Good morning. My name is Julie, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the BTB Real Estate Investment Trust 2023 first quarter results conference call, for which management will discuss the quarter ended March 31st, 2023. 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 speaker's 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 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 management discussion and analysis, and in its annual information form, which are found 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 Michel Léonard, President and Chief Executive Officer, and Mr. Mathieu Bolté, Executive Vice President, Chief Operating and Financial Officer. Mr. Léonard, you may begin your conference. Thank you and good morning. Our portfolio at a glimpse, right now stands at 6 million sq ft, 74 properties, the IFRS value north of CAD 1.2 billion. During the first quarter, we concluded an acquisition of a property located in Mirabel, Quebec, adjacent to the airport, the cargo airport serving the Greater Montreal area, where the primary tenant, or the only tenant, is Lion Electric, the manufacturer of buses and trucks that are electric. The transaction was concluded at a cap rate that was north of 7%, it's highly accretive transaction for BTB. We continue our densification efforts, given the fact that we do have zoning changes in effect for certain properties, where we're gonna be able to glean additional revenues from the densification. Our investment activity, we're focused on industrial properties, and we've demonstrated recently, again, with an acquisition of an industrial property located in Edmonton, where the proceeds were partly paid using BTB units as a equity for the transaction. We do have a good pipeline of properties that we can buy in the industrial segment, and we do have properties, office properties on the market at this time in order to redeploy the capital in the industrial segment. If we look at the evolution of our portfolio, the industrial properties used to be at 18% of our portfolio, and now they stand at 31.5%, almost double the size of the industrial portfolio for the last two years. When we look at our office segment, which is again, I remind everybody that we have not invested in the downtown core sector. We used to be at 54.7%, and now we stand at 47.7% and still divesting of office properties. Whereas in the necessity-based retail, we used to be at Q1 2021, I'm referring to, at 27%, and now we're down to 20%. We almost doubled our size in the industrial segment and are continuing our concentration in the acquisition of industrial properties. As we can see, the office segment went down 7% and the necessity-based retail went down 7% as well. The office dispositions is continuing. We have a few properties on the market. We're able to seek buyers for these properties, and we're confident that we are going to sell these properties above IFRS NAV value, IFRS valuation for these properties. As far as our occupancy rate is concerned, we're seeing an occupancy rate that is very stable. Regarding the industrial segment, we stand at 100%. In the next quarter, we know that there's going to be the departure of one tenant that is going to affect... It's 55,000 sq ft in Edmonton, and that is going to affect our performance or the 100% performance on that segment. If we look at the real estate portfolio and our geographical diversification. Now 15% of our properties are located in Quebec City, 54% in Montreal, Ottawa 15%, Saskatoon 5%, and Edmonton 11%. Generally, we're seeing a reduction of ownership in the province of Quebec in favor of Western Canada. When we look at our key metrics regarding our occupancy rate, as I mentioned, we're very stable at 93.2%. We were successful, including and concluding in the first quarter renewals and new leases representing 125,000 sq ft. As far as subsequent events are concerned, as I mentioned earlier, we acquired an industrial property for a little bit more than CAD 7 million in May of 2023, located at 8810, 48th Avenue in Edmonton. As I mentioned earlier, we paid the equity portion of the purchase price was paid with units of BTB at CAD 4.50 per unit. Again, regarding our leasing and renewal activity, we concluded 67,000 sq ft of new leases. In the industrial segment, we concluded, we didn't see an increase in revenues as a result of the fact that no lease came to maturity. In the office segment, we saw an increase of 4.2%, and in the retail, 38.9%. It's also important to note that in the retail, we do have leases that are below market, and the correction on the retail of almost 40% was basically generated by the renewal of one lease that was way below market. As far as the total of 125,000 sq ft of new leases and lease renewals, what's important to note that 67,000 sq ft of new leases were in our suburban office segment. In the retail, we finally have a firm deal with Giant Tiger. Happy to report because we have discussed this on many occasions on conference calls, this one is concluded. It's finally under construction, we finally received all the permits that were necessary in order to proceed. We believe that we're gonna give the keys to Giant Tiger in July of this year. As far as the retail is concerned, we also saw that there was a temporary retail tenant that we knew was gonna leave during the quarter and effectively left because it was a temporary transaction that was concluded with Mobilia. With this, I'd like to ask Mathieu to take you through the financial highlights of the first quarter, 2023. Thank you, Michel. Good morning, everyone. Just to start with the Lion Electric acquisition, so the battery plant, it happened on February 2nd, so it's important to say that it's already accretive in the 1st quarter. The equity portion of that transaction has been financed through the line of credit and will be replaced over time with our ongoing capital recycling initiatives that Michel mentioned. We're also pleased with the continuing good performance of the op downtown core office portfolio, with good demand on the leasing front and an average overall of 4.2% increase in the average renewal rate. The necessity-based retail segment also continues to show a good performance as most of the properties are anchored by necessity-based tenants. The occupancy rate of this segment stood at 95.9%. It's an increase of almost 1% compared to the same period last year. BTB's rental revenue increased by 13.2%. Just to note that the trust recorded a non-cash adjustment related to a change in accounting estimate for gross lease, impacting positively the revenues by CAD 1.4 million. The net operating income increased by 17.1% compared to the first quarter 2022. With the adjustment that I just mentioned, if we were to exclude this non-cash adjustment, the NOI would have increased by 8.5%. Same- Property NOI showed a stable figure year-over-year. Recurring FFO stood at CAD 0.117 per unit for the quarter, compared to CAD 0.107 per unit for the same period 2022, so it's an increase of CAD 0.01 per unit. The payout, the FFO, AFFO payout was 72.4% for the quarter, compared to 76.8% for the quarter, so it's a slight increase by about 4%. Looking at the capital structure as of the first quarter of this year, the weighted average mortgage interest rate was 4.2% compared to 3.54% for the same period last year. It's an increase of 66 basis points. This is, this increase is mainly due to the increase in the average rate of variable interest on mortgage loans outstanding, which increased by 373 basis points to 6.83%. In comparison, the weighted average for fixed interest rate increased only by 17 basis points, to an average of 3.78%. Here, I think what's important to say is, although there's an increase in the variable mortgages, we only have CAD 37 million, so most of our mortgage book is fixed rate. The Trust concluded the quarter with a total debt ratio of 59.1%, so it's 120 basis points lower than a year ago. For the refinancing commitment for this year, we have CAD 68 million to refinance related to six loans. It's five office properties and one industrial. All of them are going through a normal process of refinancing, half of this year. The other half will be the second half of the year. Finally, the Trust held CAD 1.7 million of cash at the end of the quarter, and CAD 22.9 million is available under its credit facilities. The one thing we did after March, the end of March, so we increased the available amount of the credit facilities by CAD 10 million. It gave us CAD 32.9 million remaining availability for the line of credit. We have a possibility for an additional CAD 10 million on the accordion that we have with the credit facility. 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, to ask a question, press star one. Your first question comes from Matt Rothschild from Canaccord. Please go ahead. Thanks. Good morning, everyone. Good morning. Hey. In regards to acquisitions and issuing equity, to fund that, can you talk a little bit more about the thought process when it's that? Was that something that was needed in particular to make this deal, work for the vendor? Your thoughts on doing that more of that in the future, considering where the unit price is? Well, we love to do this kind of transaction, especially as you just mentioned regarding, you know, where the unit price is. Whenever we have the opportunity, we are going to go on that route for sure. It is, you know, it's an easy process. We have done it before, so it's not the first time that BTB has done it. It's something that we have done before. We know how it works. We were glad to see that our vendor was happy to take the, you know, BTB units in equity. I think that there's a great advantage to them, and they saw the advantage by deferring their capital gains, and that's something that they wanted to do. Also, you know, I can say that when we started the negotiation, obviously our unit price was not at CAD 3.19. It was closer to CAD 4. For sure, the vendor at one point, you know, basically realized that the unit price was going down and wasn't too happy about this. Overall, we know that the value of BTB is even higher than CAD 4.50. I think that we were happy to see that there was patience on the, on their front and very understanding and I'm not just saying it just to say it, but great, great people. We had a relationship with them previously. We had concluded a transaction with them. We had acquired another property from them. All this to say is that they're great people and very understanding and they are and will be obviously patient as far as our unit price is concerned. Okay, great. Thanks. Maybe just one more question in regards to the vacancy that's coming up that you spoke about. I think it was in Edmonton. What's the impact on FFO this quarter or next quarter maybe? What are the prospects for that? If you just give a little more color on the prospects for that space. Well, the prospects that we have. That's the unfortunate part. It's a great building and we have prospects to buy it. Our first intent is definitely not to sell it's to lease it. The way this property is and laid out and the huge track of land that is, you know, in back or on the side of this property, it's just like, it's a dream for certain, not investors, but owner occupiers. So we do have people that are interested in buying it. So it's obvious that, you know, at one point, we are going to have to make a decision on that front, but it is a great property to own long-term to own on a long-term basis as well. We have to be a little bit, let's call it patient, on that front in order to make a decision because, it'd be... I'd be sad to see this property go. If we have to, if we get the right price for it, then obviously we're gonna let it go. You know, we're not falling in love with the property. It is... I mean, as we are building an industrial portfolio, it's a little bit sad to see that, you know, bought a property and now we would sell it, but obviously we would sell and redeploy the capital. It's difficult to accept. That's all I'm saying. It doesn't mean that we're not gonna, accept, an even-eventual offer. Mark, just to your question about FFO and AFFO, if you take, you know, about 55,000 sq ft at $10 per quarter out of 87 million shares, it's going to be material for next quarter. We still believe in that property as well. Okay, thank you so much. Your next question comes from Munish Garg from Laurentian Bank. Please go ahead. Hi. Good morning, everyone. Just one for me. In terms of balance sheet, could you provide some more color to us on how should we view the balance sheet for 2023 and 2024? What are your objectives for next 12 - 18 months? Any sort of target range for debt to GBV. Well, I think, you know, a couple objectives that we have is now we're at 59% of leverage. One thing first that we changed over the last two years is all new properties that we acquired, the max that we would have in terms of leverage is 60. In the past, we were close to 65, that's one initiative that we think is more conservative. The other thing, as Michel mentioned, we're going through capital recycling. Some part of it could be applied against, you know, reducing slightly the debt. I think most of it is as well related to the ventures that are coming to maturity next year and the following one. What we expect is to not necessarily issue new debentures, but more changing debt through equity. It's gonna be a mix of capital recycling. We talked as well, you know, over the last 18 months as well, the development project that is currently ongoing for one of our property, which will generate equity that we currently don't have on our balance sheet. I think it's gonna be creation of value and new equity. Part of it as well would partially it be applied to reduce down the debt level. If I may, if I may add, There's a series of debentures that have come to maturity in 2024 and another one in 2025. Obviously, we have our eye on these two series. The first one, we can't do anything before the month of November of this year. Even if we had the money, in order to reimburse it would be too soon. We have to wait until November in order to have more clarity as to what we're gonna do, how we're gonna do it, and then it becomes payable a year later. We can call it, starting in November, we'll have to monitor closely what we're gonna do as far as that's concerned. As Mathieu mentioned, our intent is not to issue other debentures. Okay, great. The sum of the two debentures, that's about 4% of leverage, just to keep that in mind. Yep. Thanks a lot. I'll turn it back. Your next question comes from Gaurav Mathur from iA Capital Markets. Please go ahead. Thank you, good morning, everyone. Good morning. Good morning. Could you just provide some more color on the CAD 1.4 million non-cash adjustment in the revenue line? Yes, I can. The CAD 1.4 million was associated with a lease where there was an issue, an interpretation issue in the lease as to the amounts that were payable. We basically adopted a conservative view in order to ensure that we would not basically overstate our performance. We discussed the problem with our attorneys, with our auditors, and they were of the opinion that our conservative interpretation was not right. As a result of it, the full amount that we that we had invoiced and we continued to invoice was the amount that the tenant was supposed to pay under the lease. Hence, we had to do a positive reversal of these amounts. Okay, great. Thank you for that. Then, just switching gears to same property NOI growth. Given the strength in the industrial market across Canada, can you talk a little about, you know, the - 5% year-on-year SP NOI growth in the industrial portfolio? Yes. I think, Gaurav, in that one, maybe one stat I should probably provide is more on a cash basis. The NOI in this case was impacted slightly in a favorable way last first quarter of last year because of the 13th month invoice. Compared to this year where we do the exercise as well, it was a bit more negative this year. That creates a bit of a disconnect and as well, the straight-line rent. Excluding that was about CAD 200,000 of impact year-over-year. Without that, we would be back to a positive NOI for the industrial book. Okay. Okay. you know, just on fair value. Gaurav, sorry to interrupt you, I just wanted to continue on the same train of thought. We don't have industrial leases coming to maturity in 2022, there's basically no change on that front. In 2023, we have one lease that came to maturity that we just disclosed. Aside from that, we don't have a maturity, any material maturities in the industrial segment. It's gonna remain flat. It's very. Aside from that lease where we think that we're gonna be able to, if we re-lease the property, that we're gonna be able to get some lift versus what the previous tenant was paying. However, aside from that, it's gonna remain flat. We're seeing leases that are starting to turn next year, and where we do forecast that there is going to be an increase in the net rent next year, obviously, if the industrial segment remains as hot as it is today. Okay. Okay, great. Then just lastly, you know, on fair value adjustments and investment properties, you know, given the volatile macroeconomic environment and, you know, the rate and sector outlook. You know, it's interesting to see the fair value adjustment to zero this quarter. I'm just curious as to what's driving that? I think, Gaurav, we've been quite proactive starting in Q3 last year to adjust fair value. We did another round in Q4 last year. What we did in Q1, I think we were, again, quite conservative with the valuation, the external valuation team, we did a full review across Canada for the properties that we own and where we stand. We were comfortable with the current values and what we did at the end of last year. I mean, we did have a meeting with Altus prior to publishing our financial statements in order to get their opinion as to whether there was movement within the cap rates of our portfolio. Given the fact, as Mathieu mentioned, given the fact that we did adjustments in Q3 and Q4, contrary to many other REITs that didn't, they feel very confident that the value that was proposed for our IFRS was the correct value. Okay, great. Thank you for the color, gentlemen. I'll turn it back to the operator. Maybe just one comment, Gaurav. As Michel mentioned it before, but as we look at some of the properties that we disposed last year and some that are in the pipeline for disposition this year, and for which we have offers on our properties as well, you know, if we talk about small office building, we feel comfortable as well with the proposal that we're seeing on that front. Okay. Okay, great. Thank you for the color. I'll turn it back. Your next question comes from Tom Callaghan from RBC Capital Markets. Please go ahead. Thanks. Morning, guys. Morning, Tom. Just sticking on that theme on the capital recycling there in the office, can you give any sense as to kind of, you know, ballpark proceeds or on those potential dispositions and kind of timelines you're looking at? What we have in the pipeline for dispositions right now is roughly between... if everything pans out, which... You know that in life, it's not everything that pans out. We are between CAD 40 million-CAD 60 million of office dispositions. The timing is, I would say, before... It would be scattered throughout the year, until the end of September for now. That's great. Thanks. Just one more from me, a quick one. I know you'd submitted a proposal to the city in terms of that first densification project. Just curious, have you heard any commentary or questions back to you guys? No. right now, the city is basically deciding as to which course they are going to take in order to propose, or implement, I should say. It's not propose, it's implement a zoning change. I think that everything has been said, everything has been done. Now it's in the hands of the city in order to implement it. It's unfortunately, Tom, the normal course of getting a zoning change when, you know, the owner, their urbanists, lawyers, representatives, experts, have done all their work in order to see traffic flows, you know, the sufficiency of the city services serving the property and so on. All the different expertise have been filed with the city, now it's just in their hands in order to see how they're gonna go about implementing a zoning change. So far it's, you know, it's been well received. We're not getting any signals that yellow lights or red lights. We're seeing green lights. We're just. It's in their hands right now, and it's, in the unfortunate part where we have to sit on ours while they do what they have to do in order to implement. Understood. Thanks, Michel. I'll turn it back. This is the conference operator again. If analysts would like to ask a question, please press the star and the number one. Your next question comes from Matt Kornack from National Bank Financial. Please go ahead. Good morning, guys. Good morning, Matt. On the retail side, with regards to the Mobilia in St- Bruno, can you give us a sense, I may have missed it in your commentary as to what's going on there? It was, the story with Mobilia is very simple. During COVID, they had a hard time supplying their customers with furniture. There were huge delays in order to get deliveries of the furniture. They went ahead and they over-purchased during COVID. I think that this is sort of a sign that you see, you know, with the larger retailers. I think we saw it with Walmart, where their warehouses are bursting at the seams. In the case of Mobilia, their warehouses couldn't handle what they had ordered, so they just wanted to... On a three, four -month basis, I forget if it was four or maybe a little bit longer, I forget. They needed a place, and we had 30,000 sq ft that was vacant, and so they used it temporarily. We knew that this was a temporary lease. It was an accommodation, basically. They paid us rent. All this to say that we knew that this was not going to be significant nor, you know, be a permanent tenant within this property. Do you have prospects for the space at this point? I know necessity-based retail is still quite solid from a leasing standpoint. We do. You know, started as I reported earlier this year, we did go to ICSC@WHISTLER and met with large national tenants, and we're in discussion with one such large national tenant. Not for the whole space, but for part of the space. We're willing to subdivide the space in order to have three, instead of having only one tenant for 30,000 sq ft, maybe two or three tenants. We got a positive signal from them. We met them again two weeks ago, and we got positive signals basically saying that they were going to paper a transaction for part of that space. We have another prospect, not in the same center, but for another space that we are renewing on a yearly basis with a tenant that is not paying us what the market should bear. As a result, we renewed temporarily that tenant on a yearly basis with rights to terminate in order to accommodate a substantial tenant, a national substantial tenant, that would take that space and increase substantially NOI within that property. Okay. No, that's helpful. There's, I mean, just to give you color, there's, we're seeing a lot of activity from national retailers at all our retail sites. This is probably where we're most busy. As we as far as negotiating and putting in place. Again, in the office segment, as we reported, we, you know, we closed 67,000 sq ft of new leases in the office segment. It's showing that, you know, at least, I'll speak to our properties and not for generally the market, but it seems that, we're getting traction in our office buildings, and this is a good sign as well. On that front, Michel, with regards to the 2023 maturities, what remains? Like, what would be your ideal kind of retention rate for tenants in the portfolio? If you do lose somebody, like what is the demand on taking that space from re-leasing as well? I think that, throughout, if you exclude the temporary lease with Mobilia, I think that we'll be north of 70% retention. Okay. Okay. No, that's very helpful. With regards to the debt maturities this year, the rate is higher. I assume, Mathieu, that that has to do something with some of the variable rate debt outstanding is in the 2023 maturity number. Does it actually mature this year, or is that just the way it's been presented? If it does, is there an opportunity there to kind of reduce your interest expense on that? Yeah. You know, out of the six properties that we have to refinance, two are variable. Variable, you know, it's been already a high rate that we have on those two properties. In terms of refinancing those, I don't see any risk, you know, in terms of differential for interest rates. The other four, those are loans that have been underrated more than five years ago in terms of mortgages, so the replacement cost is higher. You know, I think what we're seeing is about 150 basis points for about CAD 40 million of the CAD 68 million that we have to refinance. Okay. No. What would be a spread today for... I guess that depends on asset class, but generally for secured financing spreads, have they remained. Yeah. If you look at GOC, you know, at five years, GOC five years plus, about 200 basis points. Okay. 200 basis points- 225 basis points. Yeah. Just two quick ones accounting-wise. The leasing costs, internal leasing costs add back, I think it was CAD 356,000 this quarter. It was a bit higher last quarter. I know there's an allocation of some income there. Should that CAD 356,000 be kind of a good run rate, or how should we think of that addition? Maybe quickly, just on the CAD 1.4 million non-cash item, does that fall all the way through, or is there an offset at some point in the income statement? Yeah. Your first question, I think it's a, it's a good run rate to use for the rest of the year. Okay. The second question, the CAD 1.4 million is a one-time adjustment, so I don't expect any other adjustment coming from that. Okay. If we were modeling, we should take that out of our revenue number and then grow that revenue at. Yeah. Correct. Our assumed growth rate. Okay. Yeah. Fair enough. Thanks, guys. At this time, there are no further questions. Please go ahead, Mr. Léonard. Thank you very much for participating in our conference call this morning. Our results are in line with our budgets. We're happy to present these results. I think they're very positive, and we're seeing a performance from our portfolio that should really increase throughout 2023. As I mentioned, there's leasing efforts that are tremendous. It's not only the occupancy rate that we can see that is going to be affected by the leasing efforts that we're putting together. It's also our NOI because as there are leases that are coming to maturity that are basically below market, as there was a lease in retail that you saw with an increase in 38% or almost 39%, we see that in the portfolio we have these opportunities as well. Thank you very much again to have your participation to this call today, and we'll see you when we report Q2 a little bit later this year. Thank you very much. This concludes today's conference call. You may now disconnect.