Good morning. My name is Julie, I will be your conference call facilitator today. At this time, I would like to welcome everyone to the BTB Real Estate Investment Trust 2022 Fourth Quarter and Annual Results Conference Call, for which management will discuss the quarter ended December 31st, 2022. All lines have been placed on mute to prevent any background noise. Should you wish to follow the presentation in greater detail, management has made a presentation available on BTB's website at www.btbreit.com. Investor relations, quarterly and annual meeting presentations. After the speakers' remarks, there will be a question-and-answer period reserved exclusively for analysts. If you'd like to ask a question during this time, please press star followed by one on your keypad. Before turning the meeting over to management, please be advised that some of the statements that may be made during this call may be forward-looking in nature. Such statements involve numerous factors and assumptions and are subject to inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections, and other forward-looking statements will not be achieved. Several important factors could cause BTB Real Estate Investment Trust's actual results to differ materially from the expectations expressed or implied by such forward-looking statements. These risks, uncertainties, and other factors that could influence actual results are described in BTB Real Estate Investment Trust's Management Discussion and Analysis and in its annual information form, which were filed on SEDAR and on BTB's website at www.btbreit.com. I would like to remind everyone that this conference call is being recorded. Thank you. I will now turn the conference over to Mr. Michel Léonard, President and Chief Executive Officer, and Mr. Mathieu Bolté, Vice President and Chief Financial Officer. Mr. Léonard, you may begin your conference. Thank you very much, Julie. First and foremost, I'd like to congratulate Mathieu on his promotion as Executive Vice President and COO of BTB. Through his tenure with BTB for the last three years, he's demonstrated his ability and foresight in order to lead BTB's future. I welcome his promotion, and I thank the board for having recognized his contribution to BTB. Congratulations. Thank you. The real estate portfolio of BTB at a glimpse is basically at almost 6 million sq ft, 73 properties, the value of which has been generally appraised at CAD 1.16 billion. In Q4, we proceeded with, as announced, we proceeded with dispositions. We completed 83 Turgeon Street in Sainte-Thérèse and 7,001 Saint Laurent Boulevard in Montreal, two off-core office properties. Our densification proposal or conditional agreement that we have to develop a residential component that's subject to zoning change, we have filed with the required documentation with the city, and we are awaiting their comments as to what the next steps are. As a result of this, we have done all the work that was required to be done, and now it's just a question of listening to the city and getting their questions and answering their questions, I should say, and comments. We have other densification opportunities that we're working on and during the course of this year, we are going to give you information regarding these, whether in Quebec City or Ottawa or in the greater Montreal area. Our investment activity where, as you can see from the last acquisition that we concluded, we are focused on industrial assets with strong fundamentals, but we do have a good pipeline for value creation and maximization of our portfolio. We did conclude an acquisition in Mirabel, which is located at the Mirabel Airport in Mirabel. This acquisition is an industrial property located at 9900 Irénée-Vachon in Mirabel. This is a property that was acquired by a sale and leaseback with Lion Electric. It's 176,000 sq ft. The clear height of the building is 32 feet. Lion is going to produce batteries in this lab. As you could read generally on the producer of electric vehicle, the production of batteries is now core to their business, and it is important regarding the supply. We purchased this property at CAD 28 million. It's a 20-year lease with bump-ups every year of 3%, and the cap rate was a little bit north of 7%. Definitely a value creation opportunity for BTB. If we look at the evolution of our portfolio and our positioning, if we go back to December 2020, we held 18% of our assets were industrial, and at December 2022, almost 30% of our assets were industrial. Off downtown core office, we were in December 2020 at almost 55%. In December 2022, we were down to 49%. The necessity-based retail, we were at 27%, and we're down at 21%. Our target is to be 60% industrial before the end of 2026. 30% of downtown core and 10% retail. The asset allocation regarding value, as you could see from our MD&A that was published last night. As at December 2022, industrial, we held CAD 345 million of properties. Of downtown core office at CAD 571 million, and CAD 249 million in necessity-based retail. As far as the geographic diversification of our portfolio, what's noteworthy is the fact that in 2020, 57% of our properties were in the Greater Montreal area, and at the end of 2022, we were 54% in the Montreal area. Quebec City, we were at 27%, we're down to 19%. Ottawa, we were at 15%, stable at 15%. The added advantage is the fact that we included now Saskatoon and Edmonton, representing each, Edmonton 7.4% and Saskatoon 4%. If we look at the key metrics, we concluded important renewals during the course of the year and during the quarter. I'll get into this a little bit later. Our occupancy rate stood at 93.2%, and we did put in place an NCIB, as you are aware. Regarding our leasing and renewal activity, a total of 154,000 sq ft was renewed or leased during the quarter. We secured long-term renewals with important tenants such as Cineplex, GATX, SIA Scientific, EML Structure. We achieve an 8% average increase in lease renewal rates. For a quarter was 12.2% across all business segments. Downtown core office was +6.2%, necessity-based retail +11.3%, and in the industrial segment, we had no transaction to report. New leases, we concluded certain new leases that were important regarding obviously our occupancy rate. Our necessity-based retail leasing interest is picking up velocity, and we're seeing it across the REIT world. It's basically reflected in our occupancy rate in that segment at 98% compared to 95% last year. We concluded 62% of lease renewals for the year, completed 167,000 square feet of new leases with tenants, 31% of which were in the office segment and 68% were in the retail segment. We also renewed 149,000 square feet of leases that were coming to maturity after the year 2022, which is an important statistic as far as stabilizing the portfolio. With this, I'd like to ask Mathieu to take you through the financial highlights of the quarter and the year 2022. Good morning, everyone. We're pleased to share this morning the good operating performance of the portfolio to close 2022. The transformation of the capital allocation continues to contribute positively to the financial metrics. Year-over-year, rental revenue is up 19%, and NOI show 25% increase. Same-Property NOI increased by 7.1% for the fourth quarter, and 3.4% year-to-date, mainly due to a combination of the leasing efforts made during the previous quarters, resulting in the increase in the in-place occupancy rate of 1.2% compared to the same quarter last year, and the increase in the average lease renewal rates of 12.2% year-to-date. For the total year, SPNOI is positive across the three asset classes. Off-downtown core office is up 4.8%, industrial is up 4.7%, and the necessity-based retail is up 0.3%. Recurring FFO per unit was CAD 0.118 and is up for a four consecutive quarter, and is up CAD 0.008 as compared to the same quarter last year. Year to date, FFO per unit is up 7.8%. If we remember last year, we had an additional recovery adjustment of CAD 1.4 million. If we exclude that from the base of last year, the FFO per unit would have shown an increase of 13% for the entire year. The payout AFFO at 7.9% for the quarter compared to 80%, so it's down about 5% compared to last year. Also to consider the macroeconomic climate we're currently experiencing, BTB has proactively reassessed the market values of the large part of its portfolio. As of December, BTB had 70.4% of its portfolio appraised by external appraisers. That's a total of CAD 821 million. Overall, the recommendation was to adjust upward the cap rates for office and retail assets. The impact of these valuation on FMVs was offset by the good performance of the industrial portfolio. The rest of the portfolio was also part of an internal review to consider the observations of the external appraisers. Overall, the cap rates for the industrial portfolio went down 13 basis points to 5.6%. For the off- downtown core office, we see an average increase of the cap rate of 15 basis points to 6.6%. For necessity-based retail, we see an average increase of 20 basis points to 6.8%. As such, we recognize a net reduction in the property FMV by CAD 8.2 million for the year, representing an adjustment of less than 1% of the total portfolio. Looking at the capital structure, BTB concluded the quarter with a total debt ratio of 58.5%. That's an improvement of 2% compared to last year. The weighted average interest rate for mortgages was 4.1%. It's an increase of about 60 basis points. That's including the new acquisitions that we did last year and the refinancing. For 2023, the trust has only CAD 68 million of ongoing refinancing for seven properties. This completes our presentation. With that, we'll move to the Q&A. Thank you. This is the conference operator. At this time, I would like to remind everyone that the analysts may now ask their question by pressing star, followed by one on your telephone keypad. Again, if you'd like to ask a question, please press star one. We'll pause for a moment to compile the Q&A roster. Your first question comes from Tom Callaghan from RBC Capital Markets. Please go ahead. Thanks. Morning, guys, and, Mathieu, congrats on the promo there. Good morning. Good morning, Tom. Thank you. Morning. Good morning. I just wanted to start on the renewal rates. They obviously remain strong and have for the better part of the year. As you look ahead into 2023 and across the portfolio, where do you think those renewal rates could shake out for next year? I think that they should remain constant. I think that, based on what we have on the table so far since the beginning of the year, we're seeing an uptick as far as the renewal rates are concerned. We're trending very positively on the renewal rates. Okay. Thank you. Maybe just a quick follow-up, and you mentioned a bit in your prepared remarks there, but just what are you seeing in terms of velocity of tours and interest? Obviously, the retail side of things you called out as strong, but also kinda interested on the office side of things, how that's going? I'll start with the retail. On the retail front, we're seeing a lot of activity from national retailers. Certain sites that we had that were, I would say, mostly, let's call it mom-and-pop, kind of retail environment, and I'm mostly talking about, let's say, the greater Quebec City area, is getting a lot of attention from national retailers. It seems, and we attended ICSC in January, at the end of January, and we had a lot of leasing velocity. We concluded two retail transactions in Vancouver, and we also had a lot of interest demonstrated throughout. It's continuing, I should say. You know, we have certain centers where there is some vacancy. There are some centers where we have tenants that are not necessarily paying us market rents. We're seeing that we could replace these tenants at lease expiration with a larger or better covenant-type tenancy. You know, when we talk about renewals, especially in the retail segment, that may be at our discretion or our decision not to renew a certain retailer in order to conclude a transaction with a much better retailer. We're seeing that this year is going to be a year of change within our retail centers, and there is increased velocity. You saw it by our occupancy rate. You know, at 98%, it means that we're almost full. It, it is very important for us, and we're seeing this velocity, and it's constant velocity, and we're quite pleased with what we're seeing. As far as the office segment, you also saw that we were mostly impacted by a reduction of occupancy rate in Quebec City. This reduction does not appear to be something that is going to materialize in Ottawa or in Montreal. We're seeing it in Quebec City, and right now what we're seeing mostly are national tenants that are renewing. The good news is that they're renewing. The bad news is that they're not renewing for the entirety of their space. Some of them, let's say, I'll give an example. We concluded a renewal transaction with Randstad. They leased, they used to lease 7,000 sq ft in Quebec City, so the renewal was for 5,500 sq ft. There is a reduction. We see it. It's not something that is generalized within our portfolio. On the contrary, in Laval, we're seeing an increase in occupancy. We're seeing an increase of interest from, you know, the office occupancy or office tenants. In Ottawa, we're getting a lot of velocity also in the market. I think that we were hit in Quebec City, and I'll conclude with Quebec City, where our local tenants, so the local businesses, we're not seeing the same phenomenon as we're seeing from national tenancy. I won't say that we're bullish on Quebec City and the activity and, you know, to increase our occupancy rate from, say, 89% to 92%. I don't think that it's going to occur this year. However, this year, we should go back to the more normal rate in Quebec City, which would be around 86%. Got it. That's, that's great color. Thanks. Then maybe just switching gears, one more on my side if that's okay. On capital allocation, just given the market backdrop there, you've been very direct about the fact that acquisitions would be driven by capital recycling initiatives. As you look into 2023, are there any further non-core assets that you would perhaps look to dispose under the right set of circumstances? Or has most of that work been done over the course of 2022? We're always looking at our portfolio and looking at opportunities to dispose. We in Q-four, we did dispose of two properties, two off in the office segment. There is a market for smaller office properties. It's not a, you know, I think that if you go to the market and you wanna sell an office property that's, let's say, north of CAD 100 million, I think that the market is not an appetite from the market for that type of transaction. However, anything below CAD 10 million, CAD 12 million, I think can sell well in the office segment. You can surmise that given the activity in the retail segment, we have a lot of interest. As I mentioned in previous calls, we're not ready to dispose of our retail assets. There's money to be gleaned from selling air rights from the redevelopment and so on. As a result, we, you know, we may put a property on the market that would have no, like that we would think that we would have maximized value, but other than that, they're not gonna go on the market because we wanna realize the full potential of these assets. We strongly believe that there's a good potential within that segment. It would be mainly in the office segment where we would have a few smaller transactions to conclude. To basically answer your indirect question is that we're definitely not going to the market. It is not something that the conditions are definitely not favorable for us to go to market. Unless, you know, we would have a purposeful fundraise where the capital that we would raise for a transaction would be incredibly accretive, which I think that I don't think that the market conditions are there anyway. We're not going to the market. We are going to go our merry way this year and continue to recycle capital and do our, you know, our utmost. So far, our utmost was great because we haven't sold a property below our book value. Perfect. Thanks, Michel. I'll turn it back. Your next question comes from Gaurav Mathur with iA Capital Markets. Please go ahead. Thank you. Good morning, everyone. Good morning, Gaurav. Just on your prepared remarks in the beginning when you're talking about the development and the conversations with the city, I'm just wondering what type of timeframe you're looking at for a potential start? It's very difficult to give you this answer, but it's not before the end of the year. Okay. Okay, thank you. Just switching gears, just back to the mark-to-market on your leases. Is there a certain part when you're looking across the asset classes, are you noticing any accelerating or deaccelerating trends when you're thinking about marking, you know, when you're thinking of mark-to-market trends and renewals? No. When we look at our net effective rents when we conclude transactions, the net effective rent is either constant or higher than the previous transaction upon the renewal. It's still healthy. If you're referring to, you know, a lowering a net effective rent, so far we haven't seen it. Okay. Okay, great. Just last from, lastly from me, when you're going after acquisitions, especially in the industrial market, how is the buyer pool changing, you know, when you're looking at it now compared to maybe the last six months, given what's happened or given what's happened with the macroeconomic conditions? I think that the industrial segment has slowed down. Definitely not as much as, let's say, the office segment or the retail segment. I think the retail segment is going to pick up. The industrial segment has definitely slowed down. I think that there are less buyers out there than there were. Okay, great. Just to follow up on that, you just mentioned that the retail segment, you expect it to pick up. Can you talk a little more about why that is and what you're seeing that's driving that comment? At the beginning of the pandemic, you know, journalists were basically reporting on the fact that the retail segment, the brick-and-mortar segment, was dead, and it would be dead forever. All of a sudden, you know, because, you know, internet sales were supposed to take over and people would never get out of their homes in order to go shop again because you could order your grocery by telephone, by the internet, by the this, by the that, and get the delivery directly, which is true. However, as soon as the restrictions linked to the pandemic were lifted, we saw and, you know, talking to journalists, they wouldn't believe us, but we saw an increase in sales from our retailers. You know, not too long ago, I saw a report to the effect that the sales from the brick-and-mortar stores are higher than they were in 2019. To me, it's basically, it's, it says that a human is a human, and a human likes to interact with others. They like to feel and smell and shop. As a result of this, we're seeing increased sales. The consumer has returned to the stores. As a result, we're seeing a lot of velocity from national retailers that are trying to locate closer to consumers and to increase their sales themselves because they're seeing the signs that there's an increased volume in sales. So far, we're seeing an incredibly positive atmosphere. What we saw at ICSC was incredibly positive. Is the same phenomenon. This phenomenon is basically generating investments because all of a sudden, not only you may have to build stores for this, increased demand, you may have to expand your shopping center, you may have to do all sorts of things. As a result, then you're getting buyer interest. Yes, as Mathieu reported, we increased our valuation, the cap rates by 25 basis point in the retail. I think that it's going to be short-lived because I think that there's gonna be interest, and we're gonna return to normal as far as these cap rates are concerned. This is the first sort of wind after COVID. After that, is the same phenomenon gonna happen to the office segment? It may. I don't know yet. We can't, and I certainly don't want to be a prophet on that front. In our suburban type environment properties, we haven't seen or on the contrary, we're seeing an increased occupancy in this segment. Does that mean that, you know, in a year or two, because that's sort of what it took to on the retail front in order to stabilize again. Is it the office gonna stabilize in 12 months, 24 months? I can't predict it, but I can see our occupancy levels are going up in our office properties. What was 50% became 60%, becomes maybe 80%. I think it's related to the fact that these properties are located closer to where people live. As a result of this, I mean, we're not suffering. As I mentioned earlier, we're not suffering in Montreal, we're not suffering in Ottawa. We suffered a reduction in Quebec City based on certain dictum from head office. As a result, I mean, I'm cautiously bullish on the office. Don't worry, we're not gonna buy an office property anytime soon. The point is that I think that, you know, we went through stages in the retail, and these stages of correction may or I think there's a reasonable good probability that it's going to do the same in the office segment. Great. Thank you for the color. I'll turn it back to the operator. Your next question comes from Munish Garg from Laurentian Bank. Please go ahead. Hi. Good morning, everyone. Most of my questions have been answered. Just a quick question on the modeling side. Could you provide some more color, please, on the G&A and the straight-line rents? You mean in general? Do you have anything specific or— Yeah. In the G&A section, I'm seeing half a million pure-performance compensation. Should we see it more as a run rate for Q4 or the whole corporate expense as more, you know, CAD 1.8 million as more as a run rate for moving forward for all the quarters? It's more a one-off for Q4 in that case. You shouldn't keep that as a run rate in your model for this year. Just to add, Garg. Let's be very transparent. Part of it is obviously the severance that was paid to Peter Parodi upon his departure. Okay. Thank you. Just, a bit of a color on the straight-line rents as well. Specifically for the straight line, in that case, yes. The straight line can be assumed to be a trend for this year. There's no one-off specifically in the straight line. Okay. Thank you. I return it back. Yeah. This is the conference operator again. If analysts would like to ask a question, please press star and the number one. Your next question comes from Anthony Bogdan from National Bank. Please go ahead. Hey, thanks, guys. just quickly on the straight-line rent again, it was about $1 million in Q4, we should expect $1 million each quarter in 2023? That's right. Okay. Onto the G&A margins. Historically, we've seen some seasonality there, but I didn't see it as much this Q4. Do you expect the seasonality to sort of drop off in margins just given the change in your portfolio mix? In the G&A, as Michel mentioned, there was a one-time fee for the departure of Peter. Other than that, there's no real seasonality there or one-off. I just mean on NOI— sorry, NOI margins. NOI margins, well, w e see the NOI margin improving with the allocation of the industrial that are mainly triple net lease. We see that improvement as we build our book in industrial. I think overall, it's about 2% compared to last year, and it's really driven by that industrial allocation. As we will have in 2023, the full acquisitions, you know, the 12 months of the acquisition that we did in 2022, this would, we should see some improvement there as well for 2023. All right. I noticed that the CIO expense was added back to FFO. Do you expect to do this on a recurring basis? The second part to that is that the entire CIO expense, or is that a portion of it? No. What we, the math, the math that we did here is. We checked with REALPAC as well, it says, you know, last year, because of the market condition at the end, Peter, his responsibility was leasing and capital allocation. His, you know, he spent almost 80% of his time on the leasing side. This is what we put back here in FFO. 80% of the total expense? Yeah. Okay. Do you expect to keep doing that going forward? No, because he left in December, so we're not planning to replace him. Yeah. Right. Okay. That's it for me. Thanks, guys. At this time, there are no further questions. Please go ahead, Mr. Léonard. Well, thank you for joining us today. I think that the stellar results of BTB's performance for 2022 speak basically by themselves. We saw an increase in rental revenue as reported by Mathieu. Part of the increase in revenue comes directly from the acquisition. We're +CAD 22 million in the rental revenue for the acquisitions, where we disposed of -CAD 3.5 million. The plan that we have to redeploy our capital is definitely bearing fruit. I just remind you that our net operating income went up by 25%. Same-Property NOI for the quarter at 7.1%, and for the year at 3.4%, which is again, in comparison, great performance for BTB. Payout ratio at 63.6%, never been this low. Recurring AFFO payout ratio at 74.9%, never been this low again. I remind you that our portfolio is performing really, really well as our collection rate is at 99.3%. Very stable, very profitable, and, you know, great performance for BTB. With this, I'd like to thank you for attending this morning, and I'd like to thank all our employees that have participated in this great results for BTB, because without them, it would have been impossible for us to achieve these numbers. Again, thank you very much for participating this morning. As usual, if you have any questions, comments or something that you don't understand, feel free to call Mathieu or call myself. We'll be glad to answer your questions. Thank you. Have a great day. This concludes today's conference call. You may now disconnect.