Welcome to the Nexus REIT 2020 Fourth Quarter and Year-End Results Conference Call. As a reminder all participants are in a listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue you may press star then one on your telephone keypad. Should you need assistance during the conference call you may signal an operator by pressing star and zero. I would now like to turn the conference over to Kelly Hanczyk, Chief Executive Officer. Please go ahead, sir. Thank you. I'd like to welcome everyone to the 2020 year-end Rresults conference call for Nexus REIT. Joining me today is Robert Chiasson, Chief Financial Officer of the REIT. Before we begin, I'd like to caution with regard to forward-looking statements and non-GAAP measures. Certain statements made during this conference call may constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. Also, during this call, we will be discussing non-GAAP measures. Please refer to our MD&A and the REIT's other securities filings, which can be found at sedar.com, for cautions regarding forward-looking information and for information about non-GAAP measures. The REIT closed 2020 on solid footing. We completed approximately CAD 70 million of industrial acquisitions in the year, building on our previously mentioned strategy to focus on the industrial sector. Our payout ratio was slightly up for the quarter at 86%, with a conservative 82.4% for the full year. Our occupancy for the quarter remained relatively stable to the prior quarter. In the quarter, we had a 25,000 sq ft vacancy effective November 1st at one of our industrial properties at 41 Royal Vista Drive in Calgary impact our NOI by approximately CAD 55,000 per month. Offsetting this slightly will be a new lease that commenced February 1st on a formerly vacant unit at 935 Reverchon in Quebec, representing approximately CAD 12,000 per month. In our last call, we mentioned some potential headwinds on office renewals. We'll have 126,000 sq ft space at 400 Place St. John in New Brunswick come back to us on April 30th. This is a former call center for IBM. We were in close renewal discussions with them. Due to COVID, they have decided not to exercise the renewal option. The space is very well finished out. It's pretty much plug-and-play for a new tenant. We are aggressively marketing the space. While we may have had a small hiccup in the New Brunswick portfolio, we have positive momentum at our development site in Richmond, B.C. We received building permits in early March to begin construction to accommodate our two new leases for the former Wärtsilä industrial space, approximately 60,000 sq ft. Construction is moving along quickly now as the site was prepped and ready to go once permits were in hand. Upon completion, which is expected to be in and around September, sometime around there, our NOI will increase approximately CAD 165,000 per month. As an additional positive, we continue to work with a developer in Montreal on the sale of some Nexus land, which should prove to be lucrative to the REIT at Réal-Beaulieu over the next several years. The developer is moving along with their approvals, the feedback so far from the city and everything we've had is very positive, this looks very likely to happen. On the acquisition front, we recently closed on a CAD 14 million two industrial building portfolio in Edmonton, Alberta, expect to close on the CAD 103.5 million six-building industrial portfolio in London, Ontario on April 1st. The London portfolio we're very excited about. We think it'll provide significant upside as tenants roll over, believe there is significant opportunities to expand the existing tenants, there is some in the works as we speak. After the successful close of our CAD 35 million equity offering on March 4th, the REIT is in a strong cash position to continue to ramp up our acquisition program. We currently have two separate industrial deals for approximately CAD 30 million that we are putting under contract. That should be announced shortly. In addition, we are in various stages of negotiations on another CAD 120 million of industrial buildings. We're also in discussions and bidding on additional acquisitions and are hopeful 2021 will continue to be an exceptional year of growth on the acquisition side. On the disposition front, we sold one office property, a small one, 10330 Côte-de-Liesse in Lachine for CAD 2.9 million. We just closed on that the other day. Finally, as previously press released, we graduated to TSX and are now fully traded, a move that should bring additional investor interest, greater liquidity to our unit holders, and bring exposure to a larger investment base. I'm going to pass it over to Rob to give greater detail now of the REIT's financials. Thanks, Kelly. Collections remain strong, thanks again in large part to our heavy industrial weighting and to the composition of our retail portfolio, as mentioned on the last call. We had some items negatively impacting Q4 NOI, as Kelly mentioned, namely CAD 110,000 from vacancy at the Royal Vista Calgary property, CAD 150,000 of COVID-19 related allowances for expected credit loss, the vacancy of a retail space which was early terminated in Q3, combined with costs to repair the same space for tenancy, which totaled approximately CAD 125,000, all happening at a time when we were no longer receiving an indirect benefit from the Canada Emergency Wage Subsidy, which would offset. We had a contribution from our accretive acquisitions during the quarter, which partially offset as well. Interest expense was in line with slightly higher interest expense in the fourth quarter related to the financing of newly acquired properties. We continue to have ample liquidity, particularly following the close of our CAD 35 million equity offering, with no significant mortgage maturities until December of this year, when a mortgage on our old Montreal office portfolio will mature. We expect to be able to refinance without much difficulty. The equity we issued in the offering, which closed on March 4th, will have a slight drag on our results until cash raised is deployed to acquire industrial properties. Any acquisitions at a 6% cap or better are expected to be accretive, as Kelly mentioned, he's busy sourcing industrial acquisitions, which we will put our cash to use to acquire. Partially offsetting the drag from undeployed cash, the Ajax acquisition completed on December 31st was an all-cash deal, which will be nicely accretive to our results. We expect to be able to pull out a significant amount of equity on refinancing the London portfolio acquisition, which will be used to acquire additional industrial properties, balancing out our capital structure following the completion of the London deal, with 63% of the purchase price being satisfied through the issuance of units. I'll now turn back to Kelly. All right. Thanks, Rob. We'll open up the line now to answer any questions that you have. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Fred Plourde from iA Capital Markets. Please go ahead. Thank you, and good afternoon. Two quick questions from me. First, Kelly, maybe you could give us a bit of the update on the Richmond project, and what's the action plan there at this stage? Yeah. While we were waiting for permits, they were busy, I guess, erecting walls and doing everything they could in the vacant building, waiting for the permit. Everything was pretty much pre-built. I think we got all the permits at the beginning of this month, so about 18 days ago. They're in there erecting walls, pouring slab floors, and going quite quickly. It's moving along nicely. By the time the interior finishes, et cetera, et cetera, are all complete, I'm looking at September is my guess right now, kind of where we're targeting. Whether we beat that and it's August or whether we're slightly above and it's beginning of October, so it's going to be in and around there. It's been more or less a six-month delay, if I remember well. You were planning March first, and then now it's September. Yeah. Just with COVID, the permit office in Richmond has just been brutal. Lack of staff, but they were working with them closely. We got put to the top of the pile and finally we got them. We're booming away now. Okay. No, that's great. My second question, it's two-part question, really. You mentioned the lease expiries for office. What would be your scenario for this year and next in terms of retail leases? Retail is actually pretty strong, Fred, and we don't have any large leases that are terming. If we look at our retail occupancy quarter-over-quarter, very stable. Yeah, we actually don't have a lot of exposure on the retail side in the next 12 months. Okay, that's good. Also looking at the current schedule, looks like things will intensify starting in 2023. What are your views today on that front? Sorry, in terms of COVID? No, in terms of expiries. Sorry. Expiries of leases? Yeah. Yeah. You know what? I have the next 12 months on my radar screen. Beyond that, I'm not aware of any big lumpy expiries. Kelly, are you? Yeah. We look things out 12, 18 months out, and is our focus, so the three-year line is a little bit far out right now. Okay, well, that's fair. Thank you. That's it for me. Thank you. No problem. Thanks a lot, Fred. The next question comes from Kyle Stanley from Desjardins. Please go ahead. Hey, good afternoon, guys. Maybe just following on with Fred's questioning there, just on the leasing, do you have a breakdown of what your 2021 lease maturities are kind of by asset class, just to give us an idea? We could provide something after the call. I don't have it in front of me right now. Okay. Yeah, no worries. Give me a minute or two. I can give you that information. Sure. If we follow along, maybe this is a question more for Kelly. Still along the lines of leasing, how have your discussions been going? Do you have any early expectations with where leasing spreads may trend? Just your thoughts there. Yeah. In the office, I'd say office is up in the air right now overall, I don't see too much more expiring in the next little while. On the industrial side, we've done quite well, that's pretty stable, save and except for the one vacancy that we experienced here, overall, new leasing is going well, especially in Montreal, where we've seen some lift in rents and some positive activity, where we leased the 16,000 ft that we had vacant for a while at an increase over the exiting rent, which is great. Probably about, I don't know, CAD 0.50, CAD 0.75 over that. In the retail, it's a mixed bag. Our partner, Sandalwood, handles most of the retail leasing. They've managed to do pretty well in keeping things tenanted and we've seen increases in some units as we go along. It's been a bit of mixed bag on the retail side. Office, I'd say definitely that's flat, when I look at things. Kyle, just to add on to that, and to answer your previous question, we have about 87,000 sq ft on the industrial side that, where leases are expiring in 2021. We have about 125,000 sq ft on retail and 82,000 sq ft on office. Okay. Perfect. Thanks for that. Just taking a look at your collections, so they improved pretty nicely in the fourth quarter over the third quarter, and I think some commentary on the call last quarter was there may be a bit of a slower start to collections in the third quarter just given uncertainty around CERB, so that was good to see. Collections look to be strong so far in the first quarter, trending a little bit lower. Would that mostly relate to Quebec retail and government-mandated closures or what are your thoughts there? Yeah, it's a little bit of that. What we're hearing from tenants is that they're relying to a certain extent, in some cases, on CERB to pay their rent. If we looked at this number a week ago for March, rather than having been 95.3% collected, it probably would've been 92%. We're seeing the money roll in. It's just rolling in slower. That's been the story ever since we entered COVID. If you take a look at the tail end of 2020, where we're at 99% collection, I think that's where we're going to get to. It's just taking us longer to collect the receivables during COVID. Okay. That's fair. As you kind of mentioned in your prepared remarks, you've been very acquisitive in the last six months or so, and it sounds like you have some other deals locked up. Are you able to disclose any kind of cap rate pricing or whether it be a price per square foot and maybe the type of markets that some of these deals you might be looking at are in? Yeah. For sure. We have a couple that are, I would say, they're imminent to being press released, and one would be in Ontario, in and around the 7% cap, and one would be in Alberta, and both are in the 6.5%-7% cap. Newer products, solid products, one of them being brand new. We've managed to source some off-market deals, so it's going pretty well, actually. We're in discussions on quite a bit right now overall, and I'd say it's Ontario and OS, a mixture. It's been a pretty good first quarter from an acquisition side, just from sourcing and negotiating with them, and so we're quite pleased. You'd see cap rates in that 6.5%-7%. Okay, great. Are you looking at any markets maybe outside of Ontario and Alberta? It seems like that's where a lot of your growth has come more recently, but is there any interest in whether it be other provinces or other cities? Yeah, for sure. We're looking Winnipeg. We're in Saskatchewan, in some discussions on things. B.C., that's a whole different cap rate game than what we're able to participate in. In Quebec, we're looking at things all the time, trying to source stuff there, too. Yeah, we're looking, I would say Ontario, Quebec, Manitoba, Alberta, and Saskatchewan mostly. Okay, great. That's a great update. That's it for me. I'll turn it back. Thanks. Great. Thanks. The next question comes from Paul E. Durnan from Burlington Capital Planners. Please go ahead. Hi, Mr. Hanczyk. I'd have to say that I think management has done a pretty good job handling the COVID, given the circumstances. That's for openers. The stock trades at about 80% of book value. Am I right on that? Yeah. We're about, yeah. Yeah. Sure. Great. Okay. Every time you make an acquisition, you're issuing Bs, and the Bs are fully convertible into the common share. You're really hurting the retail investor a little bit. You're diluting the float. Instead of issuing the Bs, the interest rates are trending up over the last six months, the mortgage rates. I understand that, but over the long term, the average mortgage rate is something like about 7%. We're still in very attractive mortgage rate territory. Why not finance more of the acquisitions by taking out another mortgage and not diluting the float? That's what I'm really saying. Yeah. We can mortgage finance up to, say, 65%, 70% of an acquisition. There does need to be an equity component for each acquisition. A Class B equity deal is no different than a REIT equity deal in terms of diluting the float. We do look, we have levered up a little more on recent acquisitions than we did in the past. We've bumped up to 65%, 70% in some cases to take advantage of interest rates. However, we are mindful of our balance sheet, and we like having a 50%, sub 50% conservative debt to assets. We're trying to balance the two. Certainly we do look at opportunities to finance and to up finance. For example, on the London deal, where we're issuing 63% of the purchase price through equity, we'll then refinance those properties and use that to take out equity, take out cash, and then use that cash to acquire further industrial properties and sort of rebalance our capital structure. The London deal is a little unusual in terms of the percentage of equity, but we'll balance that out through refinancing and through adding, as you suggested, adding to the mortgages. Yeah. Well, I think that's in order. The idea of 50% debt to asset ratio is kind of a standard normal long-term idea, but it does not reflect these low rates. Taking the debt to asset ratio up higher is, in my mind, in order. I guess, in the current environment, we have low interest rates, but those mortgages eventually mature and have to be refinanced. We just are aware of that and don't want to find ourselves refinancing four or five years down the road at high rates of leverage when interest rates may not be as low and as appealing. We certainly are balancing out our capital structure to take advantage of low interest rates in the current environment. Thank you very much, Paul. Okay. The next question comes from Terry Fisher from CIBC Private Wealth. Please go ahead. Good day, guys. Congratulations on the quarter and getting onto the TSX and basically doing all the things you said you were going to do. I don't think there's anything the market likes better than a management that says we're going to do X, Y, Z and then goes out and does it. My question is regarding the industrial side. Given the things that you've already done, plus the ones that look to be in the bag, what would your percentage be of industrial when the next few deals are done that you can see coming? The related question is, how are you able to find these things when there's a lot of other competition out there from other REITs, DREAM or whoever, everybody wants to get into industrial, but you're able to find apparently some pretty good pieces of industrial real estate at pretty good cap rates. It continues to surprise me, at least. Those are my questions. Yeah. From an industrial standpoint, I think when we close on the London in the next few, we're going to be around 70%, I believe, in and around there. If we continue to be successful and execute on the amount that we're negotiating, that will go up to 75% or above, probably 75%-ish pretty quickly. Sort of getting there quicker than what we thought, but that is what we strive to do. The interesting thing is in some of the buildings and portfolios that we're building, buying here they already have inherent expansion ability that we're talking about even though we don't have them yet. That could be a nice little pipeline for us to add square footage at positive returns. They've turned out really well. How we're finding them some of them from long-term relationships that we've built and spent significant time building. Others, word of mouth, others off-market deals. I don't call us lucky, but it seems to be going really well. Our reputation, I think on closing and doing deals is pretty good. I think we've had a lot of word of mouth off-market opportunities that have helped us grow. Okay. That's it for me. Thanks a lot. All right. Thank you. The next question comes from Frank Mayer from Vision Capital. Please go ahead. Good afternoon, guys. Thanks, Frank. On the book value of CAD 10.16, could you tell me what the weighted cap rate you came up with in terms of calculating that number? We just took book nav. We basically took equity, added back the Class B, and divided through by the units outstanding. Whereas the analysts would apply a cap rate to NOI, we're just doing it straight off the balance sheet. Could you opine as to what the weighted cap rate based upon market and based upon your knowledge of your properties, what the cap rate today would be of those properties? You know what? I couldn't offhand. I'd have to do some calcs to back into it. Okay. Let me ask you a more general question. Do you think the number that you would come up with if you were to use a market cap rate would be higher than CAD 10.16 or lower than CAD 10.16? I think it would be higher. Can I push it a little further and ask you, would it be modestly higher, significantly higher? Well, I guess the thing that I would say is, our Richmond property, which we acquired for roughly CAD 57 million, we've continued to hold at CAD 57 million until completion of Phase 1, which is building out for existing tenancies or existing leases. Then, we're also converting the Wärtsilä space, 60,000 sq ft from industrial to much higher-yielding strip mall uses. We continue to hold that property at CAD 57 million until those are complete, at which time we expect to have a pretty significant revaluation. Our book navs or our carrying values of our investment properties are at fair value, in accordance with IFRS. However, I would say we are not aggressive in determining those fair values. What we tend to find is that if we have a property updated by way of an external appraisal, the cap rates they're applying tend to be lower than the cap rates that we're applying internally. We use that information then to adjust as necessary other properties within the portfolio. Yeah, I would say, Frank, I'd say overall, probably in the industrial side of things, our number is conservative because when we do appraise, they're coming back at very low cap rates. I think you'd see in and around probably a 6% cap. Yeah, I'd say overall on the industrial side of things. The other ones tend to stay fairly constant on any update we've done so far. Right now you'd see some upward pressure definitely on the industrial side. Going to the London portfolio, which of course is a very significant portfolio, and we've discussed it in the past, and it's real cool, I think, for you to acquire that portfolio. If I remember correctly, wasn't it a 6% cap rate? Yes. Aren't cap rates in London considerably lower than that? Yes. Any problems in closing that transaction? There will be no problems in closing the transaction. It's actually a portfolio I'm really excited about. We think there's significant lift in net rents as people grow, as they turn and go from probably gross to net rents. We see a big lift there in a couple of years especially. Even on top of that, they're great managers and have great relationships with the tenants. We're talking already about tenant expansions and the possibility there. That could be significant in the portfolio itself. Overall, it's a big win. Yeah. You've mentioned expansion space now twice. Yep. Can you give us some idea on that portfolio? The CAD 105 million, how many sq ft does it currently represent, and how much expansion space do you see in it? Off my head. Well, I'll pull it up here. I can't remember. It's 1.3 million, I think, square feet. I think, realistically, you could see 250,000 sq ft-400,000 sq ft being built on addition there if we're lucky. The price that you're paying includes that expansion space, the land for the expansion, is that correct? Yeah. Includes the land. Over what time period could you imagine building that extra 250,000 sq ft-400,000 sq ft? I'd say two years. Two, three years. Typically, returns on development properties are considerably higher than returns on leased properties that are acquired. Yep. Given the fact that the land would have almost a zero cost. Is it fair to suggest that the returns could be in the 10% range, double digits? It is. is. I'd say it is fair to suggest that the returns would be in and around 10%. What would construction cost per square foot be in London? Do you have any idea? I do have a relative idea. It's probably in and around CAD 90, CAD 100 a square foot. The partner that we have down there are very well connected and very well in the industry. I think overall, we would come out better than if we went to a third party. Their experience in taking buildings and refurbishing them, redoing them. Overall, I think we would be well-represented by them, and our costs would be on the lower side. The CAD 90-CAD 100, does that include development charges? Yeah. Well, you're talking full expansion here. Yeah, I think it's somewhere around CAD 100 a foot. How much would land cost if you were to buy land de novo in London per square foot? That I don't know the land cost. You know what? I'd be guessing right now. I've heard land in Toronto is like CAD 3.5 million an acre for a prime site. Yeah. Toronto is off the charts, B.C. makes Toronto look cheap. Yeah. Obviously, London is not Toronto. You know what? There's low availability there, and it's a good, solid market with very low vacancy, so we expect big things from it. All goes well in the relationship, we'll be adding additional buildings from the same vendor. I think the future's bright there. You made a reference to acquiring another CAD 120 million. Does that include potentially some properties from the London vendor as well? No, that's stuff that we're in different stages of negotiation on. We'll see how they all pan out if we're successful. I'm hopeful of CAD 80 of it, and if we really do well, it's about CAD 120, CAD 125, and then we're bidding on some other things. The London, anything we add in and around there from the vendor would be additional to that. Would it be comparable in size to the CAD 105 million portfolio you're currently working on? It would probably be smaller. It would be one, two buildings here and there as they look to roll more. One, two, maybe three, but they're all bigger buildings. Anything change in the London industrial market since you contracted to buy these properties? Have rents increased? Have vacancies gone down? Anything like that? Well, vacancy was already very extremely tight, and rents are pushing. There is nowhere to go, and so especially for larger tenants. At the end of the day, we see the rental stream from here increasing as guys roll. Thanks. No problem. Thanks, Frank. Just to answer your earlier question, probably about a 6.5% cap. Thanks again. 6.5% cap? The average cap rate that would be applied to arrive at the carrying value of our assets. 6.5% cap? Yes. That's for the CAD 10.16, or is that for the number that you haven't disclosed? Well, the CAD 10.16 is our net assets. The 6.5% cap is our investment properties, which make up the bulk of it, right? No, but I mean- So you- What I'm confused about is you basically told me in response to an earlier question that most probably the true number was higher than that, than CAD 10.16. What I'm asking is the 6.5% cap in reference to the CAD 10.16, or is it in reference to the higher number you mentioned earlier? That would be in reference to the CAD 10.16. Thank you. Thank you. This concludes the question and answer session. I would like to turn the conference back over to Mr. Hanczyk for any closing remarks. I just want to say thanks for everybody for attending the call, and we look forward to our next quarter. Thank you. This concludes today's conference call. You may disconnect your lines.