Slate Grocery REIT

Good morning, ladies and gentlemen, and welcome to the Slate Grocery REIT 3rd Quarter 2024 Financial Results Conference Call. At this time, all lines are in 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 an operator. This call is being recorded on Wednesday, November 6, 2024. I would now like to turn the conference over to Shivi Agarwal, Manager of Finance. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to the Q3 2024 Conference Call for Slate Grocery Reads. I'm joined this morning by Blair Welch, Chief Executive Officer, Joe Placatis, Chief Financial Officer, Connor O'Brien, Managing Director, 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 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 Q3 2024 Investor Update, which is available now. I will now hand over the call to Blair Welch for opening remarks.

Thank you, Shivi, and hello, everyone. We are pleased to report a strong third quarter for Slate Grocery REIT. Several consecutive quarters of high leasing volumes and double digit spreads are materializing in healthy same property net operating income growth. Adjusted for completed redevelopments, same property net operating income increased by 2.4 million or 6.2% year over year in the third quarter. Our team completed over 850,000 square feet of total leasing in the quarter. New deals were completed at 24.8% above comparable average in-place rents. And non-option renewals were completed at 14.1% above expiring rents. Notably, all junior anchor and anchor maturities have been addressed for 2024. Despite a difficult financing environment, our team refinanced $500 million of debt at favorable terms, significantly reducing the risk to our balance sheet. The REIT is also in advanced stages with lenders to refinance another $138 million of upcoming debt maturities, which we expect to complete in the fourth quarter. Subsequent to these refinancings, the REIT's forecasted weighted average interest rate will be 4.8% when accounting for in-place interest rate swap contracts, providing significant positive leverage and stability for the REIT. Despite our strong operational performance, the REITs units continue to trade at a discount to net asset value, which we believe presents a compelling investment opportunity. We believe fundamentals in the grocery anchor sector will continue to provide tailwinds for our portfolio of high-quality grocery real estate. Throughout 2024, high construction and borrowing costs have continued to limit new retail development. In the last 12 months, less than 0.5% of new supply has been added to shopping center inventory, while demand for retail space has remained healthy. With tenant demand exceeding new supply, landlords are maintaining pricing power to increase rents. Average asking rent in the retail sector increased by 2.5% year-over-year in the third quarter. And in our own portfolio, our average in-place rent of $12.61 per square foot remains well below the market average of $23.58 per square foot, providing significant runway for continued rental increases. We believe strong fundamentals in the sector, coupled with our below-market rents, position the REIT to continue growing revenue and increasing value for unit holders. On behalf of the Slate Grocery REIT team and the Board, I'd like to thank the investor community for their continued confidence and support. I will now hand it over for questions.