Good morning. Welcome to the Automotive Properties REIT 2023 third quarter financial results conference call and webcast. My name is Joanna, and I will be your conference operator today. At this time, all lines are in a 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. Such forward-looking information reflects 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 related 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 certain non-IFRS financial measures. Although the REIT believes these measures provide useful supplemental information about financial performance, they are not recognized measures 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 Tuesday, November 14, 2023. I would now like to turn the conference over to Milton Lamb. Please go ahead, Mr. Lamb. Great. Thank you, Joanna. Good morning, everyone, and thank you for joining us today. On the call with me is Andrew Kalra, our Chief Financial Officer. We generated continued year-over-year growth in all of our key financial metrics in the quarter, reflecting the quality of our portfolio, the positive impact of acquisitions earlier this year, and contractual rent increases. Compared to Q3 of last year, property rental revenue increased 13%, cash NOI increased by 11.6%, same property cash NOI increased 2.5%, and AFFO per unit on a diluted basis increased to CAD 0.230 from CAD 0.227. Our portfolio and debt strategy continue to demonstrate resilience in the current environment of elevated inflation and interest rates. We are well insulated from these external pressures due to our Triple Net Lease structure, as all property-level operating and energy costs are the responsibility of our tenants, allowing contractual rent escalations to flow directly to our NOI. We also have a significant proportion of leases with CPI-linked adjustments. Leases with CPI-related adjustments represent 26% of base rent this year, and for 2024, an additional 10% of our existing leases will be subject to capped CPI-related adjustments. We are well-positioned to generate continued growth in same property NOI due to this increased proportion of CPI-linked leases. We have currently managed our debt this year to limit exposure to elevated interest rates and enhance our financial flexibility. At quarter end, 91% of our debt was fixed through interest rate swaps and mortgages. We currently have approximately CAD 65.8 million of undrawn capacity under our revolving credit facilities and 5 unencumbered properties with an aggregate value of approximately CAD 70.6 million. Our debt to GBV as of September 30 is at 44.5%. I'd now like to turn it over to Andrew Kalra to review our third quarter results and financial position in more detail. Andrew? Thanks, Milton, and good morning, everyone. Our property rental revenue for the quarter totaled CAD 23.4 million, a 13% increase from Q3 a year ago, reflecting growth from properties acquired subsequent to Q3 last year and contractual annual rent increases. Total cash NOI, same property cash NOI for the quarter totaled CAD 19.2 million and CAD 17.1 million, respectively, representing increases of 11.6% and 2.5%, respectively, compared to Q3 a year ago. Growth in cash NOI was primarily attributable to acquisitions, contractual rent increases. Growth in same property cash NOI, NOI primarily reflects contractual rent increases across our portfolio. Interest expense and other finance charges for the quarter were CAD 6.3 million, representing an increase of approximately CAD 1.6 million from Q3 last year. The increase was primarily due to additional debt incurred to acquire property subsequent to September 30th last year, together with an increase in weighted average interest rates. Further, we still have approximately CAD 25 million in debt at floating rates, as we did not want to lock this amount in for term at today's elevated long-term rates. We tend to lock this amount at more favorable rates in the future. Our G&A expenses in the quarter were approximately CAD 1.4 million, up from CAD 1.2 million in Q3 last year. Net income increased to CAD 28.3 million in the quarter, compared to CAD 8.9 million in Q3 a year ago. The increase was primarily due to higher NOI and favorable changes in non-cash fair value adjustments for interest rate swaps, investment properties, and Class B units and unit-based compensation. The impact of the movement in the traded value of REIT units resulted in an increase in fair value adjustments for the Class B units and unit-based compensation of CAD 10.6 million in the quarter, compared to an increase of CAD 2.3 million in Q3 a year ago... FFO and AFFO for the quarter increased by 1.5% and 1.9%, respectively, compared to Q3 last year, reflecting the impact of properties acquired subsequent to September 30th last year, and contractual rent increases. FFO per unit diluted was CAD 0.239 in the quarter, up from CAD 0.237 in Q3 a year ago, and AFFO per unit diluted was CAD 0.23, up CAD 0.227 in Q3 last year. The REIT paid total distributions of CAD 9.86 million, or CAD 0.201 per unit in the quarter, representing an AFFO payout ratio of 87.4%. The AFFO payout ratio in Q3 last year was 88.5%. The capitalization rate applicable to the REIT's entire portfolio increased to 6.56% at quarter end, a nominal increase from 6.52% at the end of Q2, and 6.42% at the end of year-to-date 2022. The fair value loss in investment properties in the quarter was CAD 0.8 million, reflecting market conditions that compares to a fair value loss of CAD 5.8 million in Q3 last year. Discount rates at 7.46%, up 30 basis points from 6.88%, December 31, 2022. We had CAD 537 million of debt, outstanding debt at quarter end, with an effective weighted average rate of 4.18%. We continue to have minimal exposure to floating or short-term interest rates, with 91% of our debt through interest rate swaps and mortgages. We have a well-balanced level of annual maturities, with a weighted average interest rate swap and mortgages remaining of 5.1 years, and a weighted average term maturity of debt of 3.1 years. I'd like to turn the call back to Milton for closing remarks. Thank you very much. Thanks, Andrew. The fundamentals of the Canadian automotive sector remain positive. According to DesRosiers Automotive Consultants, Canadian new light vehicle sales increased by 10.1% in the first nine months of 2023, compared to the same level last year, reflecting continued consumer demand for new vehicles. With our strong portfolio of essential retail properties located in prime urban markets, high quality tenants with triple net lease structures and embedded or CPI-adjusted rental growth, we are well-positioned to generate continued growth and stable distributions to our unitholders. We continue to elevate acquisition opportunities in metropolitan markets across Canada to drive further growth. That concludes our remarks today, and I'd like to open up the lines for questions. Joanna, please go ahead. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. If you are using a speakerphone, please lift the handset before pressing any keys. First question comes from Frank Liu from BMO Capital Markets. Please go ahead. Good morning, everyone, thanks for taking my questions. Good morning. Just, do you want to start with the current dynamic in the dealership transaction market? What are you saying in terms of the transactions these days? And, should we expect more deals to come towards the end of this year, or it will be more early 2024 story? Sure. On the back of what we're seeing on the operating side, M&A, the actual dealership sales, we are seeing a bit of a lag on the buy/sell as we're coming off of 2021 and 2022, where dealers' profitability was incredibly strong. We're expecting it to still remain well above pre-COVID levels and very healthy. But those numbers are coming down a bit, and really, there's a discussion on, you know, vendors versus buyers' expectations on what's the real EBITDA to kind of base a multiple on acquisitions on. We're starting to see that buy/sell kind of come together a bit, but we're expecting to see that happen a lot more once they get the full print of a more normalized, very healthy 2023 numbers. So that flows directly to APR on opportunities. Our conversations continue to be good, and I would say that just the fact that, you know, it used to be, especially in 2021, dealers used to compare our costs to their short-term 90-day money with floating rates, which was incredibly tight and high LTVs. Those LTVs are reducing, and certainly, short-term interest rates have spiked dramatically. That just allows us to be a better proposition now than it would have been in 2021. And as far as what that means for us, I mean, in today's capital market interest rate environment, we're being extremely selective. We're having good conversations. I don't know if that means it's Q4 2023 or later in 2024, but I do like the opportunities that are coming forward. It's just we are, we are wanting to be selective for good and obvious reasons. And at the same time, we also like the fact that we've got, liquidity and some flexibility on our balance sheet. ... Got it. Thanks, Milton. And, I guess with the current interest rate environment, do you see the bid-ask spread, like, narrow a little bit or more in favor for APR? I mean, the bid-ask spread on operations, mentioned a bit, we're not as close to that as we are on, you know, what we've been requesting now. As far as applicable cap rates, you know, we're asking for a bit more because we need it to be very constructive and, you know, appealing if we're gonna trade off some of the liquidity and flexibility that we have for good acquisitions. We want our unitholders to be paid for it. Those conversations are going deeper now than they would have six months ago, when vendors were doing a very quick flashback to what cap rates they were hoping to achieve in 2021 and 2022, which were certainly dramatically lower than what you'd see today. And remember, we didn't do acquisitions in 2021 because we thought those cap rates were way too low. Got it. Thanks for the color. Lastly, I wanna touch on the balance sheet side. I believe you have, like, a, like, a 10% swap, like, let's call it, like, CAD 43 million swap expiring the next couple years. Could you just remind us quickly, what's the rate on those swaps? Is it fair to call it, like, 4%? Yeah, I mean, those were done way, way past at the time of the IPO. And- Right. They had long-term ladder maturities of over 5-7 years. We've taken that approach historically to do long-term swaps. In particular, we did that at the beginning of this year. But as we've seen long-term rates rise, we've paused on a CAD 25 million swap that we have, and we have a relatively small revolver balance of CAD 23.6 right now, so overall, 91% fixed. Yeah, I mean, to Andrew's point, we don't do specifics on each swap, but certainly, when you look at our rollover schedule, we've spread it out so that there should not be a shock to the system, and those are a bit more historical. So, it depends what we see later, 2024- Yeah on what we think that they'll roll over at. Even if it's a marginal increase, we don't think it'll be dramatic. Yeah, and just talking on the weighted average, a year ago, we were at 3.8, and now we're at 4.18, but we've added about CAD 70 million-CAD 70 million of swaps at the beginning of this year. Of new debt. Of new debt for the new acquisition, so, which balances out. All right. Thank you. That's great color. I'll turn back. Thank you very much. Have a great day. Thank you. Thank you. Thank you. The next question comes from Mark Rothschild from Canaccord. Please go ahead. Thanks. Thanks, good morning, guys. Milton, you've been historically pretty careful with the markets you've gone into and with the acquisitions. Yeah. There's been absolutely quite a bit of population growth in Canada. Does this lead to opening up new markets or new submarkets, or maybe historically you haven't gone into that that might be more interesting going forward? And I'm just asking in the context of, you know, it's definitely difficult to find good accreted-- good acquisitions that are accretive, that fit the model. So just wondering if there's gonna be any opportunities over the next few years to maybe expand your targets. I mean, it's interesting. The population growth you're talking about, a lot of that has actually been absorbed in the markets that we know and like. So I don't really think that changes it. We do think there will be some good opportunities in the markets, you know, that we like, whether it's Kelowna, Kitchener-Waterloo, you know, Quebec City, some of the markets that are not just Vancouver. But we closely watch our Vancouver level because we do like to be, you know... We're just about 80% now, and we'd like to be extremely high on that level. I don't think it's the population growth that's gonna drive our opportunities. It's a nice backstop. I think it's just the fact that short-term rates have come to a level that our proposition is a lot more attractive to dealers. So we're looking forward to 2024. Quite frankly, we're looking forward to the end of 2023 because of all the macro. 2024 is, it's gonna be nice to see. Okay, great. Maybe just one question regarding the floating rate debt. Is this something you guys are waiting to see to fix all the debt, and are there some points where- Yeah, we- - You move with? We've traditionally gone longer when rates were low, and that, you know, you can argue that cost us a little more in each quarter, but we think it was for good reasons, and we've been, you know, reaping some rewards for that. On the flip side, what we're seeing, especially over the last six months, is rates that are incredibly elevated compared to historical. We'd rather pay a bit more to keep some of that, as Andrew was saying, you know, some of this secured financing of approximately CAD 25 million that we could swap out. It's very flat right now. There's not a significant advantage to kind of embed that longer, that lower rate, sorry, higher rate for longer. So we're leaving that flexible to allow us, you know, as we go into 2024, that we can fix that at a lower rate. So it's, it's paying a bit more right now, but it's not locking in high rates for longer term, which I just don't think helps anyone. It doesn't help our unit holders. ... Okay, Okay, great. Thanks so much. Thank you. The next question comes from Jonathan Kelcher from TD Cowen. Please go ahead. Thanks. Good morning. Good morning. First question, I guess we'll stick with acquisitions. You said you're looking like you're a better proposition now for dealers. Does that mean you're seeing more opportunities given a certain level of M&A than you would have seen in the past? We are seeing less M&A, because there is the buy-sell gap for dealers. But in the discussions that we have, they are going deeper because the proposition that we're having is more compelling compared to certainly 2021, where if we're competing against short-term 90-day money, it was incredibly hard, impossible to compete, without kind of giving away the shop, which we refuse to do. Okay. So on a net basis, it sounds like you're seeing similar opportunities to past years? I would say similar and slightly better pricing. Similar number of opportunities and slightly better conversations and better pricing. Okay. And then on that, I think you said you're being extremely selective. Is that more so on pricing, or is that and I guess related a little bit to Mark's question on choosing a geographic location or dealer quality? Maybe expand on that a little bit. You know, at today's elevated, even short-term rates, but, you know, as I said, it's kind of flat with long-term rates as well. We've got to get paid on a return on investment. So certainly the first one is the equation. What does that do for our unitholders? What does it do for AFFO? But, you know, we've always liked looking at the real estate. We like high-quality dirt in good locations. So that can be in a, in a mid-sized market, or it can be one of the vector markets. We certainly look at the debt, but we do want to achieve certain returns. Okay. That's helpful. I'll turn it back. Thanks. Thank you. The next question comes from Brad Sturges from Raymond James. Please go ahead. Hey, good morning. Good day. Just on the IFRS valuation change, I guess it sounds like you made more a change in the cap rate just based on where interest rates have moved over the last few months, and less to do with, I guess, transactions you're seeing in the market at this point. It's more of a reflection of where you think values are trending at this point. It's been a combination of both. I mean, we've this is 3 quarters in a row that we've moved up cap rates slightly, so it's been a slow movement, and if we flash back to when you saw interest rates dropping dramatically, we didn't move cap rates a lot then either. You know, we tend to be the vast majority of the acquisitions on an income basis for dealership properties, so in a weird way, we kinda help set the market. So we're very comfortable with what we're seeing because we didn't not see a dramatic drop in cap rates and therefore an increase in cap rates. I think it's only fair that some of our discount rate gets flowed through, because obviously, cost of capital and expected returns are slightly higher today than they were 2 years ago or 4 years ago. Okay, that makes sense. Just in terms of the rent growth for 2024, with the CPI-linked leases, I guess a portion of them are capped. Just what would be your expectations for the average rent growth for next year? It's hard to give that number because since it's inflation-related, you've got 53% or so at 1.5, and then the remaining 26 at CPI and then the 10 that are capped, and then you got some other amounts that have got increases. So it's hard to give a number. It all depends on where CPI is gonna be. We have traditionally been between 2 and 2.5. We don't see that dramatically changing. Okay, that makes sense. I'll turn it back. Thank you. The next question comes from Lorne Kalmar, from Desjardins. Please go ahead. Thanks. Good morning. Maybe flipping back to the acquisition side of things, like, if I understand correctly, you know, typically M&A is the big catalyst, but are there any dealers who are looking to recapitalize their own business just by monetizing the underlying real estate, or are you not seeing much in the way of opportunities? We're hearing some murmurs on that right now, that there could be, but even then, a lot of the time it's related to acquisitions that may not be those properties, but they may take some equity off the table to go do an acquisition somewhere else. So not directly an M&A, but related to an M&A. So I, I think, and well, I'm going to also say we've seen, including the last acquisition, a few more conversations where ex-dealers, who retained the real estate, are now looking to monetize that real estate. So it's, it's a bit of on the back of an M&A, and it's a bit of historical M&A, where some of the vendors have kept the real estate. Okay. That's, that's great. That's all for me. Thank you. The next question comes from Gaurav Mathur from Laurentian Bank. Please go ahead. Thank you and good morning, everyone. Just, one quick question from a macro perspective. Now, south of the border, we've been seeing, you know, the American consumer fall behind on their car payments. I'm just wondering if you talk to, you know, your conversations with the dealers currently in the portfolio and if they're seeing any sort of activity here in Canada, which is pointing to duress, you know, not only the dealer profitability, but even just car sales, over the next sort of 12-18 months. Yeah, short answer is nothing material or significant. What we're hearing is that some groups, because the elevated price per unit has gone up, that you may see some rotation into mass-produced vehicles as opposed to some of the luxury and some rotation into used cars. But those still remain profitable. If it goes into a full recession, you often see people retain their cars a bit longer, which you will see service go up. You know, service is some of the most profitable areas for dealers. I would certainly say Canada versus U.S. You know, you saw a lot of U.S. dealers able to push through pricing to consumers above MSRP, so highly inflated numbers. So the very nature of it, it's negative equity the day they buy it. So that would have a greater impact on delinquencies than in Canada. We're not hearing from dealers a lot of chatter, or quite frankly, from the banks, about a lot of chatter on that, negative equity kind of default really flowing through to hurt dealers. It's something they watch, but we are seeing, you know, longer, longer duration acquisitions. And quite frankly, we're seeing more of a push towards leases than acquisitions, 'cause, you know, you used to be able to just pull out money from your home equity loan at very low rates to buy your car. Right. Now, sometimes it's better using the advertised lease rates from some of the OEMs. Okay, great. Thank you for the color. I'll turn it back to the operator. Thank you. The next question comes from Sumayya Syed from CIBC. Please go ahead. Thanks. Good morning. Good day. Just to follow up more on the M&A side of things, just Milton, I guess if, if both cap rates and your cost of capital stay sticky at current levels, like, how would you treat capital deployment, and what's your appetite to use that to fund the acquisition at this point in time? You know, as we mentioned, it's got to be compelling. There is a nice level of flexibility and a strong balance sheet that we have right now, which we certainly do appreciate in times like now. We think that's gonna open up in a bit more in 2024. So, I mean, I would just say we're not going to, nor have we ever, just done acquisitions for the sake of acquisitions and growth. We are sensing that there's going to be some good opportunities, and we want to be able to take advantage of those. What level of spread versus your cost of capital would you require today, given the current environment to make that work? It's so volatile right now in the spread. I mean, if you're talking about longer-term rates, they've certainly flattened out on the curve versus even our short-term floating rate. But we don't expect that to stay as elevated it is today. And certainly we're committing for 10-, 15-, 20-year leases that also have escalations. So it's more than just a spread on capital. It's who we're dealing with, what's our spread, what's our growth profile within that lease? Okay, fair enough. And your current leverage is, you know, fairly low. What would be your acquisition capacity based on where it sits at today versus your target? Yeah, it's low, and we certainly appreciate it. It's even lower when you put it in context that as a Triple Net Lease, that's a very clean number at the bottom. There's not a lot of leakage afterwards. You know, we've always said getting to that 50-52 level is still a comfort zone. So it really depends what we're looking at in front of us and the returns that we're able to achieve. Okay, great. I'll turn it back. Thank you. Thank you. Ladies and gentlemen, as a reminder, should you have any questions, please press star one. Next question comes from Himanshu Gupta from Scotiabank. Please go ahead. Thank you and good morning. Good day. What is the cost of debt financing available to you now? I mean, if you were to put a five-year swap today, what will be that rate? About 6% for us all in, but, a little bit- 6.25. 6.25? Did you say- It's amazing how flat it is between- Yeah. -3 years and 7 years, even 3 years and 10 years. Pretty much all in that 6.25 range at this point in time. 6.25% range. Okay. And then how's the appetite for banks to lend to this asset class now? Overall, we've had a strong relationship with our lenders. At the beginning of the year, we had 25 we converted from- ... revolver to non. We added CAD 70 million to a one of our facilities. So the appetite is still there overall, and, you know, it obviously will depend on which facility and what-- and timing. I don't know if it affects us as much in this comment, but I think it may positively impact us. We've traditionally borrowed on a per asset basis at that kind of 50%-55%, maybe 60% level, and left some other assets unencumbered. Certainly in the past, we've been competing against dealers that have been looking at 75%, 85%, 90% LTV. Those ones are pulled back, so they have to come up with some more equity right now. And, you know, the more that they compete with us on a similar loan-to-value, the better off our equation is and advantages to work with them. So we think that's a positive impact. But certainly, when we're talking about the REIT itself at 50%-60%, we're not seeing a significant impact. Okay. And then, you know, you have, you know, typically done credit facilities in the past. Would you consider, like, a traditional mortgage at this point? Will that be beneficial pricing in terms of- We, we've done mortgages, in the past. The last one was a mortgage. We just did one in at the beginning of the year. The rates are slightly higher right now for mortgages as well, or pretty close to. So, we'll pick and choose which properties that we would take a long-term mortgage on. So we're open to mortgages as well, and we have been. Awesome. Okay. Thank you, guys- It's just that credit facilities allow for flexibility, and that's the approach that we've taken. Sure. Thanks. Thanks, Andrew, and I'll turn back. Thank you, guys. Okay, thanks. Thank you. There are no further questions. I will turn the call back over for closing comments. Thank you, Joanna. We appreciate all of you joining us for our Q3 call today, and we look forward to speaking to you again in the future. All the best. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.