BSR Real Estate Investment Trust

Good morning, my name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the BSR REIT second quarter 2026 financial results conference call. All lines have been placed on mute to prevent any background noise. After management's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. And if you'd like to withdraw your question, again, press star 1. I would now like to turn the conference over to Spencer Andrews, Vice President of Investor Relations and Marketing. Please go ahead, sir.

Thank you, Krista, and good day, everyone. Welcome to DSR Reads Conference Call to discuss our financial results for the second quarter ending June 30, 2026. I'm joined on the call today by our Chief Executive Officer, Dan Oberste, our Chief Financial Officer, Tom Cirbus, and our Chief Operating Officer, Susie Rosenbaum, who are all available to answer your questions after our prepared remarks. Before we begin, I want to remind listeners that certain statements made on this conference call about future events are forward-looking in nature. Any such information is subject to risk. uncertainties and assumptions that could cause actual results to differ materially. In addition, we will reference certain non-GAAP financial measures that we believe are useful supplemental information about our financial performance. For more information, please refer to the cautionary statements on forward-looking information and a description of our non-GAAP financial measures in our news release and MD&A dated August 12, 2026. Dan, over to you.

Our second quarter performance reflects the resilience of our portfolio and the continued momentum in our business. Total portfolio revenue and NOI increased compared to Q2 last year. Sequentially, we generated growth in same community occupancy, total occupancy, same community revenue, total property NOI, and FFO. Blended lease tradeouts once again turned positive during Q2 and moved higher in July. We made substantial progress in our organic growth initiatives, including a significant increase in occupancy at our August 2025 acquisition compared to Q1 and continued progress on our resident amenities programs. To highlight a few selected numbers in the second quarter, same community occupancy increased 94.6% from 94.3% in the first quarter. Same community revenue increased 35 basis points versus Q1 of this year. Tradeouts for 50 basis points positive for the quarter, with continued acceleration to a blended increase of 1% for the months of July. Our retention rate in Q2 was 60.1%, an increase of 30 basis points from the end of Q1, and 270 basis points from the end of Q2 last year. Physical occupancy at our August 2025 acquisition increased to 91% at quarter end, up nearly 20 percentage points from March 2026. and we made further progress within our resident amenities programs including bulk internet and valet trash which have received a highly positive reception from our residents and are now breakeven to FFO accretion in the second quarter. The economic fundamentals supporting our markets remain strong. Four department deliveries and starts are certainly continuing the predictable decline from peaks exhibited previously in this decade. As a result, in the first half of 26, and particularly in the second quarter, we saw apartment demand outpace deliveries. As I've noted before, this process has not been as rapid as we'd hoped or expected, but you can see the tangible positive momentum in much of this quarter's results. Of course, we aren't waiting for the rising tide of market demand to drive stronger financial performance on its own. We are driving growth using our strongest asset, our talented people, to source, underwrite and execute upon platform initiatives including each of the initiatives we laid out in December of last year. To provide a brief update on each, first, the lease up of our 2025 acquisition class. With our August 25 acquisition approaching physical stabilization at the end of Q2, we can expect the back half of 26 to more fully reflect the confessed but occupied revenue potential of the 25 class. Our focus now turns to the second bite of the apple within this cohort of assets. The opportunity here is best highlighted by looking at our non-sane community NOI margin. You'll note our year-to-date non-sane community NOI margin sits at approximately 450 basis points behind our sane community NOI margin. Therein lies the second bite opportunity. Between collecting rent on physically occupied assets for an entire quarter or year versus just a portion thereof, burning off concessions and normalizing the expense picture at each of these five assets, We believe that the non-same community to same community NOI margin differential will naturally compress when presents the remaining opportunity in this category. Second, on our resident amenity programs, currently highlighted by our bulk internet and valet trash initiatives. Bulk internet is running without any issues to speak of. We are live on six of our 26 properties and ramping up ahead of schedule. In the ground on seven additional properties, with the balance slated to begin in the back half of the year. As new properties come online in late Q3 and in earnest in Q4, we expect material benefits to our other income line item to begin this ramp. On valet trash, we are now live at eight of our properties and this resident amenity initiative is currently working to plan. Finally, platform efficiencies. We successfully implemented our assistant community manager centralization effort during the second quarter which will generate an annualized expense savings for the rate of two cents of FFO per unit while concurrently enhancing efficiency of operations. While these initiatives are still in the early stages, we are making excellent progress and the results so far only reinforce our confidence in the broader value creation opportunities across our portfolio. We are confident that we will achieve our targeted incremental growth of 13 to 22 cents per unit by early 28, excluding the impacts of changes in market rents All in all, our long-term growth story is fully intact. We have an outstanding property portfolio in top-tier markets that is performing at a high level, and we're adding further value through our platform-induced growth initiatives. We fully expect our business momentum to continue to grow in the quarters ahead as rental markets steadily improve and we make further progress in our operational enhancements. We are increasingly confident that we are positioned to drive strong returns for our unit holders. I'll now invite Tom to review our second quarter financial results in more detail. Tom?