InterRent Real Estate Investment Trust

Good morning, ladies and gentlemen, and welcome to the Intervent Q3 2023 earnings call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, November 1, 2023. I would now like to turn the conference over to Renee Wei. Please go ahead.

Welcome, everyone, and thank you for joining InterRay Reads Q3 2023 earnings call. My name is Renee Wei, Director of Investor Relations and Sustainability. You can find the presentation to accompany today's call on investor relations section of our website under events and presentations. We're pleased to have Brad Cutsey, President and CEO, Kurt Miller, CFO, and Dave Nevins, CEO, on the line today. The team will present some prepared remarks and then we'll open it up to questions. Before we begin, I want to remind listeners that certain statements about future events made on this conference call are forward-looking in nature. Any such information is subject to risks and certainties and assumptions that could cause actual results to differ materially. For more information, please refer to the cautionary statements on forward-looking information in the REIT's news release and MD&A dated November 1, 2023. During the call, management will also refer to certain non-IFRS measures Although the REIT believes these measures provide useful supplemental information about its financial performance, they are not recognized measures and do not have standardized meanings under our IFRS. Please see the REIT's MD&A for additional information regarding the non-IFRS financial measures, including reconciliations to the nearest IFRS measures. Brad, over to you.

Thanks, Renee, and good afternoon, everyone. Let's get started with an overview of our operational performance in slide 5. As you can see, a track record of growing average monthly rent continues positive momentum during the quarter. For a total portfolio, AMR increased by 7.8% year-over-year and 7.3% on the same property basis. This robust AMR growth was underpinned by strong increases consistently observed across all markets. While we did experience a marginal dip in occupancy by 40 basis points compared to the previous year for both total and same property portfolios, our occupancy rate remained at a steady 95.2%, in line with our historical performance and strategic approach. We're pleased to see strong lease and momentum in our Montreal portfolio, which accounts for about a quarter of our total portfolio. Vacancy in the greater Montreal region decreased by 380 basis points year over year. driven by sustained recovery in downtown and urban locations. The uptick in the portfolio-wide vacancy was primarily concentrated within specific sub-markets of our portfolio where our price discovery programs did not adjust quickly enough when seasonal demand started to shift. Notably, these markets, Greater Toronto and Hamilton Area, Greater Vancouver Area, and Other Ontario, took the lead in AMR growth for the quarter, with each one achieving growth rates of 8% or higher. Encouragingly, we are witnessing robust leasing activities in the first half of Q4, and we are confident that the auxiliary levels will revert to their historical norms as we move into 2024. Dave will provide more details on this later in the call. Over to slide 7 for an overview of our financial performance. We are happy to report, yet again, double-digit same-property NOI growth at 10.5%. Our operating margins increased by a healthy 140 basis points year-over-year to 67.6%, the highest level since Q3 2019, and firmly returned to our pre-pandemic levels. This was driven by consistent revenue expansion coupled with our disciplined management of operating expenses. Despite the persistent new reality of higher financing costs, our top-line improvements have been able to slow down to enhance bottom-line performance, as seen on the chart on the right-hand side. FFO increased 4.9% to 21.3 million, and on a per-unit basis is up 4.3% to 14.6%, representing our third consecutive quarter of FFO growth. AFFO increased 6.3% to 18.9 million, a 4.9% increase to 12.9% on a per-unit basis. Taking a closer look at our balance sheet, we are in a solid financial position. Our debt-to-grills book value at 38.6% is favorably positioned at the lower end within the industry. We have a comfortable level of $268 million of available liquidity as of October 25th. With stable available liquidity and a significantly enhanced debt profile, we are in a robust position to pursue our strategic initiatives. even in the face of market fluctuations and challenges. Dave, over to you to take us through some of the operating highlights.