Slate Grocery REIT

Good morning, ladies and gentlemen, and welcome to the Slate Grocery Reads First Quarter 2025 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 the operator. This call is being recorded on Tuesday, May 6, 2025. I would like to turn the conference over to Ms. Shibi Agarwal. Manager of Finance, please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to the Q1 2025 conference call for Slate Grocery REIT. I am 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 Q1 2025 Investor Update, which is now available. I will now hand over the call to Blair Welch for opening remarks.

Thank you, Shivya, and hello, everyone. We are pleased to report positive first quarter results for Slate Grocery REIT. Our team's strong leasing volumes at double-digit rental spreads are continuing to drive healthy net operating income growth for the REIT. Adjusting for completed redevelopments, same property net operating income increased by $6.8 million, or 4.3%, on a trailing 12-month basis. The REIT completed over 220,000 square feet of total leasing throughout the quarter. Notably, renewal spreads reached a new record high of 17% above expiring rents. and new deals were completed at over 22% above comparable average in-place rents. Portfolio occupancy remained stable at 94.4%, and our portfolio average in-place rent at $12.72 per square foot remains well below the market average of $23.85 per square foot, providing significant runway for continued rent increases. The REIT has only $179 million of debt maturing in 2025, representing less than 13% of the REIT's total debt. After quarter end, the team financed over $17 million of debt at attractive terms, and productive discussions are already underway to address the REIT's remaining $2,025 debt maturities. Importantly, the REIT's current portfolio valuation continues to provide significant positive leverage and embedded NOI growth. We continue to have great conviction in the ability of grocery-anchored real estate to perform in today's economic environment. High construction costs and tight lending conditions continue to limit the pace of new retail development and overall retail availability. And while evolving global trade policies have introduced some economic uncertainty, tariff-driven increases in construction costs only further increase the elevated replacement costs for new retail development. This ultimately reinforces the value of existing well-located centers and provides a favorable environment for landlords to retain existing tenants and achieve substantial increases in rent. We believe leading grocers are also well positioned to withstand potential impacts of tariffs, given a vast majority of grocery goods are sourced domestically. And grocers are highly sophisticated and agile operators who can effectively manage fluctuations in the cost of their goods. Grocery anchored retail remains well-positioned, and we believe favorable fundamentals in the grocery anchored sector, coupled with below-market rents in our portfolio, will enable the REITs continue to grow revenue and generate long-term value for our 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.