Slate Office REIT

Good morning, ladies and gentlemen, and welcome to the Slate Office REIT Third Quarter 2023 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 Wednesday, November 15, 2023. I would now like to turn the conference over to Paul Wolanski, Senior Vice President, National Sales and Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to the Q3 2023 conference call for Slate Office REIT. I am joined this morning by Brady Welch, Interim Chief Executive Officer, Robert Armstrong, Interim Chief Financial Officer, Evan Meister, Managing Director, Sarah-Jane O'Shea, Vice President, Andrew Broad, Vice President, and Jeremy Kopp, 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 Office REIT's website to access all of the REIT's financial disclosures, including our Q3 2023 investor update, which is now available. I will now hand over the call to Brady Welch for opening remarks.

Thank you, Paul, and hello, everyone. First, I'd like to start by recognizing and thanking our team for all their efforts over the quarter. We accomplished a lot. We're operating in a challenging macroeconomic environment. Interest rates remain elevated. We're dealing with tighter credit conditions. In different regions and subsectors of office, real estate are recovering at varying rates from the impacts of the lockdowns. Through all of this, our team has been working diligently to position our business for strength and stability. The team and the board are focused on improving the REIT's liquidity and strengthening our balance sheet. We have made positive strides towards that objective in the last few months. We refinanced or amended over $577 million of debt, which is nearly half of the REIT's total debt stack. We currently have only one remaining maturity in the balance of 2023, a $34 million loan that we expect to refinance in Q4. We also announced yesterday the Board's decision to suspend the REIT's monthly cash distribution. The Board believes this decision will enable the REIT to, one, further preserve capital, two, reduce leverage, and three, ensure the REIT will be in a stronger financial position when we emerge from this economic cycle. On the operational side, we continue to actively lease vacancies in all markets and are maintaining a stable portfolio occupancy. We completed over 277,000 square feet of total leasing in the quarter at improved rental rates, strong leasing spreads, and longer lease terms. Looking ahead, less than 1% of the portfolio's GLA remains to be renewed in Q4. Finally, we are introducing a portfolio realignment plan to reposition the REIT for the long term. This plan will see the REIT divest non-core assets in certain Canadian markets that are not strategic for the REIT in the long term. Proceeds from the sale of these assets will go towards repayment of the debt and general liquidity of the REIT's business operations. Looking ahead, we want to own high-quality assets with strong occupancies, tenants, and cash flow in markets with economic tailwinds and stable office demand. We believe the Portfolio Realignment Plan we are introducing will not only improve the REITs balance sheet and liquidity, but enhance our portfolio composition, resulting in a more focused and resilient REIT. We continue to have conviction in the value of our office real estate, and we are encouraged to see global organization launching return to office mandates and employees spending more time in the office. On behalf of the Slate Office REIT team and the board, I'd like to thank the investor community for their continued support. And I'll now hand it over for questions.