Dream Residential Real Estate Investment Trust

Welcome to the DREAM Residential REIT second quarter 2024 results conference call on Thursday, August 8th, 2024. Please be advised that all participants are currently in a listen-only mode and that the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. During this call, management of DREAM residential REITs may make statements containing forward-looking information within the meanings of applicable securities 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 DREAM residential REITs control. that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Additional information about these assumptions and risks and uncertainties is contained in DREAM Residential REITs filings with securities regulators, including its latest Annual Information Form, an MDNA. These filings are also available on Dream Residential REIT's website at www.dreamresidentialreit.ca. Your host for today will be Mr. Brian Pauls, CEO of Dream Residential REIT. Mr. Pauls, please proceed.

Good morning, everyone, and thank you for joining us today for Dream Residential REIT's second quarter 2024 conference call. Speaking with me today are Scott Schumann, our Chief Operating Officer, and Derek Lau, our Chief Financial Officer. We were pleased with our financial and operational performance for the quarter. The REIT delivered strong comparative properties NOI growth at 6.8% year-over-year, primarily driven by higher rents and completed value-add renovations. Year-to-date comparative NOI was 5.1%, or at the upper end of our 3% to 5% target for the year. Comparative properties NOI margin increased to 52.6%, which is an increase over both prior quarter and the prior year comparative quarter. FFO per unit was 18 cents, representing 1.8% growth from the prior year while having one less property. Occupancy increased 20 basis points quarter over quarter, and average in-place rent of $1,167 per suite represents growth of 1%, from Q1-24 and 4% year-over-year. During the quarter, we achieved blended lease trade-outs of 2.2%, driven by 3.7% spreads on renewals. We completed 64 renovations across the portfolio with another 16 under construction as of the end of the quarter. For Q2-20-24, average lease trade-outs on renovated suites was 7.5% compared to a decrease in classic suites at 1%. Despite better than expected renovation costs, we are seeing ROIC fall below our targeted range of 12% to 16%. We constantly evaluate the value-add program, and as a result, we are updating our targeted renovations for the year to 200 suites. We will continue to monitor the pace of renovations and maintain financial and capital flexibility to accelerate or further moderate if required. Overall, Q2 2024 was a solid quarter. While investment volumes are down across the board, we are seeing stable asset values in attractive markets. We note that sentiment on the future interest rate environment is positive, and we are cautiously optimistic that this will benefit the entire multifamily market. I will now turn it over to Scott to provide an operations update for the quarter. Scott?

Thank you, Brian. We are pleased to report $6.4 million quarterly net operating income firmly within forecast expectations. Inline revenue paired with disciplined expense savings to drive 52.6% NOI margin and 4.2% year-over-year absolute NOI growth up from Q2 2023. Comparative property NOI improved 5.1% year-over-year through the first half of the year, 6.8% year-over-year for the second quarter, and 4.6% higher than last quarter. Occupancy ticked upwards to 94.0% on June 30th, 2024. This advanced 20 basis points above last quarter and finished equivalent to June 30th last year. Cincinnati occupancy held steady with Q1 at 94.9%. Dallas-Fort Worth and Oklahoma City occupancies both edged higher than last quarter, higher than last year, and higher than the trailing 12-month average. This data reflects our focus on renewals stabilizing operations, and moderated numbers of suite renovations. DRR portfolio and regional occupancies continue to better comparative national and regional benchmarks, even with ongoing value-add construction. Leasing conditions improved during the spring, but continue to reflect the temporary conditions of oversupply nationally and notably across the Sun Belt. Asking rents are volatile week to week and month to month, but blended lease tradeouts rose 20 basis points from Q1 up to 2.2%, driven largely by 3.7% renewal tradeouts and a 59% renewal rate. As a result, in-place rents grew to $1,167, 1% higher than last quarter and almost 3% higher than last year. Dallas-Fort Worth in-place rents held positive for the quarter and the year, while our Cincinnati market continued to exhibit nation-leading strength with 5.3% year-over-year in-place rent growth. In the current environment, we have moderated the suite renovation program in favor of renewals and stabilizing operations during this historic but temporary period of elevated new supply deliveries. Construction teams completed 64 suites during Q2, with renovations ongoing in all three operating regions. Year-to-date, we have completed 98 renovations and have revised our end-of-year target count to 200 suites. Lease-to-lease value-add spreads are positive relative to Classics, though they are moderating and are below our target range this calendar year. Our construction teams have renovated 734 suites over the past two years, with an average return on invested capital on the high end of our target range. Our near-term plan is to regulate suite construction investment in order to retain platform capability such that we prepare to re-accelerate value-add work when conditions are more favorable and returns are advantageous. Our washer-dryer appliance value creation program continues. We have installed 56 sets year-to-date and average a 50% return on investment. Across the market, we are seeing cap rates stabilize, but transaction activity remains comparatively subdued outside of several large headline institutional trades. Underlying apartment demand is healthy, and appears durable beyond the temporary supply wave. Near-term rent growth will be conservative, but confidence in values is rekindling. Future renter demand looks to be strong. It is my pleasure to turn over to Derek Lau, our Chief Financial Officer.