Hello, ladies and gentlemen. Thank you for standing by. Welcome to the Flagship Communities REIT Q4 2022 Earnings Call. At this time, all participants are in a listen-only mode. Following the presentation, we will hold a brief question and answer session for analyst and institutional investors. If anyone has any difficulties hearing the conference, please press the star followed by the zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded. Today's presenters are Kurt Keeney, Flagship's President and Chief Executive Officer, Nathan Smith, Chief Investment Officer, and Eddie Carlisle, Chief Financial Officer. Please note that comments made on today's call may contain forward-looking information, and this information, by its nature, is subject to risks and uncertainties. Actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult the company's relevant filings on SEDAR. These documents are also available on Flagship's website at flagshipcommunities.com. Flagship also has prepared a corresponding PowerPoint presentation, which encourages you to follow along with during this call. Now I'll pass the call over to Kurt Keeney. Kurt. Thank you, operator. Good morning, everyone, thank you for joining us today. 2022 was our second full year as a publicly traded REIT, during that time, we continued to demonstrate the merits of both Flagship and the resiliency of the MHC industry. When we went public in October of 2020, many investors are drawn to the strong track record of the MHC industry because of its consistent performance over the past 25 years. While that still remains the case, what is especially true today is that homeownership is out of reach for many Americans. Unprecedented inflation, coupled with high rental and high mortgage rates, have caused many Americans to seek more cost-effective living arrangements, that's where we come in. Manufactured homes offer a better living experience compared to other options. These homes are detached structures that do not share walls, utilities, air conditioning, or heating with any other homes. Our customers typically enjoy two, three, and four-bedroom homes, typically with two bathrooms. These homes also have a deck, yard, driveway, in-home laundry facilities, all for less than the cost of renting an apartment. With its strong track record, coupled with our positive outlook for the MHC industry, we believe Flagship is well-positioned to deliver long-term unitholder value. We are one of the Midwest region's largest MHC operators in a highly fragmented industry with limited supply. Flagship has a stable and growing resident base, which also speaks to the affordable nature of our homes. The majority of our residents have steady jobs, or they are retired and receiving Social Security or fixed income from the government. The residents in our communities are less affected by inflationary pressures as those with traditional stick-built homes who are more prone to fluctuation in their rent and their mortgage rates. We also maintain a conservative low-cost debt profile with long-dated average maturities. Our goal is to obtain secured debt on a fixed-rate basis. We have no bank balance sheet mortgage debt, and Eddie will provide more details on this at this point on his remarks. This strategy allows us to maintain staggered maturities to lessen our risk exposure while allowing us to ride out difficult economic cycles in the fullness of time. The strong fundamentals of the MHC industry, coupled with our operating success, translated into another consistent financial and operating performance for our business. The predictable nature of the business allowed us to announce a 5% increase in November to our monthly cash distribution to unitholders in the Q4, which is the second consecutive year that we have increased distribution. Each year, we demonstrate our ability to grow our organic portfolio, which speaks to our operating expertise. We have the ability to grow our organic portfolio in a variety of ways. First is through lot rent increases, which are typically implemented at the beginning of the calendar year. Second is through our higher occupancy rates. This past year, we increased occupancy over 2021 due to the high desirability of our MHC homeownership model. Finally, through cost containment initiatives such as water submetering. We continue to implement new submetering technology with water recapture programs across all the MHCs that allow us to detect water leaks. Let's turn to the financial results. Our key metrics are all trending in the right direction. Our 2022 revenue, net operating income, and adjusted funds from operations all increased relative to last year, primarily because of the following. The acquisitions we have completed to date, lot rent increases, and occupancy increases across the portfolio. What is particularly noteworthy is the performance of our same community metrics. Our same community revenues, same community net operating income, and same community occupancy all increased relative to last year. These are important signs of our business because these metrics demonstrate our ability to develop operational efficiency the longer we own communities. Now I'll turn it over to Nathan to provide more detail on our operating regions and growth strategy. Nathan. Thank you, Kurt. Good morning, everyone. When Kurt and I started this business in 1995, our vision was to provide Americans with sustainable and affordable housing. That vision is as true today as it was back then. Since housing affordability is a pressing concern for many Americans. As MHC owners and operators, our focus is to optimize our current portfolio as well as add external opportunities that adhere to our strict acquisition criteria. During the quarter, we add a resort-style MHC in Marblehead, Ohio, in a key market where we have existing presence. Marblehead is a residential MHC located on the bay leading to Lake Erie in Northern Ohio. The 20-acre community is fully occupied, comprising of 100 lots, with each home including a boat slip as well as access to a community swimming pool. In early 2023, we agreed to acquire a 20-acre high-quality MHC in Austin, Indiana. This acquisition is our 18th in Indiana and will benefit our economies of scale with regards to management and service. The Austin location offers affordable housing and includes an array of amenities. The acquisition includes 94 developed lots and 26 lots for additional expansion, totaling 120 MHC home sites. These acquisitions and all others are made to date were made possible in part through our long-standing industry relationship. We have been in the MHC space for 28 years, and during that time, we have established credibility and long-standing industry relationships. The MHC industry is primarily comprised of local owner-operators. The top 50 MHC investors are estimated to control approximately 17% of the 4.2 manufactured housing lots in the United States. There is also a limited supply of new manufactured housing communities, given the various layers of regulatory restrictions, competing land uses, and a lack of land zone, which creates high barriers to entry. Our industry experience helps us distinguish between good and bad opportunities in the marketplace. We aren't committed to growth for growth's sake. When considering an acquisition, we do considerable amount of due diligence, and if at any point during that process an acquisition does not meet our strict criteria, we won't move forward on it. Our acquisition criteria is as follows. First, we're looking for opportunities that will be accretive to our adjusted funds from operation per unit. Second, we are seeking opportunities that will enable us to leverage management synergies and generate economies of scale. Finally, we're seeking acquisition targets within our current markets or adjacent U.S. states where our current operations with similar regulatory framework and characteristics as the existing market within our portfolio. This framework allows us to achieve responsible growth while establishing a platform to acquire adjacent properties or to enter new jurisdictions. I'll now turn over to Eddie, our CFO, to talk about our financial performance for the quarter. Eddie? Thanks, Nathan. Good morning, everyone. We generated revenue of $15.7 million during the Q4, which was up 28.8% over the same period last year, primarily due to acquisitions, lot rent increases, and occupancy increases across the portfolio. Revenue for the year was $58.8 million, which was an increase of 36.5% for the same reason. Same community revenues for the Q4 and full year 2022 grew by 8.2% and 7.5% respectively over the comparable periods last year. These increases were driven by higher monthly lot rents as well as growth in same-community occupancy and increases in utility revenue. Net operating income and NOI margin were $10.4 million and 66% respectively, compared to $8.2 million and 67.2% during the Q4 of 2021. NOI and NOI margin for the year ended December 31, 2022, were $38.9 million and 66.2% respectively, compared to $28.7 million and 66.5% last year. The increases in NOI were primarily driven by acquisitions, lot rent growth, and cost containment efforts, while the decreases in NOI margins were driven by declines from NOI margins on acquisitions. Value add acquisitions in new markets during 2021 and 2022 incurred higher than anticipated costs as the REIT worked to integrate and implement its operational strategies. We expect these value add acquisitions will become accretive and increase NOI margins in the long term. Same community NOI margins for the Q4 and full year 2022 increased 1.3% and 0.7% respectively over the same periods of time last year, demonstrating our ability to develop operational efficiencies the longer we own the communities. AFFO for the Q4 of 2022 was $4.1 million, an increase of 4.8% from the Q4 of 2021. AFFO per unit for the Q4 of 2022 was approximately $0.21 per unit, a decrease from $0.22 same period last year. FFO and AFFO per unit for the year ended December 31, 2022, were $18.3 million and $0.93 respectively, a 36.1% and 6.3% increase respectively, compared to the year ended December 31, 2021. Same community occupancy of 82.2% increased by 1.6% versus last year, reflecting our commitment to resident satisfaction and ensuring our communities are in desirable locations. Rent collections for the Q4 were 99.5%, which demonstrates the strength and predictability of the MHC sector and was within our expectations. As at December 31, our total lot occupancy was 83.1%, and our average monthly lot rent was $388. Both of these metrics were within our expectations. We ended the quarter with total cash and cash equivalents of approximately $17 million, with no near-term debt obligations. The REIT also has 14 undercovered assets with a value of approximately $21 million. We remain committed to preserving a conservative debt profile. Our weighted average mortgage term to maturity is 11.7 years, with our first maturity due in 5.5 years, and our weighted average mortgage interest rate was 3.78% at the end of the quarter, which is entirely at a fixed rate. With that, I'll now turn it back over to Kurt for some final remarks. Kurt? Thanks, Eddie. Our financial results during 2022 demonstrate our proven capabilities as operators, as well as the stability of our resident base, especially in the current inflationary environment. We also completed a series of acquisitions throughout the year that included MHCs as well as resort-style communities that we expect will help contribute to our next leg of growth. Our stable and consistent results gave our board the confidence to increase our monthly cash distribution to unitholders in the Q4. We head into 2023 with a solid foundation and strong financial position that will help us achieve measured growth via organic and external opportunities. We believe we will continue to be poised for growth as housing prices, high monthly rental rates, and mortgage rate increases have the potential to lead more people towards manufactured housing. We can now open up the Q&A session, please. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a 3-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Mark Rothschild of Canaccord Genuity. Please go ahead. Thanks. Good morning, guys. Good morning, Mark. Good morning, Mark. Hey. The occupancy has pretty much been improving like you had been guiding. Maybe a two-part question. First part, has anything changed in that regard as far as the way we should look at it going forward? Do you still think you can get the same type of steady improvement? Maybe if you can just comment on how you're seeing that in some of your markets versus maybe the markets where your peers were operating because your organic growth has been stronger than the peers of late. absolutely. Do you want me to- I still think, you know, our guidance on occupancy has always been around 2%-3%. In this environment, we're very comfortable with that range. More people are just being pushed to us because of high apartment rents. We're not seeing apartment, multi-family rents in our areas have any type of concessions, and there's still lots of... I'd say the average gap between our affordability on a new home purchase is about $200-$400 a month compared to the going apartment. I don't have any problem with that at all. Don't see. Again, typically, when we go through, you know, a recession, whether you think it's here or not, we actually do better. With these high mortgage rates, people are just genetically when they leave our communities, they typically go to stick-built housing. Right now, stick-built housing has inflationary pressure from years ago now, two, three, one year ago. Now it's the mortgage rates have gone from three to seven. That one-two punch makes the exit harder for the customer to upgrade to stick-built housing until mortgage rates come back down, probably. At the same time, they need an extra bedroom, and that's why they come to us. I think we're in good position to have a nice year. As far as compares, we don't normally comment on peers. Certainly, you know, we're not a coastal environment. You know, we're in the Midwest and, you know, it's steady as she goes here. Okay, great. Looking at the acquisition market, obviously, with the higher interest rates, that impacts some of the more levered buyers. With the opportunities you're seeing now and fewer competitors, are you finding deals with higher cap rates? To what extent does higher interest rates impact the cap rates that you're seeing opportunities at? Well, Mark, Nathan, you want to jump in on what you're seeing? Sure, sure. you know, we are seeing really interesting no-deal flow. When you're talking to our peers, and I talk to other folks, they're like, it's almost like it's a standoff. The seller's like, "Oh, I thought it was this cap rate was going to keep going lower and lower and lower," and the interest rate keeps going higher and higher and higher, and they have to have some equality to be able to afford them. I actually think it'll take the Q3 or Q4 for people to come to their senses that, hey, this is a new norm, and interest rates on a commercial property, may it be at LifeCo or wherever, is moved up. Interestingly enough, you know, I actually see a lot of what I would consider our competitors, private equity or just a local person, you know, their number has changed. I'm seeing very little deal flow from them. I see some people this year repositioning their properties and being able to look back and say, "Do I want to be in that market anymore? And if I don't want to be in that market, maybe I should sell that property to someone else and move forward and say that I'm out of that market." I think that's mostly what you see out there right now. But cap rates have not moved lower, but they've really not moved higher. It's like a... It's a, it's really kind of like everybody looking at each other and says, "Who's going to move first?". Mark, I truly think the cap rates, you may see a bifurcation in the market in the future. I think for the last couple of years, cap rates, you know, everybody got the same cap rate. Regardless if deals were in secondary markets or less stable, everybody was pushing towards the same cap rate. I think the investment-grade opportunities are still priced at the same cap rate. We haven't seen any change in that, to Nathan's point. I think when you go into tertiary markets or secondary markets and the properties are less stable, I think we may see some cap rate expansion there, and that might be helpful. Okay. Thanks so much. Thank you. The next question comes from Brad Sturges of Raymond James. Please go ahead. Hi, guys. Morning, Brad. Just want to touch on the small acquisition there in Indiana from Empower Park. Just curious to get a little bit more details around the occupancy rate for the 94 developed lots, and then how you're thinking about the potential or the timeline for the expansion of the additional 26 lots. I'll jump in. I think we're around 70% occupied right now on the 94 lots. This was a deal that we had in Empower Park at the time of the IPO, and I think occupancy at that time was 56%. It really didn't pass the test for the IPO for our underwriting, so we went ahead and put it in Empower Park at day one. I, you know, I look for us to be, you know, again, 2%-3% under this scenario. Property's in good shape and we are, we'll expand as needed there. The lots are pretty big, I don't think you'll see us expand the 24 lots, 26 lots until we're about 90%. Okay. We might add onesies, twosies, Brad. You know, if we had somebody. We have people buying really big houses right now, you know, 28 by 70 and, you know, four bedroom, three bedroom houses. Those take a bigger lot sometimes. If we run into a lot problem, we'll just. We can. The infrastructure's in on the 26. The water main's in, the sewer main's in, and the electric main's in. We just have to actually do all the secondary work. [crosstalk] Okay. For now, there wouldn't be that much capital requirements. No, there wouldn't be any right now. Yeah. Again, we've got vacant lots on the ground that are fully developed, so, we're in good shape. Okay. Then just looking at Empower Park, what would still be in there today, and is there anything else that would be close to being REIT-suitable? We put two properties. Just to be incredibly clear, we can't arbitrarily put anything into Empower Park. The independent Canadian trustees have to vote to put it in there has to be a reason. As they stabilize, we pull them out. We've put two properties in since we went public, and we've taken two properties out since we went public, the two oldest. There's two properties in Empower Park as we speak. Both of them have different underwriting issues. One of them is just a an environmental issue that we've actually worked through, and we're just that when we bought it was intact, it was well-known, and we worked through it. It's got about six more months. I'd say, you know, of the two that are in there today, they're not coming over to the REIT in the near future, you know, in the next 12 months. They may come shortly thereafter. Got it. Last question just for Eddie. Just on the G&A, it was a little bit higher this quarter. Just curious to get a sense of what you think that would look like more for Q1 and then any guidance for 2023 as a whole? The $300,000 that we had on the due diligence expense from acquisitions, maybe Nathan, do you want to speak to that for a second, then I can continue on the other G&A issues? Are you saying about the deal flow? Is that what he's asking? No, no. The due diligence expense from failed acquisitions. I'm sorry. You cut out there for a second. No. You know, with the deal expense, we are never going to purchase something that isn't good for our shareholders, and we are, you know, Kurt Keeney and I are some of the two largest shareholders here. When you look at the deals that we saw last year, there were two deals. One was in our market. It was $50 million. As we did our due diligence, and which we do, and we do deep due diligence, we sort of figured out that these properties had lots of environmental issues that was not disclosed from us in the beginning, and had a lot of governmental issues with zoning and other things. We could not get comfortable with either of those. The other one was actually in Louisiana. It was a $50 million. We were completely in. I think it was $291,000 that we spent on the two properties. We got to Louisiana. I love these properties. Still love them today. They were great. They would have been great assets for us. As we got closer to closing, we found out that you couldn't buy insurance. That was the first time I had ever imagined that you couldn't buy loss of rent income insurance. After Hurricane Ian went through, it was just not purchasable. They wouldn't. No one would call us back. They would just keep saying, "We're not going to insure those." You know, we're never going to buy property that you don't have loss of rent income insurance on. [crosstalk] Does that help? I would say that. Yeah. would say that. Yeah. would say that. Yeah. Thanks, Brad. I'd say that, you know, those type of things aren't normal for us. As we continue to do acquisitions, you know, for the most part, we go into an acquisition, and we have a pretty good handle on, you know, whether or not that it'll close. I would say that that's something that you can exclude. We did have some income tax expense of about $100,000 related to new states that I would say is not recurring. It was. Again, as we move into new states, there's been some new expenses there that we didn't necessarily foresee. Outside of that, I would say, you know, the G&A is pretty normalized, once you back those out. Okay, that's quite helpful. I'll turn it back. Thanks a lot. Thanks, man. Thank you. Once again, ladies and gentlemen, if you do have a question, please press star one at this time. The next question comes from Kyle Stanley of Desjardins. Please go ahead. Thanks. Morning, guys. Hey, Kyle. Morning, Kyle. Good morning. Would you be able to just talk a little bit about your expectation for AMR growth in 2023, maybe just in the context of, you know, the higher inflation we've seen and, you know, what you might expect to achieve this year? Yes. For average monthly rent growth, the guidance is, it's already taken effect in general. It's 7.8%. Again, we have a home ownership model. The equation there, the math there gets to about a $30 average this year. To kind of frame that conversation, the CPI increase that happened with our fixed income customers from the federal government, Social Security, disability, that came out at 8.7%. We think we're within range there. It's a little higher than our historical. As you all know, we've had a little inflation, somebody told me. Anyway, it's, we're very comfortable with that. We have not seen any anything that says that that's not attainable. Okay, great. Then just looking for a bit of commentary around the demand you're seeing for manufactured homes in today's market. I'm thinking a little bit more on the home sales side and, you know, just maybe an update on how that's going. Oh, you just want Nathan to talk, Kyle. Go ahead, Nate. Well, you know, as you know, our home sales are in Empower Parks because of many, many reasons. We have actually seen last year, we sold 580 manufactured housing homes in our communities, which was a wonderful, amazing year. We. The first quarter is looking very good. I will tell you, I think, Kyle, one of the things that I'm seeing out there is this is the first what I would call... If this is a recession, let's just say if it is, this is the first time I'm seeing where interest rates are moving up and higher, and because of Dodd-Frank, that makes a ceiling on what you can charge on a manufactured housing chattel loan. That spread is becoming less and less every day. As long as we are able to keep our housing prices in check, we will be the winner of affordable housing in the United States. Okay, great. That's very clear. Just one last question, and, you know, it might be a little bit too early to have any real commentary here. Just, you know, given some of the distress we've seen in the regional banking sector in the U.S. over the last week or so, do you foresee this creating any more potential external growth opportunity as maybe some of the mom-and-pop landlords in your markets struggle to refinance, you know, existing debt with some of those regional banks? I think the first thing you're gonna see there is, Kurt, you wanna or me? No, no, go ahead, Nate. Go ahead. Okay. Yeah. I think the first thing you're gonna see there is people who have done debt that is floating, and they underwrote the property at, and they bought the property at a five cap, and their interest rate has gone up three- points. That's a real problem for them. So they'll have to decide if maybe they take a gain on three properties to keep the other three properties. You can see that. Also, I think the thing you're out there that would probably in acquisitions that would make it a little bit more problematic for those people is that if you have a large pool of rental homes, that property, that ability to place that financing permanently will be difficult for them, and they may see some pressure there. Kurt, I'll let you try as well. Our history, Kyle, says yes. To give you a short answer. Again, Nathan and I have been doing this for 28 years. We've been through multiple economic cycles, including the Great Recession and industry cycles. Again, it's gonna apply. You know, there's people that are gonna have loans that are maturing that are at sub 4%. Today, they're not. There may be. I'm not actually gonna call it distress. I think that's important. I don't think it's distress that will cause it. I think it's just normal, you know, debt maturities and things that we'll call it. You know, again, if you got a high rental fleet, you know you're gonna have to finance that. I think that'll, I think it'll give us opportunities. That's what history has told us. We grew substantively post-Great Recession. Okay. Thanks for that. I will turn it back. Thank you. The next question comes from David Chrystal of Echelon Capital Markets. Please go ahead. Thanks. Good morning, guys. Good morning, Dave. Um- Morning, Dave. In terms of the, in terms of that 7.8% rent bump, did you see any pushback from any existing tenants and any occupancy erosion? Should we be looking at really a step function, 8% increase in sequential revenue in the Q1? Great, great question, that's what we look at, by the way. That's why we're so mindful. You know, we do rent increases by property. This is not something where we just say, "Oh, well, you know, to get the average, we got to do this." We actually go through each property. We have not seen any occupancy erosion at all. It kind of makes logical sense if you think about it. Again, apartments aren't doing concessions. People move into us because we're already a more affordable $200-$400 a month than our local apartments. We, we compare ourselves to apartments, by the way, and multifamily. Our competitor is not the mobile home park down the street. It's, it's the, it's the two bedroom, one bath apartment that's around the corner. That's where our people come from. I think, no, I think we feel good about the top line, and I hope you're right on the 8%. You know, again, it should be. Okay, that's helpful. Looking at your year-end cash balance and then your facility balance. Obviously, you know, you carried excess cash into year-end, but was that carried for much of the quarter? Like is there any interest expense savings coming either from paying down the line or? Yeah. We actually repaid the entire facility shortly after year-end. Yeah, I would not That piece of the interest expense won't be recurring, moving forward. How much of the quarter was that carried from? I think you renegotiated and upsized it in late December, but was it fully drawn before that? The $5 million was fully drawn before that. We upsized it in December, drew the remaining amount during December, so for that full month. In Q1, again, it was paid the first week of January. Why was that pulled? Was that deposit for the deals or was there any reason for the half the- It was. Okay. Okay, fair. Yeah, exactly. Okay, perfect. Thanks a lot. I'll turn it back. We had $100 million worth of deals, so there you go. Large deposits, man. Thank you. There are no further questions at this time. I'll turn the conference back to Kurt for closing remarks. Thank you everyone for joining us today. We certainly appreciate your participation, and we look forward to serving you in the future. Have a great day. Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.