Good morning, ladies and gentlemen, and welcome to the Killam Apartment Real Estate Investment Trust Q3 2021 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require assistance, please press star zero for the operator. This call is being recorded on Thursday, November 4th, 2021. I would now like to turn the conference over to Philip Fraser, President and CEO. Please go ahead. Thank you and good morning. I want to welcome you to Killam Apartment REIT's Q3 2021 earnings presentation. I am here today with Robert Richardson, Executive Vice President, Dale Noseworthy, Chief Financial Officer, Erin Cleveland, Senior Vice President of Finance, and Nancy Alexander, Vice President of Investor Relations and Sustainability. Slides to accompany today's call are available on the investor relations section of our website under Events and Presentations. I will now ask Nancy to read our cautionary statement. Thank you, Phil. This presentation may contain forward-looking statements with respect to Killam Apartment REIT and its operations, strategy, financial performance, conditions, or otherwise. The actual results and performance of Killam discussed here today could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risk and uncertainty surrounding forward-looking statements. For further information about the inherent risk and uncertainties in respect of forward-looking statements, please refer to Killam's most recent annual information form and other securities regulatory filings found online on SEDAR. Unless otherwise stated, all forward-looking statements made today speak only as of the date which this presentation refers, and the parties have no obligation to update such statements. Thank you, Nancy. I am pleased to report another very strong financial and operating quarter for Killam. Throughout the Q3, we have seen strong leasing activity in our apartment and commercial divisions and a strong rebound in our seasonal MHC business. Our 2021 targets are outlined on slide three, along with our year-to-date performance. We produced positive same-property net operating income for the 30th consecutive quarter and increased our same-property NOI target to exceed 4%, up from the initial target of +2%. Dale will take us through Killam's Q3 financial results, followed by Robert, who will discuss our operating performance. I will conclude the call with an update on our recent acquisitions and our development pipeline. I will now hand it over to Dale. Thanks, Phil. Financial highlights of Killam's strong Q3 results can be found on slide four. We achieved net income of CAD 46.6 million compared to CAD 37.5 million in Q3 2020. The resilient demand for apartments, the rebound of our seasonal MHC business, and strong leasing in our commercial segment are reflected in both same-property growth and CAD 25.8 million of fair value gains on investment properties in the quarter. Killam realized FFO per unit growth of 11.1% and AFFO per unit growth of 13.0% in the quarter. Killam's AFFO payout ratio improved 900 basis points in Q3 to 66%. Please refer to slide five. Killam's same-property portfolio achieved a strong 7.4% NOI growth in the quarter. Year-to-date, same-property NOI is up 5%. Killam's key revenue levers are charted on page six. Apartment leasing and occupancy have been steadily gaining momentum since the beginning of 2021, leading to 97.4% same-property occupancy in Q3, 90 basis points ahead of a year ago. This included occupancy of 98.0% in September, and the trend of strong occupancy is continuing in Q4. Apartment rental rates as at September 30th, 2021, were up 3.4% versus September last year. Year-to-date, we've achieved 1.5% in rental increases on renewals and 4.9% on regular unit turns. Our repositioning program also contributed to our top-line growth. We've seen a slight uptick in rental incentives in the last year, with incentives in the quarter equal to 0.7% of revenues. These incentive offerings remain primarily limited to our Alberta portfolio. Excluding Alberta, incentive offerings for our same-property portfolio remain very low at 0.3% of revenue in Q3. In addition to strong performance from our apartment portfolio, our MHC and commercial properties also performed well in Q3, which Robert will expand on. We remain focused on expense management. Turning to slide seven, we realized a modest 0.2% increase in same-property expenses for the quarter. Year-to-date, same-property expenses increased 1.5% as higher general operating and property tax expenses were offset by lower utility and fuel expenses. Killam's same-property NOI margin increased by a healthy 160 basis points in the quarter and 80 basis points year-to-date. Slide eight highlights our debt maturity profile, including average apartment mortgage rates by year versus prevailing CMHC-insured mortgage rates. We realized a 43 basis point reduction in interest rates on CAD 27.3 million of maturing debt in the quarter. Based on current market conditions, we expect to refinance maturing debt throughout the remainder of this year and in 2022 at relatively flat rates. Slide nine highlights our debt metrics. Debt as a percentage of total assets was 44.1% at September 30th, below our target for the year of less than 47%. In addition, Killam finished the quarter with acquisition capacity of over CAD 250 million. I will now turn the call over to Robert. Thank you, Dale, and good morning, everyone. Today, I will provide an update on the strength of our apartment, manufactured home, community, and commercial property segments before turning the call back to Philip to discuss our acquisition and development pipelines. Please refer to slide 10. Killam continues to execute its long-term growth objectives to increase unitholder value based on three key strategies. One, increase Killam's earnings from its existing portfolio. Two, expand the portfolio, diversifying geographically through accretive acquisitions with an emphasis on newer properties. And three, develop high-quality properties in Killam's core markets. We have made notable progress on all three strategic priorities this year. Killam's growth is intentional and focused, keeping both community building and long-term sustainability top of mind. Slide 11 shows Killam's revenue growth for the Q3 and year to date by property segment. Market fundamentals for apartments throughout Canada remain solid, with consistently high occupancy rates coast to coast. In Q3 2021, Killam's occupancy increased 90 basis points, contributing significantly to same-property apartment revenue growth of 4.1%. This trend continues today with 50% of Killam's 216 apartment complexes at 100% occupancy, and 80% of the apartment complexes have only one unit or less vacant. After a challenging 2020 that saw Killam's resort properties in the manufactured home community sector experience record high vacancy and a commercial segment that required rental deferment and in some cases, rental abatement, 2021 has produced markedly improved results for Killam's MHC and commercial properties. Our MHC business accounts for approximately 7% of Killam's total year-to-date net operating income. In these 39 communities, Killam owns the land and the supporting infrastructure and leases sites to tenants that own their own homes and pay Killam in monthly site rent. 30 of Killam's 39 MHCs offer permanent year-round affordable housing to 3,800 residents. The remaining nine communities are seasonal, operate from May- October each year, and are often referred to as resort communities, as they typically have water features as well as many recreational amenities. Killam's resort portfolio achieved record growth this quarter and year to date. With the easing of COVID-19 restrictions and the return of inter-provincial travel, all the resort communities opened on time and operated at near capacity throughout 2021. Revenue growth as well as NOI growth were bolstered by MHC site expansions at many of Killam's communities this year. Killam's commercial segment consists of approximately 1 million sq ft of standalone commercial space that accounted for 5.1% of Killam's NOI for the nine months ended September 30, 2021. The majority of the commercial space is concentrated in three assets totaling 847,000 sq ft, namely Westmount Place in Waterloo, the Brewery Market in Halifax, and the Charlottetown Mall, soon to be renamed Royalty Crossing in Prince Edward Island. Killam's commercial portfolio reported same-property revenue growth of 8% in Q3 and 6.2% revenue growth year to date. A combination of increased commercial occupancy, rental step-ups, nominal rental abatements, and a lower bad debt expense all contributed to better performance when compared to 2020. Year to date, the commercial team has completed deals totaling 160,000 sq ft, 110,000 sq ft of renewals at a weighted average increase of 10%, and 50,000 sq ft of new commercial leasing at an average net rent of CAD 15.90/sq ft. I will now discuss Killam's apartment suite repositioning program. The market demand for Killam's new and newly renovated suites remains robust. Slide 12 highlights Killam's plan to deliver 550 repositioned suites for 2021. To date in 2021, the average capital investment for a repositioned suite is CAD 26,000, resulting in an average return on investment of 13%. I want to emphasize that Killam repositions suites once they have become vacant and has not and would not pressure a resident to surrender their suite for repositioning. The demand for upgraded suites is not restricted to specific geographies or properties, but holds true across Killam's portfolio. These upgrades provide attractive rental growth and return opportunities, as well as improving the energy efficiency and curb appeal of the portfolio. To finish the discussion on Killam's revenue growth, I want to highlight Killam's value proposition that has been successful for 20 years in attracting and retaining our valued residents and tenants. We undertake to build and be part of our communities, supporting housing initiatives that house 800+ families needing additional support. Please refer to slide 13. Killam has close to 19,000 apartment units and as noted earlier, 5,900 MHC sites across seven provinces from Newfoundland to British Columbia. We offer a range of housing options in each of our markets and have always maintained a very responsible approach to increasing rents for existing tenants. The decision to move rent takes into consideration the financial demands on our tenants and the evolving economic climate in our communities throughout Canada and increasingly globally. Killam's portfolio has a wide selection of locations, unit sizes, and layouts throughout its urban markets and suburban communities. With an average apartment rent of 1,200 CAD per month, this represents considerable value and accommodates a diverse group of tenants and potential residents. Fully 35% of Killam Suites rent for less than 1,000 CAD per month, and Killam's average MHC sites lease for 260 CAD per month. Slide 13 also compares Killam's average rent to the median household income in the markets where we operate. Using CMHC's recommended 30% of median household income at the upper limit for rent, this slide clearly shows Killam's rents are well below this upper limit. I will now hand you back to Philip, and thank you. Thank you, Robert. Please turn to page 14 to see our acquisition summary slide. This is a record year of growth for Killam, with CAD 390 million in acquisitions year-to-date. After a quiet Q3, we have acquired four new properties totaling 482 units in Charlottetown, Moncton, and two in Edmonton. On October 6th, we closed on a new 61-unit property in Charlottetown, as shown on slides 15 and 16. The purchase price of this four-story wood-frame apartment building was CAD 15.3 million or CAD 251,000 per unit, and contains 30 affordable rental units approved under the CMHC National Housing Strategy Program. These projects are to encourage a stable supply of new rental housing for middle-class families across Canada. In addition, this purchase aligns with our ESG initiatives to increase our affordable housing base by 20% by 2025. Average monthly rents for the affordable units are CAD 1.14 per sq ft, which is 65% of market rents at CAD 1.76 per sq ft. The property opened early this year and is 98% leased. On October 18, Killam acquired Emma Place for CAD 31.8 million or CAD 269,500 per unit, representing a stabilized all-cash yield of 3.9%. Please refer to slide 17 and 18. This new luxury 118-unit concrete building in Moncton has a mix of unit types with an average size of 1,035 sq ft. This quality asset has many amenities and is very well located in Moncton. The next two acquisitions on slide 19 and 20 are located in Edmonton. As a part of our geographical diversification growth strategy, we are increasing our presence in Western Canada by using our established operating platform to absorb the management of these new assets. On October 28th, we acquired Heritage Valley Central, a newly constructed 123-unit wood-frame building for CAD 28.9 million or CAD 241,000 per unit, representing an all-cash yield of 4.6%. This property is near other Killam assets and is close to the new Edmonton Hospital that is under construction. Killam has agreed to acquire Nautical Suites, a 180-unit property that contains three wood-frame buildings built in 2019 for CAD 42.3 million or CAD 235,000 per unit, representing a 4.9% all-cash yield. The average monthly rent is CAD 1,525 or CAD 1.74 per sq ft and is currently 98% leased. Killam is assuming a CAD 32.7 million mortgage with a 2.3% interest rate that matures in March 2023. We expect this purchase to close early next week. Through acquisitions and completed developments, we have added 1,601 apartment units this year to our portfolio. Our recently completed developments on slide 21 show the operating margins in annual NOI contribution of Tin Harley, Nolan Hill, and Shorefront. They were fully leased within six months of completion and contributed CAD 0.7 million in FFO in the Q3. Our development pipeline provides us with an excellent opportunity to add high-quality real estate assets to our portfolio. Slide 22 shows the five developments underway in the following cities: Halifax, Mississauga, Kitchener, and two in Ottawa, adding an additional 497 units to our portfolio over the next 18 months. Slides 23- 29 show updated progress shots of each development project along with construction information. The cost increases have been minimal, and we have experienced slight delays due to supply chain issues similar to all developers across the country today. The Governor remains on schedule and on budget. It will be a great complement to our surrounding neighborhood of The Brewery in The Alexander apartment building in Halifax. Renderings of two future development projects are shown on slides 30 and 31. We expect to break ground on both of these projects in early 2022. Finally, we continue to refine and advance our development pipeline. A full list of our development pipeline is included on slide 32. We are committed to being among the leaders in ESG for multifamily REITs, and we are working to reduce our environmental footprint. Our 2021 GRESB results earned us a green two-star designation. It is also worth noting that we also earned an A rating on the GRESB Public Disclosure Survey, an improvement from 2020, and outperforming our GRESB comparison group. To finish, Q3 has been a very good quarter with strong operating and financial performance. Our focused strategy is leading to increased earnings, a stronger balance sheet, more geographical diversification, and one of the highest quality apartment portfolios in Canada. This concludes the formal part of the presentation, and we will now open up the call for questions. Thank you. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Your 1st question comes from Jonathan Kelcher with TD Securities. Please go ahead. Thanks. Good morning. Good morning. Good morning. 1st, Rob, just to clarify, I think I might have missed this, but did you say 50% of your apartment properties are 100% full? Yes, I did. Okay. 80% one unit or less vacancy? Correct. Okay. I guess you'd have some markets in there that would be basically as strong as you've ever seen them. Would that be fair to say? What markets would those be in? Yeah. Well, for the most part, it's coast to coast. Like, there is demand everywhere. Now, the West a little bit, in Alberta a little, but, you know, Atlantic Canada across the board, they're performing very well. In Ontario, just a little bit of vacancy in Ottawa, and it looks to be coming around now in the Q4. But they're all strong. Okay. Just switching gears on energy costs, been a lot of volatility in those. What are your expectations for this winter versus last winter? Do you think with higher revenue, you can sort of keep margins similar to last winter? We are expecting to see some pressure on natural gas and oil costs, as we've seen. I think most people are expecting that. I do think when we look at our total energy utility costs, we are expecting more moderation, though, like less increase on electricity and water, which should balance it out. We'll see. We do expect to see, especially in Q1, an increase in utility costs overall. The electricity and water should be nominal. We'll see. You know, we've been investing a lot in those energy initiatives. We continue to. The solar panel, all of the other energy upgrades, so that should help. We know that our utilities here in Atlantic Canada have been securing delivery lines in less volatile markets, so that also should help. We have done a lot of heating plant conversions, and that will help us as well. They'll be more efficient, and these ones will be doing burning propane. There's some efficiencies there. Okay. What about hedging? Have you hedged much of your costs? We haven't. No. When we looked, you know, the pricing on locking those in are pretty high. Right now, not a lot hedged, but we do have our biggest exposure in New Brunswick and Nova Scotia, again, that have, you know, they've been very proactive after the volatility we saw years ago in securing lines to less volatile markets. I think it'll be a different story than it was back in 2014, 2015. Okay. Thanks. I'll turn it back. Thank you. Your next question comes from Joanne Chen with BMO Capital Markets. Please go ahead. Hi. Good morning. Good morning. Good morning. Just wanted to get a sense of, you know, how it has obviously been a very strong quarter on the leasing front. It's great to see. I mean, notice how leasing has trended so far, I guess, in October and November. Has that cadence kind a continued? The leasing trend? Yes. Yes. Yes. Yeah. Oh, yes, it has continued. In fact, it has stayed as strong, if not stronger than where we would have. Hello? Oh, did you hear us? Sorry. It accidentally got cut off there. Apologies. I missed that. I'll just repeat it to say that the leasing trending that we've seen, you know, when we ended the quarter, it has stayed as strong, if not stronger, in October and November, whereas historically we tend to see occupancy come off a little bit in Q4. We're seeing stronger than normal demand and leasing activity than in past years in Q4. Well, that's great to hear. I guess just switching on the acquisition side of things, you know, right now, where are you seeing, I guess, the best markets in terms of the most attractive for balance in terms of, you know, growth potential and, you know, the acquisition price? I know the goal is to continue to diversify out of Atlantic, but you're still kind of are you seeing some more attractive opportunities in those markets right now given how strong it is? I think to answer your question, you were asking if we are seeing attractive opportunities in Atlantic Canada as well? Right. Yeah. Yeah. No, we've got our eye on a number of interesting opportunities in Atlantic Canada, which we typically always have. There's a lot of opportunities in Ontario, which we're pretty excited about. A lot of them would be added value, sort of in terms of being able to go in and repositioning some of these assets long term or with a development, surplus density opportunity as well. Then, West, BC, there's lots of product available, as well as Alberta. Okay, got it. Yeah, Alberta is, you know, obviously gaining a lot of strength these days, so that's good to hear. I guess, you know, it's great to see, you know, this quarter, you guys really keeping your expenses down. The expense growth was very minimal. I guess just on that, what are you guys doing differently with respect to kind of how you're managing the portfolio to keep, kind of costs down like the way you guys are? Well, I'd say that, you know, the energy initiatives, we are seeing the impact of that, which we've already talked about. Okay. We are looking at contract negotiations as we look for economies of scale across the country for everything from looking for opportunities with garbage collection and any of those large contract services, which is helping. Also working with our staff, tremendous group of employees that are keeping the buildings running well. And if they can take on some of the smaller maintenance tasks on their own, then that's teaching them that and expanding the capabilities of that team is also helping. Across the board, looking for opportunities for efficiency. Tax appeals. Yes, tax. Yes, absolutely. Are assisting us. There's benefits there. The conversions on the heating plan. Hello? Pardon me. It sounds like the phone may have went on mute. On the company end, right? Yes. I'm sorry, Joanne. Yeah, okay. Yeah, no. Yeah. Let me just take a quick check here. Please stand by. We are just experiencing a technical issue. Can you hear us? We can hear you now. Yep. Okay. Okay, great. I'm pressing on something. Okay, here we go. Okay. Sorry, Joanne. Um, I- Go ahead with your question. Yep. Yeah, sorry. Just maybe one more from me. Any thoughts on the regulatory front? I guess any changes that you think in 2022? I mean, or is it, do you think it's gonna be likely more so status quo in most of your markets? I think it's gonna be status quo. With respect to rent. I mean, there was Oh, sorry about that. I think it's status quo. We don't have any insight to any changes in Ontario or out west, and the announcement was out a couple weeks ago regarding Nova Scotia. It's not rent control, it's a rent cap for the next 24 months. Yeah. Okay. All right. Now I will turn it back. Thanks very much for your time. Thank you. Your next question comes from Matt Logan with RBC Capital Markets. Please go ahead. Thank you, and good morning. Good morning. With significant cap rate compression across the country this year, can you talk a little bit about what, you know, your acquisition pipeline and how you're balancing that with development and your thoughts going forward? Well, I think what comes first is that the development side, the planning is multiple years in the works to get ready to start a project. Once it starts, it's another two years. We've been working on our projects that we hope to finish in the next 12 months- 18 months for probably the last five to six years. We're working on the next two or three to keep that pipeline going. That's a constant relative to what we see in terms of growth compared to the acquisition side. The acquisition side, again, it's always interesting and sort of changing, but the deals that we're looking at, you look at them in terms of where they are relative to cap rate. If they're accretive, if we see good upside with the actual asset, then we're more than willing to sort of get to the point to try to purchase it. With rent growth in your market, you know, offsetting some of the cost increases, would you say development yields are largely steady, or has there been any compression on the development front? Well, I mean, again, there is pressure on the cost side right across the board in every market in Canada. By the time you pro forma, and hopefully by the time you finish, that the market has again moved on the upside, which takes care of all the sort of the cost pressure throughout that piece. The interesting part of your question is there is such a demand for housing and new supply across this country that, no matter what, we're gonna have to figure out a way to build it, to house all the people and all the new folks that are coming into the country. Which gives us really the huge opportunity for the years to come. Agreed. Maybe just changing gears to the commercial property segment. Were there any non-recurring items in the quarter? Or said differently, how should we be thinking about the cash NOI run rate? Would that be something around CAD 10 million? In terms of the investment side? In terms of the NOI run rate. NOI run rate. I'd like to think it's gonna have a bit more growth in 2022. We've done some deals here that haven't made it to the income statement yet, so it should improve. I don't have a number for you. There's no recurring income in that. No, not in this year, not in the CAD 10 million. Yeah. Yeah. I heard that question. Yep. Okay, good. Maybe just one last. 10% plus a little bit of growth here next year is kind of how we should be thinking about the outlook for commercial. Yes. Maybe one last question from me before we turn it back. You talked about some of your energy initiatives and cost savings. What are you seeing on the labor front? Yeah, there are pressures on the labor front. We're seeing. I think a part of it is a federal policy on the CERB side, where some workers were happy to not find themselves in the workforce. But that, we're hoping in 2022, will change, and they'll come back to work. But right now, there's a bit of pressure, and you're seeing it. I know I noticed in the paper today the minimum wage in Ontario will go to CAD 15, so that's the way things are tracking. Okay. Well, I appreciate the color. That's all for me. I'll turn it back. Thank you. Thank you. Ladies and gentlemen, as a reminder, should you have any questions, please press star one. Your next question comes from Matt Kornack with National Bank. Please go ahead. Hi, all. Just with regards to the Nova Scotia election, the new premier came out, obviously put a rent cap in place, but noted that supply is the true answer to affordability. Have there been any new programs that would've been rolled out by the province at this point to encourage supply? Obviously I'd think that you guys, as a potential supplier of it, would've been involved or may be involved in the future in providing affordable housing in Nova Scotia. The only thing they've come out so far with is a CAD 35 million investment looking to support 1,100 new units. That would be the equity portion of the investment. Nothing other than that at this time. Having met the premier a number of times, he's serious about looking to find a solution, and he knows it's gonna take additional investment by, I think, the various levels of government have to come together and contribute to making some of the new housing more affordable. Yeah. I also think he's engaging the city of Halifax in terms of understanding the process for the whole permitting and development of new applications, not only for multifamily developments, but for large tracts of single family. If there is sort of a log jam that gets broken, then I think there's gonna be more supply of all types of housing for Metro in the next six to 12 months. It's still gonna take time to build. Sure. No, that makes sense on all fronts. Then last one for me. Edmonton, you bought there, granted newer assets with pretty good yields. Does that signal sort of increased optimism around the Alberta market, and could we foresee additional expansion there? It does. Yes, it does. I mean, you know, that province is still heavily dependent on the price of oil. This rebound in the price of oil, I think, has got positive effects for all of the province. We see it in terms of leasing and just talking to whether it's brokers or other developers out there, that they see increased traffic right across the board. Okay. Makes sense. Congrats. I don't often get beat by a few cents on my FFO estimate, so there you go. Our pleasure. There are no further questions at this time. Please proceed. Thank you very much for participating in today's conference call, and we look forward to reporting Q4 results in February of 2022. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.