Good morning. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to the BSR REIT Q1 2022 Financial Results Conference Call. Note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star then number one on your telephone keypad. If you'd like to withdraw from the question queue, please press star followed by two. Thank you. Mr. Oberste, you may now begin the conference. Thank you, Sylvie, and good morning, everyone. Welcome to BSR REIT's conference call to discuss our financial results for the first quarter ended March 31st, 2022. I'm joined on the call by Susie Koehn, our Chief Financial Officer. Blake Brazeal, Co-President and Chief Operating Officer, is also with us and will be available to answer questions following our prepared remarks. I'll begin the call with an overview of our first quarter performance and other corporate developments. Susie will then review the financials, and I'll conclude by discussing our business outlook. After that, we'll be pleased to take your questions. First, I want to remind listeners that certain statements about future events made on this conference call are forward-looking in nature. Any such information is subject to risks, uncertainties and assumptions that could cause actual results to differ materially. Please refer to the cautionary statements on forward-looking information in our news release and MD&A dated May 10th, 2022, for more information. During the call, we'll reference certain non-GAAP financial measures. Although we believe these measures provide useful supplemental information about our financial performance they are not recognized measures and do not have standardized meanings under IFRS. Please see our MD&A for additional information regarding our non-IFRS financial measures, including reconciliations to the nearest IFRS measures. Also, please note that all dollar amounts are denominated in U.S. currency. Q1 was another period of outstanding financial performance for BSR REIT. We generated robust growth across all of our key financial measures, supported by very strong rental market conditions in our core Texas markets. Let me take you through a few of our highlights. Same community revenue increased 11.2% compared to Q1 last year. Same community NOI rose 16.3%. AFFO and AFFO per unit nearly doubled, and net asset value per unit increased 66.4% compared to Q1 last year and 11% sequentially from the end of the fourth quarter. Our weighted average rent at quarter end was $1,349 per apartment unit, representing a year-over-year increase of 19%. Rental rates for new leases, excluding properties undergoing initial lease-up, increased 17.4%, and renewals increased 9% for a blended increase of 12.5%. We carefully balance the time an apartment unit is unrented, as well as the cost to turn an apartment unit when determining whether to renew a lease to maximize net operating income. That gives you a sense of just how much the Austin, Dallas, and Houston rental markets are booming. It also highlights the strength and resilience of the BSR property portfolio, which was significantly upgraded through our capital recycling program. We continue to pursue attractive growth opportunities in our core markets. As you know, we recently completed a $115 million equity offering. It strengthened our balance sheet and gives us considerable financial firepower to capitalize on potential acquisition or development opportunities. We didn't announce any new acquisitions in the first quarter, but there was still a very significant announcement for our unit holders. In February, our board of trustees approved a 4% increase to our monthly distribution, bringing it to $0.52 per unit on an annualized basis. This decision highlights the strength of our portfolio and our positive business outlook. I'm also proud to note that BSR was recently ranked second among all U.S. multifamily REITs in online reputation assessment scores for 2021 by J. Turner Research. For those who aren't familiar, J. Turner ranks top properties and management companies in the United States based on reviews from websites like Google, Yelp, Apartments.com, and ApartmentRatings.com. BSR's ORA scores of 82.08 for 2021 is a strong indicator of resident satisfaction. By comparison, the national average ORA score is 62.62. Our team members work hard every day to be responsive to our residents and provide them with the best possible living experience in our communities. This ranking is a credit to our team, our culture, and our residents. I'll conclude by simply noting that we are thrilled to be generating such strong financial performance. Given the strength of our portfolio in our core Texas rental markets, we are confident there is more to come. I'll now invite Susie to review our first quarter financial results in more detail. Susie? Thank you, Dan. Same community revenue increased 11.2% in the first quarter to $22.2 million, compared to $20 million last year. The improvement primarily reflected a 9% increase in average rental rates for the same community properties from $1,136 per apartment unit as of March 31st, 2021, to $1,239 as of March 31st, 2022, as well as a $0.2 million increase in other income. Total portfolio revenue for Q1 2022 increased 45.7% to $37.5 million, compared to $25.8 million in Q1 last year. This reflected a $2.2 million of organic same community rental growth, as well as contributions from property acquisitions and non-stabilized properties, which added $13.5 million and $0.6 million of revenue, respectively. Property dispositions reduced revenue by $4.6 million compared to Q1 2021. As a reminder, non-stabilized refers to properties that were undergoing lease-up or significant renovation during at least part of the comparative periods. NOI for the same-community properties was $12.1 million, an increase of 16.3% from $10.4 million last year, reflecting higher same-community revenue. This was partially offset by an increase in real estate taxes of $0.4 million. NOI for the total portfolio increased 47.1% to $19.6 million from $13.4 million in Q1 2021. Same-community NOI growth increased total NOI by $1.7 million, while property acquisitions and non-stabilized properties boosted it by $6.9 million. Dispositions reduced NOI by $2.3 million. FFO for Q1 2022 increased 90.6% to $11.1 million or $0.21 per unit compared to $5.8 million or $0.12 per unit last year. The increase reflects the higher NOI, partially offset by increases of $0.2 million in G&A expenses and $0.6 million in finance costs. AFFO nearly doubled year-over-year in Q1 2022, increasing 98.2% to $10.5 million or $0.20 per unit from $5.3 million or $0.11 per unit last year. The increase primarily reflected the higher FFO. Net asset value increased 66.9% year-over-year to $1.15 billion from $688 million at the time of Q1 last year. NAV per unit was 21.98 at the end of Q1 2022, an increase of 66.4% from 13.21 a year earlier. Dan noted, NAV per unit also increased 11% sequentially from 19.81 per unit at the end of December 2021. The REIT paid quarterly cash distributions of $0.128 per unit in Q1 this year and $0.125 last year, representing an AFFO payout ratio of 63.3% in Q1 2022 compared with 117.3% last year. All distributions were classified as return of capital. Turning to our balance sheet. The REIT's debt to gross book value as of March 31st, 2022 was 43.2% or 40.2% excluding the convertible debentures. Following our equity offering in April 2022, total liquidity increased to approximately $150 million, and debt to GBV improved to 37.9% or 35.1% excluding the debentures. We also have the ability to obtain additional liquidity by adding properties to the current borrowing base. As of March 31st, we had total mortgage notes payable of $488.8 million, excluding the credit facility, with a weighted average contractual interest rate of 2.9% and a weighted average term to maturity of 5.8 years. Total loans and borrowings were $831.6 million. Following the April follow-on offering, total loans and borrowings were $721.8 million, excluding the debentures, and 61% of the REIT's debt was fixed or economically hedged to fixed rates. We also had $42.4 million of convertible debentures outstanding at a contractual interest rate of 5%, maturing on September 30, 2022, with a conversion price of $14.03 per unit. Investment properties were valued at approximately $2 billion as of March 31st, 2022, compared to $1.9 billion at the 2021 year-end. We recorded a fair value gain of $118.8 million for the quarter, driven primarily by cap rate compression and higher NOI. I briefly mentioned the bought deal equity offering we completed. I'd now like to provide a little more detail. We issued 5,888,000 units at a price of $19.55 per unit for gross proceeds of approximately $115.1 million and net proceeds of $109.8 million. The over-allotment option granted to underwriters was fully exercised, underlining the strong demand from investors. Net proceeds were used to pay down the REIT's credit facility to fund future acquisitions and for general trust purposes. I'll now turn it back over to Dan for some closing comments. Dan? Thanks, Susie. We're obviously very pleased with our current competitive position. We have a high-quality portfolio focused on three incredibly strong Texas rental markets. Given the robust fundamentals underlying these markets, including population and employment growth that far exceed the national average, we expect continued strong rental growth moving forward. Accordingly, we are maintaining the highly positive guidance for 2022 that we first provided in March. We anticipate FFO per unit of $0.86-$0.90 compared to $0.60 in 2021, and AFFO per unit of $0.80-$0.84 compared to $0.59 in 2021. In addition, on a same-community basis, we expect revenue growth of 8%-10% in 2022 and NOI growth of 11%-13%. Property operating expenses are expected to increase 4.5%-6.5% year-over-year, well below the projected growth in revenue.. These numbers are based on our current portfolio and do not take into account any acquisitions or dispositions. However, external growth remains an important priority to us. We are continuing to pursue accretive acquisition opportunities in our core markets as they arise. As always, we prioritize off-market or limited bidding situations. At the same time, we are highly disciplined and committed to maintaining a strong balance sheet. By focusing on our internal and external growth strategies, we're confident that we will continue to deliver strong results for our unit holders. That concludes our remarks this morning. Susie, Blake, and I would now be pleased to answer any questions you may have. Operator, please open the line for questions. Thank you, sir. Ladies and gentlemen, if you would like to ask a question Please slowly press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw yourself from the question queue, please press star followed by the number two. If you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and slowly press star followed by one on your telephone keypad. Your first question will be from Sairam Srinivas at Cormark. Please go ahead. Hey, Dan, Sairam. Thank you for your comments, and congratulations on a good quarter. My question is finally around the supply chain crisis as well as the higher renter demand we're seeing around us today. Are you seeing that impact the supply response in your markets? If so, how does that impact rent growth? Hey, Sar, this is Dan. I'll try to tackle that. Yeah, you know, the supply chain disruptions are definitely slowing development in our markets. I mean, you've seen, I'll say a disconnect in supply and demand drivers. That is to say that, absorption last year in our markets was roughly twice the pace of supply. To dig into that, you gotta think about what it takes to build an apartment project. Let's say it takes 10,000 different items to be purchased. Well, if three of those items can't be produced, then you can't lease a unit or an apartment, a residence to a resident. If a water heater can't be delivered from China or from another area, you can't lease an apartment. I think that's what we're seeing. There's about, let's say, 80%-90% of the supplies necessary to build an apartment are readily available, albeit at different costs, most of the time higher. There still remains that 15%-20% that takes a little bit longer for those developers to obtain. That's gonna stretch out deliveries. That has stretched out deliveries in the last year. It continues to do so. Our development partners continue to, I'll say, stretch out their construction timelines for new starts and underwritings for permits pulled. We don't expect that to go away or the dynamics we've seen in the last 6 months generated by supply and demand dysfunction to go away anytime soon. As it relates to runway of continued rent growth, you know, right now our markets are projecting elevated rent growth through 2023. That goes back to just, you know, more renters than available apartment units being delivered in our markets. It makes a lot of logical sense when you think about it. Thanks, Dan. Yeah, that makes sense, and it's in line with other things that I'm reading around over here. Probably looking at this from the other side, has there been any policy response as such in your market in terms of like making renting more affordable or generally dealing with the housing crisis? Are you talking about affordability, discussions, rent caps and the like? Yeah, yeah, especially from the local governments or the local municipalities. Yeah. You know, we think about that, and I know it's a general concern in housing in the United States and to a certain extent in Canada. The way we look at it is our current rent, even with the increases we've seen as a percentage of our average resident income is 21.4%. That's around the range that our rent income was when we went public. That, you know, so long as it stays down at those levels, I would say we feel more comfortable than the property owner who owns an apartment project where the rent in an MSA where the rent to median income is 43% or 45%. You know, we see that our markets, from just an economic standpoint, are far behind, we'll say 50-75 other markets. We haven't seen a big push in affordability discussions outside of, we'll call it Boston, Minneapolis, parts of California, and the upper Pacific Northwest at this time. That's the economics of it. We think that that it bodes well in the BSR investment strategy. Now down to the politics of it. You know, Texas has historically been and continues to be, a different political environment. The concept of government regulated affordability and housing and income-restricted rent restrictions is not. I wouldn't say it's foreign in Texas. I would say Texas doesn't look to lead the charge in that political topic. Thanks for that color, Dan. Probably my last question before I turn it back is on the acquisition pipeline. In terms of the product you're seeing in the market, like is that changing because of all the factors we've discussed until now? Do you see more deals coming through or has the pace slowed down? Man, Sar, sometimes I wish. This is Dan again. Sometimes I wish it would. You know, I wanna remind everybody that you know, we don't talk about cap rates a lot 'cause my cap rate, your cap rate, they're all different. What we buy is a spread, an unlevered spread above our cost of capital. We like to buy around a 1%-1.5% spread on top of where we see debt prices sit. So in the current environment, that puts you know, even with underwritten growth, that oftentimes puts BSR and other disciplined underwriters like us outside of the competitive stack. What we've seen in our markets is no impact to volume or pricing. Let me detail that a little bit. In March and April alone, you know, our team assessed, underwrote, walked 31 potential acquisitions, aggregating about 10,355 suites with a collective asset value of $3.04 billion. The average asking price of those assets was $98.2 million, and the average age of construction was 2012. Every single one of those assets sold, and BSR didn't buy one of them. What we're seeing in our markets, specifically in Dallas and Austin as well as Houston, is those cap rates remain entrenched at 3%-3.5%. That differs from the rising interest-rate environment. We're seeing a lot of buyers go in and lever at 4.50 or 4.75, and buy a 3.25 cap. They're buying that rent spread increase that's depicted in our markets. There's a half dozen to a dozen other markets in the United States that exhibit the same fundamentals, and that's rapid cap rate compression. Part of that's driven by that opportunity for lease increases as they're embedded over the first year of ownership. Where we are seeing some cracks are in markets not like ours, where we see rent compression. We don't see the same 20%. Just the same outpaced rent increase numbers. We're seeing a developing bid-ask spread between a seller and a buyer. These are not in our markets, these are other markets. That is to say that the seller's not capitulating on its compressed cap rate ask, and the buyer simply can't afford to buy an asset with such high leverage. The seller is not capitulating because even though they may not have 25% growth in their rent and revenue side, they're still experiencing a healthy 5%, 10%, 15% growth number. That seller is very happy to sit on their existing debt and watch their cash flow position increase. It's a very favorable, and I'll say a very bullish trend that we're seeing in multifamily. Again, it makes a lot of logical sense. Multifamily and industrial seem to be very, very attractive asset classes with limited options outside of those two sectors. That's amazing, Daniel. Thank you so much. I'll join back. Thank you. Next question will be from Brad Sturges at Raymond James. Please go ahead. Hi there. Just to follow on to that line of questioning, but more related to the elevated pace of rent growth that you're seeing. Can you just talk about, you know, some of the leasing spreads you're seeing in Q2 to date and how you see that trending over the course of the year? I guess the last couple of quarters, you were on a blended basis more in the low to mid-teens. I'm just curious if that's still the level of spread that you're getting on new and renewal leasing together. Hey, Brad. This is Blake. Yes, we're continuing to see that acceleration of the rent spreads. What we're noticing a little bit is our renewals are going up because some people are choosing to do shorter term leases right now, and we've capitalized on that. In terms of the percentages that were quoted in our MD&A and what we're seeing going forward and what I see going into the rest of the year, I think we've kinda had a reset where we're, you know, if you look at our loss to lease, we're around 15%-16%. I think that's what I told you the group last time. I see the same thing developing into the rest of the year. Okay, that's great. You know, I guess, do you think, given you know, some of the move in rents, would that have any impact, you think, on your retention rate with existing tenants, or do you think that will be fairly stable? No, actually, I don't. I see our retention rates improving as we've been seeing this over the last month or so. We've seen a flip. You know, we were at a 60/40, I believe. Now we're at a 52/48, so I really feel good about where we're heading in that regard just because of, as I've told the group over the last couple of quarters, that the migration into Texas just continues and continues. We're looking at an 18% of our new leases are coming from out of state residents. 43 different states represented. The housing supply in Texas, a good thing that I monitor is how many people we take surveys when people leave us. What dropped from Q4 to Q1 was the amount of people leaving for houses. All of these factors combined are trending in the positive direction, which is helping us accelerate rents and also accelerate occupancy, and we feel like that's gonna continue into the future. Also, another thing that I've told y'all in past quarters has gone up to 83,844. That's over a 7% increase over last quarter again. All these factors combined are playing into a good situation for us, and I feel like that's going to continue the rest of the year. Great. Dan, in your opening remarks about, you know, growth initiatives or opportunities, you did highlight acquisition and development. I just wonder if that development piece is that more related to what you've been doing recently in terms of buying new construction assets from developers? Is there an expansion of that strategy to maybe considering doing maybe intensification of existing communities on balance sheet or even greenfield development? I would say, Brad, it's a little bit of an expansion. You know, the developers that we work with are some of the best in the country and the most prolific in the country. You know, we also hold the belief here that you're good at what you do a lot of, and BSR does a lot of managing properties and a lot of acquiring and underwriting of stabilized assets. These developers are really good at developing. You know, I think it's when we look at the assets that we bought and our experience with those assets and the availability of phase II, for those assets, as well as the availability of other developments developed by these developers in sub-markets that we are very well familiar with, we see an opportunity. You know, we've talked in the past about how we see the development spread to stabilization to be about 100-150 basis points north of where we see stabilized cap rates in for acquisitions right now. That's a compelling growth sleeve for BSR. You know, I think it's a win-win-win in all respects. A partnership with a developer on a phase II who delivered the phase I that we obviously loved and we're obviously enjoying, and our unit holders are enjoying the ownership of, you know, a partnership there is just gonna help our operating margins. We've already vetted the submarket. We've vetted the developer. We've vetted the product, and we have a pretty clear understanding on how to lease up the product. It makes a lot of logical sense in this environment to kind of expand upon, I think, what the REIT has done a little bit of in the past few years. When you say partnership, is that, like, an equity partnership, or would it also include potentially providing development loans with a ROFO in return to buy the asset on stabilization? You know, I think that the beauty of working with a pretty prolific developer is it's kind of like looking at the menu on the Cheesecake Factory. They can slice it and dice it however you wanna look at it. I think the REIT managers and the executive officers here will make the best decision for our unit holders on a development by development case. Each option is attractive depending on where we see the REIT currently and where we see it headed over the near term, I'll call it 6 months, and then the strategic term that the board and management focus on, which is more of a 3-year plan. All are on the table right now, and BSR's method is to take the most disciplined approach for our shareholders. Okay. That makes sense. We'll turn it back. Thanks a lot. Thank you. Next question will be from Jenny Ma at BMO Capital Markets. Please go ahead. Hi. Good morning. Good morning. I wanted to ask about how you're thinking about acquisitions over the near term, because you talked a lot about your desire to remain disciplined and cap rates remaining fairly low. After the equity offering, your leverage is sitting quite nicely well below 40%. I think in the past, you mentioned you know, wanting leverage to hover around the 50% level. How should we think about where you think your leverage might settle out in the next 6-12 months against the opportunities in the market? Yeah. Hey, Jenny, this is Dan. You know, when our team looks at leverage on a look-forward, we feel very comfortable with the leverage range between 40% and 45% debt to GBV. We'll set a guidance or a target over the long term on a sustained single-digit debt-to-EBITDA coverage ratio. That's a little bit different from the profile that we've spoken about in the past, which is a 50%-55% range. But that's where we feel comfortable with in the current environment, 40%-45%. As you know, as to your question on the current environment for immediate deployment of capital into stabilized acquisition markets or stabilized acquisitions in our markets, you know, I think about it like a baseball player coming up to the plate. You know, BSR right now doesn't have anything under contract because the deals that we're seeing in our markets, they're just not our pitches. They're fantastic properties. But we see. You know, we talked about it. We like to buy a spread above our cost of capital, and we start to feel a little uncomfortable when that spread gets to a 50 to a 100 basis points. And right now, if I'm looking at rates that the private buyer's financing at, they're buying. They're financing at 4.23%-4.75% on an interest rate, and they're gonna pay 3.25% on a cap rate. We wish them well, and we know that there is a good investment thesis that they have behind that. But that's not BSR's pitch. We're not gonna swing at that ball. We don't think that's a permanent environment for multi-family properties in our markets. We see, I think a very stable and disciplined opportunity to hit a single or a double in a kind of a property intensification phase II co-development. That opportunity is certainly in front of us, and we continue to surveil these markets. I would remind everybody that, you know, we're not the biggest REIT in the world. We've proven time and time again that we can deploy capital accretive to our unitholders on an AFFO per unit basis and a NAV basis. We'll just continue to do that. We don't feel much urgency to put something under contract for the sake of deploying our shareholders' capital. We like to buy the best property in the market that we look at. We're comfortable, you know, being disciplined. If that market hits us in a month, we'll hit it hard. If it hits us in 3 months, we'll hit it hard. With all that being said, right now, with interest rates as volatile as they are from a day-by-day and a month-by-month basis, you know, it takes a month and a half to buy a property from soup to nuts. We feel like this market benefits the cash buyer. Mm-hmm. A finance contingent purchase price in this market creates a lot of uncertainty. Our recent equity offering enables us to compete as a cash buyer at just about all levels for single and double property acquisitions in our markets, and that's exactly what we wanted. That's exactly how well we're positioned on a go-forward. That's great color. Thank you. You mentioned the 4.23%-4.75% on the mortgage rate. I know you guys aren't out in the market for renewals per se, but would that be an indication of where it might come in for BSR if you were looking to tap the market? No, it wouldn't be. You know, that's the fun part about competing. It's knowing your strengths and your weaknesses as well as your competitors' strengths and their weaknesses. I'm using what a private buyer would approach Fannie Mae or Freddie Mac and expect to receive on a rate spread at a leverage ratio between 60%-80%, based on a term of between. You know, the agencies are gonna offer you 7-, 10-, and 12-year terms. Those are Fannie Mae quotes from 7-12. Freddie Mac is inside and out, depending on the term and the tenor, the interest-only request, so on and so forth. A fair range right now that a private buyer is financing at on the spot today is that 4.25%-4.75% number. BSR, obviously, it, you know, we haven't engaged the agencies for lenders for lending on projects since last August when we refinanced a facility, I think, for seven years at 2.6% fixed interest only. You know, I think there's a time and a place for a partnership there with the agencies. Right now, our syndicate relationships and our private bank relationships seem to be very, very favorable and provide, we think, a competitive advantage on our overall capital cost relative to our peers. With that said, even though we have a lower cost of capital, you know, we remain disciplined. We haven't changed our underwriting standards, and we'll continue to wait for our pitches. Okay, great. Lastly from me, your variable rate exposure is relatively high, I think just under half on your total debt. Any plans to take that exposure down, or are you comfortable sort of riding out what we're seeing in the market over the short term? Yeah, sure. So when we think about interest rate management, we look at you know, we're looking at that every week, and we have. It's a very popular topic right now. I think BSR would look to hedge if it's opportunistic for BSR to hedge. Right now, we see you know, a market pricing hedging at, well, you know, between, we'll say, 250 and 350 for hedging costs. Mm-hmm. That sits well above the market expectation for the increase in LIBOR and SOFR over the course of the next 12-24 months. Our thought is when you're buying insurance, you know, you don't wanna pay too much for your insurance. With that said, you know, we remain pretty, I think, pretty comfortable with our guidance for 2022 that we kind of maintained this quarter, given our current leverage profile. You just answered the question that I had. Thank you very much. I will turn it back. Thank you. Once again, as a reminder, ladies and gentlemen, if you would like to ask a question, please slowly press star followed by one on your touchtone phone. Your next question will be from Matt Kornack at National Bank Financial. Hi, all. I know property taxes in Texas is a blood sport, but should we think of the figure this quarter as a good run rate for the remaining quarters, assuming no change in the portfolio in terms of acquisitions? And yeah, or are we expecting some appeals to come in that may bring that figure down? Hey, Matt. Yeah, I think what you saw in the first quarter is a good run rate for the rest of the year, assuming no, again, dispositions or acquisitions. The reason for that is because you have to understand, right, when you buy new properties or when your properties just increase in value, naturally that means your real estate taxes are going to go up, and we've included that assumption in our guidance. Okay. Nope, fair enough. Just around growth going forward, you had talked about potentially leveraging the platform through partnerships on that front. Is that still something that you think there are partners out there that are willing to do and something that would make sense in the context of your capital structure? Yeah, I think there's two questions in our. The answers to both are it depends. You know what? I think the market environment for a strategic partner when you're printing the type of top line numbers that Blake and the team are bringing in, the number of available partners is limitless. Now, with that said, the rise in interest rate environment is certainly gonna preclude a highly levered partner from wanting to partner with BSR. That's okay. You know, that environment will change, and those partners will become more compelling. The way we think about it is, in times of low interest rates and massive revenue upheavals, there's 6 partners that are very much willing to work with the BSR platform. In environments like this, there's 6. They're just a different 6. BSR is gonna continue to look to, I'll say, leverage our platform to grow a bit. I think it needs to be under the right circumstances. How we would define the right circumstances is, you know, we don't wanna overcomplicate our balance sheet or our P&L. That's step 1. 2, it has to be the correct partner that rows the boat in the same direction that we're rowing as well. I think those two things, when you can get past those two there's again a half a dozen partners out there that make a whole lot of sense, that can help BSR grow outside of our organic growth and our acquisition growth. Okay. No, that makes sense. A last one for me. I think when you originally put your guidance out, it contemplated that almost half of the mark-to-market opportunity would be captured throughout this year. Should we still think kind of that renewal spread should trend kind of from the 17% range that they're at now to sort of something in and around the high single digits by the end of the year? Or have market rents outstripped expectations at this point, increasing growth into the next year? Yeah. Matt, right now, again, we'll point back to our guidance. We feel very comfortable inside that range of growth for same store rental and NOI growth on a percentage basis and then the AFFO and the FFO per unit range. We just wanna hit that again. Those comments from last quarter, we continue to see in our markets, and we've reflected in our guidance that we produced in March. Fair enough. It's good enough guidance for us, so we'll take it. Thanks, guys. Thank you. Thank you. Next question will be from Jimmy Shan at RBC Capital Markets. Thanks. Yes, just to follow up on that, on the guidance. I mean, this quarter, same store NOI was, you know, quite high, 16%. That would imply in the second half that we should see that decelerate to maybe high single digit. Is that a fair way to think about it? Is that kinda how we should think about 2023 as well, given what you're seeing in the marketplace? Yeah. Hey, Jimmy. Yeah. That's, it's the same as last quarter where I said, as we continue to true up our leases to market, right? You're gonna see a decline in the revenue over the prior year, right? Because we're not gonna get 20% increases on top of 20% increases year-over-year. As we shift towards the latter half of the year, that is certainly gonna come down. Okay. That also is embedded in our guidance. Okay. The guidance also in terms of, I might have missed that the interest rate hedging, it does not assume any interest rate hedging in 2022. Actually the guidance includes an increase in rates, right? That, Okay. Okay. Sure. Okay. Sorry. It does assume an increase in interest rate. To what amount? To what level? Yeah. Well, we embedded a 75 basis point increase incrementally over 12 months, but we also have had some shrinking in our spreads as well. Okay. What are you paying right now on the credit facility? What rate are you paying right now? What was the. Hey, Jimmy. This is Dan. Right now, I think based on the terms of the credit facility, we're paying about 2.25%. Okay. Since you asked, obviously the credit facility is gonna—our credit facilities are gonna be based off LIBOR, and LIBOR contract rates, set each month. LIBOR is gonna move around the U.S. Central Bank Fed movements. So right now what we're paying on our rates are really in line with our guidance through April through May. You know, any additional movements in the Fed kind of looking forward, you know, they. Depending on, as Susie said, depending on when those movements take place, they may have a positive or a negative impact on our guidance for the year. But at this time, we feel very comfortable with where we've guided to. Okay. Sounds good. Then maybe just lastly, you provide some good color on your on the investment market. I was just curious, so on the assets that you've underwritten, I believe you said it was through something like $3 billion. When you look back at what the pricing ended up being, and again, given your comment about where Fannie and Freddie debt costs for levered buyers are, like, what type of levered IRR you think these people are getting, you know, buying in the current environment? And I presume they're underwriting higher rents. Is it your view that the rents are just not reasonable or just too aggressive? And how do you. When you look back at your underwriting and what sort of conclusion do you come with? Yeah, sure. There's a little bit to unpack there. Yeah. If I don't answer part of your question, it's not intentional, feel free and follow up. Mm-hmm. First things first. We look at some of those. I mentioned $3 billion, and that's just in March and April. We wanted to provide color on March and April because it's our view that this interest rate, you know, these rapid escalation in interest rates kind of began as a combination of rate and credit spreads in the middle of March, really post-Russia and Ukraine. Most of those deals are gonna close at. I'm gonna give you a range of 3%-3.5% on a cap rate. Yes, you're correct. What those buyers are looking at is they're embedding some of the rent growth that we're depicting currently, and then the mark-to-market leases that Blake talked about that are they're remaining in a rent roll. They're gonna underwrite, I'd call it, a going-in cap rate of 3.25. Their assumption is that their year two going-in annualized cap rate might be a 5. Call that a 175 basis point expansion between their year 1 and year 2 numbers. Now, it's not that we don't believe that, it's that we think it's at ninety million dollars a pop for an acquisition, which was the average price we talked about. That represents maybe an elevated risk to us. Now, in the past, we've underwritten a spread expansion. We feel comfortable, and we've talked about it, on a stabilized asset to underwrite to 75 basis point cap rate expansion over a 3-year period. That's our criteria. On a lease up, we wanna feel comfortable with a little bit more year 1, year 2 spread. We just don't feel comfortable with an increase in interest rates and a compression of cap rates underwriting twice the spread for a lease up that we would otherwise underwrite to. Number two, you think about the spread on stabilized assets. We like that 75 basis points. Well, the market's underwriting 175 right now. That's just not our pitch. We'll wait, and that we believe very strongly that those numbers will come back down to normal, whether it's with a reset of prices and an expansion of cap rate or a continuation of outsized rate increases, driving the volume and rate as they have driven in the last year in our markets. Now, is there anything that I missed, Jimmy? No, that makes sense in terms of what you just said. What I would just also, in terms of levered IRR that people are trying to get, what they're trying to solve for, is it. What would that number look like if you're going in stabilized 5? So you're still looking at a high single digit, low double digit type of levered IRRs? Is that for the type of assets that you would typically underwrite. That's a good question. Levered, historically, that's ranged between 11%-15%. I think the underwritten levered IRRs remain the same, 11%-15%. I think what's embedded in that levered IRR is, it's interesting. It's probably less about the reversion cap rate now, and it's more about that year one to early year 2 rent growth driving yield. Both of those will juice an IRR. You know, we've talked about in the past, BSR does. When we underwrite to a very similar 10%-15%, 11%-17% IRR on our hold, on our modified internal rates of return, we really place, we've always placed less emphasis on reversion cap rates, than I think our competitors. Now all of our competitors, or we'll say all the other competitors in our markets. You know, I think we all agree. Nobody's putting a whole lot of emphasis on that reversion cap rate. Where we differ is perhaps some of the victors in these $3 million transactions that traded in the last 2 months that we saw that qualify for it to be a BSR property. Those victors have probably underwritten a bit more collected revenue increases throughout the course of the next year and a half than we do. The second thing is, we might underwrite those rents to come in, and we certainly expect those rents to come in and those mark-to-markets to come in in our markets, in the properties we own. We just might expect them to come in over a traditional time period of 18 months or 24 months. Our competitors, in order to place that capital, may be underwriting that rent to come in in 3 months or 9 months, which really elevates that year one cap rate. That's a pitch we're not gonna swing at. Got it. Thank you. Thank you. Next question will be from Mark Rothschild at Canaccord Genuity. Please go ahead. Thanks. Morning, everyone. My question is on the quarter-over-quarter decline in occupancy. Should we think about that as being part of the strategy to drive rent growth and more of a temporary thing? Or was there some other factor that drove that? Quarter that there was gonna be, that was part of our internal strategy. Frankly, we hit right on top of our expectations in that regard. In doing that, we also were able to increase the sequential income by dropping the occupancy. It's really made up of about six properties. If you really look at it, what's happened, those sequential gains in income run anywhere from 1%-3% on all six of those. What we're seeing into the second quarter is an acceleration of the rent plus an acceleration of the occupancy. You're right, it was on purpose, and we've seen it come to fruition, and it continues to. Okay, great. Thanks. That's it for me. I'll turn it back. Thank you. Next question will be from Himanshu Gupta at S Capital. Please go ahead. Hi. Thanks for taking my question. I'm seeing your own implied cap rate close to 4.7% with the stock at $17 a share now. I'm wondering, do you agree with that math? If so, why not buy back your own stock at a huge discount to private market prices? Is it Andrew? Yes. You know, we don't wanna speak to whether we agree or disagree with that math. I believe the company produced an IFRS NAV with a blended underwritten cap rate of 3.8%. That's a cap rate that's reflective of a process, and we feel comfortable with that cap rate. To your question on stock buybacks, that's not a topic that we're really prepared to discuss about in an earnings call at this time. Okay. You're not open to share buybacks? I didn't say that. My comment was BSR is not prepared to have a discussion about stock buybacks on this earnings call Okay. Can you share whether you have the ability to buy back stock or a plan in place? I don't believe we've filed a plan, not a current plan. I think we have in the past. Okay. Thank you. Thank you. This concludes the question and answer period for today. Please proceed with closing remarks. Thanks. That concludes our call today, and thank you for your interest in BSR REIT. We look forward to speaking with you again after we report our 2022 second quarter results in the summer. Ladies and gentlemen, this does conclude your conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines.