Canadian Net Real Estate Investment Trust

Good morning. I would like to welcome everyone to the Canadian Net REITs 2023 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session, and instructions will be provided at that time. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would like to advise everyone that this conference is being recorded. I would now like to turn the conference over to Ben Gazit, Canadian Net REITs Chief Financial Officer. Please go ahead, Mr. Gazit.

Thank you, operator. Good morning, everyone, and thank you for joining us on our Q1 2023 results conference call. Before we begin today, we are obliged to advise you that in talking about our financial and operating performance and in responding to questions today, we may make forward-looking statements, including statements concerning Canadian nets, objectives and strategies to achieve them, as well as statements with respect to our plans, estimates and intentions, or concerning anticipated future events, results, circumstances or performance, which are not historical facts. These statements are based on our current expectations and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from the conclusions in these forward-looking statements. Additional information on the risks that could impact our actual results and the expectations and assumptions we applied in making these forward-looking statements can be found in Canadian NET's most recent annual information forum for the year ended December 31st, 2022 and management discussion and analysis for the period ended March 31st, 2023 which are available on our website at www.cnetread.com and on CDAR at www.cdar.com. We will also refer to non-IFRS financial measures today, which are widely used in the Canadian real estate industry, including FFO, AFFO, and NOI. CanadianNet believes these financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of CanadianNet. These financial measures do not have any standardized definitions prescribed by IFRS and may not be comparable to similarly titled measures reported by other entities. For more information, please refer to the section Non-IFRS Financial Measures of our MD&A for the period ended March 31st, 2023. I will now turn the call over to Kevin Henley, Canadian Net REIT's President and CEO. Kevin.

Thank you, Ben, and good morning, everyone. I'm pleased to be hosting my first earnings call as CEO of the REIT. As many of you know, I've been with Canadian Net REIT since 2017, and I've occupied the position of CFO and most recently Chief Investment Officer. As such, I've been deeply involved in the REIT's growth from 20 properties to 100 today, and this has resulted in a seamless management transition. I'm excited about the growth opportunities ahead of us and eager to lead the REITs in generating strong, sustained return for unit holders. The business strategy remains intact with a focus In the first quarter of 2023, we continue to generate solid financial performance, including a 4% increase in FFO per unit. Importantly, we achieved this result in the face of headwinds, including a soft acquisition market and rising interest rates. This success is attributable to our distinctive business model that features 100% triple net leases. Under these leases, our tenants are solely responsible for variable costs, including insurance, taxes, and ongoing operating expenses, as well as the management of the property. This has obviously limited our exposure to inflation. This model also enables CanadianNet to operate under a lean management structure with minimal overhead while maintaining industry-leading occupancy level. At the end of the quarter, our occupancy was at 100%. In Q1, we also benefited from the positive contribution of our most recent acquisitions, in addition to the organic growth from incremental rent attributable to scheduled rent increases. At the end of Q1 2023, our occupancy was 100%. Only one of our Q1 2023 expiring leases remains to be renewed, and we expect to complete the renewal over the course of the third quarter. Looking forward to 2024, we have 12 leases coming up for renewal, representing approximately 1.7 million of NOI. Approximately 40% of these renewals have already been completed. The portfolio's weighted average length term is now of 6.9 years. As I indicated earlier, the M&A market continues to be quiet in Q1 2023. Following the end of the quarter, we started seeing more deals being marketed in our space. Nevertheless, the challenges of high debt costs and fluctuating rates present obstacles in successfully carrying out these transactions while achieving our desired returns. Subsequent to quarter end, we sold a single tenant restaurant property in Timmins, Ontario for a total consideration of $1.3 million. The sale price represented a capitalization rate of 6.2%, which was a premium of 19% over our IFRS cap rate. This premium underlines the conservative philosophy we follow with respect to the ongoing valuation of our portfolio. With respect to financing, we had five loans coming due in Q1 2023. One of them was on the Timmins property, which was sold. Three others were renewed during the quarter, and the last one subsequent to the quarter end. As mentioned earlier, there is significant volatility in rates, but overall, Those swings benefited us for those renewals. We refinanced certain properties at rates that were 100 bps lower than initially anticipated. We currently have two properties for sale which are still being marketed. We continue to survey the market for opportunities, and as we move forward, we expect interest rates and capitalization rates to stabilize, translating into a more favorable acquisition environment for the REITs. I will now turn the call back to Van de Gezeve, who will review the Q1 results in more detail. Ben?