center in Calgary, Alberta that we completed this past quarter. Canadian Tire has now taken occupancy and will begin operating out of the facility this quarter and rent commence on January 1st, 2024. Other notable completions in 2023 included new third-party retail located at our shopping center in Moose Jaw, Saskatchewan, two new Canadian Tire Store developments in Sherbrooke, Quebec and Toronto, Ontario, and nine Canadian Tire Store expansion projects. From a balance sheet perspective, we repaid all outstanding amounts owing on our line of credit after raising $250 million in a successful unsecured debenture offering in November. As such, at year end, we had no variable rate debt outstanding, and our balance sheet is in excellent shape with our only debt maturity in 2024 related to one series of Class C LP units that comes due mid-year. Through the course of 2023, we repurchased over 450,000 CT REIT units through our NCIB facility at a weighted average purchase price of $13.99 per unit for a total cost of just over $6.3 million. And as we described on our call last quarter, We also successfully celebrated CTREIT's 10-year anniversary since going public and our tremendous track record that we have established since our IPO. CTREIT's unwavering dedication to long-term success remains our primary focus. As Jody will relay, our operational performance this past year reflects the strength of our assets as well as the health of the retail leasing market, and our portfolio remains nearly fully occupied. We continue to proactively manage our weighted average lease term, and to work towards driving rental growth by engaging in new leasing activities and renewal discussions with both Canadian Tire and our third-party tenants. From an investment perspective, our development pipeline has been a great source of growth and opportunity for CT REIT, and we were pleased to announce an attractive new redevelopment project yesterday. We also continue to look for additional opportunities that suit our strategy and fit within our financial parameters. We work hard not to take undue risk, and have improved our balance sheet and debt metrics in order to deal with an ever-changing financial backdrop, provide flexibility, and capitalize on those investments we feel are best suited to our long-term growth. I want to take a moment to thank the whole CTREIT team for their efforts, hard work, and dedication over this past year. I am very pleased with how 2023 turned out, and we are being purposeful about our prospects as we chart our course for 2024. And with that, I will now pass it over to Jody to walk you through an overview of our investment, leasing, and development activities, And then Leslie will speak to our financial results. Jody?

Thanks, Kevin, and good morning, everyone. As highlighted in our press release yesterday, we were pleased to announce one new investment this quarter. This new investment relates to the redevelopment of an existing enclosed mall located in Winkler, Manitoba. If you recall, we purchased this property on attractive terms in 2016 and expanded the freestanding Canadian Tire store on-site in 2018. We have now entered into a lease with an additional new anchor tenant that will allow us to partially de-mall the balance of the property and complete the asset strategy for this property that we devised at the time it was acquired. It is anticipated that this $9.1 million investment will be completed by the end of 2025 at a cap rate of 9%. In Q4, we successfully completed seven projects totaling $96 million which added an additional 455,000 square feet of GLA to the portfolio. The projects included expanding four existing Canadian tire stores located in Napanee, Ontario, Invermere, British Columbia, and Sydney and Bedford, Nova Scotia. Furthermore, we developed a third-party pad at one of our properties in Hamilton, Ontario, as well as entered into a ground lease with a third party in Kingston, Ontario, to enable the future development of a new Canadian Tire store. Lastly, as Kevin noted, we completed our first Net Zero Certified Distribution Centre in Calgary, Alberta and turned over occupancy of the building to Canadian Tire. As you can see, there was significant activity to conclude the fourth quarter and wrap up a very busy year. At the end of the quarter, Fiji REIT had 18 properties that were at various stages of development. These development projects represent a total committed investment of approximately $258 million upon completion, $86 million of which has already been spent, and $43 million of which we anticipate will be spent in the next 12 months. Once built, these projects will add a total incremental gross leaseable area of approximately 571,000 square feet to the portfolio, 98.8% of which has been pre-leased at quarter end. We also continue to focus on our existing portfolio of high quality net leased assets. In 2023, we successfully extended 28 Canadian tire store leases and over 310,000 square feet of third party leases at a 10.3% blended weighted average renewal spread. Our portfolio remains nearly fully occupied at 99.1%. As at the end of Q4, The weighted average lease term for our portfolio was 8.4 years, which remains one of the longest in the sector. With that, I will turn it over to Leslie to discuss our financial results. Leslie?