Good afternoon, ladies and gentlemen, welcome to the Morguard North American Residential REIT 2026 second quarter 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 need assistance, please press star zero for the operator. This call is being recorded on Thursday, July 30th, 2026. I would now like to turn the call over to Chris Newman, CEO. Please go ahead. Thank you. Hi, everyone. Welcome to the Q2 MRG conference call. With me today is Angela Sahi, President and CEO. Paul Miatello, Senior Vice President. Beverley Flynn, Senior Vice President, General Counsel. John Talano, Senior Vice President, U.S. Operations. Ruth Grabel, Vice President, Canadian Operations. As is customary, I'll provide some comments on the REIT's financial position and performance. In terms of our financial position, the REIT completed a second quarter with total assets of CAD 4.8 billion, higher compared to CAD 4.5 billion at December 31st, 2025. The increase in total assets was due to a change in the U.S. dollar exchange rate, a fair value increase on the REIT's income-producing properties, and an increase in cash from REIT financings completed during the quarter. During the second quarter, the REIT completed the CMHC insured refinancing of three residential properties located in Ontario and Alberta for an aggregate amount of CAD 162.8 million at a weighted average interest rate of 4.26% and a forward weighted average term of 11.2 years. The REIT completed the refinancing of a residential property located in Kennesaw, Georgia, in the amount of $29.2 million at an interest rate of 5.4%, and for a term of five years. In total, the refinancing provided CAD 86.4 million of additional proceeds net of financing costs. The REIT finished the second quarter with approximately CAD 204 million of cash on hand and CAD 100 million available under the REIT's revolving credit facility with Morguard Corporation. Mortgages payable end of the quarter with a weighted average term to maturity of 5.2 years, an increase from 4.8 years at December 31st, 2025, and a weighted average interest rate of 4.18%, higher compared to 4.07% at December 31st, 2025. The REIT's debt to gross book value ratio was 40% at June 30th, 2026, higher compared to 39.5% at December 31st, 2025. The REIT's IFRS net asset value per unit at June 30th, 2026, was CAD 45.55. As previously announced, the REIT and Morguard Corporation agreed to jointly invest approximately CAD 1 billion in a Canadian multi-suite residential real estate portfolio currently owned by TD Asset Management. We are actively progressing through due diligence, including determining individual property allocations to the REIT and anticipate closing the transaction during the second half of the year. Turning to the statement of income. Net income was CAD 26.1 million for the three months ended June 30th, 2026, compared to CAD 30 million in 2025. The CAD 3.9 million decrease in net income was primarily due to a decrease in NOI and offsetting net non-cash changes. IFRS net operating income was CAD 54.2 million for the three months ended June 30th, 2026, a decrease of CAD 2.7 million or 4.7% compared to 2025. On a proportionate basis, proportionate NOI for the three months ended June 30th, 2026, decreased by 4.9% compared to 2025 due to the following. NOI in Canada decreased by CAD 1.1 million or 6.6%, mainly due to higher vacancy and a decrease in ancillary revenue, partially offset by an increase in AMR. NOI in the U.S. decreased by $0.9 million, or 3.9%, mainly due to higher vacancy and an increase in operating expenses, primarily from higher R&M and payroll costs, partly offset by an increase in AMR and ancillary revenue. The change in foreign exchange rate decreased proportionate NOI by CAD 0.4 million. Interest expense increased by CAD 0.4 million for the three months ended June 30th, 2026, compared to 2025, primarily due to an increase in interest on mortgages from higher principal and interest rates on the completion of the REIT's refinancing. The REIT's Q2 2026 performance translated into basic FFO of CAD 22 million, a decrease of CAD 2.7 million or 11.1% compared to 2025. On a per unit basis, FFO for the three months ended June 30th, 2026, decreased by CAD 0.05 to CAD 0.42 per unit, compared to CAD 0.47 per unit in 2025 due to the following. On a proportionate basis in local currency, a decrease in NOI, mainly from higher vacancy, lower interest income, and an increase in interest expense was partly offset by a decrease in trust expense at a net CAD 0.04 per unit negative impact. The change in foreign exchange rate had a CAD 0.01 per unit negative impact. The REIT's FFO payout ratio of 46.8% for the three months ended June 30th, 2026, represents a very conservative level, which allows for significant cash retention. Operationally, the REIT's average monthly rent in Canada increased to CAD 1,885 at June 30th, 2026, a 3.5% increase compared to 2025, reflecting the quality of our Canadian portfolio. During the first half of the year, the Canadian portfolio turned over approximately 5.1% of its suites and achieved AMR growth on suites turnover of 6.8%. Occupancy in Canada finished the second quarter of 2026 at 91.4% compared to 95.2% at June 30th, 2025, and was lower primarily due to increased competition from new rental buildings and lower immigration levels. Management believes market conditions will improve as new supply is absorbed and incentive-driven competition moderates. While in the U.S., AMR increased by 1.8% compared to 2025, having an average monthly rent of $1,933 U.S. dollars at the end of the second quarter. Occupancy in the U.S. of 92.8% at June 30th, 2026, was lower compared to 94.8% at June 30th, 2025, primarily due to a combination of tenant relocations, affordability, and increased home buying. As we move into this busier summer leasing season, management expects occupancies to continue to grow moderately, which should be followed by modest AMR growth. During the six months ended June 30, 2026, the REIT's total CapEx amounted to CAD 26.5 million. That included revenue-enhancing ensuite and tenant improvements, exterior building projects, garage renovations, common area mechanical plumbing, and electrical projects, as well as energy initiative expenditures. At this time, I'll turn the call back over to the moderator for any questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by two. If you are using a speakerphone, please block the handset before pressing any keys. First question comes from Jonathan Kelcher at TD Cowen. Please go ahead. Thanks. Good afternoon. First question, just on the Canadian portfolio occupancy. I think in May, you guys were talking about occupancy starting to improve. It ended up basically flat versus Q1. Could you maybe give us some color on what happened or changed in the market? How you see occupancy trending over the back half of this year. Hi, it's Ruth. Right now, we do see that the leasing activity has definitely increased. During the past quarter, we did have some move-outs that are pretty typical for us for our property in Ottawa and Edmonton. It's student-based. We have more move-outs. But now what we're seeing is leasing activity has increased. Our availability today is 92.7%. That takes into account all the leases, not necessarily all the move-outs as yet. But overall, our team is reporting significant amount of interest in the units. We have a lot of showings per day. As well, we see some groups coming back from IT, where we previously had our prospective tenants leasing out our buildings. They're coming back, like from Cognizant and Citibank, some other groups as well. The immigration for specific businesses have opened up, and we're seeing that translated into leases in Mississauga. We are optimistic going forward and the number of showings and leasing that we've completed and our availability is kind of dictating that. If I put that all together, it sounds like maybe Q2 is the low point for occupancy, but not expecting huge change over the back half? I would say that's a fair statement. On the TDAM transaction, I know you're probably not going to give a lot of info here, but what approvals do you need for that to close? Is it just down to CMHC or are there any others? Hi, Jon, it's Paul here. Yeah. Go ahead, Paul. Sorry. Yeah, it's Paul here. We're just working through what I would characterize as the final stages of due diligence. The vast majority of it is complete and behind us. Beyond just our internal work, yeah, it would be down to lender consents and obviously involving CMHC after that. We've commenced the process with CMHC in anticipation of getting to a waiver of conditions. With CMHC, it's hard to put a timeline on. Yes. If that's your next question. No, no. Yeah. CMHC. Yeah. Yeah, CMHC and lender consents would be the only other approval required. Okay. Does this portfolio Do all the assets have a similar amount of leverage? I'm kind of asking in that the assets that MRG.UN takes on, how are you thinking about that in terms of your overall leverage profile? For MRG.UN, the debt that will be taken on won't alter, not materially anyway, won't alter the leverage levels that are in place today. Okay. You're roughly 40% now, and then at the end of this, you might be 42%, 43%, but not anywhere near 50%. Is that a way to think about it? That's a fair statement. Yes. Okay. Yeah. I will turn it back. Thank you. Thank you. Jimmy Shan at RBC Capital Markets, please go ahead. Thanks. Just a follow-up on the Canadian portfolio. The 92.7% number you referred to, that sounds like it's committed occupancy, if you were to include the expected move-outs, what would that number look like? I don't know as yet what that number would look like. We do have some properties, like in Alberta, they don't have to provide notice. We can fairly say fairly close to 92%. I'm not quite sure. Okay. All right. Yeah. It's probably no better, no worse than where we stand today. It's just the point is there's a lot of leasing activity. There's a lot of momentum. We also have in Ontario, you give two months notice, we definitely have two months of work ahead of us to keep finding leases and tenants. We think the positive momentum will lead to a net gain relative to our position at June 30th. I think in the MD&A, you made reference to rent cuts, et cetera. Can you maybe provide some color on sort of what rental incentives or rent cuts that you're doing and how do we think about the AMR growth on a go-forward basis for Canada? Right now we're offering one or two months free rent. We might be offering some signing bonus between CAD 500 and CAD 1,000, just so we close a lease, finalize the lease. On rents, on select units, we have decreased some of our rents on one-bedrooms, maybe some two-bedrooms, just to, again, improve our occupancy. Mm-hmm. Sort of more, again, more looking for trends. Has those incentives, selective rent decrease, have they been pretty well the same over the last 3-4 months, or has it gotten worse or better? It's trending down, so not all units are being offered the two months. We are seeing a gradual decrease in the amount of incentives that are being offered. Okay. Turning to the U.S. portfolio, the operating costs did go up quite a bit in Q2. I was wondering if you could provide what are the main drivers and what would be your expectation for NOI margin for the U.S. portfolio for the year? John, do you want to answer that? I know that R&M and payroll are main culprits for the increase. Want to add some more information on that, John? Sure. I would say a lot of it, especially our R&M, was tied to going into our busy leasing season. We turned over 1,400 units over the quarter. That went up significantly, obviously, when we're turning that many units. Payroll was up as well, and honestly, that is tied to being fully staffed. Part of our decreased payroll costs over the last several years has been the difficulty in maintaining maintenance staff on the properties. We're in a much better position now, and I would say it's stabilized. I believe that those expenses are high for the quarter, but I don't foresee that those R&M expenses will continue throughout the rest of the year. This high turnover, can you put us in context, that 1,400, is that a lot? Is that more than? Oh, no. I would say it's actually low for us, but it's a big number. It's just much higher than it was in the previous quarter because we're so busy, if that makes sense. Our turnover in general, in the U.S., is between 55% and 60% nationally. We are in the 40% range on an annualized basis. Okay. On a year-over-year basis, it was higher. That's what- The way it hit, right? Yeah. The way the expenses hit in this quarter, rather than it being more normalized across Q1 and Q2. Oh, I see. Okay. Got it. Lastly, a lot of the debt refinancing that you did, and now you've got CAD 200 million of cash. Was that done pretty well towards the end of the quarter? In other words, the interest expense that we see here in Q2 is probably a good run rate. Is that fair? Yeah. All of them happened in the last 15 days of the quarter end. We'll see the full impact next quarter on the higher interest expense. The cash that you have is sufficient to close on MRG.UN's equity share of the TDAM deal, right? Predominantly. Based on timing of cash flows, we might have to temporarily leverage the Morguard facility by a smallish amount. We don't expect it to be a large component. Okay. That's it for me. Thanks. Yeah. Thank you. As a reminder, if you have any questions, please press star one now. Alex Leon from Desjardins, please go ahead. Hey, good afternoon, everyone. Just want to circle back again on that Canadian portfolio increase in availability. I'm just wondering if there was any change in maybe how aggressive you guys were rolling down rents to pick up some of the demand or if it was more just a function of some of the seasonal move-outs in Ottawa and Edmonton and a stronger demand profile. A bit of combination of both. We did reduce our rents on select units. We're able to get more traction on those units. It's very competitive right now. We have great product in Mississauga, large units. There has been a considerable amount of new product out there. In order to compete, we have lowered our rent. Along with that, we're seeing a lot more prospective tenants looking to make changes and entering into the market. We had a lot more leases that took place, are taking place right now. It's typically busier at this time of year. We have been successful in closing a lot of leases right now. We certainly hope the momentum will continue. There will be some move-outs that we're aware of that are factoring into that availability rate. We're seeing a lot of positive movement right now and a lot of showings, a lot of leasing. Again, some incentives. We're dialing back some incentives on some units. It's a combination of a lot of different factors just depending on the building. Okay, that's good color. I'm just wondering, is there a certain price point that you see maybe demand bifurcating around in terms of maybe elasticity? Is it CAD 2,000 a month? Typically, we've heard from some of your peers where you see lower demand if it's under CAD 2,000, there's a lot higher demand. Are you seeing that across your portfolio? Not really. Again, we have very large units. Our price point is, I think our AMR is over CAD 1,800 a month, and our new rents are over CAD 2,000. They are leasing at those rates, depending if it's a one-bedroom. Two bedrooms are again, within that range. I can't really say that there's one particular. It depends on the unit, it depends on the building. They are leasing. We have large units, in Mississauga, in Toronto as well with our portfolio there. It really depends on the competition that's around us. If it's new rental product, the incentives that are being offered by our competition, we keep track of that very carefully. We're basically very competitive with our product, and I think that's what makes the difference with us. We're offering larger units. We have good management services at the property. Customer service, everything really functions when people are looking to lease a unit. Okay. Appreciate that. You also made the comment that incentive use was trending lower. I'm just wondering, would that be consistent across both Canada and the U.S. or different trends there potentially? I will- [inaudible] is kind of on U.S. Yeah. I would say we are on a positive trend, for sure. Last quarter, our turnover rates on new leases only were negative. This quarter they're definitely positive. We've seen a significant swing there. Our occupancy is at 93% today, and we're leased at 95%. Again, I think everything is moving in the right direction. It's certainly not easy street like it was two years ago. We're in a good place. Our management team, our leasing teams, our marketing teams are working hard for every lease. That's the business, and we're doing pretty well. I appreciate the color. That's it for me. I'll turn it back. Thank you. We have no further questions. Back over to Chris Newman for closing comments. Thanks again everyone for joining us, and we'll look forward to speaking to you again next quarter. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.