Good morning. Welcome to the Automotive Properties REIT 2021 third quarter financial results conference call and webcast. My name is Grant, and I'll be the conference operator today. At this time, all lines are in listen-only mode. Following management's remarks, we will conduct a question-and-answer session. Please be aware that certain information discussed today may be forward-looking in nature. Should forward-looking information reflect the REIT's current views with respect to future events, any such information is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those projected in the forward-looking information. For more information on the risks, uncertainties and assumptions relating to forward-looking information, please refer to the REIT's latest MD&A and Annual Information Form, which are available on SEDAR. Management may also refer to non-IFRS financial measures. Although the REIT believes that these measures provide useful supplemental information about financial performance, these measures are not recognized and do not have standardized meanings under IFRS. Again, please refer to the REIT's latest MD&A for additional information regarding non-IFRS financial measures. This call is being recorded on Friday, November 12, 2021. I would like to turn the conference over to Milton Lamb. Please go ahead, Mr. Lamb. Great. Thank you, Grant. Good morning, everyone, and thank you for joining us today. On the call with me is Andrew Kalra, our Chief Financial Officer. Our positive business momentum continued in the third quarter. This was supported by the resiliency of the automotive dealership industry, which continues to drive strong margins and solid levels of sales and service activity throughout the pandemic. According to DesRosiers Automotive Consultants, new automotive sales in Canada increased by 15.2% for the nine months ending September thirtieth compared to the same period a year ago. This number, combined with revenues generated from used car sales and service, highlights how successfully dealership operators have responded to the COVID-related business restrictions through measures such as enhanced e-commerce solutions and streamlined operations. Our portfolio remains fully leased and we're collecting 100% of contractual base rent under our leases, including contractual base rent due under remaining deferral agreements. Our total remaining tenant deferral receivables under the agreements is less than CAD 0.03 million at the end of the third quarter, and we expect this amount to be fully repaid by the end of the year. We generated growth across all of our key performance measures in the third quarter. In comparison to Q3 of last year, our property rental revenue grew by 4.5%. Cash NOI increased by 4.9%. Same-Property Cash NOI was up 1.9%, and AFFO per unit diluted increased to CAD 0.225 from CAD 0.221 last year. At quarter end, our debt-to-GBV ratio was 40.1%, down from 43.2% at the end of 2020, and 44.8% at the end of Q3 of last year. We remain well positioned to deploy the capital on any available growth opportunities. The capitalization rate applicable to the entire portfolio was at 6.4% at quarter end, a reduction of approximately 10 basis points from the second quarter. The reduction reflects a decrease in discount rates used for our properties in the Greater Vancouver area and Alberta by approximately 25 basis points during the quarter and other reductions in discount rates for specific properties in specific markets. Reductions were primarily due to industry-wide single-tenant retail and industrial capitalization rate reductions. To put the 6.4% cap rate number in perspective, I would note that this is only 10 basis points lower than the 6.5% cap rate we used back in 2018. As provincial COVID-19 related restrictions continue to ease, we anticipate that pent-up consumer demand will continue to support Canadian new and used auto sales and service work performed by the dealerships. The pandemic has also impacted the vehicle supply chain, resulting in constraints on specific parts, models and brands. We believe these supply constraints will continue in the near future but will not have a material impact on our tenants as these supply constraints are offset by the strength of dealer margins, including strength in used car sales. I'd now like to turn it over to Andrew Kalra to review our financial results and position in more detail. Andrew? Thanks, Milton, and good morning, everyone. Our property rental revenue for the quarter totaled CAD 19.5 million. The 4.5% increase from Q3 2020 reflects growth from properties acquired during and subsequent to Q3 last year and contractual annual rent increases. Total Cash NOI and same-property Cash NOI for the quarter totaled CAD 16 million and CAD 15.4 million respectively, reflecting increases of 4.9% and 1.9% compared to Q3 a year ago. Growth in Cash NOI was primarily attributable to acquisitions and contractual rent increases. Growth in same-property Cash NOI primarily reflects contractual rent increases. G&A expenses for the quarter were approximately 6.9% of Cash NOI compared to 6.6% in Q3 last year. Higher G&A expense in Q3 this year was attributable to the REIT's growth and to the vesting of the previously issued deferred units. Net income for the quarter increased to CAD 30.8 million compared to CAD 4.4 million in Q3 last year, reflecting higher NOI and CAD 22.3 million fair value adjustment for investment properties. The adjustment reflects a capital reduction that Milton mentioned and discussed. FFO and AFFO for the quarter increased by 4.5% and 6.5% respectively compared to Q3 last year. FFO per unit diluted was CAD 0.237 in the quarter compared to CAD 0.23 in Q3 a year ago, and FFO per unit increased to CAD 0.225 from CAD 0.221 in Q3 a year ago. This growth was primarily due to properties acquired during and subsequent to Q3 a year ago, and contractual rent increases. REIT paid total distributions of CAD 9.85 million, or CAD 0.201 per unit in the quarter, representing an AFFO payout ratio of 91%. This compares to total distributions paid of CAD 9.6 million or CAD 0.201 per unit in Q3 last year, representing an AFFO payout ratio of 92.5%. The AFFO payout ratio was lower this quarter, primarily due to contractual rent increases. The higher AFFO payout ratio in Q3 was also reflected by the temporary dilutive effect of the December 2019 equity offering. At quarter end, we had a strong financial liquidity position with CAD 5 million in cash, approximately CAD 75 million of undrawn credit facilities, 7 unencumbered properties with an aggregate value of approximately CAD 103.2 million, providing us with additional financial flexibility and a debt-to-GBV ratio of 40.1%. We had CAD 396.2 million of outstanding debt at quarter end, with an effective weighted average interest rate of 3.72%. We have a well-balanced level of annual maturities and our weighted average interest rate swap and mortgage term is 5.4 years with a weighted average term to maturity of debt of 3.1 years, similar to the end of Q3 2020. I'd like to turn the call back to Milton for closing remarks. Thank you. Great. Thanks, Andrew. We've continued to collect 100% of our October and November 2021 contractual based rents, plus the rent that is due under the remaining deferral agreement. As COVID-19 vaccinations continue to increase across Canada and the economy strengthens, we feel confident that the industry consolidation will start to accelerate. This should present attractive opportunities for us to continue expanding our portfolio and drive growth in AFFO per unit. Given our strong balance sheet position and the strength of our existing portfolio, we can pursue acquisitions on a strategic basis through debt financing and available liquidity. That concludes our remarks. I'd now like to open the line for questions. Grant, please go ahead. Good morning, gentlemen. Morning, Scott. Morning. Just a quick question on the automotive supply chain issue. Yeah. -issues. Have they had any impact or any discussions with acquisition targets?, I realize that there's no or at least little impairment to your tenants' ability to pay their leases, but just wondering if it's bringing timing either forward or back on the- Yeah. on the discussions. Yeah, interesting question because you are kind of right. There has been some impact in the quiet discussions from them saying they're in no rush to close until they are confident that there's inventory both in the used and the new. As we went from a year ago looking over a bit of a ledge saying, "What does this mean?" with a bit of a concern to a bit of elation now. People are, "Well, if we're gonna pay numbers based on today's profitability, we wanna make sure there's inventory that we can sell so we can continue the profitability." It certainly, I don't know if it has had a, direct measurable impact, but I certainly think that there's a quiet impact where no one's in a rush. Traditionally, remember that first quarter is always some of the slowest sales periods and lower profitability for most dealer operations. They really start making money in Q2, Q3 and, go from there. Do you expect that there's will be kind of a little wave of deals when the supply chain issues normalize? I'm gonna go back to, looking at real estate when we've seen kind of quiet periods as there's been a change in the baseline. When there's a gap in buy-sell, normally there's a lag, and once you see two or three deals, that sets the new benchmarks, and then there seems to be a flurry of deals. We're certainly seeing that in the States, and, I'm surprised it hasn't happened yet, but I certainly think it is going to. You're right. Once people start printing the new numbers, it tends to give both vendors and buyers confidence to actually strike and get deals done. Thanks, Milton. That's helpful. I'll turn it over. Thank you. Thanks. Good morning. Good day. Just continuing on with Scott's questions. Yeah. I guess historically, you've done a lot of your acquisitions. You almost have your own seasonality, Q4, Q1. Yeah. Do you think that gets pushed back a little bit? Obviously it's a very open question with six weeks left, or I should say a very open question. I understand. with six weeks left., that seasonality continues to be there. Does it get pushed back a bit? It could very easily, but people do like doing deals and, the chatter always increases at this time of the year, and hopefully we can take advantage of that. Okay. Just secondly, you guys have lots of liquidity. Your leverage is 40%. Yeah. How high would you be comfortable taking the leverage? we've talked about it before, that as we continue to mature, we've always liked to, reduce our leverage and slowly increase our AFFO per unit. Kind of use a little of the proceeds for both buckets. We continue to like that strategy. In the low-50% range, we're still very comfortable. It really depends on what we're seeing on the pipeline as well. Okay. You're happy using a good chunk of your liquidity then? , again, it depends on what we're seeing on pipeline, but we're putting ourselves somewhere in that CAD 150 million-CAD 200 million of, availability to go out and do acquisitions. Okay. I'll turn it back. Thanks. Thank you, and good morning. Good day. Milton, as inflation starts to pick up, can you remind us, like, what sort of ballpark of like percentage of your leases are indexed to inflation versus what percentage are kind of on fixed rent escalators? It's funny because Andrew and I, when we were writing the MD&A, we certainly looked at that and we're debating whether or not to kind of put that forward. If you look back, a number of them had a lag before the CPI kicked in. Certainly in 2018, a number of the acquisitions we did, we looked at wanting to balance, set escalators with some CPI. It's certainly in there and you can, see it starting to reflect on our same property growth as, coincidentally, inflation starts kicking in at the same time as some of our acquisitions coming in, coming into the world of taking advantage of that CPI. But as of yet, we haven't specifically disclosed what that percentage is. You can imagine, Dilawri numbers, everyone knows is 1.5. Okay, fair enough. I just thought I'd ask. Maybe carrying on that in a slightly different context. Yeah. What impact do you think wage pressure and inflation will have on the industry consolidation? Like, will those trends hit the smaller operators perhaps a little bit harder, and could that drive more M&A? That's interesting. It's partly wage inflation, but it's also, adopting technology and pushing more towards the omni-channel. I think your underlying costs if you are a consolidator and have bulk, you can control them a lot more than if you are a, one, two, three operator. I certainly think that, and I don't think that's just the dealership model. I think overall, if you're talking about a lot of industries, the consolidation is gonna push it. In some ways, I would see the dealership world as lagging in the consolidation in a lot of other industries. The short answer is, what you brought up absolutely comes into play, but at the same time, there's other costs that are going up, that if you can consolidate it lowers G&A overall. They're certainly seeing that since COVID with lower employee numbers and higher technology use. That has a bit of an advantage when you are a large group. Maybe changing gears here. We talked a little bit about acquisitions. Yeah. In terms of funding dealership upgrades, Volkswagen being one of your larger tenants, has a plan to launch almost 70 new EVs in the next decade. Like, what sort of a kind of run rate figure could we see allocated to dealer upgrades kind of on an annual basis over the next 2 or 3 years? Electrification has a part of it. More, it's when you're seeing, they have the box, white box front. So if it is more of a significant imaging, that probably costs as much or probably more than the electrification. A lot of them will tie it. They want the image upgrade at the same time as putting in new charging stations. That does fall into the dealers' costs. If they are coming near renewal and want to talk to us about extensions, we can certainly look at funding it, and we've done that before, as long as we see that they're adding value and we're getting a return for doing it. As of yet, we don't have a run rate or don't have indications on that. Okay. Well, I appreciate the commentary. I'll turn it back. Thank you very much. Thanks. Thank you. Your next question comes from Jenny Ma from BMO Capital Markets. Please go ahead. Hi, good morning. Good day. Just a quick one, just going back on the acquisition pipeline right now. Just the opportunities that you're seeing, would you think that it's mostly you're seeing more opportunities kind of in a tuck in, or are there opportunities for larger portfolio sales right now? We have- Is it just the activity is not picking up yet? Sorry about that. Well,, surprisingly, we haven't seen a significant amount of portfolio deals., the Lithia one for Pfaff was good to see. Lithia mostly owns their own real estate, but we were fortunate enough that we have them now in our portfolio because of the Pfaff Audi in Vaughan. It was nice to get them into the tenant roster. You would think that kind of when that pushes and, to Matt's question on the underlying costs, when is that gonna accelerate? We anticipate seeing it. I'm just surprised we haven't seen it yet and look forward to when it does. In the meantime, yeah, you're gonna see some singles and doubles that occur. Okay. APR really comes into play when it's a portfolio. Okay. That's great. Just going back, not to keep harping on the supply chain issue, but, you did- Yeah. Mention before too that, margins obviously have been good for the dealers. Yeah. That's offsetting that pressure. Have you noticed that there's been a significant pickup on the used car sales that's continued as well that's helping to offset some of that? There is, but I would make, the same sort of comment on supply constraints there. Mm. I just had to buy a car, and it was a real headache to find something that met requirements. The dealers are getting proactive. They're calling people who have one year or two years left on their lease and offering to trade it in and get them a new car. They're certainly doing what they can to push margins. It's interesting, the balance, because as going into 2022, the supply chain opens up a bit, it means they're going to get greater number of cars, and arguably you can say the margins will change a bit. Right. revenues go up, profits remain the same, margins goes down. It'll be interesting to see how it unfolds. From our perspective, are we looking forward feeling confident that dealers are making money and therefore we will have no issue with rental? Yeah, we're feeling pretty good about that. Exactly where they get the profits, that is gonna change. Okay, got it. Okay. I guess, with the inflationary environment right now, are you guys increasing on renewals any of your annual rent escalators with in conjunction with that? We've only had the one renewal, and the next one's 2026. Okay. The short answer is I'd like to. The longer answer is Yeah. Okay. Yeah. Okay. we will need to wait. Okay, no, that's good. Okay, that's it for me. Thank you very much, guys. I'll turn it back. Thank you. Thank you and good morning. Good day. If the, on the acquisition side, you know Yeah. If the acquisition pipeline dries up or slows down in the near term, what else can you do to add value?, any expansion on any of the properties, have you looked into that? Yeah, I wouldn't say it's material, and it's certainly not driven by us knocking on their door. It's driven by the tenants knocking on our door and saying, "Can we?" I kinda go back to one of the questions an investor asked not that long ago, which is, are you will be one of those companies that feels pressured to do an acquisition because people are saying, "Do acquisitions," and then do something you shouldn't? I kinda laughed and said," I've been 20-30 years in the industry. It takes a lot longer to unwind, and there's a lot more pressure to unwind bad deals than it is to, not have anything exciting to talk about for a couple quarters." I said it then, and I still believe it now. is there will be opportunities to expand on the existing portfolio in the near term before we do acquisitions? I wouldn't say it's a material number. Got it. If I look at, the Dixie Auto Mall- Yeah. I think two premises are unoccupied. I know you're collecting rent, but Yeah. Do you have an option to reposition that and probably increase the rent on that unoccupied space? We have one lease on that. That is for the entire Dixie Auto Mall. Okay. that resides with Dilawri. They have decisions internally on do they wanna lease it to a third party, or do they wanna take advantage of that opportunity to potentially drop in a tenant or an operation that they control. That's not in our world. We like getting the one check and having the surety of 100%. Certainly, we'll work with them depending what they want to do as long as we get a return for doing it. I think that absolutely resides in their world, and I'm not upset about that at all. Got it. Will you consider expanding into the U.S. at all? given where we are standing today. I saw, Auto Canada, they recently bought something in the U.S. as well. Maybe- Yeah. They're also seeing shortage of, M&A opportunities back home. Is that coming to your mind at all? Yeah, I think it would be. You don't wanna say no to things. Certainly if you look in the U.S., there's only one other group that focuses solely on automotive retail. I think there would be opportunities there. I think it would have to be strategic. We'd do it for the right reason as opposed to saying we're gonna do it just to do it. I wouldn't say it's a hard no, and I wouldn't say we're in any rush. Got it. Okay. Probably the last question, and again, the discussion has been on M&A. So, the slower M&A is that a supply chain issue or is that a cost of capital issue?, if I look at cost of capital for auto dealers, that has improved quite a bit. Yep. Do they really need to rely on someone else to provide capital for the rooftops now? I think it's a combination of a number of things. Part of it is they've swung from, what does this mean as COVID hit to, wow, I didn't expect it to be this good. What's the normalized? That's where the buy-sell gap is occurring, and therefore there's a bit of a delay. Yeah, you're right., if you look around the industry, it's now viewed as a bit more of an essential retail, essential service. Financing's more comfortable. Banks are more comfortable lending to them. At the same time, a lot of these groups are sitting on profits/equity. There's will be a bit of that, but there's money in the bank that they've got to spend, and then there's opportunities as they continue to spend. We certainly think that there's a place for us. We're seeing a bit of a delay as people figure out the buy-sell and take advantage of the equity that they have on their books. Got it. Thank you, Milton, and I'll turn it back. Thanks. That's great. Thank you, everyone. We look forward to chatting soon. Bye. Thank you.