Slate Grocery REIT

good day ladies and gentlemen and welcome to the slate grocery read fourth quarter 2022 financial results conference 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 0 for the operator this call is being recorded on wednesday february 15th 2023 i would now like to turn the conference over to paul Wolanski, SVP National Sales and Investor Relations with Slate Grocery REIT. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to the Q4 2022 conference call for Slate Grocery REIT. I'm joined this morning by Blair Welsh, Chief Executive Officer, Andrew Agatap, Chief Financial Officer, Connor O'Brien, Managing Director, Alan Gordon, Senior Vice President, Braden Lyons, Vice President. Before getting started, I would like to remind participants that our discussion today may contain forward-looking statements, and therefore we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures, both of which can be found in Management's Discussion and Analysis. You can visit Slate Grocery REIT's website to access all of the REIT's financial disclosures, including our Q4 2022 Investor Update, which is now available. I will now hand over the call to Blair Welsh for opening remarks.

Thank you, Paul. Our Q4 results show that in a year defined by widespread market volatility, Slate Grocery Reef has maintained steady growth and strong performance, highlighting yet again the defensiveness of our grocery anchored portfolio. Heading into 2023, market fundamentals in the grocery anchored sector are favorable. High construction costs and retail conversions and redevelopments are keeping inventory levels low. This dynamic is creating tailwinds for our portfolio, accelerating leasing demand and rental growth. Importantly, our average in-place rent in the portfolio is $12.22 per square foot, which is significantly below market rents and the per square foot rent required for new construction. This means that we have significant rental growth embedded in our portfolio. By steadily increasing our rents, we believe that we can unlock this growth and significantly increase our revenue and the overall value of our real estate. Our team's operational performance this past year underscores this growth potential embedded in the portfolio. We completed a record 1.8 million square feet of total leasing in 2022. New leasing was completed at a 20.7% above average in place rent and total leasing was completed at a 9% spread to in place. We have a further 2.7 million of contractual base rent coming online, two thirds of which we expect to occur in the first half of 2023. Our grocery anchored retention rate in the year was 100% and our 93.2% portfolio occupancy presents runway for continued growth. We completed over 424 million of acquisitions in 2022 at a defensive basis with upside on our rents and occupancy. providing runway for organic growth and value creation. We also sold four non-strategic properties and one out parcel with plans to recycle these proceeds into new accretive opportunities. Lastly, the REIT completed 25 million in redevelopment projects, adding 3.4 million to our NOI, which represents a 13% return on investment. The REIT share price finished the year on a strong note. gaining 17% in the fourth quarter and providing a total all-in return of 12.5% in 2022. Heading into 2023, the REIT is well capitalized with a strong balance sheet, meaning we can be flexible and act quickly to capture attractive opportunities. Our partnership with Slate North American Essential Fund validates the REIT's net asset value and provides the REIT with access to nimble capital. We also refinanced $608 million of the REITs credit facility in 2022 at improved terms. And at year end, 92.9% of the REITs debt portfolio is fixed, with no debt maturing in 2023. We have strong conviction in grocery-anchored real estate, and we continue to evaluate new investment opportunities to acquire well-located real estate anchored by high-performing grocers. We are well-positioned for growth, and we will continue to allocate capital strategically in ways that are accretive to the REIT. On behalf of the Slate Grocery Team and the Board, I would like to thank the investor community for their continued confidence and support. I will now hand it over for questions.