Hello, ladies and gentlemen. Thank you for standing by. Welcome to the Flagship Communities REIT's second quarter 2023 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 analysts and institutional investors. If anyone has any difficulties hearing the conference, please press the star followed by zero for operator assistance at any time. I would also 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 the Flagship's website at flagshipcommunities.com. Flagship has prepared a corresponding PowerPoint presentation, which it encourages you to follow along during this call. Now, I'll pass the call over to Kurt Keeney. Kurt? Thank you, operator. Thank you everyone for joining us today. Flagship continued to demonstrate the merits of its business model with another strong quarter of financial and operating results. Our rental revenue and same-community metrics, which demonstrate our ability to maximize operational efficiencies and increase economies of scale, were both very strong. Rental revenue this quarter increased by 21% over the same period last year. Same-community revenue was up over 9% over the same period last year. In addition to these increases, this is the second consecutive quarter where rental revenues increased by over 20% and same-community revenue increased by over 9%, which speaks to the consistency of our business. Our positive results translated to strong net operating income metrics as well. Net operating income was up 22.4% over the same period last year. Finally, same-community NOI was up 9.4% compared to Q2 of last year. After raising $3 million in the Q2, we have now raised a total of $23 million through our at-the-market offering. Our ATM program has been an effective use of sourcing capital to help fund future acquisitions and for general business purposes. That's why we reestablished a $50 million ATM program toward the end of the Q2. The ATM program is designed to provide us with additional financing flexibility as we continue to grow our portfolio. The REIT has grown every year since we went public in October of 2020. The public REIT began with 45 MHCs, comprising of 8,255 lots across four states. Today, the REIT owns 71 MHCs with over 13,000 lots across seven U.S. states, as well as two RV resort communities with 470 lots. Our ability to grow on an annual basis, coupled with our strong financial results, speak to the strength of our business model and the solid fundamentals of the MHC industry. The MHC industry has demonstrated a consistent track record of strong performance regardless of the economic cycle. The interest rates of our customers have not changed substantially, and their credit underwriting remains available, which is why our manufactured homes are a very appealing and cost-effective option for many Americans. They also offer a better living experience compared with other options. Manufactured homes are detached structures that do not share walls, utilities, air conditioning, or heating with any other homes. Our customers 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. In addition to the same-community metrics, a key measure of the success of our business model are occupancy rates and average monthly rents, both of which went up during the quarter and have steadily increased since 2019. We have 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 disability, or private or public pensions. The residents in our communities are less affected by the inflationary environment as those in traditional stick-built homes or apartments, who are more prone to fluctuations in their rents and mortgage rates. After being recognized by the Manufactured Housing Institute with the three highest national awards for excellence in manufactured housing, last month, we received the Kentucky Manufactured Housing Institute's highest award for the Community of the Year for the second consecutive year. Our Mosby's Pointe community, located in northern Kentucky, was recognized for its considerable transformation. Mosby's Pointe is a 250-lot community, and this past year we added an outdoor recreation center, which includes two state-of-the-art municipal grade playgrounds and basketball courts, soccer field, and a paved walking trail. When a community of our wins an award, it's a great honor, but more important, it's a recognition of our highly talented team that helps serve the needs of every family within the community. Our staff makes it possible for us to run a successful business, and for that, I want to say thank you to everyone on our team for the important work they are doing on a day-to-day basis. With that, I will now turn it over to Nathan to provide more detail on our operating regions and growth strategy. Nathan? Thanks, Kurt. Good morning, everyone. Acquisitions of new communities have always been a big part of Flagship's success. We are one of the Midwest region's largest MHC operators and have nearly 30 years of operating experience. When you see both top line and same-community growth, you're seeing the benefits of that experience. Our top-line growth reflects the positive contribution from the acquisitions we completed last year, while our same-community growth shows our ability to optimize our existing portfolio. We have completed many acquisitions in our short time as a publicly traded REIT, and we continue to see prominent deal flow in the MHC space that adheres to our strict acquisitions criteria, which is as follows: First, we're looking for opportunities that will be accretive to our adjusted funds from operations 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 market or adjacent U.S. states where we currently operate, with similar regulatory framework and characteristics as the existing markets within our portfolio. This framework allows us to achieve slow and measured growth while establishing a platform to acquire adjacent properties within our existing markets. During the quarter, we made three acquisitions in our existing markets, Indiana, Arkansas, and Tennessee, for approximately $21 million, using capital raised from our ATM program. This is our largest acquisition so far this year and adds to our existing footprint in three states. The Clarksville, Indiana, community includes 334 lots, of which 47% are occupied. The Conway, Arkansas, community includes 200 lots, in which 82% are occupied. The Jackson, Tennessee, community includes 126 lots, of which 97% are occupied. Our operating experience has helped us establish a long-standing industry relationship. These acquisitions were made possible in part through these relationships and our solid reputation as responsible and credible operators. The MHC industry is primarily composed of small, local owner-operators. The top 50 MHC owners are established to control only approximately 17% of the 42 million manufactured housing lots in the United States. With that, I will now pass it on to Eddie. Thanks, Nathan. Good morning, everyone. We generated revenue of $17.4 million during the Q2, which was up 21% over the same period last year, primarily due to lot rent increases, occupancy growth, increases in utility revenue, and economies of scale within existing markets. Same-community revenues of $15.1 million grew by 9.1% over the comparable period last year, which was driven by higher monthly lot rent year-over-year, as well as growth in same-community occupancy. Net operating income was $11.6 million during the quarter, an increase of 22.4% over the prior period as a result of our acquisitions, lot rent growth, and cost containment efforts. NOI margin was 66.6%, compared to 65.9% last year for the same reasons. AFFO for the Q2 of 2023 was $5.5 million, an increase of 15.9% from last year. AFFO per unit was $0.26 per unit, an increase of 8.3% from the same period last year. Our same-community occupancy increased to 84.9% versus 83.6% last year, which reflects our commitment to resident satisfaction and ensuring our communities are in desirable locations. Rent collections for the quarter were 98.9%, an increase over last year, which continues to demonstrate the strength and predictability of the MHC sector. As at June 30, our total lot occupancy was 83.3%, and our average monthly lot rent was $415. Both of these metrics were within our expectations. We ended the quarter with total cash and cash equivalents of approximately $5 million, with no near-term debt obligations. We also have 18 unencumbered assets with a value of approximately $40.3 million as at June 30, 2023. With that, I'll now turn it back over to Kurt for some final remarks. Kurt? Thanks, Eddie. We are pleased by the progress we have made so far, and we are poised for growth as we continue to integrate and maximize economies of scale from the acquisitions we have completed to date. We are also confident in our ability to source accretive acquisitions in the foreseeable future. We remain committed to preserving a conservative, low-cost debt profile with long-dated average maturities. Our weighted average mortgage term to maturity is 11.2 years, with our first maturity due in 2027, and our weighted average mortgage interest rate was 3.78% at the end of the quarter, which is entirely a fixed rate. Obtaining secured debt on a fixed-rate basis is important to us to mitigate risk. We have no near-term debt obligations and no bank balance sheet mortgage debt. This strategy allows us to maintain staggered maturities to lessen our interest exposure, while it allowing us to ride out difficult economic cycles in the fullness of time. In closing, our REIT offers investors an opportunity to participate in a niche and stable market with significant growth potential. In our two plus years as a public, publicly traded company, we've demonstrated the steady and predictive nature of the MHC industry and our ability as operators. We certainly thank you for your time today, now we'll now open up the line for questions. Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please 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 from the question queue, please press star followed by two. If you're using your speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. Your first question will be from Mark Rothschild at Canaccord. Please go ahead. Thanks. Good morning, guys. Good morning, Mark. Good morning. Hey, looking at the improvement in occupancy, can you maybe just talk a little bit about what's driving that as much? Is it converting people who are renting homes from you to homeownership? Is it impacted by maybe the acquisitions, or is it just leasing maybe vacant sites where there isn't even a home at all? The answer is all the above. We were absolutely successful converting people to rental home customers into owners. I think that number was 74 in the Q2. We've also, you know, the integration of the assets that we bought in the last 1.5 years, two years, is coming to fruition. We're, you know, we've gotten our sales team focused, and we've gotten our rental homes and I think you're just starting to see the synergies come together. It's certainly an environment where the affordable housing products in our market, you know, the differential between us and multifamily apartments and every other, every other housing form is still pretty substantial. I think in our markets, we think the average differential is $300-$500, that more affordable for our, our community. I think it's pushing customers towards us as well for the vacant lots. Great. Maybe just following up on that, while I appreciate the, that it's relatively affordable relative to many other housing types, for the people who are now renting homes from you for that, so that part of your portfolio, is it going to be more difficult to convert them to homeownership with the rise in interest rates, or is that not as much a factor for you, for your customer? My customers, rise in interest rates hasn't been that substantive. It's only gone up about 0.5 point, I don't, I don't think that, that's not a driving concern of ours at this time. Maybe just one more small question? In regards to the G&A, how much of that going up is general inflationary or maybe other things going on in the company? Is it just growth or, other items? Eddie, do you want to take that one? Yeah, absolutely. There's some growth in the company with adding some headcount, but that's not a significant portion of it. Really, we had some legal and consulting fees in Q2 around the AGM process, and then some tax fees as we completed our 2022 year-end taxes. Those were kind of the major drivers of the increase in G&A. There is a little bit of ongoing G&A, like I said, related to us, a couple of new positions, but for the most part, it was really related to some events that happened during Q2. Okay, great. Thanks so much, guys. Thanks, Mark. Next question will be from Brad Sturges at Raymond James. Please go ahead. Hi, good morning. Morning, Brad. Just to follow on to Mark's questions on occupancy, just trying to, I guess, think through seasonal trends from that perspective, you know, and congrats on, on the occupancy growth that you've seen. Just curious, typically, from a seasonal perspective, would, would that-- would your occupancy growth typically be more first half of the year and, around the spring season? Or, you know, how, how should we think about occupancy improvement for the, for the back half of the year? Historically, it was more cyclical in the Q1. As the years have marched on, with home sales, it's gotten flattened out a little bit. Typically, you know, when we see good, strong occupancy in Q1 and Q2, like we've seen, that trend typically continues for the rest of the year. You know, again, wherever you're at in December is where you're at, right? Nobody moves in December, and that really starts probably closer to October and Thanksgiving. It looks, it looks, the foreshadowing is good. Okay. In terms of, maybe, leasing, trends that you're seeing or the conversion from rental to homeownership, is there particular markets or even communities that you're seeing, you're being positively surprised in terms of demand or the, the take-up on that conversion, at this point? No. No, it's pretty much universal, actually. wherever we have some more rentals, and, yeah, most of our rentals that we've picked up, not all, but most of them have been picked up through acquisition. I, you know, I think, I think, you know, we've got plenty of opportunity to continue to decrease our rental home percentage of outstanding lots, but right now, I think we're running just shy of 10%. We'd like to drive that number down over time through homeownership, but, you know, that's a long strategy, not a short strategy, but it looks like it's pretty universal, to answer your question, in the marketplace. Last question. You know, and I can appreciate it's probably early days with the Q2 acquisitions, but just any update on some of the early trends on occupancy or some of where you're at from a CapEx amenity package point of view? I, I don't know if I fully. Can you repeat the question one more time? Just on the acquisitions, I guess, that you completed in Q2 for $21 million, just curious of what you're seeing early days on occupancy trends and leasing, and then, just your plans around the CapEx spend for the year right now? Oh, gotcha, gotcha. On the occupancy and the trending on the three acquisitions, very pleased so far. We actually sold the first home, which is a great sign, in, down in Arkansas at the new acquisition. That's a pretty that's some pretty quick takeoff, to get our home inventory actually pulled in and actually turn around and get it sold in the first, you know, 90 days is, is great. I think, I think from an occupancy perspective, we're, we're right on plan, on those, acquisitions. We, we've been pretty successful getting our submetering, installed as well, which is huge. Again, that's, that's how we have our NOI, savings and, and, and drive the NOI from, from our business model. I think that is actually being completed on the CapEx side at the two locations that needed it, the one in Clarksville and the one in Arkansas. Now we're just focusing on getting our playgrounds installed and our pickleball courts, and I think we did have one pool closure of an old, tired pool, and we're replacing it with some year-round municipal grade recreational amenities, which is, which is great. I look for all those to be, to be completed this summer on the acquisition, then we'll continue to hopefully see some positive occupancy as we march forward. Okay, great. I'll turn it back. Thanks a lot. Mm-hmm. Next question will be from Kyle Stanley at Desjardins. Please go ahead. Thanks. Morning, guys. Morning, Kyle. -at the transaction market, you know, are, are you starting to see the bid-ask spread, maybe, maybe start to tighten? Just love your kind of outlook for overall activity in the second half and into 2024. Nathan, you want to jump in? Yeah, sure. We, we're, you know, here's what I would say: I'm seeing lots and lots of deals. I'm not sure the cap rate has changed yet. It definitely has not changed for those deals that are five star deals. I do start seeing a weakening of the two and the three and the four star deals. Maybe not as much the four, but definitely the two and three. The value-add deals are starting to come back in line. I, I, I think you're going to see. It's gonna take a while for people to come to reality that interest rates have risen and that everybody doesn't get a forecast now. I, I'm, I'm pleasantly surprised with the things I'm seeing. talk-- and I'm talking about lots of deals out there, but I, I don't think there's a lot of deals transacting, no matter what anybody says. Does that help? Yeah, definitely. I guess, would you say, you're, you're sticking with kind of the $30 million-$50 million acquisition target for the year? You think that's still achievable, maybe? I think it is. I think you, I do think it is. I think you'll see a lot of people talking about deals that they won't have, but I feel very comfortable about where we're at because, you know, we're talking with mom and pops a lot, and, and there are circumstances that change in those people's lives every day. Right. Nope, that makes sense. Thank you for that. Maybe one for Eddie. I mean, it's a small number, but there was a $2 million draw on the credit facility. I'm just curious for modeling purposes, maybe when this was drawn and, you know, when, you know, you might expect to repay it. Yeah, it was drawn at the kind of end of May, so we got, you know, June, the interest there from June. You know, I would anticipate that to stay drawn for probably the rest of this quarter, and probably be paying it back toward the end of this quarter. Okay, perfect. At the end of Q3. Okay, that makes sense. I mean, total CapEx was closer to CAD 7 million in the quarter, a bit higher. I'm assuming obviously that's related to, you know, both seasonal factors, but also the recent acquisitions. I'm just wondering, you know, how are you thinking about your CapEx budget for the balance of the year? I think we did a lot of the CapEx spending that was needing to be done in the first, kind of the first half. Whether it was installation of some of the rental homes, and then a lot of the work that's being done on the new, the acquired acquisitions, as we, you know, fix streets and put in playgrounds and those kind of things. Q3 will be probably more similar to Q1. I would say that Q4 will fall off significantly as we, you know, the, the season to complete those capital projects, you know, is kind of runs out. Okay. That's it for me. Thank you for, for the color, and congrats on the quarter. Thanks, Kyle. Next question will be from David Chrystal at Echelon Wealth Partners. Please go ahead. Thanks. Good morning, guys. Good morning. On the OpEx side, obviously, you know, the year-over-year, we still saw the effects of inflation, but how should we look at margins for the balance of 2023? You know, do, do you think the worst of OpEx inflation is behind you? Yeah. Is that better to you? Yeah, absolutely. I, I, I do from an inflation standpoint. You know, what we saw in Q1 was partly inflation related, but it was also kind of seasonal weather related. We had the real bad freeze where we saw a significant amount of water leaks and cost associated with just getting that back up and going, getting folks back with water. Q2 kind of normalized a little bit more. Our utility recapture was back over 90%, which is kind of where we would expect it to be. You know, I, I, I do think that the, the inflation related to wages has really leveled off for us in our markets. You know, that was pretty, pretty significant at the end of last year. That seems to have leveled off. You know, the, the nice thing about what, our model is, we're passing, passing through the utility cost, and frankly, the property taxes to, to the residents, which is where we see, you know, big opportunities for inflation. So, to the extent that, those things, do, do drive, inflation, we'll be able to, to recapture the majority of that. So yeah, I think so. Okay. On the revenue side, have you started looking at 2024 rent increases and the kind of magnitude that those might be? We, we haven't fully done that yet, David, because that's typically a September, October conversation for our group. We, we, we will go by line with each, with each location to do that. What we do know inherently is that there's plenty of runway. We just need to be mindful of, of, of, of our rent increases so that, that our customers stay healthy. Would you say that Social Security and the kind of magnitude of that increase would play a large part, or is it community-specific? The answer is yes, and we always, we always look for what we think CPI would come in at. Again, last year, you know, I think CPI came in 8.7%. Our rent increase was 7.8%, which was a little up from our guidance of 4% - 5%. Again, from a modeling perspective, I'd probably use 5%. Okay, perfect. Appreciate it. I'll turn it back. Thanks. As a reminder, ladies and gentlemen, if you would like to ask a question, please press Star followed by one on your touchtone phone. Your next question will be from Tal Woolley at National Bank Financial. Please go ahead. Hey, good morning. Morning, Tal. Just wondering if you can give us your sort of latest and greatest view on the state of the actual for sale MHC market, you know, how are inventories, pricing, financing, availability, anything remarkable going on on that side of the business right now? Are you talking about the home sales or- Yeah community sales? Home sales? The home sales, yeah. It's, it's, it's home sales. Nathan, you want to jump in on that? Yes. Yeah, sure, sure. Yeah, we're home sales have been robust the first two quarters. Actually, I was a little bit or originally a little concerned, but I think that the width of what a new home costs, a stick-built home in the United States, has gone up so much, and between that and apartment rent, it's just been really. It, it's been very good. We're seeing, I have heard our actual new home sales have been way above what we expected. We've been very pleased, and, and, and actually, July has been pretty good, too. We anticipate that it will continue as of right now. Home availability is fine. You know, one of the things is when Dodd-Frank was passed, there was a lot of concern in the industry about what that would actually do. It, it is, it is actually kind of in the end, this is the first time we've seen a rising rate environment, and it has kind of not raised the rents because, raised the rates because of its triggers inside the inside the the regulatory framework for that. We've been very pleased, and, you know, I anticipate it's going to continue right now. We've not seen this kind of affordability factor span for us in quite some time. Okay, that's great. Then I guess one of the things I wanted to ask about, too, is just was leasing strategy. Like, let's say you've acquired a community, you fixed it up to your liking, and it's maybe like low, sort of 80% range occupied. Given you have such a low turnover on tenants, how do you think about filling that up over time? Is it, you know, do you try and think like, okay, we wanna add a couple hundred basis points a year, or is it, let's move as quickly as we can? I'm just wondering, you know, when you, when you get these assets into, you know, ready for service into the condition you want, how aggressively you start to move, try to move occupancy. I, it's an interesting, it's relevant to the individual location, is what I would say to you. Is again, we have a homeownership model, so if, you know, if, if you were 80% rental home, or of the 80%, if you were 50% rental homes, because we bought the community and it had a high rental home, we would, we would be very focused on driving homeownership through new home sales and just converting those rental customers and driving that down so you get a more stable resident base. So that, at the, at the mature location, you know, what, what we've guided is, and what we truly believe is, again, we have some very large communities that have no rental homes at all in them, and that are in the 80% to 85% to 95% range in occupancy. We, we, we'd guide about a 2% occupancy growth on average. You know, kind of like the rental home or the average monthly rent increases, we'd guide about 5% on that. When you get to 95% occupancy in some of these communities that are older, you do have to be mindful that, you know, some of the housing stock is getting older, and you've got to make sure that that housing stock is being replaced with new, modern homes. I don't, I think, you know, for me to say that, oh, we're going to have a 100% occupancy, we probably aren't. You know, I think from a modeling perspective, I'd probably hold it at 95 as we continue to make long-term decisions on the housing stock within that individual community. Okay. Then just lastly, in terms of borrowing costs right now, where are you seeing mortgages these days, and for what kind of term? Eddie, you in? Yep, absolutely. Yeah, what I'll say is, you know, the, the debt markets are, are still kind of wide open for us. Certainly the rates have, the rates have, have driven up. As far as terms, you know, I'm still quoting 20 year fixed rate deals that, that we can get, that we can get done. Those rates, though, that were, you know, four or even sub four at one point, are now closer, you know, 5.5, 5.75. The, the credit availability is there. What I'll tell you is what we're seeing is the, the lenders, they're hungry to do deals. They're, they're not doing a lot of deals either. You know, we've seen folks get a little more aggressive on, on spreads, maybe that we could come inside of that, that, that 575 or 550 rates. The availability for the credit at this point has not changed. The lenders like our asset class, the stability that it comes with. You know, it's still there, just more expensive. Okay. That's great. Thanks very much, gentlemen. Thank you. Thank you. At this time, we have no further questions, so I would like to turn the meeting back over to Kurt. Thank you, operator, and thank you everyone for participating. Please feel free to reach out to our investment relations team at ir@flagshipcommunities.com if you have any further questions. Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines.