Slate Grocery REIT

Good morning, ladies and gentlemen, and welcome to the Slate Grocery Reef First Quarter 2024 Financial Results Conference Call. At this time, all lines are in the 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, May 1, 2024. I would now like to turn the conference over to Shibi Agarwal, Manager, Finance of Slate Grocery Reef. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to the Q1 2024 conference call for Slate Grocery Reef. I am joined this morning by Blair Welch, Chief Executive Officer, Joe Placatus, Chief Financial Officer, Alan Gordon, Senior Vice President, and Brayden 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 the 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 disclosure, including our Q1 2024 investor update, which is now available. I will now hand over the call to Blair Welch for opening remarks.

Thank you, Sheevy, and hello, everyone. Slate Grocery REIT's first quarter results demonstrate the continued strong demand for our high-quality grocery-anchored real estate and the rental growth embedded in our portfolio. Our team completed over 770,000 square feet of total leasing in the quarter. Over 98,000 square feet of new deals were completed at 31% above comparable average in-place rent. Non-option renewals were completed at 15% above expiring rents. and at quarter end occupancy was 94.4%. Our positive leasing momentum at double digit leasing spreads continue to translate to income growth for the REIT. Same property NOI increased by 1 million or 2.5% year over year. We expect NOI to continue to increase over the coming months as the impact of new leases completed over the last 12 months is realized. At $12.49 per square foot, our average in-place rent is well below the market average of $23.21, meaning we have significant runway to continue increasing our rents and growing our net operating income. Our team also continues to prudently manage the REITs balance sheet to ensure we remain protected in the current interest rate environment. The REIT exercised a six-month extension option on its $300 million revolver, and over 94% of the REIT's total debt remains fixed at a weighted average interest rate of 4.4% and a weighted average remaining term of 3.1 years on the REIT's interest rate swap contracts. This provides us with stability in today's interest rate environment. We continue to have strong conviction in the fundamentals of the broader grocery-anchored real estate sector. Vacancy levels in the neighborhood, community, and strip center segment continue to hover near record lows, and new retail supply remains muted. At the same time, tenant demand for well-located grocery anchored spaces remains high, and grocers continue to see increases in sales and foot traffic. Americans leading grocers like Walmart, Kroger, Publix, and Aldi continue to invest significant capital in both new and existing stores. underscoring the important role of physical stores as a local distribution hub. With in-place rents that are well below market, Slate Grocery REIT is uniquely and well positioned to capitalize on these fundamentals and increase rents over time to deliver long-term growth for our unit holders. On behalf of Slate Grocery REIT team and the board, I would like to thank the investor community for their continued support and confidence. I will now hand it over for questions.