Good morning, and welcome to the City Office REIT, Inc. first quarter 2022 earnings conference call. At this time, all participants are on listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, you may press star followed by one on your touch-tone phone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then followed by two. As a reminder, this conference call is being recorded. If you require operator assistance, please press star followed by zero. It is now my pleasure to introduce you to Tony Maretic, the company's chief financial officer, treasurer, and corporate secretary. Thank you very much, Mr. Maretic. You may begin. Mr. Maretic, please check that the line isn't muted. We're currently not receiving any audio from your line. Good morning. Before we begin, I'd like to direct you to our website at cioreit.com, where you can view our first 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. While 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 first 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 will now turn the call over to Jamie. Good morning. Thanks for joining today. On our last earnings call in February, we laid out our goals and expectations for 2022, and to date, we are tracking well against those expectations. Broadly speaking, we've witnessed an uptick in utilization of office space across our portfolio as tenants continue to return to the office following the Omicron spike. Similarly, leasing and lease prospect tour activity, which are leading indicators, are improving. We view the lifting of COVID restrictions as a positive for our business and helpful for tenants' return to the office. Notably, we are experiencing the strongest leasing activity at our best located and amenitized properties. As companies implement their return to the office plans, providing an exciting office environment for their employees is an advantage. We have strong conviction that these types of high-quality assets are well positioned for both rent and value growth over time. Within our own portfolio, a large percentage of our total value is represented by this category of properties, including our three most recent acquisitions. This provides us a strong foundation for our business. As I mentioned on our last call, we have opportunities at some of our properties to further modernize and update, including renovating some of our older tenant suite inventory. These properties are well located in great cities, and our past experience investing into the creation of desirable inventory gives us confidence with this strategy. Completing attractive renovations, including enhancement of lobbies, fitness facilities, outdoor tenant spaces, and environmentally sustainable property features is a great way to differentiate ourselves. Within tenant suites, we've had success driving leasing by building new and modern open spaces, and in some cases, installing furniture to make them move-in ready. With rising construction costs and elevated lead time for materials, making these investments up front will help position us favorably. Specifically in our portfolio, we are engaged in planning or implementing renovations at 190 Office Center in Dallas, FRP Collection in Orlando, Pima Center and SanTan in Phoenix, and City Center in Tampa. We believe that the thoughtful execution of this strategy over the next 12-18 months will position these properties for further leasing success, cash flow growth, and long-term value creation. Next, I'd like to provide an update on our recent acquisitions in Raleigh, Phoenix, and Dallas. We've successfully integrated these properties into our portfolio and are thrilled with their position. Block 83, our recently developed Raleigh complex, is 62% occupied and 81% leased, including leases that are signed but have not yet taken occupancy. In total, we have 96,000 sq ft of quality vacant space remaining. Today, we're in various stages of lease drafting with over 25,000 sq ft of potential new tenants, with two of these being smaller retail tenants, which will enhance the overall experience at the property. An important component of our acquisition strategy was to be very selective with the street-level retail vacancies. This retail is a unique differentiator for our project that provides energy and excitement to the complex. We review each potential new retail tenant under the lens of ensuring it will enhance our overall project. Beyond these leases, we have over 50,000 sq ft of active prospects for the remaining space and expect we will convert this demand to further signed leases in the coming quarters. At Block 23 in Phoenix, 77 sq ft of new tenant leases have commenced since the end of last quarter, increasing occupancy from 62% to 87% at March 31st. Occupancy will increase to 94% by the end of the next quarter as signed leases take occupancy. The new building, great location, and unique amenity base continues to be a draw for leasing interest as we explore prospects for the remaining 17,000 sq ft of vacant space. Finally, the Terraces in Dallas is 96% occupied and 99% leased. One other announcement this quarter is the pending sale of our Lake Vista Point property in Dallas. On our last call, we mentioned that the tenant was likely to exercise its option to acquire the property. During the first quarter, this occurred, and a purchase and sale agreement was finalized for $43.8 million. The sale price, when adjusted for the amount of the tenant's unspent TI, translates to a 6.1% cash capitalization rate. The sale is scheduled to close in mid-June and is expected to generate a gain of approximately $22 million. Upon closing, we will repay the mortgage on the property, which has a balance of $16.9 million as of quarter end. The net proceeds from the sale will be held to either reinvest in a tax-efficient exchange or potentially for other corporate uses, which could include a combination of a special dividend distribution, further debt reduction, or a stock buyback. Going forward, we will continue to actively evaluate other capital recycling opportunities. This has been a great strategy for us historically, and over the last 8 years, we've generated a remarkable $570 million of total gains across 10 dispositions. I look forward to providing further updates next quarter and will turn the call over to Tony Maretic. Thanks, Jamie. Our net operating income in the first quarter was $28.4 million, which was $3.3 million higher than the amount reported in the fourth quarter of 2021. This is primarily a result of the acquisitions completed in the fourth quarter of 2021. We reported core FFO of $17.6 million or $0.40 per share, which was $1.8 million higher than in the fourth quarter of 2021. $0.40 represents the highest core FFO per share in the company's history and was driven by the sale of our life science portfolio in the fourth quarter and the recycling of that capital into the three acquisitions we completed in December. Our first quarter AFFO was $8.3 million or $0.19 per share. The largest single item to impact AFFO was a $1.2 million investment at our 190 Office Center property in Dallas to upgrade lobbies and common areas. We also continued to invest in building out ready-to-lease spec suites and implementing vacancy conditioning, which is a key part of our 2022 business plan. The total investment in spec suites in the first quarter was $800,000. Last, we incurred $800,000 of tenant improvement expenses related to the new 73,000 sq ft tenant at our Park Tower property, which is scheduled to take occupancy in Q2. We expect to incur the bulk of the remaining $1 million of TI for that tenant at Park Tower in the second quarter. Our first quarter same-store cash NOI change was in line with our expectations at -4.7% or $1 million lower compared to first quarter of 2021. First quarter same-store cash NOI was impacted by lower occupancy year-over-year. Contributing $500,000 or half of that decrease, BB&T vacated their space at Park Tower during the third quarter to accommodate a new 73,000 sq ft tenant. That new tenant's lease commences on May 1, 2022, but will not begin paying cash rent until February 2023. That new tenant's eight-year lease increased the value of the property, but the downtime and free rent period is a significant contributor to our negative Q1 same-store results. As Jamie mentioned, we have entered into an agreement to sell our Lake Vista Point property according to the terms that were agreed when the tenant signed a lease renewal in 2020. We expect the sale to close in mid-June. Under accounting rules ASC 842 for sales-type leases, we have recorded a receivable on our balance sheet at March 31 to reflect all the future cash flows from the property until the expected June closing, net of anticipated transaction costs. That resulted in a gain on sale of $22 million being recorded in our first quarter results. Our total debt at March 31 was $662 million. Our net debt, including restricted cash to the debt, was a healthy 6.0x. We have no debt maturities in 2022 and two small maturities in the fall of 2023. Our debt is primarily fixed rate. Lastly, we continue to track the 2022 guidance ranges we issued last quarter. The expected loss of income from the sale of the 100% leased Lake Vista Point property would push us toward the lower end of the previously provided guidance ranges for occupancy, net operating income, and core FFO per share. This impact could be offset in 2022 through the redeployment of sale proceeds. We expect to provide an update to our guidance ranges next quarter when we can provide more clarity as to how and when the proceeds from that sale will be used. That concludes our prepared remarks, and we'll open up the line for questions. Operator? Thank you. If you would like to ask a question, it's star followed by one on your telephone keypad. If you do change your mind, it's star followed by two. Our first question today comes in from Rob Stevenson of Janney. Rob, your line is open. Please go ahead. Good morning, guys. Tony Maretic and Jamie Farrar, given the comments in terms of, you know, the leases starting, et cetera, and then what you know in terms of tenants vacating, how are we expecting this to play out over the remainder of 2022? Are the revenue coming in from the new leases that'll start paying rents in excess of anything that vacates, or are we likely see the disposition to have a quarter where the lost revenue from the vacates is greater than the new revenue from the new leases? Hey, Rob. It's Tony here. Good morning. I mean, I think the short answer is we're effectively expecting it to be flat. A couple things I wanted to point out. One was, you know, on page 16 of our leasing activity schedule, you'll see that the number of leases that are not commenced that are already signed. We have approximately 330,000 sq ft of leases that are signed that will be taking occupancy with the bulk later this year, and a big chunk happening in Q2, particularly with the recent acquisitions. We have a number of known move-outs later this year. Just really speaking briefly, I mean, the largest being Toyota, which we've previously disclosed, that's 133,000 sq ft. That's the largest. The other second largest is, during the quarter, we renewed a tenant at our Pima property, on 36,000 sq ft, but they will be vacating 61,000 of their existing 97,000 sq ft. We do have a couple significant move-outs that effectively offset the signed leases for the year. I think, Rob, what you're really getting at, which is the key kind of thing to get your mind around is the trends. I think, you know, there's been a real turn in our mind and worthy of spending a moment on. When you look where we were this time last year, there's been, you know, a quantum leap forward in many respects. When you look at people's personal lives, they've largely returned to normal. Airplanes are full, you know, vacation spots are packed, concerts and bars are jammed. The return to the office, though, is lagging, and it's slower. I think the good news for us and the message that we keep hearing from their companies and our tenants is they want their people in a collaborative environment long term, but many of them have been hesitant to be kind of an outlier and push people back too quickly. What we've seen and what's picked up lately is, you know, a partial return to work that's increasing. The usage of our own space is picking up. You know, recently, the GSA started to come back, and a number of our larger tenants have started to come back. We're seeing a lot of positive things, but the challenge and gets to the point of why it's been choppy is, you know, tenants today have a number of quality options for space, and they can comfortably look today and say, we can downsize and save money. And what that has turned into is some shorter-term leases and some smaller space requirements. We think that's gonna persist over the short term. What tenants keep telling us is they want great quality space to lure their people back. If we look forward and say this time next year, you know, our belief is we're gonna continue to have evolved this narrative in our favor. Advisors to tenants right now are saying, "Hey, you can pull back in your lease space requirements. There's lots of options." I think for quality properties, that's starting to change, and it's gonna continue to change. As that space, the good space in our cities starts to be absorbed, I think we're gonna see real movements in rental rates. That's really what's been driving our strategy, as I mentioned on our prepared remarks at the beginning, is invest in our really well-located properties, bring them up to the next level of quality, and they're gonna be well positioned as that trend continues. Okay. I guess how are you thinking about redeploying the. You talked about redeploying the Dallas sale proceeds as to, you know, paying down the debt and then either 1031 exchange, et cetera. I mean, how are you thinking about the trade these days if you were to redeploy those proceeds? Is it likely to be in something that's a relatively lower cap rate asset like the ones that you've been buying recently? Are you know, still in the market looking at stuff that's, you know, high sixes, sevens cap rate assets? Where is the sort of focus if you were to buy any assets these days, is it in the higher value assets? Is it the lower cap rate assets? How should we be thinking about that? It's still too early to say, Rob. I mean, we're looking at all of the above, I would say. We're also looking, as I mentioned, at our own stock and where we're valued in trading, and we think we're undervalued. That's something that's on the table as well. Okay. Last one for me, what's the thought on the preferred at this point? 6.625 I think it is. Is that, you know, given the cost of the rest of your capital today, still likely to be, you know, attractive in the near term until something changes there? Yeah, I think it's fair. You know, obviously with the rise in interest rates over the last couple of months, the math on kind of refinancing that has changed. It's something that we're gonna be watching over the next little bit, but I don't anticipate we'll be making any decisions on that short term. Okay. Thanks, guys. Appreciate the time. Thanks, Rob. Thank you. Thank you. The next question on the line comes from Michael Carroll of RBC Capital Markets. Michael, your line is open. Please go ahead. Yeah. Thanks, Jamie. I know a couple of times in your prepared remarks, and I think in the prior question, you kind of talked about some of the renovations at a handful of your projects. I mean, how should we think about these renovations? Are this really just kinda pre-building out those spaces, making it more attractive and easier for potential tenants to move in, or is it more meaningful than that across the board? It's a mixture, and it really depends on the property, Michael. What we're seeing today is having, you know, outdoor space, you know, refreshed amenities, fitness facilities. Those are big draws and lures that tenants are using to help bring their people back. When you get into the space, you know, pre-investing and building out, you know, in the high quality condition that's fast, can be moved into quickly. In some cases, we're putting furniture in. We're just seeing that as a strategy that's really accelerating discussions and moving us ahead of other discussions, frankly. How big is these investments over the next, I guess, quarter or this year? I mean, is it a substantial investment that you're putting in your portfolios? Is there a way to kinda quantify that? Hey, Mike, it's Tony here. I can answer that question and give you kind of a few numbers. Maybe let's specifically talk about since you asked about the spec suite program. You know, the spec suite program, technically, typically, that involves us, you know, doing kind of a ready to move in. Typically, the square footage is under 7,000 sq ft, 5,000 is typical size or smaller. We have another approximately 20 units that represent about 70,000 sq ft that are either under construction or planned for the balance of this year. That's approximately $1.5 million just for the spec suite program. Stepping back just generally, if you look at, you know, where our, you know, TIs and capital expenditure dollars are gonna be for the next little while, I mean, really, if you take the average of the past two quarters for TIs and CapEx, you know, that average is about $6 million per quarter. I mean, we're expecting those numbers to continue for the balance of the next four quarters, as we kind of finish out this program that Jamie described. Then there's leasing commissions above that, obviously, depending on leasing volume. Just to give you a sense, though, the spec suites, Mike, if we lease those all up, you know, it's roughly just over 2% of our portfolio. From an earnings potential, that drives about $0.08 a share. It is really meaningful for, you know, a relatively small percentage of our portfolio. It's a big focus. Yeah. Great. How are those, I guess. What's the timeline on those? How many of the spec suites have you already built out? I know there's been several at Park Tower. I believe you're kind of building out. Have you seen an uptick of activity at those sites that you've already completed? Yeah, I think it's pretty steady. I mean, I know it, you know, it's averaging, I think one or two a month of lease up over the last quarter. We have 19 spec suites in current inventory that are ready to go, and that's about 60,000 sq ft. Okay, great. Just last one from me on the remaining 2022 lease expirations. I know that you kind of, Tony, you kinda highlighted some of the expected move-outs. Can you kinda quantify how the smaller tenants in there? I mean, how much do they typically represent and how are those discussions going? I believe last time you were saying that they're going well, but you expect some of them to downsize. I mean, how should we think about that? Yeah, it's a fair question. Maybe let's just, you know, recap. We do have for the, you know, the next four quarters, about 700,000 sq ft rolling. There are kind of five leases that are greater than 30,000 sq ft. I've already talked about two of them. One, we have a move-out at Pima Center, 31,000 sq ft on April first that we previously discussed. We have 30,000 sq ft GSA tenant for Research Park that straddles Q2 and Q3, and we're optimistic on a renewal on that 3,000 sq ft space. And then we have another tenant that rolls at the end of the year, December thirty-first, at our Pima property, that's 36,000 sq ft that we do now expect to vacate. Beyond that, to your question on small to medium-sized leases, and those are going, I would say we're pretty well and consistent with historical. You know, our historical renewal rate worked out to an average of about two or three, and that's kind of what we're expecting and what we're seeing with the remaining small to medium-sized leases. Okay, great. Thank you. Thanks, Mike. Thank you. As a reminder, if you would like to ask a question, it's star followed by one on your telephone keypad. We have a question in now from Craig Kucera of B. Riley Securities. Craig, your line is open. Please go ahead. Yeah, thanks. Good morning, guys. I know you didn't change your disposition guidance, but given where your stock is now trading on an implied cap rate versus where you've been selling assets, I know Lake Vista, that pricing was actually struck a while ago. Are you revisiting perhaps selling other assets and looking at share repurchases again? Yeah. We're constantly looking at our own portfolio, Craig, and I'd say we've picked that up recently. You know, for us, you know, we try and spend a lot of time and be thoughtful if we're going to execute, what could we do to help enhance value. We're looking at a number of properties right now and trying to get our arms around what's the best execution to position those. Then we'll make decisions over the coming quarters. Again, when we look at where we're trading and our implied cap rate, you know, we think we're very much below where we should be. That's a focus. Okay, thanks. That's it for me. We have no further questions on the line, so I'll hand back over to Mr. Farrar for closing remarks. Thank you. Thank you for joining today, and we look forward to updating you on our progress next quarter. Goodbye. Thank you very much for joining us today. This concludes today's call. You may now disconnect your lines. Have a great afternoon.