Good morning. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tricon Residential's Q1 2023 analyst conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I'd now like to turn the conference over to your speaker today, Wojtek Nowak, Managing Director of Capital Markets. Thank you. Please go ahead. Thank you, operator. Good morning, everyone, and thank you for joining us to discuss Tricon's Q1 results for the three months ended March 31, 2023, which were shared in the news release distributed yesterday. I would like to remind you that our remarks and answers to your questions may contain forward-looking statements and information. This information is subject to risks and uncertainties that may cause actual events or results to differ materially. For more information, please refer to our most recent management discussion and analysis and annual information form, which are available on SEDAR, EDGAR, and our company website, as well as the supplementary package on our website. Our remarks also include references to non-GAAP financial measures, which are explained and reconciled in our MD&A. I would also like to remind everyone that all figures are being quoted in U.S. dollars unless otherwise stated. Please note that this call is available by webcast on our website, and a replay will be accessible there following the call. Lastly, please note that during this call, we will be referring to a slide presentation that you can follow by joining our webcast, or you can access directly through our website. You can find both the webcast registration and the presentation in the investors section of triconresidential.com under News and Events. With that, I will turn the call over to Gary Berman, President and CEO of Tricon. Thank you, Wojtek, and good morning, everyone. We've had a great start to 2023, and I'm excited to discuss our Q1 results with you. Let's turn to slide two so I can share with you our key takeaways for today's call. We delivered another solid quarter of operational performance with no evidence of economic weakness in our single-family rental business. We reported same home NOI growth of 6.2%, a near record NOI margin of 69.5%, high occupancy of 97.3%, low turnover of 16.8%, and consistently strong blended rent growth of 7.2%. We continue to grow responsibly, acquiring 409 homes during the quarter. In response to significant demand for our homes, we plan to double our acquisitions in the Q2 as the MLS listing volume increases during the spring selling season. We remain committed to growing our business over the long term in a strategic and responsible way. Third, we are focused on process improvement and cost containment during this period of slower growth by driving cost savings in corporate overhead and property operating expenses. At the same time, we strengthen our balance sheet by refinancing over $100 million of near term maturities on a proportionate basis and reducing our floating rate debt exposure to 26% from 29% last quarter. Finally, when market conditions do improve, we are well-positioned to grow with about $55 million of annualized AFFO, less dividends and $2.6 billion of available capital, including liquidity in our balance sheet and third-party unfunded equity commitments. On slide three, as we spoke about at our Investor Day in April, we continue to see a major valuation disconnect between our share price and our fundamental value drivers such as book value per share and NOI growth. We take a step back and look at it, our net operating income has grown at a compounded rate of 18% per year since 2019. Our book value per share has also grown by 16% per annum since 2019. Interestingly, though, our stock price is now back to 2019 levels, which doesn't make much sense when you look at the value that's been created since that time. Now let's look at the interplay between private and public market cap rates on the right-hand side of the page. What's different about single-family rental when compared to other commercial real estate sectors is it's one of the largest, most liquid asset classes in the world. There's no price discovery per se, and there's no bid-ask spread. This is because every single day there are thousands of transactions to validate pricing. That's why we feel confident about our own internal valuation of a 5% implied cap rate based on stabilized NOI and 6% when including the loss to lease in our portfolio. Green Street arrives at a similar valuation or an implied weighted average cap rate of 4.7% for our market coverage through their Cap Rate Observer publication. It's true that right now we're acquiring homes close to a 6% cap rate, but that's only because we're buying in small volume. If we wanted to go back to acquiring a large volume of homes every year, let's say 8,000 or 10,000, we believe the cap rate would be closer to 5.25%. Let's compare that with the public market. Tricon is currently trading at a 7.5% implied cap rate based on stabilized NOI. If you include the loss to lease in our portfolio, we're closer to 9%. This shows a massive disconnect between where the public and private markets are trading. We think that over time, the public markets should catch up. There seems to be a lot of value to unlock for our shareholders, and we believe that this is a tremendous opportunity to own Tricon for those that have a longer-term investment horizon. Moving to slide 4. Demand for our rental homes continues to be robust. To show this, we focus on two key indicators: monthly leads and monthly applications per available home. You can see that seasonality was more pronounced in Q4 than in prior years, with leads and applications dipping. The rebound in Q1 and into April has been very healthy, with leads and applications even higher than what we were seeing before the pandemic. This makes for a very supportive demand backdrop as we head into the busy spring market. Turning to slide 5. You can see that the rental supply has been increasing post-pandemic. We think this is partly due to the lock-in effect of low in-place mortgage rates, which is incentivizing some homeowners to rent out their homes rather than selling them. What's interesting is the supply looks like it's starting to stabilize at levels that are slightly below what we saw pre-pandemic. Anecdotally, this finding agrees with research that was recently published by the National Rental Home Council, showing that over the past decade, the proportion of single-family rentals within the overall single-family housing market has actually shrunk by 1.4%. Taken together, the combination of rising demand for rental housing and stabilizing supply of rental homes provides a compelling backdrop for our business. On slide 6, you can see how this translates into rent growth, which remains well above pre-pandemic levels that were already strong to begin with. Our rent growth in April remains resilient and is slightly ahead of Q1, featuring 11.9% growth on new leases and 6.5% on renewals for blended rent growth of 7.6%. Turning to slide 7, let's talk about the general state of the housing market and what the opportunity set looks like for acquisitions. Within our target markets, prices of homes that meet our buy box have declined roughly 4% year-over-year, while rents are actually up 3%. Together, this combination of moderated home prices and slightly higher rents has led to an expansion in cap rates of about 30 basis points. While this is directionally positive, MLS listings volume in our market has declined roughly 20% year-over-year, given homeowners' reluctance to sell and forego their attractively priced in-place mortgages, thereby reducing our buying opportunity. The good news is both prices and rents seem to have stabilized since the beginning of the year and appear to be moving back up. Listings volume has increased roughly 20% since January and should enable us to acquire homes at a faster pace as we head into the spring and summer months. As you can see on Slide 8, Q1 was a relatively slow quarter for Tricon's acquisitions, but it's on target with our expectations. As we look out to Q2, we expect seasonally higher listing volume to provide the opportunity to double our acquisition pace from Q1 while remaining disciplined in our acquisition criteria. Recall that we are targeting Cap rates of 5.5-6%, albeit with a preference closer to 6% to match our expected cost of debt financing and to help us generate the mid-teens IRRs we expect in our joint ventures. That being said, borrowing costs come down, and we were to shift our criteria to a lower target Cap rate, let's say 5.25-5.75%, we could buy a lot more homes. With that, I'll now turn it over to our CFO, Wissam Francis, to discuss our financial results. Thank you, Gary. Good morning, everyone. We delivered another solid quarter of financial results, and I want to thank our exceptional team for their hard work and dedication as we focus on process improvement and cost containment across our business. Let's turn to slide 9 to review our key financial metrics for the Q1. Net income from continued operation was $29 million compared to $150 million last year, which includes $12 million of fair value gains on rental properties against a very strong comp of almost $300 million last year, as home price appreciation has moderated in recent months. Core FFO per share was $0.14, which is consistent year-over-year, and AFFO per share was $0.11, also consistent with last year, providing us with ample cushion to support our quarterly dividend with an AFFO payout ratio of 48%. Lastly, our IFRS book value stands at $13.96, or CAD 18.89, up almost 19% year-over-year. I will also note that our book value does not factor in the value of our fee streams. Let's move on to slide 10 and talk about the drivers of core FFO per share. Our single-family rental portfolio delivered 18% year-over-year growth in Tricon's proportion NOI. This figure reflects 17.2% revenue growth, which was driven by 5.6% increase in proportionate rental home count, 1.1% of higher occupancy, and 8.7% increase in average rent. Our same-home NOI also increased by a solid 6.2% this quarter. FFO from fees increased by 3%, primarily driven by higher Johnson development fees, including $3.5 million earned from large bulk sale of commercial lands. This was partially offset by a lower property management fee following the sale of the U.S. multifamily rental portfolio in October. In our adjacent residential businesses, the year-over-year decrease of 6% in FFO reflected strong results in residential development driven by healthy for-sale housing demand, offset by lower FFO following the sale of the U.S. multifamily portfolio. I want to highlight that both of our U.S. residential business and our Johnson business are a great read-through into the overall housing market. From what we can see today, housing demand is holding up exceptionally well. On the corporate side, interest expense was up as we have a higher debt balance to support the growth of our single-family rental portfolio, along with higher average interest rates. Meanwhile, corporate overhead expenses decreased from last year because of lower AIP, LTIP, and performance fee expense, which was partially offset by higher G&A and stable salary expense. As we mentioned last quarter, we are laser-focused on cost containment in this period of slower growth. As we see, we are delivering on this commitment. Lastly, the diluted share count this quarter was 0.5% lower than last year due to the impact of our share repurchase program. We have repurchased over 1.7 million shares so far. Let's now turn to our proportionate debt profile on slide 11. We have been proactive with addressing our near-term debt maturities and floating rate debt exposure, as we said we would. In Q1, we repaid or refinanced over $140 million of near-term maturities, with plans in place to refinance or repay all of our remaining 2023 maturities in the coming months. These near-term maturities include 2 JV subscription lines that are used to fund acquisitions, which will be fully repaid this year by calling on JV capital commitments, or we'll be refinancing into longer-term debt. We also have a bank term loan with an extension option. We have already exercised our option to extend this loan by another year. During the quarter, we also refinanced $101 million of floating rate warehouse loans maturing in 2025 into fixed-rate loans maturing in 2028. This has helped bring down our floating rate exposure from 29% of total debt last quarter to 26% this quarter. As a reminder, we use floating rate warehouse lines to fund acquisitions in the short term. This is not a permanent part of our capital structure and is an exposure we seek to actively term out and roll into fixed-rate instruments. Over time, as we continue to grow, our percentage of floating rate debt will also continue to go down. I also want to highlight that more than 74% of our floating rate debt is subject to caps, which is explained on slide 12. Rising interest rates have been a headwind for our floating rate debt as well as new fixed rate debt used to grow the business. We mitigate some of these higher debt costs with interest rate caps that are now in the money. As you can see on the bottom right-hand chart, our interest rate caps saved us approximately $1.4 million of interest rate costs in Q1. If we sensitize the SOFR rate for an increase of 25 or 50 basis points, you will see that our hedging program effectively cushions two-thirds of that increase. I'll finish off with slide 13 to note that our guidance for 2023 remains unchanged from the initial guidance that we issued last quarter. We believe we are on track towards our guided range for the full year. As Gary mentioned, our acquisitions are on target so far, with the expectation of seasonal acceleration in the summer months. FFO per share and same-home NOI growth are also on track, even though the components of same-home revenue growth and expense growth were both light this quarter against the prior year comps. We expect this to normalize in the year ahead. Now to give more insight into our same-home metrics, I'll turn the call over to the wind beneath my wings, our Chief Operating Officer, Kevin Baldridge. Thank you, Wissam. Good morning, everyone. Our strong Q1 performance is very much a testament to the dedication of our amazing team, our people first approach, and our best-in-class operations. We've had a great start to the year, and we're only getting started. Let's move to slide 14 to talk about the drivers of our same home NOI growth of 6.2% for the quarter. On the top line, revenue growth was driven by a 7.4% increase in average in-place rents that were partially offset by a 60 basis point decrease in occupancy as we shifted slightly towards a rent growth bias going into the spring months. Our rent growth remains healthy, with blended rent growth of 7.2% during the quarter, underpinned by 10.3% growth on new move-ins and 6.5% on renewals. Our renewals reflect our policy of self-governing, which maintains rent growth below market levels for existing residents, helping them stay in their homes longer, as a byproduct, keeps our turnover low. As we moved into April, we saw demand continuing to strengthen with rent growth coming in at a healthy 11.9% on new leases, 6.5% on renewals, and 7.6% on a blended basis. Our bad debt expense, which is embedded in the revenue numbers, has been tracking around 1.2% compared to 0.5% in the Q1 of the prior year, when we benefited from significant government rental assistance payments. I should note that our bad debt has improved significantly from a pandemic high of 2.9%. Looking ahead, we continue to target bad debt of 1% of revenues by the end of this year. Finally, other revenue decreased by 13% from last year. This was driven by lower late fees as our collections have improved, coupled with more conservative provisioning for resident recoveries to reflect actual collections rather than build amounts. This was partially offset by revenues earned from services that enhance our resident experience, like smart home and renters insurance, which saw increased adoption year-over-year. Over time, we do see a path to increasing other revenue as we continue to focus on rolling out additional services that add value to our residents. Let's now turn to slide 15 to discuss our same home expense growth of 2%. The slight rise in expenses was driven by property taxes, which were up 10% from last year, reflecting meaningful home price appreciation in our markets. We still expect property taxes to be up around 8% for the full year, but are comping against a relatively low accrual in Q1 of last year. On the other hand, repairs and maintenance expenses were down this quarter by 20.5%. Although we experienced higher work orders as well as cost inflation, we were able to offset this by cost containment initiatives, refining our work scopes, and undertaking more work orders in-house. We now have about 75% of our available work orders completed in-house and are on track towards our goal of 80% by the end of the year. We also benefited from higher refunds in the quarter through our vendor rebate program, which helped to bring down R&M expense. Turnover expenses were also meaningfully down as our turnover remained low at 16.8%. Thanks to our focus on superior customer service, along with a greater proportion of costs being capitalized, given the more extensive work being done on homes with longer resident tenures. We've put in place process improvements and cost containment initiatives that have brought down the combined expensed and capitalized turnover costs by 14% compared to last year. Homeowners associations costs increased by 14.5%, reflecting about 5% inflation in HOA dues, as well as a heightened level of violations imposed by HOAs coming out of the pandemic, which drove higher penalties. Finally, other direct expenses increased from having a higher penetration of smart homes in our portfolio and increased utility costs. We remain focused on the things that we can control to offset rising costs while keeping an emphasis on creating the best resident experience possible. With this, I wanted to walk through our proactive approach to managing our costs to maintain on slide 16. I'm pleased to report we reduced the cost to maintain by 3% year-over-year. We really think of three main areas of savings. First, our national procurement program, we're focused on negotiating price reductions on materials to help offset inflationary pressures. Next, our scope management, where we actively refine and manage work scopes. Finally, our internalization efforts, where we use our in-house team to undertake a higher number of work orders versus using outside vendors. Our in-house technicians cost per work order is about $400 cheaper than using a vendor for similar work. We are also seeing a stabilization in the mix between capitalized and expensed items. Recall that over the last few quarters, we have seen a higher mix of CapEx compared to the prior year, given the more extensive work required to turn and maintain our homes. This was partially driven by longer resident tenure, which is almost a year longer than it was at this time last year. It's also a function of people spending 24 hours a day in their homes during the pandemic, which created more wear and tear. We are starting to lap those comps, the mix of CapEx versus OpEx should be less of a driver of expense variance going forward. Turning to slide 17, I'm thrilled to introduce to you our proprietary resident app, which some of you saw at our recent Investor Day. We're super excited about this app as it provides a one-stop shop for our residents where they can control their smart home devices, pay their rent, submit maintenance requests, and track their work order progress all in a single sign-on app. They can even monitor our maintenance technicians while they transit to their home in an Uber-style function, which we think is really cool and adds an elevated level of convenience and transparency to our resident experience. Our goal is to invest in technology that improves the lives of our residents, and we're happy to see this app going live in nine markets so far and serving over 5,000 residents and counting. We have plans to roll out to all markets within the next year. We're not only innovating in our operations and resident experience, but also in our pursuit of our ESG objectives, as shown on slide 18. We recently released our third annual ESG report. One of the highlights in this report is the progress we've made on addressing our environmental footprint. We developed an industry-first energy consumption model to estimate the baseline environmental footprint in our SFR portfolio and to track future improvements as we make our homes more sustainable. Given that the utilities in our homes are controlled by our residents, we don't directly control the energy use in each of our single-family homes. However, with our consumption model, we can now measure and meaningfully improve the energy usage and emissions of our homes through the choices we make on our systems and components we install when we build and renovate. We officially launched our down payment assistance program and made our first down payment contribution to our Atlanta resident, Kelsey. This program provides $5,000 to qualified Tricon residents who want to purchase a home of their choice. We could not be happier for Kelsey in her new chapter as a homeowner, we wish her all the best. Since then, I'm also pleased to report that we have had another 5 residents benefit from this program and another one who is currently in escrow. At Tricon, we are deeply committed to providing housing optionality for our residents, including the ability to either rent or own a home. As we aim to be part of the solution in addressing America's significant shortage of housing options. I'll turn the call back over to Gary for closing remarks. Thank you, Kevin. Before we close things off, I did want to highlight the incredible multifamily portfolio that we're quietly building in Toronto, as showcased on slide 19. The portfolio is advancing quickly, with close to 1,300 units delivering this year, and the majority of projects already under construction. Our latest project, The Taylor, is currently 3 months ahead of schedule, achieving 64% lease up by the end of March, with average monthly rents of CAD 4.55 per square foot. As this portfolio is stabilized over the next few years, we estimate it will have a gross asset value close to $3.2 billion, creating a lot of strategic optionality for Tricon. Moreover, the book value per share of our stake in this portfolio is expected to double from $0.89 - 1.74 per share upon stabilization, creating meaningful value for our shareholders. To finish off on slide 20, as we look ahead to another exciting year, we want to emphasize the following messages for you. First, the value of our company is underpinned by our SFR portfolio, which continues to perform extremely well and is reflected in our book value per share that is well above our share price. Next, we believe in responsible growth. We are prudent in our capital allocation, disciplined with our cap rate criteria, and laser-focused on cost containment during this period of slower growth. Finally, we have the platform, people, technology, and available capital to grow much faster when the time is right. I will now pass the call back to the operator to take questions. With Sam, Kevin, and I will also be joined by Jon Ellenzweig, Andy Carmody, and Andrew Joyner to answer questions. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question is from the line of Mario Saric with Scotiabank. Your line is open. I, thank you and good morning. Hi, Mario. A quick question on the guidance. It was maintained, and I may be reading too much into this, but the reiteration of the guidance seemed to be caveated with an early days reference. Does that reference pertain to the uncertainty over potential U.S. economic weakness, which you haven't seen thus far, or a possible acceleration in acquisitions, which can be a key towards, you hitting the upper end of your guidance range? It's the latter. It's the latter. I mean, we don't see any weakness in our fundamentals at all. The, you know, on the ground, the economy and the fundamentals for rental housing are extremely strong. They've moderated obviously a little bit since the pandemic, which was really an anomaly. As we explained in our presentation, they're stronger than where we were in 2018 and 2019, which we would characterize back then as very strong. We feel great about the fundamentals, but really I would say to hit the upper end of the guidance on FFO per share, Mario, it really does depend on us going faster, being able to buy, you know, more homes and obviously having the cost of capital to do that. That's, that's really where the early days caveat lies. You know, from everything we can see today, things are heading in the right direction, right? As we've been clear, we feel very confident about our ability to double acquisitions in Q2. If we can continue that, let's say at 800 per quarter into Q3 and Q4, it essentially sets us up to launch JV3, and really complete the investment program for JV2 and Homebuilder Direct over the course of the year. We feel really good about that. The housing market's clearly stabilizing. Cost of debt for us seems to be coming in. We've talked about green shoots appearing. We see that today. We feel really good about being able to go a little faster over the course of the year. Perfect. That's great. Thanks for the clarification. Just on the cost of debt, what's your sense of where it is today on 5 to kind of 7-year term? Yeah. Hi, Mario. It's Wissam. When we look at securitization market, it is open but for lower LTVs. Right now, if you're looking at a 60-65% LTV, it ranges from 5.5% to almost 6%. That's kind of the range of the cost of debt today. We're seeing it more closer to, like, depending on the day yesterday, had we priced yesterday a deal, it would've been around 5.5%, 6%, or something like that. Got it. Can you remind us of where those, where the 5.5-6% would have been, three months ago or so? I suspect it would've been a bit higher. Yeah. Yeah, Mario, I would say probably around, I mean, easily could have been upwards of 6.5%. That's significant movement, right? I mean, if you look at the five-year treasury today, I think it's about 3.5%, 3.5%. Spreads look like it's 60% LTV at about 200 basis points. You're looking at 5.5%. That's a big movement in 3 to 6 months. Again, you know, that reflects my earlier comments, which starts to set us up for the ability to go faster because we're buying cap rates really at high fives. If we can borrow at five and a half, we're really in the money, we get that spread, and it allows us to go faster. Now we will say, look, the debt for capital market has been incredibly volatile, and they have been oscillating from week to week. From where we sit today, we definitely see green shoots. Perfect. Okay. Then maybe a question for Kevin, just on the bad debt expense. 1.2% of revenue this quarter, still targeting 1% by the end of the year. What factors do you foresee driving that ratio down a bit relative to Q1, and what would the expected kind of rent-to-income ratio be embedded within the 1% target? Yeah. Hi, Mario. Yeah, we are still expected to get to 1% by the end of this year. The difference between this quarter and quarter last year really is Q1 of last year, we had a lot of government rental assistance money that came in. It was 3.5 x what we got this quarter. In addition to that, we also received last year a lot of past due balances we received that quarter, and we also had a number of payment plans we were paying. We had like a trifecta that came in last quarter of last year. That said, we're still continuing to improve. You know, during the middle of the pandemic, we were at 2.9% bad debt to 1.2%. We're improving. Last quarter, in Q4, we were at 1.3%. Even in Q1 of like, this past quarter, we had half the government rental assistance that came in that we got last quarter, and yet our bad debt improved. We continue to see it improving. I think, you know, some of the headwinds are we still see some of the courts that are backed up a little bit right now. Then with the government rental assistance, you know, really coming to an end, that's gonna, you know, also keep us from, like, getting there faster. On a rent-to-income rate, I mean, we're still really at 23%. Interestingly, over the periods, you know, as rents have climbed, so have the incomes of our residents. We're now in the pre-12 months, we've been. Gosh, $95,000-100,000 has been the average household income for our residents. It's, it's increased, and it's kept the rent-to-income the same really. Our resident profile has strengthened, over the. You know, FICO scores have also improved. We see ourselves getting back down to, you know, 1% towards the end of the year. Recall prior to the pandemic, we were at 0.88% for 25 months in a row. We hope ultimately to get there someday, but, you know, we're hoping to get to 1% by end of the year. Got it. Okay. The last one for me, just on the same-store expenses where the growth came in much lower than peers. You've identified cost containment as a key focus for you. You did also mention that the R&M benefited from a vendor rebate program, higher refunds on that. Can you quantify what the year-over-year change was for that? Maybe give us a bit more color on the drivers. You want me? Yeah. I mean, if you think about the vendor rebate program, which is kind of an ongoing thing, I mean, if we were to isolate that, and we would remove the impact of the vendor rebate program, the R&M would've been savings essentially, compared to last year, would've been cut in half. The way we would think about it, Mario, is instead of expenses growing 2%, again, if we remove the impact of the rebate, expenses would've grown by 4%. That gives you... And again, that's a little bit closer to where our guidance is, and we see that kind of normalizing over the course of the year. Kevin also talked about the impact of bad debt, right? We also had a bit of an anomaly given that in the previous period, bad debt was much lower. If we isolate that for that, our revenues would've grown closer to 6% and overall, same home NOI would've grown at 7.5%. Again, there's a little bit of noise in those Q1 numbers, but we do think they stabilize, you know, over the course of the year, and we feel really good about where the guidance is. Mario, if I can add just a little bit of color. Just on the vendor rebates. We have several relationships like that with a lot of our national vendors, and they come in, you know, throughout the year. This one just happened to be a little bit bigger than ones in the past. It's essentially, it's based on what we buy from our vendors the year prior, and they calculate what that was, and then we start getting rebates as a% of purchases, you know, Q1, Q2. Okay. In terms of those rebates, the expected rebates for 2023, what% of that would've been achieved in Q1 of this year? How much of that have you already recognized? Probably 50%. Yeah. This one was the biggest one that we will get. Your next question comes from the line of Brad Heffern with RBC Capital Markets. Thanks. Good morning, everybody. Continuing on the expense front, you know, I think most people are surprised at how low the figures are this quarter, but also how low they've been for several quarters now. So I'm curious, you know, how much of that do you attribute to these streamlining and cost containment initiatives and, you know, how much incremental room is there for additional savings from those programs? I mean, I'd say the great majority of what you're seeing is due to the cost containment programs. We've worked really hard to get our expenses down. I mean, this is one of the things that we can really control, right? We have programs where both on the R&M and the turnover, we're using more internal labor than we did before, and we're finding that on a like for like work order, we're saving about $400 per work order when we do something in-house. We're now up to 75% of our work orders are in-house, done by in-house labor, and up to 15% of the work that's done on turns are now done by in-house labor, where last year it was zero. We're really seeing a pickup there. We've also worked hard with our vendors. We have a price book that we use throughout the country that's consistent so that we're all using the same type of pricing. We've been able to get savings on over 670 line items. That's gonna save about $1.3 million for the year. In addition, we're working to, you know, just to work with our vendors and improve. We've also been working on our scope refinement. We have a delegation of authority that we've compressed, so we're looking at all scopes In addition to just working to repair more than we replace. We'll repair an HVAC unit more than we would replace. We're looking to have them work out longer. Also, we'll do touch-ups versus painting a whole wall or painting a whole house, to help that. It'll still live really well. It's clean and functional. The same as we'll look at carpet replacements, where before we might have replaced carpet throughout the whole downstairs, and now it just needs one or two rooms. The scope refinement that we've been working on, as well as the price book and then integrating more people to do in-house has really brought the cost down. Okay. Got it. Thanks for the detailed answer there. Gary, I think you mentioned JV3 in your prepared comments. I guess, is there any update on how those conversations have been going with your partners? Is there still the potential that could include a lower leverage target? Yeah. We've had very good conversations. Obviously, we're in touch with our partners all the time on the existing programs. JV2 and Homebuilder Direct, they're happy with how that's going. I think they're optimistic about us launching another fund later in the year. Very positive conversations. Our investors love the asset class. They like how we're performing. They've got capital to do more. It's really just a question of us being able to get through the existing investment program and staying disciplined on our cap rate criteria, which is important. That's all. I would say everything's going well. What was your second question again there, Brad? On the JV3. Lower leverage. Yeah, on lower leverage. Yeah, I would say, we will likely, when we get to JV3, we will likely look at lower leverage targets. The leverage targets in HomeBuilder Direct and JV2 have been, you know, really in that 65% range. I would expect for JV3, as we get closer to that later in the year, that leverage will probably come down about 5%. We might be at 55-60%. Okay. Got it. Last one for me, just on, you know, lack of REIT status. I know in the past you talked about how, sort of the subsidiaries are generating sufficient losses that you wouldn't anticipate paying taxes anytime soon. I'm curious if that's still the case and, just any broader thoughts about the need to potentially convert at some point. Yeah, I think that's still the case. you know, we're not, we're not a taxpayer. We're not a cash taxpayer in any significant level right now. If that becomes more of a headwind, then that's a reason to convert. We don't see that at this point in time. We don't really think that, you know, rather being a corp or a REIT is really an impediment, let's say, from index inclusion. It, it's not really an IR factor either. It's really about really optimizing cash flow. At this point, you know, I think we're fine. Obviously, as a corp, we get the benefit of being able to reinvest more capital. I think we're fine to be a corp at this point in time. The question down the road in the future is, you know, if you were to re-domicile, that's a, that's a different question, where if you did, then it might make more sense to be a REIT. Your next question is from the line of Haendel St. Juste with Mizuho. Your line is open. Hey there. Thanks for taking my questions. First one, I guess, for Wissam on the leverage here ticked up, I think by about a turn 8.2. It seems like some of that might have been tied to the loss of the JV, EBITDA. Can you talk overall about leverage, how you think about leverage in this current environment, what the target leverage that you'd like to solve to, and when do you think you'll be able to get there? Thanks. Great. Thank you. When we look at leverage, we really look at our long-term target, which we've mentioned publicly, it's 8 to 9 x net debt to EBITDA. We'll get there. The idea is to get there over a period of time and also during this period of growth. If I look at what's outstanding today and I look at our near-term maturities, over the next 12 months, we have one maturity, which is a term loan that we mentioned that we've extended. We've submitted our extension notice to extend at our option by one more year. The other two would be, one of them would be refinance. I'm looking at doing some sort of refinancing around June or July timeframe. One subscription line will also be paid off. Next year we have one securitization that's maturing in 2017-2. We've got two plans there. One is doing a refinancing probably later on this year and do another securitization deal. If the market happens to be closed, we have a backup financing already in place to extend it by another two years. Obviously, it's not extending the securitization. You pay it off. You do a term loan for another two years, and then you see what the right time is. What we're focused on is really reducing the percentage of our short-term debt and also reducing the percentage of our floating rate debt exposure. Obviously, we have caps in place already, and some of those caps mature end of this year. It's also those exact same deals that we're looking to refinance with the long-term fixed rate debt. Ideal target, again, is 8-9 x. We're gonna have them flow. We're gonna be in the higher end or lower end of that range on a quarterly basis. On a full year basis, ideally, we'd like to be between 8 and 9 x for now as we continue to grow. If at any point we decided that we're gonna halt growth completely, we could use our AFFO proceeds after dividends and de-lever over a period of time as well. That's great, Tyler. Appreciate that. Not nitpick, but maybe a follow-up on the decision to pay off the warehouse credit facility versus the subscription line, which I think carried a far higher effective interest rate. Was that just to maintain more financial flexibility? Maybe some color on that decision. Thanks. Yeah. Part of it is to maintain flexibility. The other part of it is just sizing as well. The one deal that's larger, that's why we refinanced it even though it matures in 2025, but it's better to extend that by another, may do a fixed rate deal for five years. The subscription lines we have to pay off 'cause they're in lieu of equity. Just a reminder, we use subscription lines instead of calling on equity from our JV partners. We use them as a tool to allow us to just call in the cash and control the cash. Subscription line always has to be repaid first. Warehouse lines, the idea is extend that into longer term fixed rate debts. Your next question is from the line of Eric Wolfe with Citi. Your line is open. Thanks. Good morning. You talked about your stock trading around the nine implied cap rate, and you're buying homes in the sort of high 5% range. I know the FFO yield is higher when you include the fees, but maybe help us understand how you're thinking through your capital allocation choices and what would cause you to pull back on acquisitions, if anything. For sure. The 9 includes the loss to lease, so I'm not sure really that's a fair comparison. I think the comparison is more probably an implied cap rate of closer to 7.5 versus where we're buying homes at closer to a six. Then I would say if you add in the fee income, which is, you know, which can be substantial over time, that gets us to about 7.5. It's basically neutral. Then the other way we look at it is if we look at a single home, we showed this model before, you know, where are we acquiring on an FFO multiple basis. At the current time, we're acquiring at an FFO multiple of about 12, and we're trading at 14. We think that's accretive to continue to allocate capital to growth. That's the way we think about it. We do have, you know, a small buyback program in place, but in order to do, you know, substantially more than that, we'd have to use leverage. We don't think that makes sense. We don't think this is an environment where we should be levering up to buy back our stock. Again, to the previous point, we run the math on that, and it's not accretive, given where we borrow today. We think the best course of action is, again, to grow but grow at a more moderate pace, complete the investment programs for JV2 and Homebuilder Direct, which our investors are very happy with, and then prepare ourselves for JV3. Got it. And I think we're about halfway through the quarter at this point. Would you say that you've already bought or under contract for the vast majority of the 800 homes that you're guiding to for this quarter effectively? If you could maybe share the cap rate for those on a pre- and post-CapEx basis. Yeah. Jon, you wanna take that? Yeah, sure. We're tracking well to, you know, that kind of 800+ target. As you've seen and as we talked about in our materials as well, we've seen listing volume tick up this quarter sequentially versus Q1, which certainly is helping also from a rent perspective. We're seeing much more stabilization or actually modest growth sequentially month-over-month from a rent perspective, which certainly is helping our cap rates. In terms of where we're buying on a nominal basis, it's really targeting that high 5s and low 6s at this point in time. You know, again, if we were, as Gary mentioned earlier, if we were to target call it 10,000 homes a year, we'd be buying closer to 5, in that 5.25, 5.5 range. Given our targets this year, and our guidance range, we're much closer to 6% right now. Your next question is from the line of Keigan Cole with Wolfe Research. Your line is open. Hey, guys. thanks for the time here. maybe first on turnover. obviously remains incredibly low, so I'm just kinda curious, is it simply just lower renewal rates that are driving this, or is there something more? What's your expectation throughout 2023 on your total turnover rate? Yeah. Well, certainly I think that, you know, we self-govern on our renewals, and I think that has an effect. We also have, you know, we pride ourselves in having superior customer service, and we really take care of our residents, where, when somebody calls, we are, you know, immediately we're trying to get to people within, you know, 24 to 72 hours, and we try to exceed expectations. We talk about being a people first company and, you know, we have a lot of different programs that we're helping them with. We think that really has a stickiness factor. We also have seen the number of families that are in our portfolio grow, and that creates a stickiness factor. Having said that, we're also, you know, still have somewhat of remnants of the pandemic. I think as we come into this next you know, the leasing season and the summer season, we'll see that turnover will kind of move up a little bit into the, you know, 20, low 20% than where we've been now. That's still really low compared to multifamily or where the industry has been in the past. On the topic of rental rates, your April spreads looked really impressive, especially in the new lease growth. Just curious what you guys sent out for May and June as far as both new and renewal lease rates? Yeah. On the renewals, we're sending them out at really at our cap, 75%. 72%, 75% of our, of the renewals go out at the cap rate or at our cap and just depending on where people are on the loss to lease. We're really. Yeah. They're going out like in the mid to high single digits, which is where our renewal cap rate is, unless somebody is right at, you know, is at market, then we're, you know, a little bit more, you know, into the low single digits. Yeah. I mean, let me just clarify that the renewals are going out at 6.5% +. Okay? The new leases are in the high single digits. That's, you know, that's really where we would guide to really for the rest of the year, right? If you look at that, if you assume, as Kevin just said, turnover of about 20%, that gets you to blended rent growth in the low 7s, right? We're a little bit ahead of that in April and so far in May. I think we feel comfortable with, you know, guiding really to low 7s on blended rent growth, which is very, very strong. Your next question is from the line of Adam Kramer with Morgan Stanley. Your line is open. Hey. Yeah, maybe just a clarification question on your prior comments there, Gary. Just on the renewal, maybe just remind us where the cap is, and then kind of, you know, are there exceptions or if a home is, you know, well under market 'cause some tenant's been there for a long time, you know, are there exceptions to the cap? Maybe how you're thinking about the renewal cap, you know, going forward. Could it move around or is it pretty stable where it is? Yeah. We don't have exceptions. We have moved the renewal cap up over time given the significant loss to lease in the portfolio. We are taking that into account, but we don't go home by home or market by market. We've essentially moved the renewal cap up to roughly 7%. That is moving up, and that provides you with a little bit more clarity why the renewal spreads are also ticking up and why, we think that, you know, instead of being at 6.5, they might be a little bit higher over the course of the year. Hopefully that provides you with a little more clarity. That does. Yeah. That's super helpful. Maybe just on the new lease side, and look, similar to a prior question, but if I just look at kind of April new lease versus where kind of February, March were implied based on your prior January disclosure, it looks like a pretty significant acceleration in April versus February, March. Was that just kind of, you know, That just kind of what the markets allowed you to do? Was that kind of more of a conscious decision to maybe push new lease, you know, maybe at the expense of occupancy is the wrong way to phrase it, but kind of push, you know, maybe optimize for new lease, not occupancy? Maybe just walk us through that. Then if you could just remind us what the loss to lease is as well, that'd be really helpful. Sure. This is Kevin. The loss to lease currently is about 15%. Regarding to the occupancy and the increases, we set ranges depending on where we are in the demand, supply, demand or economic conditions. We'll set an occupancy range. To the extent we get to the higher end of that occupancy range and we feel comfortable, we start pushing rents. That's where we were really where we've been. If we get into that lower end of the occupancy range, then we back off on rent growth. You'll see from quarter- to- quarter, we'll try to stay. Right now we're trying to stay kind of like in a 97% occupancy range, ±. To the extent we get to the top of that, right, then we'll push rents harder, and we start getting below that, then we will pull back on rents a bit. You'll see that over time. Yeah. Adam, the only thing I would add to that is that the thing you have to remember is it really depends on which leases or tenants are rolling over and what's the tenor of that lease, right? Where you're seeing a bit of the variation from month to month in new lease growth really depends on the tenor of the leases that are rolling over, right? If we have more shorter term tenor leases rolling over, you'll see lower new lease rent growth. If we have higher tenor leases rolling over, you'll see higher new lease rent growth, if that makes sense. That's why in January we had, you know, significantly higher new lease growth because of the mix. In February and March, it moderated. Now back in April, it's accelerated again. Again, partly because of the mix of what's rolling over. The key thing to remember over time is the loss to lease, which is 15%. We should recover that. You know, we should recoup that over time. Your next question comes from the line of Stephen MacLeod with BMO Capital Markets. Your line is open. Great. Thanks, thanks, guys. Morning. Couple of questions here. Lots of great color, thank you. I just wanted to clarify the Q2 acquisition pace, more than doubling. Is that largely due to just seasonality or is a portion of it also due to, you know, better acquisition math? I think you sort of alluded to both in the Q&A, just wanted to confirm. Yeah. It's largely because of seasonality. We've seen, you know, a pretty significant increase in listings. Obviously, they're down meaningfully year-over-year, but if you think about where the listings are from January, they've increased about 20%. That basically allows us to, you know, if that hits our buy box, it allows us to go faster. That I would say is the key reason as to why we go faster from, let's say, 400 to 800 in Q2. The biggest governor overall though is the cost of capital, is the cost of debt, right? As we get, you know, confident that we can borrow at 5.5 or lower, then we can acquire at lower cap rates, which allows us to go faster and faster. Again, I think things are heading in the right direction. The Q2, you know, guidance to $800 is largely predicated on increased listings. You know, to go faster than that, it means we need a lower cost of capital. Okay, great. That clarifies it. Thanks, Gary. Just could you give a little bit of color around NOI margin in the SFR business, just how you see that evolving through the year? Yeah. I mean, the NOI margin, I think we feel pretty... I mean, look, we never thought... I don't think we ever thought, Kevin, right, that it would get up to 69.5%. No. Close to 70%. I mean, never in a million years. It's far exceeded our expectations. The initiatives that Kevin's talked about, in terms of, you know, you know, cost prevention and some of the really exciting things we're doing on the controllable expense side are really driving that. I think I would just say over the course of the year, we probably feel stable, right? In that kind of high 69% or 69% range. In order for us to ultimately have a seven handle on the margin, which I think is clearly possible, it does mean that revenues have to grow faster than expenses. I would say on our guidance, you know, obviously for this year, we're assuming that revenue over expenses is roughly the same, which would mean that you're not really gonna be able to drive margin expansion this year. Over time, I think we're hopeful that we can. Again, if you would like to ask a question, press star followed by one on your telephone keypad. Your next question is from Jade Rahmani with KBW. Your line is open. Hi, this is Jason Sabshon on for Jade. What are the implications if rates continue to stay high due to sticky employment and inflation? Would you consider either reaccelerating acquisitions but focusing on higher cap rate assets, or considering raising third-party capital and investing unlevered? We're not gonna buy. We're not gonna chase yield. That's not something we're gonna do. We're very disciplined on the quality of home that we buy. It's extremely consistent. The market ultimately dictates, you know, what the cap rates are. We're not gonna go out there and try to buy 6.5% or 7% cap rates in order to make the math work and buy an inferior quality home with, you know, lower household income. We're just not gonna do that. We are somewhat beholden to where the market's at. You know, could we ultimately, you know, look at a model where we go unlevered? It's possible, but I think, you know, as what Wissam talked about, we're probably just better off just to use less leverage rather than go unlevered. Rather than go to 65%, you know, maybe we're just better to go to 55% and 60%. From what we see today, you know, we are seeing positive spreads. Again, that could change, but, you know, from what we see today, we are able to hit that positive spread. We feel great about that, and we're just gonna monitor it kind of week to week, month to month. Great. Thank you. There are no further questions at this time. I'll turn the call back over to Gary Berman, President and CEO of Tricon Residential. Thank you, Brent. I'd like to thank all of you on this call for your participation. We look forward to seeing many of you in June at the NAREIT conference and speaking with all of you again in August to discuss our Q2 results. This concludes today's conference call. You may now disconnect.