Slate Grocery REIT

Good morning, ladies and gentlemen, and welcome to Slate Grocery Reads Fourth Quarter 2024 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 anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference over to Shibi Agarwal, Manager of Finance. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to the Q4 2024 conference call for Slate Grocery Re. I'm joined this morning by Blair Welch, Chief Executive Officer, Joe Placatus, 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 Discussion and Analysis. You can visit Slate Grocery REIT's website to access all of the REIT's financial disclosure, including our Q4 2024 Investor Update, which is now available. I will now hand over the call to Blair Welch for opening remarks.

Thank you, Shivi, and hello, everyone. We are pleased to report strong fourth quarter and year end financial results for Slate Grocery REIT. Strong leasing activity at high rental spreads over the last several quarters continue to drive net operating income growth for the REIT. Adjusting for completed redevelopments, same property NOI increased by 6.7 million or 4.3% on a trailing 12 month basis. The REIT completed close to 3 million square feet of total leasing throughout the year at double-digit rental spreads. New deals were completed at 28% above comparable average in-place rent and non-option renewals at over 14% above expiring rents. Portfolio occupancy remained stable at 94.8%. And we expect our pipeline of new leasing opportunities to support a continued positive trend for occupancy in the coming quarters. In a challenging financing environment, our team financed over $630 million of debt throughout the year at an interest rate spread similar to the maturing debt, highlighting the confidence our lenders have in the REITs business. Despite our strong operational performance, the REITs units are trading at a discount to net asset value, which we believe presents a compelling investment opportunity. Our track record further validates this opportunity. The REIT has been a top performing retail REIT stock in Canada and the US on a total return basis over the last several years. We continue to have strong conviction in the fundamentals of grocery anchored real estate. High construction costs and tight lending conditions continue to limit new retail development. In the fourth quarter, retail construction completions totaled four million square feet, marking the lowest quarterly total in more than a decade. The constraints on new supply continue to limit the overall retail availability rate. The resulting competition for limited space and high demand for prime locations continue to give retail landlords pricing power. In our own portfolio, our average in-place rent of $12.65 per square foot remains well below the market average of $23.80, providing significant runway for continued rent increases. Our focus on fundamentals has always underpinned how we invest and manage our real estate, and we believe favorable fundamentals in the sector, coupled with our below-market rents, will enable the REIT to continue growing revenue and generating long-term value for our unit holders. On behalf of Slate Grocery REIT 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.