Dream Industrial Real Estate Investment Trust

Welcome to the Dream Residential REIT Third Quarter 2023 Results Conference Call for Thursday, November 9th, 2023. During this call, management may make statements containing forward-looking information within the meaning of applicable security legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties many of which are beyond its control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Additional information is contained in DREAM Residential REITs filings with security regulators. These filings are also available on its website at www.dreamresidentialreit.ca. Your host for today will be Mr. Brian Pauls, Chief Executive Officer of Dream Residential REIT. Please go ahead, Mr. Pauls.

Good morning, everyone, and thank you for joining us today for Dream Residential REIT third quarter 2023 conference call. Speaking with me today are Scott Schumann, our Chief Operating Officer, and Derek Lau, our Chief Financial Officer. We are pleased with the operational and financial results for the third quarter of 2023. Net operating income was $6.1 million, increasing 11.4% year-over-year. This was a significant driver to our FFO per unit of 18 cents, which represents an 18.8% increase year-over-year. We remain on track to achieve our communicated NOI and FFO per unit guidance for the year. On the value-add program, we completed renovation work on 122 suites, and we remain on track to renovate 400 suites in 2023. The returns continue to be attractive with a 23.5% renovation premium on these units in Q3. While we are seeing broader macro challenges, we remain optimistic on the long-term fundamentals in our markets. Our portfolio is defensive and geographically diverse. Our value-add renovations continue to be a differentiator, and we are well positioned for the current market volatility. In terms of capital allocation, we were limited on NCIB activity with a goal to preserve capital. We will continue to monitor overall market conditions and while we view the NCIB as a valuable tool, we continue to prioritize maintaining a safe and flexible balance sheet. This, in conjunction with a strong liquidity position, will prove very valuable in this environment. We continue to assess asset recycling opportunities as well as private capital structures to further strengthen our ability to pursue compelling future opportunities. Looking ahead, we will remain prudent with our capital allocation as we continue to navigate the current conditions. I will now turn it over to Scott to provide an operations update for the quarter. Scott?

Thank you, Brian. Last quarter, we completed the first full year of operations in line with the original IPO forecast. Q3 2023 is our first reporting period that qualifies for a full comparative look at year-over-year public performance. And we continue to generate strong results. DRR ended this quarter consistent with management's expectation. Year-over-year same property revenue increased 8.9% and same property net operating income grew 11.4% during the third quarter, driven by strong organic performance in our Cincinnati regional communities and sustained value creation within our Sunbelt renovation program. Even as real estate conditions continue to change, demonstrated by interest rate rises and cap rate expansion across the sector, DRR's Q3 revenue and operating expenses were consistent with Q2 2023, absorbing the mid-year non-discretionary cost increases and delivering net operating income of $6.1 million. Q3 vacancy ticked up as planned due to the seasonal summer draft of interior suites into our value-add construction program. This shifted occupancy to 93.4% on September 30th, 2023, mirroring the previous year's occupancy of 93.7%. Management is pleased to report that operating margins improved 120 basis points up to 51.1% from 49.9% last year across the same quarter, also occurring during a value-add seasonal wave. The value-add program remains a distinguishing feature and strong part of our business operation. Our self-performed team completed renovation of 122 suites during Q3, 325 suites year to date, and is on track to renovate 400 suites as guided for 2023. Year to date, upgraded apartments have commanded a 21.7% leasing premium which is a $231 per month per suite increase in rent. Our construction team's disciplined cost controls and timely execution are driving returns on invested capital upwards of 19%, favorable compared with the going-in target range of 12% to 16%. VRR's market diversification adds to the strength and resilience of our performance. Each of our three operating regions outperformed the flat national rent benchmarks as well as their respective local market benchmarks. In-place rent across our Dallas-Fort Worth communities grew 2% in Q3 and 6.9% on the year, and Cincinnati led all regions with in-place rent growth of 2.9% for the quarter and 8.9% over the year. We are expecting lease tradeouts and market rents to moderate in the fourth quarter, corresponding with seasonal trends, which emphasize occupancy and renewals during the winter leasing season. DRR NOI will finish the year within the mid to upper band of our forecast range prior to Texas property tax legislation adjustments, and we are finalizing renovation studies to refine our value creation business plan for 2024. As Brian suggested, economic conditions and the supply pipeline are impacting the multifamily operating environment, but these pressures have significant nuance. varying widely from region to region, submarket to submarket, and demographic to demographic. DRR assets are located in sturdy neighborhoods with a hardy resident base, safe from the turbulence experienced across the luxury segment, and secure within the affordability spectrum of America's middle-of-the-middle labor force. DRR will continue to deliver sustained, safe, risk-adjusted returns by way of our diversified geographies, benchmark feeding operations, and proven value creation. Looking forward, we anticipate that economic uncertainty and supply pressures will persist into 2024. We also anticipate that 2024 may present unique opportunities. We are actively exploring ways for DRR to capitalize on upcoming market conditions wherein distressed sponsors or discounted assets may present conditions for accretive acquisitions. We will focus on the fundamentals be disciplined with capital, and be opportunistic-minded during such a time as this. I will now turn things over to Derek Lau, our Chief Financial Officer.