Hello, ladies and gentlemen. Thank you for standing by. Welcome to the Flagship Communities REIT Second Quarter 2025 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. To ask a question during the session, you will need to press star one one on your telephone. 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 risk 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 has also prepared a corresponding PowerPoint presentation, which we encourage 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. In the second quarter, our operations continued to perform according to plan, which has set us up well to have another great year in 2025. Our strong performance also showcases our ability to continue growing occupancy levels, rental revenue, and FFO, in addition to same community metrics. Our solid financial performance speaks to the strength of our business model throughout all economic cycles. We have been able to improve our portfolio in a number of ways. The first is by improving the amenities packages within existing communities, making them more desirable locations. The second is through ancillary revenue and cost containment. Through bulk purchasing, we can provide certain amenities that allow our residents to save money while providing us with a means for additional revenue. The third way is through our lot expansion strategy, which allows us to add more housing opportunities within certain existing communities for a modest capital investment. After adding 112 lots to our portfolio in 2024, roughly 10% of customers have begun moving into these lots, and we are beginning to generate revenue from these new residents. Our success this year and since our IPO is also a reflection of the solid fundamentals of our industry. The MHC industry continues to demonstrate a consistent track record of strong performance regardless of the economic cycle. For over 20 years, the MHC industry has grown approximately 4% per year, outperforming all other real estate sectors. As you can see from slide seven of the presentation, NOI growth remained positive during the housing crisis and the Great Recession, and more recently remains resilient during the pandemic. In today's environment, home sales for traditional housing and the condo market are down, primarily due to rising prices, credit tightening, continued higher mortgage rates, and general economic uncertainty. These factors are generally positive for MHCs because our customers tend to stay in our community because they are the more affordable option. That is why the MHC industry is seen as a defensive asset class relative to other real estate classes. We have stable and recurring rental income streams, mainly due to our large and diverse resident base. There also continues to be a limited supply of new manufactured housing communities, given the various layers of regulatory restrictions, competing land uses, and lack of zoned land. With that, I will now turn it over to Nathan for his remarks. Nathan? Thanks, Kurt. Good morning, everyone. On the heels of the largest acquisition in our history last year, we have worked hard to integrate and improve the communities, and we are very pleased with the progress we have made to date. In West Virginia, we have steadily increased occupancy levels since owning the communities, and in Nashville, Tennessee, new home sales have continued to advance. We have also recently added an amenities package and new clubhouse in one of the communities for the benefit of our residents. Amenity packages and improved clubhouses are important for enhancing the living experience of our residents. Over the last year, we have added pickleball courts, municipal-grade playgrounds, clubhouses, cornhole, dog parks, and more to our communities. We also provide extensive holiday and seasonal events, such as back-to-school programs that our residents look forward to and enjoy as a community. Recently, our efforts were recognized when our Derby Hills Point community in Alexandria, Kentucky, was named Community of the Year by the Kentucky Manufactured Housing Institute. This is the fourth year we have won KMHI's Community of the Year Award, and it is a testament to our team's commitment to building safe, high-quality, and vibrant communities that foster pride and connection among our residents. We have done a great job on our existing portfolio, but at the same time, we are always looking for external opportunities that adhere to our strict and disciplined criteria. As one of the Midwest region's largest MHC operators, we can leverage our 30 years of operating experience to source off-market opportunities through longstanding industry relationships. 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 $25.1 million during the second quarter, which was up 18.1% over the same period last year, primarily due to acquisitions as well as lot rate increases and occupancy increases across the portfolio. Same community revenue of $22.7 million for the second quarter grew by approximately $2.5 million over the comparable period last year. This increase was driven by higher monthly lot rents, as well as growth in same community occupancy and increased utility reimbursements and ancillary revenue agreements. Net operating income and NOI margin were $16.7 million and 66.6% respectively, compared to $14.1 million and 66.2% during the second quarter of 2024. Same community NOI margin for the second quarter was 66%, which increased by 1.2% compared to last year as a result of lower repairs and maintenance expenses, as well as increased utility recapture. FFO adjusted and FFO adjusted per unit for the quarter were $9 million and $0.357 respectively, a 19.1% and 13.7% increase respectively compared to 2024. AFFO adjusted and AFFO adjusted per unit for the quarter were $8.2 million and $0.326 respectively, a 23.5% and 18.1% increase respectively compared to 2024. Same community occupancy of 85.5% increased 1.2% over the same period last year. As Kurt mentioned in his remarks, last year we completed a lot expansion that added 112 lots to our portfolio. Adjusted for the impact of this expansion, total portfolio occupancy and same community occupancy would have been 85.6% and 86.1% respectively. Rent collections for the quarter were 99.2% compared to 98.7% last year, which demonstrates the strength and predictability of the MHC sector and was within our expectations. As at June 30, our total lot occupancy was 85.1% and our average monthly lot rent was $484. Both of these metrics were within our expectations. We remain committed to preserving a conservative debt profile. Our weighted average mortgage and note interest rate was 4.26%, and our weighted average mortgage and note term to maturity was 9.5 years. We had total liquidity of approximately $13.4 million. The REIT currently has 22 unencumbered investment properties with a total fair value of $97.2 million as at June 30, 2025. We are well positioned for future growth opportunities with additional leverageability on our balance sheet. For this reason, we chose not to renew our ATM program. With that, I'll now turn it back over to Kurt for some final remarks. Kurt. Thank you, Eddie. We are pleased by our progress so far this year and expect to build on this success in the second half of the year. The ongoing integration of our communities in Nashville and West Virginia, our lot expansion strategy, and our strong balance sheet have helped position us for another great year in 2025, the 30th anniversary for Nathan and me in the MHC business. We expect to maintain our high level of performance and growth as housing prices, high monthly rental rates for multi-family competitors, and mortgage rate increases have the potential to lead more people toward manufactured housing because our homes remain affordable. All of this speaks to the strength and the quality of our residents and the predictability and consistency of the MHC sector. We certainly thank you for your time today, and I will now open up the line for questions. Thank you so much. As a reminder, to ask a question, simply press star one one on your telephone and wait for your name to be announced. To remove yourself, press star one one again. Please stand by for our Q&A roster. Our first question comes from Mark Rothschild with Canaccord. Please proceed. Thanks. Good morning, guys. Morning, Mark. Hey, looking at the same property NOI growth, which has been consistently for a number of quarters now, quite strong and better than your U.S. peers. Obviously, I'm sure you guys do a better job at managing the properties, but is there something related to maybe how fundamentals have been changing in the markets you're in versus other markets, or maybe that you're coming in with greater vacancy than some of them that's leading to that? I'm just trying to understand if that's something you believe is possible to continue to occur over the next few quarters. I think that we've been buying some vacancy, and then we added some vacancy over the last couple of years. I do think we've created our own opportunity for same community growth, essentially. I don't think our markets are particularly that, I mean, again, you can't compare us to some of the other competitors when they're coastal. I don't think that's probably a fair comparison for either party. At the end of the day, I think it's really just been because we've had a good strategy at our existing communities of filling vacancy, and then we've actually created and developed some vacancy that we're filling. The other thing is the ancillary revenue is continuing to kind of help us. Those mature communities were the ones that we did the ancillary revenue, you know, the bulk buying of cable and internet agreements with. Okay, great, thanks. Maybe just one more on the more recently acquired properties, Nashville in particular. Are there any metrics you can provide to let us know how they are performing relative to how you expected initially, and maybe what we should expect and how that would compare to the same property portfolio? Yeah, we're just thrilled with the acquisitions. It looks like it was a well-timed acquisition from an expansion of the portfolio perspective, and they are going as planned. We're selling more homes, which is kind of exciting. We're selling more homes in Tennessee than we thought we were going to sell. Right now, it looks like that project's coming along as well as it can. When we're redeveloping sites and some of those need to be redeveloped, it takes you 12- 18 months to kind of get that under control typically, and that's going really well. I think West Virginia is completely stable right now, and Tennessee is growing with home sales. We're real happy on both fronts in that they're making their occupancy globally, and their NOI is on plan. Okay, great, thanks. Maybe I'll just add a short note to that. Just from the metrics standpoint, NOI seems to be ahead of where we originally thought in the margins as well. That's mostly driven by the fact that, you know, generally we assume we will get a year-one property tax reassessment. That doesn't seem to happen in about half the communities, so that was a win. When you look at the actual NOI, it's trending ahead to this one. Okay, great, thanks so much. Let's send it back. Thanks, Mark. Thank you. One moment for our next question. It comes from Tom Callaghan with BMO Capital Markets. Please proceed. Thanks. Morning, guys. Morning, Tom. Just want to maybe just drill down a bit on some of the drivers of that same property growth, and particularly on the occupancy side, that continues to march higher. Can you just maybe talk a bit about your expectations for that momentum over the second half of this year? I guess in the second piece of that question, just what are you seeing in terms of drivers of that growth? Is it, you know, people trading down from apartments, migration, or something else? How does that compare, I guess, relative to history, just given the economic backdrop today? The fundamentals of our industry really haven't changed in the last 12 months. We're still $300- $500 cheaper than alternative competing forms of housing. Typically, our customers come from multifamily. In our markets, I get updated data every two weeks, and there are no rent concessions. There's no overbuilding of multifamily in our markets. It's pretty much business as usual here. From just a marketing and a demographic growth kind of perspective, I don't see anything different there. The good news is this is a good environment for us. It was a good environment last year. It's a good environment this year. There's still the competing, not only are multifamily more expensive, and we get customers from multifamily, and then customers will move out to go to stick-built housing. Stick-built housing has some challenges right now about affordability. Mortgage rates are still high. Credit tightening has happened at the banks. It's kind of our understanding on stick-built housing. I think it's tougher for them to go upgrade later. I think right now people are staying in place a little bit more. The other side of it is that we've been buying some vacancy and developing a little bit. We expect, we think full occupancy of the location is, call it 95%- 100%, right? Something in there, because you're always making decisions in the future about how to improve the community through improving the housing stock. Right now, we think we've got 46 locations that are at all-time highs on occupancy, but that average is only about 86%. We can still march that forward another 7% or 8% just same community. That's what's happening kind of organically right now. It's a good time to be in the business. Perfect. Thanks. That's great color, Kurt. Maybe second one or last one for me is just capital allocation. Like the balance sheet obviously continues to improve in very good shape. I know in the past you guys have talked down previously about, you know, maybe some potential refinancing headwind for, you know, private operators who may have to think a little bit harder in terms of what their portfolios look like. Have you started to see any product hit the market on that side of things? Nathan? Eddie, you want to jump in there? Yeah, I'll jump in. You know, you continue to not, like in the past, you had a lot of private equity. I just don't think private equity right now with what the returns they have to have, the manufactured housing isn't happening for them. I've seen very, very little private equity out there. I've seen some one-off people buy here and there, but there's not a lot that comes on the market. As I said, you can't beat the big guy upstairs. At some point, some people pass away or the situation changes and the families that own these are forced into, we need to sell. You still are starting to see that. You still see that. You're also still seeing some of the private equity companies and some of the big companies. I mean, Blackstone, just last week I saw where they put up three of their five-star properties and that they may not be staying in the market because they can't buy enough. That's what is interesting in this business. There's not a lot, it's a boutique business and it's hard to scale it. Understood. Thanks, thanks, Nathan. I'll pass it back. Thank you. Our next question is from Jonathan Kelcher with TD Cowen. Please proceed. Thanks. Good morning. My question just on the expense side, the same property expense growth was around 8.5% this quarter. I think last quarter you guys talked about some one-time items in there. Was this a cleaner number in the quarter and a level we could think about going forward? Eddie, you want to jump in? Yeah, sure. Yeah, yeah, John, I would say that it was a much cleaner quarter. We didn't have a lot of one-time expenses. Q1, we had a lot of storms, storm cleanup, those kind of things. Q2 didn't really have that. Q2 may be slightly elevated from a wages standpoint just because we have some seasonal workers as it relates to, you know, cutting grass and those things. It should be a much better, much more representative number where we see it. Our utility recapture, so you think about utility spend, those things were also kind of normalized this quarter. I would say it's a pretty good representative number moving forward. Okay, that's helpful. Secondly, just on Kurt, you talked a little bit about ancillary revenue being one of the reasons you guys have to do a little bit better on same property NOI. Some of the stuff like bulk buying, like how long can that go on? How many communities have you rolled it out to and still have the opportunity to do so? Eddie, you want to jump in on your cable revenue? Yeah, absolutely. Right now we've done about, call it, 60% of the portfolio. Really, we're only going to be able to probably effectuate, call it, 80% of the portfolio. The other 20% would have issues, whether it's in a market that's not served by a cable provider, or frankly, sometimes a cable provider doesn't want to work with you if they already have really good penetration in a particular market. We still have opportunity for another, call it, you know, 15%, 20% of the portfolio to add. It's just not something operationally you can do all at one time. It's a pretty heavy lift from an operations standpoint just to work, kind of work through it with the residents and the cable companies. We'll certainly be turning some more on here in the third quarter. That will give us some tailwind as we move into Q3, Q4. The opportunities will come back around next year when we are able to start taking a look at the portfolio that we just bought. None of those communities currently are on having any bulk cable or internet providers there. It's an opportunity for us to really help the resident from a cost standpoint on their cable and internet, as well as helping us a bit as well. I still think we have a pretty good runway. Certainly, the next four quarters we should have some tailwinds. As we move into next year and start looking at the acquired portfolios, we'll have to work on that as well. Sounds good. Thanks. I'll turn it back. Thanks, Jonathan. Thank you. Our next question is from Brad Sturges with Raymond James. Please proceed. Hey, guys. Morning, Brad. Just maybe circling back to the, I guess, the acquisition market and, you know, looking for a little bit of color or commentary on how you view your acquisition pipeline opportunities today and whether or not you think you can hit your kind of annual acquisition volume target of, call it, $30 million- $50 million this year? Yeah, we have been looking at deals. As I said before, you can't beat Mother Nature. I would anticipate that we will surely get to the 30- 50 number this year. We're working hard to get there. It can be a tough market. As I said in the past, you got to take the deals when they come because you don't know when they're coming. Has there been any change in terms of pricing expectations, whether it's core assets or value-add assets from a contractor perspective? No. Okay. No, it's just, you know, everybody wants to see cap rates move up in Manufactured Housing Communities. In my 30 years, they've never moved up. I've watched them move down, especially in the coastal states to 3%, you know, three cap. In the Midwest, they just haven't moved very much. There are 10 caps and 11 caps over time that we have bought, but they are very difficult properties to turn. You can only take so many of them a year or in three years or five years, whatever it takes to turn them. Thanks, John. Just last question, just real quick, on the lot expansion program, how do you think about what that will look like this year? I think the target was somewhere around 75 lots this year. Is that still the case? I think it's probably a little bit lighter. It's probably somewhere between 20- 40. This is not at one location. This is just where we get chances to expand right now. It's a relatively small number this year compared to the 15,000 lots that we're managing. At the end of the day, is it there? Yeah, it's there. Will it be a big number this year? No, but I don't really expect it to be a big number in a year. That's how you make same community, back to an earlier question, that's how you make same community grow. When you take a same community and you can actually add lots and you get the entitlements to do that, that's long-term very creative. You just got to be patient with it. Yeah, makes sense. Thanks a lot. I'll turn it back. Thank you. Our next question comes from Kyle Stanley with Desjardins. Thanks. Morning, guys. Morning, Kyle. You've noted new home sales activity slowing. I think you mentioned this definitely last quarter in response to higher rates and maybe the economic outlook. That could drive residents towards the properties within your rental fleet as you look to sell them down. I'm just wondering, can you update us on this dynamic through the second quarter? So far in the third quarter, are you seeing this translate to more home sales within your kind of rental fleet? I think I'll let Nathan answer on home sales, and then I'll answer on the rental fleet. Nathan, you want to jump in on what you see in home sales? Yeah, we have seen some slowing in home sales. It's mostly because the consumer doesn't have the down payment. It's not because there's not financing available. It's not because the interest rate on manufactured housing has gone up terribly. It is literally the pushback on the down payment. As you know, we take 10% or more down. When you're talking about on a $70,000 single wide, that's $7,000 minimum. They are having a tougher time coming up with that money. We are selling homes, but the other thing is we're not having a lot of people move. I mean, you see that as well, where normally you would have people moving up. You're seeing very little, very, very little moving up. Yeah, I think on that same note, on the rental fleet, we're at a high watermark on occupancy of the rental fleet right now. I think it's like 93%, something like that, 93.6%. We do expect to be able to sell some of those rental homes because, again, it's just an economic kind of directional moment. If people, for whatever reason, can't or are uncomfortable buying big double wides for $100,000, they move to single wides for $70,000. After that, they move to maybe a rental home that you're selling for $40,000. That's an evolution that we've seen over the years. This call is being recorded. We are just taking what the market gives us. We do not think we have to rent our way to prosperity, but we will. We do not think we will ever be out of the rental home fleet business either. Okay. No, that makes sense. Thank you for that. Just the last one, just on G&A, who was hired this year, I think you know it obviously hires staffing. I think we've heard about that being a driver of the cost profile over the last few quarters, but also some higher kind of consulting and legal fees. I'm just wondering if you can elaborate a little bit. Would you say this is a good run rate for G&A, or is there additional cost in this as you stabilize some of and integrate some of the 2024 acquisitions as well? Eddie, you want to jump in? Yeah, what I'd say is obviously the increase in spend was pretty broad within a number of areas. In this quarter's data, I won't say there's one-time items. What there are is a couple of annual items that we end up having to pay once a year that account for about $200,000 of that amount. As far as a run rate, I think it is a pretty good run rate, less those items for Q3 and Q4. As we continue to position ourselves for future growth, I think, again, we did a little more platform expansion. To your point, we obviously did add communities, so there are some more roles that are added as well. I think it's a pretty good run rate, less those, what I'll call an annual expense that will certainly come back next year, but you shouldn't see the same thing in Q3 and Q4. Okay, perfect. That's it from me. I'll turn it back. Thanks, guys. Thanks, Kyle. Thank you so much. As a reminder, if you do have a question, simply press star one one to get in the queue. Our next question is Himanshu Gupta with Scotiabank. Please proceed. Thank you and good morning. Good morning, Himanshu. Just looking at the IFRS NAV unit, I mean, it's up almost 10% year-to-date, up nicely. What is driving your portfolio value assessment higher in the year so far? Eddie, you want to jump into that? Yeah, absolutely. We've not had any change to our IFRS cap rate this year at all. It's still at the 5.11% as it has been since January 1st, 2023. What we've continued is it's the same community NOI growth, right? We're looking at capitalizing the trailing 12 NOIs as we do our valuations. We continue to see significant same community NOI growth driven by kind of the areas Kurt talked about, which, from there, it's kind of math that it's driving the portfolio to continue to grow in value. That's what we're seeing. Rental homes, which is part of that investment properties, we continue to see that have, as you would expect, some declines in fair value. The good growth in our same community NOI continues to drive the valuation up. All right. Eddie, what percentage of portfolio is externally appraised every year? We appraise one-third of the portfolio annually. That was up until last year, we did 100%. There was a change due to some discussions with the auditors. They thought it would be better that we were doing a third. We do one-third external third-party valuation every year. Okay. Just to follow up there, if I look at the value of portfolio per lot, I think it's almost like $75,000 per lot. Is that where the market is? When you go out for acquisitions in your target markets? You think I'll let Kurt speak to that? Yeah, I think it is, but it depends on, you know, where you're at and are you buying a stabilized property or not. In general, our portfolio is stabilized. When we're talking about having, you know, some same community operational, you know, NOI gains because of these bulk purchasing agreements, and then you turn around and talk about you being at starting to approach some all-time highs and 46% of the outstanding portfolio in occupancy, you're starting to really see the benefits of a long-term strategy of home ownership. Therefore, you're going to get the higher, that's how you get the higher margins, right? Home ownership drives the occupancy up. It's a slow process, but as you get there, it gets very valuable. I think we're right there on the stabilized properties that are out there. You could buy lower than that, but normally you're buying some kind of volatility or some kind of, you know, you've got to go roll up your sleeves and get to work. Maybe if I heard right, I think in one of your remarks, you mentioned Blackstone is putting some product in the market. I mean, what kind of pricing are they looking for? Nathan, that's all you. Yeah, what I saw in it, just so you know, we didn't bid on it, it was a sub $4,000. Which markets are we talking here? I think one was in Washington, one was in Cincinnati, and the other one was in, I think, Atlanta. That's right. Okay. Thank you, guys, very helpful. I will turn it back. Thank you. Thanks, Himanshu. Thank you so much. Our last question comes from the line of Jimmy Shan with RBC Capital Markets. Hey, guys. Morning, Chan. Morning. I I just have one quick question. Just on occupancy, you'd mentioned you're currently at 85%, and several of your markets are in the 95% range. I guess if you don't buy or create any more vacancy, what do you think is a reasonable timeframe over which you think you can achieve a 95% occupancy? I think the modeling should be 2% a year, you know. If you want to be more conservative, use 1.5%. Again, it's not because you're not moving new people in at a faster rate than that. One of the nuances about our industry is that the housing stock in a community gets a year older every year, right? My point is if this park was built in the 1970s or 1980s, you've probably got some housing stock that's still in there from the 1970s and 1980s. When that original user or the current user gets to a certain moment, that home has to leave because of age. You can move in two people, but maybe you've got a little normal turnover there to make sure your housing stock is getting better every year. I think 1.5%- 2% year growth on a stabilized community is a good model. Okay. The pace is somewhat dictated by the fact that the houses are aging, and it is a natural turnover, which takes time to replace. Correct. It depends on the original owner too, right? We've purchased some of these communities. Some owners like to rehab 1970s series homes and resell those. We don't like to do that. If the original owner was selling new homes all the time, then that actually housing stock doesn't have as much of that turnover. In the first example, you have to muscle that through until you get the average age up a little bit. Yeah, okay, great. Thank you. Thank you so much. This concludes our Q&A session. I will turn it back to Kurt Keeney for final comments. Thank you, operator, and thank everyone for participating today. Please feel free to reach out to our investor relations team at ir@flagshipcommunities.com if you have any questions. Have a great day. Ladies and gentlemen, this concludes our conference. Thank you all for participating, and you may now disconnect.