Good morning, and welcome to the City Office REIT, Inc. third quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. As a reminder, this conference call is being recorded. If you require operator assistance, please press star then zero. It is now my pleasure to introduce you to Tony Maretic, the company's Chief Financial Officer, Treasurer, and Corporate Secretary. Thank you. Mr. Maretic, you may begin. Good morning. Before we begin, I would like to direct you to our website at cioreit.com, where you can view our third quarter earnings press release and supplemental information package. The earnings release and supplemental package both include a reconciliation of non-GAAP measures that will be discussed today to their most directly comparable GAAP financial measures. Certain statements made today that discuss the company's beliefs or expectations or that are not based on historical fact may constitute forward-looking statements within the meaning of the federal securities laws. Although the company believes that these expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved. Please see the forward-looking statements disclaimer in our third quarter earnings press release and the company's filings with the SEC for factors that could cause material differences between forward-looking statements and actual results. The company undertakes no obligation to update any forward-looking statements that may be made in the course of this call. I'll review our financial results after Jamie Farrar, our Chief Executive Officer, discusses some of the quarter's operational highlights. I'll now turn the call over to Jamie Farrar. Good morning. Thanks for joining today. Since our last earnings call, we've announced transactions that have completely repositioned our company. Year to date through the end of the third quarter, the market value of our common stock has nearly doubled, and shareholders have experienced a 91% total return. This makes City Office a top five performer among all property REITs year to date. These results are largely attributable to the tremendous value creation at our Sorrento Mesa property in San Diego. As we announced, we are under contract to sell all of our life science assets in San Diego for a gross sale price of $576 million. The sale translates to a staggering gain on sale of approximately $430 million or almost $10 a share. The sale was structured pursuant to two transactions, a $395 million first closing scheduled for December 2021 and a $181 million second closing scheduled for early 2023 with an acceleration option. Based on our confidence in redeploying the sale proceeds, we've accelerated the second closing date to December 2021 as well. Our belief is that the best place to reinvest this capital is in the top sub-markets of high-growth cities across the South and West. When we entered into the Sorrento Mesa sale, we set a goal to use these proceeds to strategically enhance our portfolio across exceptional locations. As we consider acquisition prospects, we've been targeting newly built properties with vibrant amenities and superior tenant build-outs. While the cap rates for this asset profile are lower than our historical average, buying these types of properties will enhance our company's future cash flow stability and add long in-place leases and quality tenants. We believe premier properties like these are positioned for continued healthy rental rate growth and will thrive over the long term. I'm pleased to report that we've made great progress building our pipeline with exactly this sort of transaction. We've been very busy since August and have underwritten over $2 billion of potential acquisitions. We are focused on all of our existing cities, as well as markets with similar growth and demographic characteristics in the South and West. Today, we are advancing just over $600 million of potential acquisitions that fit our criteria perfectly. These acquisitions are still in the due diligence phase, but we are very excited about their prospects. If we choose to proceed after completing our due diligence, we will provide further details in the months ahead. Turning to the operating environment, executing new and renewal lease transactions continues to be impacted by low tenant space utilization across the industry. The good news is that our properties are located in exciting and growing cities that are positioned well for a strong pickup in demand over time. Across our portfolio, leasing tour activity continues to improve. This has translated into more lease inquiries and discussions with prospective tenants. However, it continues to take longer to finalize leases in today's environment. This applies to both new leases as well as renewal discussions. The overriding comment we continue to hear from tenants is that they want employees back to the office, but likely this will be, at least initially, on a hybrid basis for many companies. With potentially changing needs in mind, tenants have been challenged determining how their offices should be configured. Many real estate decision makers have therefore been hesitant to commit long-term with this uncertainty remaining. We believe this dynamic will continue to improve as we head into 2022 and more people return to the office. At the same time, we continue to hear how tenants want modern, dynamic space in highly amenitized locations. Employers view this type of high-quality office space as a draw to help accelerate a return to the office. This is why we're targeting premier properties in our acquisition pipeline, and it's also shaping our own strategy to accelerate leasing across our portfolio. In our experience, we found very strong demand for modern, pre-built, and move-in ready spec suites. This strategy speeds up the decision-making process and allows us to better control costs. Learning from this, over the next year, we plan to invest in our existing properties through our spec suite program, common area upgrades, and repositioning select buildings. We achieved tremendous leasing success with this approach in the past and believe now is the time to position our portfolio to win greater market share. This will differentiate our properties from many of our local competitors who are not actively reinvesting. We will discuss this further in the future as we execute these plans. Tony Maretic will provide further details on our recent leasing activity in a moment, but I want to conclude by saying that driving leasing success is one of our top priorities as we enter 2022. We believe our quality portfolio, along with some strategic enhancements, will position us favorably and for cash flow growth. We expect a very busy and exciting remainder of the year, and I look forward to providing you further updates on our progress. With that, I'll turn the call over to Tony Maretic. Thanks, Jamie. Our net operating income in the third quarter was $29.7 million, which was $3.9 million higher than the $25.8 million we reported last quarter. The increase was primarily a result of termination fees, which were $4.5 million higher than in the prior quarter. In total, we recorded $6 million in termination fees in the third quarter. The largest contribution was $5.3 million from BB&T at Park Tower, which we reported on last quarter. This represents the full amortization as the tenant vacated the property at the end of the third quarter. We reported Core FFO of $14.1 million or $0.32 per share, which was $1.2 million lower than the previous quarter. The higher termination fee income was offset by higher general and administrative expenses. The G&A increase reflected a one-time $5 million employee incentive compensation accrual as a result of the extraordinary $430 million gain that Jamie discussed earlier. Our third quarter AFFO was $8.5 million or $0.19 per share. The largest impact to AFFO was a leasing commission paid at our Sorrento Mesa property of $1.5 million related to a 69,000 sq ft, 12-year lease renewal signed prior to the execution of the sale contracts, and therefore contributed to the value creation on that transaction. We also signed two other significant leases during the quarter. We signed a 72,000 sq ft, 3-year renewal at our AmberGlen property in Portland. We have referenced this lease on previous earnings calls as one of our larger near-term expiries and are pleased we were able to come to terms. In addition, we signed a 41,000 sq ft tenant to a five-year renewal at our Papago Tech property in Phoenix. These two leases significantly stabilized the portfolio. Our third quarter Same-Store Cash NOI growth was a positive 1.4% as compared to the third quarter last year. The leases we signed in 2020, particularly those at our Denver Tech property and our life sciences portfolio, are the biggest drivers to these results. With the pending sale of our Sorrento Mesa portfolio and the previously announced departures relating to a few tenant terminations, we are projecting lower same-store results over the next few quarters. Our total debt at September 30 was $603 million. Our net debt, including restricted cash to EBITDA, was a healthy 6.1x. At quarter end, our total debt had a weighted average maturity of four years and 86% of our debt was effectively fixed. Our weighted average interest rate is now 3.6%, and we have no property debt maturities until 2023. Our only maturity in 2022 is with respect to our unsecured credit facility. We do have a one-year term extension right, but we are making good progress on renewal discussions and expect to renew prior to the initial term expiry. Last, we have provided updating guidance in our press release. The only change to reflect is the one-time $5 million general administrative expense accrual that I mentioned earlier, which it also impacts Core FFO. We refer you to our material assumptions and considerations set forth in our earnings release. That concludes our prepared remarks, and we will open up the line for questions. Operator? We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Jason Idoine with RBC Capital Markets, y ou may go ahead. Hey, good morning, guys. A question on redeploying this Sorrento Mesa sale proceeds. How many transactions are you expecting to close before those proceeds are redeployed? Thanks, Jason. As I mentioned in my prepared remarks, we're looking north of $600 million. That represents three transactions, and all of them right now are under due diligence. Okay. How should we think about acquisition cap rates for prime office assets? When you look at kind of the quality of the properties that we're looking at, Jason, you know, just to give you some kind of guidance overall. We're thinking top sub-markets, irreplaceable locations, new construction, high quality amenities, long leases in place, you know, perfect, predictable long-term assets for growing cash flow. When you look at cap rates in the markets today, you know, think probably around a five cap. Okay. Last one for me. You guys got AmberGlen re-signed. I think the last remaining expiration in 2021 is the Kaplan lease, which I think was a partial re-sign, I guess. What's the plan with that asset? Could you also provide an update on, I guess, San Tan and Pima in 2022, and then any large lease rolls in 2023? Yeah. Good morning, Jason. It's Tony Maretic here. You've basically hit all the large kind of roll we have as you talked about. You know, Florida Research Park, we are getting that 46,000 sq ft space back at the end of the year. You know, that building currently is really a triple net, single-tenant building. We have plans drawn up to convert that to a multi-tenanted building and really enhance some of the amenities and common areas and whatnot for that space. We expect or are hopeful to kind of lease that up later in 2022 at this stage. In terms of the other roles that you talked about, San Tan, the Toyota space, we are getting that back at the end of August of next year. That is the largest space that we're getting back over the next four quarters. Really beyond those two, there really is only one other lease over the next four quarters that is greater than 30,000 sq ft, and that is at our Florida Research Park. We have a GSA tenant rolling in Q2. That tenant's been there for a very long time and discussions are preliminary, but we are optimistic on a renewal for that tenant. Those are the only three in the next four quarters. Okay, thanks. Thanks, Jason. Our next question comes from Rob Stevenson with Janney, y ou may go ahead. Good morning, guys. Jamie, how did the acceleration clause work? Was it an all or nothing for December 2021? Could you have accelerated the second tranche into February or March or June of 2022 if you wanted to? How much flexibility did you have there? The northern properties were hard coded for December 2, and the southern, which is the 181, we had the ability to accelerate on 45 days notice. Looking at our pipeline and timing, Rob, and wanting to make sure we line everything up for a proper 1031 exchange, we decided to bring it into this year. We had flexibility around that. Okay. Just wanted to figure out, like, I assume then that, you know, it's pretty confident that you'll be under contract at some point in the not-so-distant future on some of these acquisitions, at least, in order to have you pulling that forward at some point and not, you know, pushing it to February or March or whatever to buy yourself a little bit more time. That was the reason why I was asking that. We feel very good, Rob. Okay. Tony, so you guys are 88.7% occupied, but 91.1% committed and occupied as of September. How should we be thinking about the committed and occupied number at year-end with what you guys have in your leasing pipeline at this point? I mean, the 88.7% is basically at the top end of your year-end occupancy guidance range. Is the committed and occupied at year-end likely to be in that sort of similar sort of 91%? You've got a bunch of stuff sitting on yours and Jamie's desk to sign that would push you guys higher than that from a committed and occupied standpoint. How should we be thinking about that at year-end? Yeah. Good question. If we talk about that, the difference between occupied and the committed, the single largest committed lease that we have that's in those numbers is the fintech tenant at Park Tower. They are expected to take occupancy in May. That's the single largest item. That item alone will not go into the occupied column at December thirty-first. That will remain in the committed column beyond that. I would say at this point, you know, we're beyond the kind of known move outs that I talked about earlier. We're really not expecting a significant change in either of those numbers as we roll into December thirty-first. Okay. Last one for me. As you guys are talking to both the tenants that you guys have signed over the last couple of quarters, as well as the people you're in contracts or contact with now for renewals and new space, how would you characterize where the demands are in terms of tenant improvements and other sort of leasing costs today versus, you know, where it would have been on that similar space pre-COVID? Is there a noticeable sort of demand, you know, I'll take the space, but I want either, you know, this much more free rent or this much more tenant improvements to build out my space. Is that coming to fruition at this point, or is that not really what you're seeing these days? You know, today, you know, call it November 2021 versus November 2019. Good questions there, Rob. Again, if you kind of step back and say what's happening, you're seeing rents really hold in there. You're seeing concession costs higher, and that's been driven. If you look, you know, as far as what's been happening in the markets, you know, early in the year across our cities anyways, there's about six million sq ft in Q1 of negative absorption. That dropped to about 2.5 million sq ft in Q2 of negative absorption. It's gotten better. We're down now to about one million sq ft of negative absorption. We feel like we're past the bottom. Generally in the market, things are getting better on a leasing front. You know, costs for sure are higher to build construction costs. We're finding what tenants want is, you know, more impactful space to use as a lure to draw back employees. Just generally, as we've been having leasing discussions, they've been slower, costs are a little elevated. That really has factored into our own plan of getting in front of it and putting some capital to work here to have really high-quality spec suites where we can spread the cost over a number of units, try to keep it more efficient and give tenants, you know, prospective tenants space that's ready to go. There's not a lot to haggle about or think about because it's plug and play. That's driving our strategy. Okay. Thanks, guys. I appreciate the time. Our pleasure, Rob. Our next question comes from Craig Kucera with B. Riley FBR. you may go ahead. Yeah. Hey, good morning, guys. Looking beyond the lease terminations that you captured this quarter, are you in discussion with any other existing tenants that are contemplating maybe moving out early? Hey, Craig, it's Tony here. You know, we just kind of completed our kind of budget and kind of strategic review processes. Part of that, we actually went through all of the leases that had significant termination fee options within their leases. Really, there's only a handful left that, you know, the ones that we've announced were by far the largest. We could see another one in early 2022. That's really down to you can count them on one hand, and they're and we're only expecting maybe one or two beyond that. Beyond that, in terms of, you know, that space dialogue, you know, there'll always be the opportunity if we have another tenant that we want to push out as we've had, you know, the deal with, you know, I'm thinking about the Park Tower where we have a tenant in tow. I mean, those discussions are always ongoing, but nothing significant at this point. Got it. You know, obviously you can't give too much color on what you're looking to acquire with the three transactions at north of $600 million. Given that you've had since August to kind of be working on this and building your pipeline, how are you thinking about how quickly you can deploy that capital that's coming in the door? Is that a first quarter 2022 event? Does that maybe take you to the middle of the year? Just any thoughts there would be helpful. Faster than that. Our own expectation, again, if they come together, is we're gonna have a lot of closings in Q4. Okay, great. More or less match funded then. Correct. There wasn't a huge amount of delta between what the cash you're getting and maybe the number of transactions you're looking at. Tony, are you thinking about plugging the gap with a line of credit? Are you thinking at all about mortgage finance or just sort of your thoughts on, you know, what you're thinking about leverage in regard to those transactions? Yeah, yeah, good question, Craig. Yeah. You know, Jamie mentioned that the transactions that we have are just north of $600 million. The estimated proceeds from Sorrento Mesa is approximately $546 million. I mean, there potentially is, you know, $50-ish million to finance. Just given our line of credit today, we have a $250 million availability. We have $88 million drawn at September 30. Certainly a lot of room there. As I mentioned in my remarks, we are talking about or making good progress on a renewal on that line, where we potentially could have a little bit more availability. That's the most likely outcome on the financing. Are you thinking just, you know, bigger picture beyond maybe this first tranche of levering up kind of what you're buying and buying even more, just given the amount of money coming in the door? Or are you thinking that this is what the balance sheet, you know, may effectively be looking like with the, you know, an overall much lower leverage amount going forward? Yeah. Very good question. I think the best way to answer that question is, you know, just given where, you know, the delta in NOI that'll be achieved once we complete these acquisitions, there will be excess cash flow that we will be generating over our dividend and as a result, you know, slowly reducing our overall leverage. I think over time, there'll be an ability to perhaps do more acquisitions or if we find something we're particularly excited about. In the short term, I think that's what you'll see the balance sheet at for a little while. Okay, thanks. Appreciate it. Thanks, Craig. Again, if you have a question, please press Star then one. Our next question comes from Barry Oxford with Colliers, y ou may go ahead. Great, thanks. Jamie, when you had mentioned doing some rehab work on some of your older buildings, what type of IRR can we expect from that? You know, Jamie, you know, of course, as you know, some people have already indicated on the call, you've got labor costs, and you've got material costs. Is that gonna eat into that IRR? You know, I guess when you step back, Barry, and you've got vacant space that's earning no return currently, and you can put some capital in and turn that into probably very healthy rents and overall returns. You know, I don't have the IRR on that exact expenditure per se, but I just know from an overall cash flow and what it impacts on that particular building in each case, it's a meaningful pickup to both cash flow and value creation at the property. Costs are rising. We factored that into kind of our own planning here. We're trying to finalize our numbers, but we think we can accelerate leasing and generate a really good return on that capital. Okay, perfect. That makes sense. Thanks, guys. You're welcome. As there are no additional questions, I will turn the call back over to Mr. Farrar to conclude. Thank you for joining today. Please don't hesitate to reach out if you have any other questions. Goodbye. This concludes the call. You may now disconnect. Thank you.