Canadian Net Real Estate Investment Trust

Good morning. I would like to welcome everyone to CanadianNet REIT's 2024 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. 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 1 1 again. I would like to advise everyone that this conference is being recorded. I would now like to turn the conference over to Ben Gazeth, Canadianet REIT's Chief Financial Officer. Please go ahead, Mr. Gazeth.

Thank you, Operator. Good morning, everyone, and thank you for joining us on our Q1 2024 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 NET's 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 CanadianNet's most recent annual information forum for the year ended December 31, 2023, and management discussion and analysis for the period ended March 31, 2024, which are available on our website at www.cnetread.com and on CDRplus at www.cdrplus.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 ending March 31st, 2024. I will now turn the call over to Kevin Henley, Canadian NetReach President and CEO. Kevin.

Thank you, Ben, and good morning, everyone. Our portfolio continued to perform very well during Q1. We maintained our 100% occupancy and 57 payout ratio. In addition, we are happy to announce the completion of our Lachnay-Benion co-development which came live in May. We are also starting the construction on our Belleuil-Bénin co-development, which will come live in the fall. Combined, those properties will add approximately $135,000 of NOI on an annual basis to the REIT. While the portfolio performed well, we reported a 3% decrease in FFO per unit from 15.7 cents to 15.2 cents per unit. This was due to higher interest expense on our line of credit and, most importantly, from mortgages renewed in 2023 in the wholly owned and in the JVs. As we move into 2024, we are seeing lower mortgage rates than 2023, so we believe the high is behind us at this point. Turning over to lease renewals, we only have one lease coming up for renewal at the end of 2024, representing approximately $60,000. Looking at 2025, we have five leases coming up for renewal, representing approximately $2.35 million of NOI. Of those, one lease of $90,000 has already been renewed at a 32% spread. We expect the leasing spread on the 2025 renewals to be at around 7%. Demand remains excessively strong in our asset class. The properties on which we have expiring leases hold strong positions in their markets and rents are below market. As we move into the year, more of the 2025 leases will be renewed. Our weighted average lease term is at 6.5 years. On the financing front, we have eight loans for renewal in 2024. Those include two variable rate mortgages on the properties held for sale and three mortgages in joint ventures. Those are spread throughout the year, and including those on the properties held for sale, we have one in each of Q1, Q2, Q3, and three in the Q4. The loan renewal in Q1 allowed us to generate $150,000 in cash proceeds, which we will get during Q2. As we look at the transactional market, we are hopeful that activity will pick up as we saw a decrease in the all-in mortgage rates compared to 2023. Valuations held strong last year, which made it impossible to find accretive opportunities. With lower rates in 2024, we might see a pickup in activity. Our current objective remains to recycle capital in order to high-grade the portfolio and invest in accretive opportunities as those arise. I will now turn the call back over to Ben Gizis, who will review our Q1 results in more details. Thank you.