Good morning, ladies and gentlemen, and welcome to the NorthWest Healthcare Properties Real Estate Investment Trust Second Quarter 2023 Results and Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session for analysts only. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, August 11th, 2023. I will now turn the conference over to Craig Mitchell, Interim CEO. Please go ahead. Thank you, operator, good morning, everyone. Thank you for joining us. My name is Craig Mitchell, Interim CEO of NorthWest Healthcare Properties REIT. Joining me is Mike Brady, President, Shailen Chande, our Chief Financial Officer. Before I get into the quarterly earnings, I want to preface this discussion. As you know, this is my first analyst call as interim CEO and Mike's first since becoming president. REIT's trustees announced our appointments earlier this week as part of some key decisions regarding the REIT's future direction. The goal is to unlock NorthWest value in response to changing market dynamics. We also announced that Paul Dalla Lana has stepped away from the board of trustees and has resigned as Chief Executive Officer to focus on initiatives at Northwest Value Partners, the REIT's largest shareholder. As the board acknowledged, we thank Paul for his leadership and invaluable contributions to NorthWest. From establishing the REIT to taking it public in 2010 and stewarding operations across four continents, Paul has built the foundations for this business. The changes announced on Tuesday are important in our progression as a publicly traded REIT. I joined NorthWest in 2018 as CEO for Australia and New Zealand, and a member of the global management team. I was named President in 2020, with a focus on funds and operations. I have more than 20 years of experience in the real estate sector. Thanks, Craig. Mike Brady here. Most of you know me. I have been with NorthWest since 2006 as Executive Vice President and General Counsel. I have extensive experience in real estate investments and finance, transactions, global leadership, governance, and legal matters. To that end, I'd like to point out that we make forward-looking statements defined under Canadian securities law during today's call. While such forward-looking statements reflect management's expectations regarding our business plans and future results, they are necessarily based on assumptions that are subject to uncertainties and risks, which could cause actual results to differ materially. We direct you to all the disclaimers and risk factors outlined in our public filings. Thanks, Mike. With that, I want to touch on a few highlights from our earnings this quarter. Our global portfolio of healthcare real estate continues to differentiate itself from the broader commercial real estate landscape. With 83% of our leases subject to indexation and delivering strong SPNOI growth of 5.1% from a stable cash flow profile that is highly diversified and supported by 96% occupancy and a weighted average remaining lease term of approximately 14 years. Adjusted Funds From Operations, AFFO, per unit decreased from $0.20 in Q2 2022 to $0.13 in Q2 2023, as a result of lower management fees and an increase in interest expense related to floating rate debt. Adjusting for the non-reoccurring component of management fees, AFFO would increase to $0.15 per unit for the quarter. Globally, our businesses are stable and growing, and I'll go through each one. Canada, we're on plan with portfolio occupancy remaining stable at approximately 89% and seeing our variable revenues, particularly through parking, continue to rise towards pre-COVID levels. In the U.S., our team has successfully integrated the assets acquired approximately one year ago, and we continue to work closely with all our tenants. Europe continues to perform well, with occupancy and weighted average lease terms stable at 97% and 15 years respectively. In Brazil, we're on plan with steady 100% occupancy and continued strong constant currency SPNOI growth of 6.4%. Operationally, the REIT's major tenant in Brazil, Rede D'Or, continues to deliver strong results and is among Brazil's top 10 companies by market capitalization. Finally, in Australia and New Zealand, our largest market, occupancy remains steady at nearly 100% and delivered constant currency SPNOI growth of almost 5% with a weighted average lease term of 16 years. The takeaway is that NorthWest's resilience in a challenging environment of rising interest rates and inflation is evident. There is much to build on, and I intend to bring an operational focus as interim CEO. Our strong fundamentals, our evolution as a global asset manager, and specialized expertise in healthcare real estate underscores our position of strength. Now I'd like to turn it over to Shailen to provide the financial results. Thanks, Craig, and good morning, everyone. I'm pleased to provide a few updates for you this morning. From a balance sheet perspective, at June thirtieth, 2023, the REIT reported Debt to Gross Book Value, including convertible debentures of 50.8%. I want to emphasize that strengthening the balance sheet is a high priority for the REIT, and we are taking steps to do so. As of today, August eleventh, 2023, the REIT has refinanced 91% of its 2023 debt maturities and increased its exposure to fixed rate debt to 66%. It has a weighted average interest rate of 5.1%. Post quarter end, the REIT enhanced liquidity by CAD 175 million by finalizing a new CAD 50 million Non-revolving credit facility and extending the maturity of its CAD 125 million Revolving unsecured credit facility by one year to November 2024. The REIT remains constructive on the long-term demand factors that drive value creation in healthcare real estate, and with CAD 5.8 billion of available fee, Fee-bearing capital, it is well positioned to execute new investment opportunities while remaining disciplined in its capital allocation strategies. The REIT remains highly disciplined for capital deployment, and as a result, in Q2, acquisition volumes were muted. That said, the healthcare real estate market continues to adjust to the rapid change in global interest rates over the last 12 months, with Bid-ask spreads beginning to converge and transaction volumes increasing. With that, I'll pass it back to Craig. Thanks, Shailen. To close, NorthWest remains committed to delivering value for our unitholders. The decisions announced earlier this week and the solid foundation we've built are essential steps in unlocking the significant value of the REIT. With deep strategic relationships, excellent regional operating platforms, and strong access to capital through existing commitments, the REIT continues to be a leading global healthcare real estate investment manager. With that, I'll now ask the operator to open for questions. Thank you. Ladies and gentlemen, we will now take questions from our analysts. Should you have a question, please press the star followed by the one on your touchtone phone. If you'd like to withdraw your question, please press the star followed by the two. If you're using a speakerphone, please leave your handset before pressing any keys. One moment, please, for your first question. Your first question comes from Mike Markidis from BMO Capital Markets. Please go ahead. Thank you, operator. good morning, NorthWest team, and Craig, and Mike, it's, it's a pleasure to speak with you for the first time on the call. just with respect to the key changes, that were announced earlier this week, and Craig, you gave us some, some pretty good color, with respect to the thought process there, but I'm not sure if you can answer this, but the changes that were made at the management and the board level, was this part of a normal sort of succession planning, or was it response, in response to anything in particular? Look, thanks for that question, Mike. Look, as you know, due to confidentiality, I really can't elaborate further than what we announced on August 8th. I'm happy to go through the three major points on the August 8th announcement, but you've got that. Okay. No, that's fair, that's fair. I guess there's no mention, but you mentioned that you guys are continuing to look at, you know, strategies to surface the value in the UK portfolio. The press release in your comments didn't mention anything with respect to the US recap. Is it safe to say that that's on hold pending the strategic review at this point, or is it something that continues to be a priority for the REIT? Yep. I just, I'll pass on to Shailen for that. Yeah. Thanks, Mike. You know, I guess, as the board has assembled its strategic review committee, it will look to examine all options available to the REIT. Nothing specific to the UK JV to announce at this time. Okay. now with respect to the non-recurring management fees, thanks for highlighting that in terms of the, you know, adjusting for that, that would be a CAD 0.02 impact. Perhaps you could give us a little bit more color as to, to what that related to. Maybe, I don't know if you're able to give us any guidance in terms of where you see total fees playing out on a full year basis, Shailen? Yeah. Thanks, Mike. I'd call out that in respect to the management fee reversals over the course of Q2, those amounted, as you noted, to roughly $8 million or so, as disclosed in the MD&A. You might recall that last quarter we had an increase in project acquisition and other fees. On a year-to-date basis, we look at that number as being stabilized given the reversal this quarter. In terms of stabilized asset management fees, I, I'd really take you to the base fee that we report, and calling out that that's that's underpinned by $5.8 billion of committed fee-bearing capital. As we know, project and acquisition fees can be lumpy, so it's hard to give guidance there. Okay, perfect. Last thing from my end is just the, the cash that you disclosed in the MD&A. How much-- I think it's, CAD 60 million some odd million bucks, CAD 68 million. How much of that is at the corporate level, as opposed to potentially being trapped within a sub? Yeah. I, I'd call out and maybe refer you to our supplemental, which does break that out by region. Although maybe, I mean, the more substantive issue there is that the cash that the REIT has on a global basis is accessible by the REIT, with the exception of the fact that we consolidate Vital, and that is a separate and independent entity. There's not really any, any substantive difference as to whether the REIT, the REIT's cash sits at the corporate level or in any of our regions. Okay. without having a chance to look at the details, is, is any of that CAD 68 million within Vital or is CAD 68 million the full amount that's available to you? I'd need to go back and check the supplemental. We're happy to come back to you, over email on that. Okay. Thanks. I'll turn it back. Thanks, Mike. Your next question comes from Tal Woolley from National Bank Financial. Please go ahead. Hey, good morning. Morning, Tal. Yeah, morning. Shailen, I'm wondering, you know, you mentioned that the REIT's focused on, you know, getting to a strong balance sheet. What's, what's sort of the metrics near term that, you know, you would put around, you would put on leverage and stuff like that to define, like, what, what you would consider strong? Yeah. Tal, I'd really say, I mean, as you know, the REIT's current Debt to Gross Book Value is circa 50% on a consolidated basis and circa 58% on a proportionate basis. That's higher than where we'd like to see it longer term. We've historically guided to circa 40% on a consolidated basis. As we consider our strategic review and as the board engages on that, we'll be announcing to the market our initiatives and target balance sheet metrics. Okay. Then I'm just wondering, with the active joint ventures, like, do you have a sense of what kind of acquisition volume you are looking at? Because I'm just wondering how you're gonna be able to finance, you know, keeping up with the JVs and at the same time trying to get the leverage ratios down. It's Craig here. I think the, the joint ventures in the current market with the bid-ask spread quite wide, I don't think you see much transactional volume, coming out of the joint ventures from either party. Okay. And then, you know, was there any... You know, I don't exactly know the sequencing of events, obviously, heading into the, heading into the release today, but, like, in terms of the, you know, board review, was there any discussion around the distribution rate this quarter? Then as you guys take over, what is your feeling about, you know, where the distribution rate should be? Hey, Tal. I'd call out that we did announce the distribution for August today. We continue to review and approve distributions on a monthly basis. We'll, we'll continue to update the market as planned. Craig, do you think the current rate is the right number for the company, or You know, because, obviously, it's one of the ways that you could create a little bit more breathing room for yourself on the balance sheet. Look, I think it's, the committee's just been formed, and we've just got to go through our due process with the committee. Okay. I appreciate this all came together very quickly, but, you know, one of the things that wasn't mentioned in the press release earlier was, you know, this is an interim appointment. Is the board's intention to run a process or, you know, like, can you just sort of give a, give an idea for investors about how you're looking at that longer term? Yeah. I, I think, with, with best governance practice, the board needs to go through a, a, a search. That's why my appointment is interim. I have put my hand up to be permanent, and we'll see how that goes. Okay. That's great. Thanks very much, gentlemen. No, thank you. Your next question comes from Robert Novoselac from Solomon Investment. Please go ahead. Well, good morning. Thank you. I'm just wondering, sort of a similar question, that was already sort of covered about the AFFO payout ratio. I'm just wondering, or maybe it has to wait till the strategic review is over, in order to get that back in line, I'm wondering what the thinking is there, whether the AFFO is expected, you expect it to increase or you may have to reduce the distribution or a little bit of both. I'm just kind of wondering how you're gonna bring that payout ratio back into line? Yeah. Thanks, Robert. Good morning. I, I would call out that, as you've noted, you know, it is something that is under consideration as part of the strategic review. I'd reiterate my earlier response that we did announce the distribution for August today, and we continue to review and approve distributions monthly. Okay. Thank you. Your next question comes from Dean Wilkinson from CIBC Capital Markets. Please go ahead. Thanks. Morning, everyone. Shailen, just an accounting question. When you book the project and acquisition fees, what's the trigger that would have you put those in, into the P&L? The reversal of that, was that the UK JV? Just some clarity around kind of what happened there and how you deal with that from an accounting perspective? Yeah. We're gonna get into the details of IFRS Rev rec, which I don't wish on anybody. Mm-hmm. I mean, I think it's really a probability test that we apply against accruals on management fees. In respect of the specific, the specific fees accrued in Q2, you're right. In the Q2 MD&A, we did attribute those to the acquisition of project fees to the U.K., and that is the reversal that came through in our Q3, or sorry, Q2 results. Q1 is where we did accrue them. I think that covers the crux of the question, but it was ultimately a probability test. in Q1, and then in Q2, related to the, related to our earlier announcements in respect to the, termination of the UK JV. Got it. That's clear. Thanks. Your next question comes from Sairam Srinivas from Cormark Securities. Please go ahead. Thank you, operator. Good morning, NorthWest team. Craig, just going back to your comment on widening bid-ask spreads, how should we be looking at that from your disposition program perspective? Like, does that kind of cause a bit of a delay in going through the $340 million of dispositions, or is that something which you're comfortable kind of planning through the year? No, we're, we're, we're comfortable. You know, we, we've chosen the assets carefully. We, we know, we know the, the, the markets, and going by region, we're, we're pretty comfortable. You can see we've been pretty successful to date, and that's in the end results in Q2. I think it's nearly 50% either settled or under Letters of Intent, to give you a sense. Yeah, no, I think that's the- I would say the other, the other point, it's in line with our book value. All right, no, that's good to, that's good to know. Just probably on that, in terms of the buyers who are actually acquiring these assets, can you just give some color on, like, you know, what are the profile of these buyers? Are they more institutional funds, or are they more individual operators? look, I'll just pass you over to Mike for that one. Yeah. Yeah. I mean, there are different counterparties depending on the region. You know, to date, we're finding that they tend to be regional, local operators, but well-respected operators in those specific regions. All right. That's good, Mike. I'll be back. Thank you. Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the one. The next question comes from Michael Markidis from BMO Capital Markets. Please go ahead. Thanks, operator. Just a quick follow-up from me, guys. You know, one of the great features about NorthWest is that the fund structures that you have outstanding have perpetual life terms or very long life terms, I think, in the case of one of them in Europe. I'm not sure if you can answer this, but with respect to those asset management agreements, is there anything in there that would preclude or be an impediment to a change of control at the manager level? Craig here. I'm going to, I'll pass over to Mike, but, but I think the simple answer is no, but I'll pass over to Mike. Yeah. Hi, Mike. I mean, those agreements are subject to confidentiality restrictions, but I, you know, I concur with the, the high level assessment that Craig has made. I appreciate that. Thanks so much. There are no further questions at this time. I will turn the call back over to Craig Mitchell, Interim CEO, for closing remarks. Thank you, operator. Thanks, everyone, for your time this morning. Shailen, Mike and I will, you know, be setting up the one-on-one. Looking forward to seeing you, in person, early next week. Thanks for your time. Talk to everyone soon. Bye-bye. Ladies and gentlemen, this concludes the conference call for today. We thank you for joining, and you may now disconnect your lines. Thank you.