Good afternoon, ladies and gentlemen, and welcome to the Morguard North American Residential REIT First Quarter Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator. This call is being recorded on Thursday, April 27, 2023. I would now like to turn the conference over to Paul Miatello. Please go ahead, sir. Hi. Thank you very much, good afternoon, everybody, thank you for joining us for the REIT's first quarter conference call. Just do a quick roll call for everybody. With us we have Chris Newman, Chief Financial Officer; K. Rai Sahi, Chairman and Chief Executive Officer; Angela Sahi, Senior Vice President, Canadian Operations; John Talano, Senior Vice President, U.S. Operations; Beverley Flynn, Senior Vice President and General Counsel. I will now turn the call over to our Chief Financial Officer, Chris Newman, to give us an overview of what was a very strong quarter results-wise for the REIT. We're happy to present on this, we'll turn it over to the operator for questions and answers. Chris? Great. Thank you, Paul. As is customary, I'll provide comments on the REIT's financial position and performance. In terms of our financial position, the REIT completed the first quarter of 2023 with total assets amounting to CAD 4.1 billion, higher compared to CAD 3.9 billion as of December 31st, 2022. This was a result of a fair value increase in the REIT's income-producing properties of CAD 67 million and the acquisitions completed during the quarter. During the first quarter, the REIT completed the following transactions. On January 5th, the REIT acquired from Morguard Corporation the remaining 50% interest in The Fenestra at Rockville Town Square, comprising 492 residential suites for a purchase price of $71.5 million U.S. dollars, including closing costs. The REIT assumed mortgages payable of $34 million US dollars. The REIT now owns 100% of this asset. On March 29th, 2023, the REIT acquired Xavier Apartments, a multi-suite residential property comprising 240 suites located in Chicago, Illinois, for a purchase price of $84 million, including closing costs. Their acquisition was funded primarily from sales proceeds from the disposition of a property during Q4 of last year. As the REIT utilized a tax-deferred strategy under Internal Revenue Code Section 1031, where the REIT was able to defer tax payable upon the acquisition of Xavier Apartments. The REIT finished Q1 with $24.2 million of cash on hand and $49.3 million drawn on the REIT's $100 million revolving credit facility with Morguard Corporation, with approximately $50.7 million available remaining under the facility. The REIT issued CAD 56 million of 6% convertible unsecured subordinated debentures and fully repaid CAD 85.5 million of its maturing 4.5% convertible unsecured subordinated debentures. The REIT completed the first quarter with CAD 1.3 billion of long-term debt obligations. As at March 31, 2023, the REIT's overall weighted average term to maturity was 4.7 years, a decrease from 4.9 years at December 31, 2022, the weighted average interest rate increased from 2%-3.52% from 3.5% at December 31, 2022. The REIT's debt to gross book value ratio increased to 38.9% at March 31, 2023, an increase compared to 38% since December 31, 2022. Subsequent to quarter end, the REIT entered into a binding agreement for the CMHC financing of a residential property in Toronto, Ontario. We now have CAD 61.1 million at an interest rate of 4.18% and for a term of 10 years. The REIT also entered into binding agreements for the refinancing of two U.S. residential properties for an aggregate amount of $61.1 million at an interest rate of 5.06% and for terms of 10 years. The REIT expects the refinancings to close at their scheduled maturity date, June 1, 2023. Net income was CAD 34.2 million for the first quarter compared to CAD 171 million in 2022. The CAD 136.9 million decrease in net income was primarily due to the following non-cash items: the lower fair value gain on real estate properties of CAD 180 million relative to the gain recorded during 2022, and was partially offset by a lower fair value loss on Class B LP Units of CAD 12 million and a decrease in deferred income taxes of CAD 29.2 million. IFRS net operating income was CAD 19.3 million for the first quarter of 2023, an increase of CAD 1.9 million or 10.8% compared to 2022. Change in foreign exchange rate increased NOI by CAD 0.4 million of the overall variance to last year. On a same-property proportionate basis, NOI in the U.S. increased by $1.7 million or 10.1% as an increase in revenue from AMR growth and an ancillary income was partly offset by higher vacancy and an increase in operating expenses. NOI in Canada increased by CAD 1.6 million or 12.8%, mainly due to AMR growth and lower vacancy, partly offset by an increase in operating expenses. The change in foreign exchange increased the property proportionate NOI by CAD 2 million. Interest expense increased by CAD 0.4 million for the first quarter of 2023 compared to 2022, primarily due to an increase in interest on mortgages of CAD 2.3 million. Mainly resulting from higher principal and interest rates on the completion of the REIT's refinancings during 2022, and the net impact of acquisitions and dispositions, which were partially offset by a higher non-cash fair value gain on the convertible to ventures conversion option. The REIT's first quarter performance translated into basic FFO of CAD 22 million, an increase of CAD 3.6 million or 19.9% when compared to 2022. On a per unit basis, FFO was CAD 0.39 per unit for the three months ended March 31st, 2023, an increase of CAD 0.06 compared to CAD 0.33 per unit in 2022. The increase in FFO per unit was due to the following: On a same property proportion of basis and in local currency, an increase in NOI from higher AMR and lower vacancies was partly offset by higher operating expenses, an increase in interest expense, and an increase in trust expenses, had an overall CAD 0.03 per unit positive impact. In addition, the change in foreign exchange rate had a CAD 0.02 per unit positive impact. The impact from acquisitions and dispositions were offset, having a nil impact, and an increase in other income, primarily from interest income earned on restricted cash held as part of a 1031 exchange from the disposition proceeds last year, had a CAD 0.01 per unit positive impact. The REIT's FFO payout ratio continued to decline to 46.1% for the three months ended March 31, 2023, a very conservative level which allows for significant cash retention. Operationally, the REIT's average monthly rent in Canada increased to CAD 1,613 at March 31, 2023, a 3.7% increase compared to 2022, reflecting the quality of our Canadian portfolio. During the first quarter, the Canadian portfolio turned over 2.4% of total suites and achieved AMR growth on suite turnover of 22.5%. While in the US, same property AMR increased by 11.3% compared to 2022, having an average monthly rent of $1,760 U.S. dollars at the end of March 2023. The REIT continued its strong performance benefiting from strong market fundamentals across many regions. The REIT's occupancy in Canada finished the first quarter of 2023 at 98.6% compared to 93.8% at March 31st, 2022. Rental market conditions remain stable as housing demand continues to outpace the supply. Same property occupancy in the U.S. of 95% at March 31st, 2023 was lower compared to 96.3% at March 31st, 2022. Management expects leasing activity to maintain stable occupancy levels as we move into the busy spring leasing season. During the three months ended March 31st, 2023, the REIT's total CapEx amounted to CAD 5 million. That included revenue-enhancing in-suite improvements, common area, mechanical, plumbing, and electrical, as well as exterior building projects as we continue to ensure we maintain the structural and overall safety of our properties. At this time, I'll turn the call back over to the moderator to answer any questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your telephone keypad. You will hear a three-tone prompt acknowledging your request. Questions will be taken in the order received. Should you wish to cancel your request, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from the line of Jonathan Kelcher from KeyBanc. Please go ahead. Thanks, good afternoon. First question, just on the U.S. leasing, we have been reading a lot about market rent stalling, maybe even falling a little bit, that I think was attributed to seasonality. Now that you're entering the spring season, how do you expect that to play out? John, do you mind answering that question? Sure, sure. Not at all. Actually, things are pretty good. We're 95% occupied today overall, and actually 97.8% leased. We are in a very good place going into spring. I think a lot of what we were seeing was more seasonality in the northern regions, Chicago, D.C., those markets. That, you know, is very seasonal, right? Very few folks move in the winter months. We are expecting good results, and our trends are good too. Looking 60 days out, you know, we're not having a significant number of move-outs, the markets seem good. It's still early, right? It's still early for markets like Chicago, and D.C. You know, starting next month, May and June will be very busy and there isn't a whole lot of supply as well, new supply that's come out. Those markets too I think will do fairly well. What would you think your current mark to market is? We still have some room. You know, our rents, we did raise them obviously over the last year or two very aggressively. The pace has slowed, definitely, especially, you know, in the winter months. We still have room from our folks that are living with us below market, you know, those rents are still below where our asking will be today. You know, it depends obviously on all the various markets, but we were very cognizant about that, maintaining our occupancy as things were increasing. That's left us a little bit of runway between what folks are paying with us, on renewal and what market is today. Okay. If you look at your markets right now. I guess this goes for the whole portfolio, U.S. and Canada, are there any markets or assets where you'd be looking to exit? Maybe, John, is there any comments from the U.S. side? I, I highly doubt anything from the Canadian side will happen, but, you know, John, if we continue to look for assets to improve on every, year. Yeah, no. I would say our existing portfolio is relatively core. You know, we capitalized on some older assets when the timing was really good. You know, I think we did really well with what we were able to dispose of and acquire. You know, there aren't any residential assets on the radar as something that we would consider trading today. Okay. Thanks. I'll turn it back. Thank you once again. If you wish to ask a question, please press star and one on your telephone keypad. Your next question comes from the line of Jimmy Shan from RBC Capital. Please go ahead. Thanks. Obviously, Chicago is a big market for you now. I was just wondering if you could talk about your outlook for that market in terms of growth profile, especially relative to your other Sunbelt markets. What is it that you see in that market that maybe others aren't seeing? Sure. Go ahead, John. You can answer. Well, I would say... Yeah, you want me to speak? Yeah, go ahead please. Yes, please. Thank you. Sure. I would say that, you know, Chicago has been a very good market for us. It is absolutely one of the biggest cities in the U.S. and one of the largest Fortune 500 companies or cities with Fortune 500 companies outside of New York. I think it's number two in the U.S. So there's huge activity. There is a lot of growth. For us, the risks that our competitors have seen was really related to property taxes. And we have done very well with our property tax negotiations. And that, I think, scared some folks out of the market and created us opportunities to acquire at some pricing that was highly competitive. That's played out, you know, really well so far. Chicago too does have a significant amount of new inventory that's coming available. You know, we've been dealing with that for, you know, 10+ years in the city, and we've been able to manage through it. You know, our occupancies and rent growth have been good. For us, it's a metropolitan, you know, big city that has good fundamentals and, you know, a large population of folks in that generation, in the high-rises, you know, those luxury high-rises that are, you know, 25-35-year-olds that, you know, is vibrant and highly active and has worked well for us. Yeah, that's good color. Then I guess if you were to compare the growth profile in rent and occupancy and NOI over the next few years, given that dynamic of property taxes and the new supply into the urban core, is it your view that they'll probably perform on par with the rest of the Sunbelt markets? How do you, how do you think about that? In my view, Chicago's got a bit of a bad rap. Just so you're aware, I actually am from there. I lived the first 30 years of my life there. I lived downtown for over 10 years. Just having that history with the city and knowing the specific markets and the growth, you know, I think we have some insights that some other companies who aren't, you know, local, don't have. You know, that's definitely made it a little easier for us to acquire there. You know, the growth that we're seeing in, you know, in Chicago is definitely comparative to what we're seeing in our other markets. You know, lately, I would say, you know, since we've acquired Echelon and Xavier, the cap rates are really good and the performance of those assets have been good as well. Xavier is already 94% leased. We've owned it for a very short period. Echelon is right at 98% occupied today, so it's doing very well. Okay, great. Xavier, the cap rate on that would have been in the fives? Yeah, maybe. In the fours. Just. Yeah, just sub five. Just sub five. Okay. Okay. Then maybe turning to Canada, this maybe more for Chris. We noticed the utility expenses in the Canadian portfolio is higher on the year-over-year. I would have thought that that would have come down because natural gas is down so much. I'm just kinda wondering if you have any color as to what, you know, why that might not be the case. Yeah, I can start, and Angela can finish. We got gas prices, I believe it started to rise midway through last year, Q1. Relatively speaking, the gas prices are a lot more expensive this year. I think consumption relatively is stable. we do also within our utilities grouping, we have a decrease in water consumption because of some toilet retrofit projects we've done. you know, we're seeing that the gas prices are driving utility expenses. I think the Q1 was as mild as last quarter. I don't think there was much of a difference when it comes to, you know, the weather patterns. I know sometimes that does fluctuate quite a bit in Q1. I think the rates were still higher than last year- Yeah. It was the gas that actually brought up the utilities for sure. Yeah. In terms of hydro, we are sub-metering, and we have to pass the portfolio that we can sub-meter is sub-metered at this point. We continue to do that in turnover. And like Chris mentioned, for water, we do have some retrofits and some pretty significant savings as soon as we implemented the retrofits towards the end of last quarter. It's about CAD 200,000 or about 25%-30% savings for each property. And then the LED retrofits as well, they're bringing us some substantial savings too. We're doing a bunch of these projects on the capital side to save on the utilities moving forward. The rates are something we can't really control. Okay. Sorry, I got a couple more. Maybe on the GTA assets, obviously turnover rates come down and spreads have gone up. How, how is, how are those tracking into April? You know, we can say it's kinda stabilized its level or is it accelerating, any color there? In terms of turnover is lower for sure, just because of what's going on with the housing market and affordability. People are renting and they're staying put because of, you know, just the cost once they, once they turn over those units and they move out. There is very low turnover right now, and it's trending to be probably right now is about the same, I would say at this quarter is what we would expect. In terms of rent growth, it's substantial. I mean, I can quote you some numbers. I mean, this is all over north of $3 a foot on some of the smaller units. We're even at $3.40 a foot on turnover. Even North Coast Park is approaching $2.90 a foot on turnover. It's just a matter of how many units will actually move. Okay. The turnover rent growth going into April, it seems like. I'm not sure what that means. Does that mean it's actually gone up a little bit more from the 22% and change that was the average for the quarter? Yeah. Okay. Okay, Last, just on the unit buyback, you have not been active, on the NCIB for quite a long time, I'm just kinda wondering what's changed here, and how do you think about the pace of the buyback going forward? Yeah, I mean, you know, nothing's really changed in our view other than, you know, we have, like, as you pointed out, Jimmy, we have become active. You know, it's always an issue of capital allocation, I guess. You know, we'll continue to, you know, to just monitor that. No, we are using most days, currently we're just chipping away at our daily maximum. Okay, thank you. Thank you. There are no further question at this time. Please continue. Okay. Thank you, operator. Thank you everyone for joining us for our Q1 conference call. We look forward to speaking to you next quarter. Thank you. Thank you. Thank you. That does conclude our conference for today. Thank you all for participating. You may now disconnect.