Good morning, and welcome to the City Office REIT, Inc. Q2 2022 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 Anthony Maretic, the company's Chief Financial Officer, Treasurer, and Corporate Secretary. Thank you, Mr. Maretic. You may begin. Good morning. Before we begin, I'd like to direct you to our website at cioreit.com, where you can view our Q2 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 these expectations will be achieved. Please see the forward-looking statements disclaimer in our Q2 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 will review our financial results after James Farrar, our Chief Executive Officer, discusses some of the quarter's operational highlights. I will now turn the call over to Jamie. Good morning, and thanks for joining today. We believe the companies that are going to be most successful in the office sector are those focused on growth markets with high-quality assets that align with today's tenant desires. From a big picture perspective, we are very well-positioned in this regard. Our predominantly Sun Belt locations are the right markets, and they are poised for long-term growth in rental rates and demand. Cities like Phoenix, Raleigh, Tampa, Dallas, and Orlando provide a lower cost of doing business, higher quality of life, and a growing talent pool. For these reasons, among others, they have been the beneficiaries of labor force migration and corporate relocations. We believe these trends will continue. Further, there continues to be a flight to quality, with companies seeking differentiated, amenitized, and well-located office spaces for their employees. Our portfolio is principally invested in high-quality, amenitized assets that are consistent with what tenants are looking for. While we have a solid core portfolio that aligns with this opportunity, we are advancing and executing plans that we've discussed on prior calls to elevate several of our properties. We also continue to build out spec suites across the country to drive leasing appeal and accelerate occupancy timelines. Our spec suite program is proven and effective at yielding results. Year to date in 2022, we have leased 17 of our spec suites totaling 64,000 sq ft. We've also leased three spaces totaling 38,000 sq ft where we had completed substantial space conditioning. To provide some larger context on this program, despite the pandemic's impact on leasing, since 2019, we built out over 200,000 sq ft of spec suite inventory. We've leased approximately 84% of it to date, with a typical lease-up period of approximately six months. Our remaining inventory of spec suites is 33,000 sq ft across our portfolio. We intend to commence construction on over 100,000 additional sq ft of spec suites during the remainder of 2022, plus another 150,000 sq ft of conditioned space. We believe these planned investments will position us with attractive, ready-to-lease inventory that will drive results. In terms of overall leasing, it was generally healthy in the Q2. We executed a total of 254,000 sq ft of leases, consisting of 126,000 sq ft of new leases and 128,000 sq ft of renewals. We are also pleased to report that we signed 23,000 sq ft of new leases at Block 83 in Raleigh during the quarter. That brings the property's occupancy to 85% when including signed leases that have not yet commenced. Our remaining inventory at Block 83 is approximately 45,000 sq ft of office space and 28,000 sq ft of retail space. We remain confident in our ability to lease these spaces on attractive terms, given the property's tremendous amenities, new and modern construction, and great location. It fits perfectly with what tenants are looking for. Today, we are in lease negotiations for approximately 17,000 sq ft of this space, with a number of additional prospects beyond that. Overall, tenant retention rates in the quarter were approximately 60% with a strong 4.8% increase in renewal cash rental rates. These results are generally in line with our overall leasing results during the trailing 12 months. However, looking forward over the next 12 months, we do expect to have several larger tenants vacate or downsize, which will lower retention rates and require us to backfill some space. We've previously discussed Toyota vacating at the end of August at our SanTan property in Phoenix. Subsequent to quarter end, we came to a conclusion on a major tenant at our 190 office property in Dallas. Effectively, our largest tenant there, a healthcare company, will reduce its footprint from 173,000 sq ft to 43,000 sq ft when their lease rolls in June of next year. Their renewal space has been extended by three years through June of 2026. We were aware this tenant had implemented a work from home strategy and potentially didn't require all of its space. To mitigate that scenario, we commenced a property upgrade earlier in the year, which was completed during the quarter. The renovation positioned us to retain as much of the existing tenant as was feasible and set us up to backfill the balance of the space. The project included enhancing the lobby and adding a modern conference center, an upscale tenant lounge, a high-end fitness facility, and connected outdoor space. The renovations look spectacular and completely transformed the property for an investment of just over $2 million or a modest $7 per sq ft. We've included before and after renovation photos in our most recent investor presentation posted on our website. We've already experienced the benefits of these upgrades. After quarter end, we've come to terms with two tenants that we expect will backfill approximately 49,000 sq ft at the property, and we have over 10 months of lead time to find replacement tenants for the balance. Other notable activity during the quarter included the completion of the sale of Lake Vista Point in Dallas for $44 million. The sale generated us a $22 million gain on sale and was completed at a 6.1% cash cap rate. On the capital markets front, during the quarter and subsequent to quarter end, we've been executing a share repurchase program. While we remain sensitive to reducing the number of common shares outstanding, the disconnect between our stock price and our view of its value is a great opportunity. To help investors understand our rationale on the buyback, we included a new slide in our investor presentation. The average repurchase price to date, including purchases after quarter end, is $13.11 per share. This effectively means that we're buying our own portfolio at approximately a blended 8% cap rate. That is tremendous value, and we would not be able to acquire comparable high-quality office properties in the private markets anywhere near that valuation. We've also provided segmented information on that slide which may be helpful. When you consider the value inherent in our three most recent acquisitions in Raleigh, Phoenix, and Dallas, purchased for $614 million, the implied metrics associated with our other 22 properties is even more compelling. Today, newly constructed and highly amenitized office buildings with long in place lease terms remain desirable for investors. Our three recent acquisitions fit this segment perfectly and are highly discounted by our implied valuation. To help illustrate this further, JLL released a report last month that provided current construction and replacement costs across Metro Denver and its five major submarkets. The estimated costs ranged from a low of $490 per sq ft to a high of $835 per sq ft with an average of $650 per sq ft. We believe this range is indicative of replacement costs across each of our markets as well. Contrasting this to our stock buyback, we purchased our own portfolio at a blended $221 per sq ft, including our three most recent acquisitions, which should be more equivalent to premium new construction today. Bottom line, we know our portfolio and our tenants better than anyone, and we believe repurchasing stock at these deeply discounted levels will be strongly accretive to earnings per share and net asset value over time. As we navigate the noise in the office sector and the markets broadly, we will continue to focus on creative ways to unlock value and grow cash flow. This approach has served us well and has led us to achieve the second highest total shareholder return in the office sector since our IPO in 2014, second only to Alexandria Real Estate. I look forward to updating you further next quarter, and will hand the call over to Tony Maretic to discuss our financial results. Thanks, Jamie. Our net operating income in the Q2 was $28.7 million, which was $300,000 higher than the amount reported in the Q1. This is primarily a result of the increased income generated by the properties in first generation lease-up that were acquired in the Q4 of 2021 as tenants take occupancy at those newly developed properties. For instance, Block 23 in Phoenix, which started the year at 62% occupancy, was 94% occupied at the end of the quarter. While operating expenses have seen increases as a result of inflation in various categories, the impact on net operating income was muted as recoveries mostly offset their impact. We reported core FFO of $17.6 million or $0.40 per share, which was equal to the amount we reported in the Q1. The increase in net operating income was offset by slightly higher interest costs on our credit facility. Our Q2 AFFO was $8 million or $0.18 per share. The largest single item to impact AFFO was $1 million of tenant improvement expenses related to the new 73,000 sq ft tenant at our Park Tower property, which took occupancy during the quarter. As Jamie mentioned, 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 Q2 was $700,000. Last, we also completed the property upgrade project at our 190 Office Center property in Dallas, which Jamie just discussed. That investment during the quarter was $400,000, completing the $2.1 million upgrade. Moving on to some of our operational metrics. Our Q2 Same-Store Cash NOI change was in line with our expectations at -7.1% or $1.5 million lower as compared to the Q2 of 2021. Q2 Same-Store Cash NOI was impacted by lower occupancy year-over-year and free rent periods associated with new leases. Contributing $500,000 to that decrease, BB&T vacated their space at Park Tower during the Q3 of 2021 to accommodate the new 73,000 sq ft tenant. The new tenant's lease commenced on May 1, 2022, but will not begin paying cash rent until February 2023. That new tenant's 8-year lease increased the value of the property, but the downtime and free rent period is a significant contributor to our negative Q2 Same-Store results. Further decreases were attributable to scheduled free rent periods at our Superior Point and FRP Collection properties as a result of recent lease renewals. We expect Same-Store Cash NOI results in the remaining quarters of the year will improve as these free rent periods burn off. Our total debt at June 30 was $654 million. Our net debt, including restricted cash to EBITDA, was a healthy 5.8 times. We have no debt maturities in 2022 and two small maturities in the fall of 2023. Our debt is primarily fixed rate. Restricted cash was elevated at quarter end as we held the net proceeds from the Lake Vista Pointe sale in a 1031-eligible restricted cash account. Subsequent to quarter end, the net proceeds of $25.6 million restricted cash were released and applied against our line of credit. Last, we have provided updated guidance in our earnings press release. There are several pluses and minuses, the net effect of which is a slight decrease in the midpoint of Core FFO per share guidance for the year. First, we are anticipating higher interest rates on our floating rate credit facility for the balance of the year. Second, while we had healthy quarter leasing, we are reducing the expected 2022 income derived from new leasing assumptions that were included in our prior guidance. We still expect to make leasing progress through the balance of the year, especially at Block 83 in Raleigh and our spec suites, but we now forecast that income will more likely commence in 2023 than in the Q4 of this year. These same leasing related factors that impacted our Core FFO per share range are the same factors that led us to adjust occupancy guidance. Offsetting part of the downward impact from guidance is the positive accretion generated by the share buyback program. During the quarter and subsequent to quarter end, we completed $30 million of share repurchases of the $50 million that our board has currently authorized. 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, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question comes from Michael Carroll from RBC. Please go ahead, Michael. Yeah, thanks. James, the larger move outs that you mentioned you expect over the next 12 months. Now, is that mostly the previously announced tenants that we've been talking about for the past few quarters now including this healthcare company in Dallas too? Hey, good morning, Mike. This is Tony. I can take that question. Let me break it down for you. You know, over the next four quarters, we have roughly 850,000 sq ft rolling. Of that total, we do have five tenants that are greater than 30,000 sq ft that are known vacates. We have discussed three of these on previous calls, to take you through those. One is Toyota. They're vacating 133,000 sq ft at the end of this month. A title company at our Pima property is downsizing by 61,000 sq ft in October of this year. We have a tenant at 50/90 who is vacating 49,000 sq ft at December 31, 2022. All of those have previously been discussed. Adding to those is the one, the healthcare company that Jamie just spoke about at 190. They'll be downsized by 103,000 sq ft. We have one other tenant greater than 30,000 sq ft, and that's also at 190 Center. They'll be vacating 44,000 sq ft at March 31, 2023. One other thing I just wanted to highlight is, you know, offsetting these known move outs, we do have signed 292,000 sq ft of new leases that will be taking occupancy over the next year, which includes that 49,000 sq ft tenant at 190 Center, completed after quarter end, which will help offset these known vacates. Okay, great. Tony, I know what does the term fee in 2Q what did that relate to? I believe that the new guidance range includes a bigger term fee than the prior guidance range. Can you kind of talk about that a little bit? Yeah. Thanks for that question, Mike. I appreciate the opportunity to sort of explain that. The single largest item in our termination fee income continues to relate to that Toyota lease. Just to review that, we announced in 2021 last year that Toyota paid us a total of $3.8 million, and that we would amortize that until they depart at the end of August of this year. At the time, we announced we would amortize $2 million in 2021, and a further $1.8 million was scheduled to be amortized in 2022 until their scheduled departure. At the time we published our guidance in February, we announced an additional $1 million of termination fee. Really the total number that we were anticipating was $2.8 at the beginning of the year, and therefore the change in guidance for this quarter is an additional $600, 000, and that relates to that tenant at 190 office property, which I mentioned, 44,000 sq ft, who have exercised their termination option in March, and they are expected to vacate in March of 2023. I hope that kind of clears that up. No, that's very helpful. Related to the share repurchase program, I mean, how should we think about, I guess, future activity under that? I mean, is it gonna really depend on your ability to sell assets within your portfolio to kind of continue to fund repurchases? Is that how we should think about it? We have $20 million remaining that's authorized, and you know, our own view is we're trading at a major discount to what real estate's worth. We're gonna continue to reassess that, and we'll be using cash in the line. I mean, basically to date, the bulk of it's been funded from the Lake Vista Pointe sale. But when we look at our own portfolio and using the average price of $13.11, we're basically buying an incredible portfolio at around an 8 cap, $221 a foot. And you just can't buy anywhere near comparable real estate at that metrics. We're gonna continue to reassess as we go into the fall and, you know, we'll see versus alternatives and where our price is and we'll report back on where we land. Great. I know, James, there was other asset sales that you were kind of contemplating within the portfolio. Are you still looking at some of those right now? Yeah, I mean, we're constantly looking at, you know, our own portfolio, what we can do to create value, how best to position assets. There's nothing imminent today. I don't think today would be a great time to be trying to monetize some assets. I think what we've really tried to do is lay out in our investor presentation, there's a new slide eight, that really talks about how do we create value. This applies to our core portfolio, and it's also gonna apply to some assets that we may wanna dispose over the next few years. It's really how do we best position those properties, capital that we can put into it to drive leasing and ultimately create value for our investors. Across our portfolio, what we're seeing today is the best assets, the premier properties are getting the most leasing interest, and you're getting excellent rental rates. That side of the market is great. That covers a large portion of our properties. We do have a number of assets that are, you know, a little bit older, but in great condition and fabulous locations. Our experience is you can put capital into it, you know, have a feeling that when a tenant or a prospective tenant walks through the door, it ticks all the boxes. It has a, you know, fabulous lobby. It's got an incredible fitness facility, outdoor space, all the things that tenants want, and you can offer those products in great locations at a big discount to what the Class AA buildings are. We think that strategy makes all the sense in the world. That's a big focus for us. We're gonna do that. We've talked about, you know, certain properties that will benefit from that. Over the next few years, some of those assets may be candidates to dispose of, but we think we'll create incremental value by doing that. Okay. Great. Thank you. Thanks for the questions. Our next question comes from Rob Stevenson from Janney. Please go ahead, Rob. Your line is now open. Good morning, guys. Tony, you talked about the spend on the spec suites in the Q2. What's the spend on that business in terms of per square foot cost? What are you guys on average? It probably differs by market, but what are you guys on average spending per square foot to build out a spec suite today? Yeah. I'll answer that. Basically, really to your point, it depends on the condition of the space you're getting back. On average, it's anywhere from, you know, $40-$60/sq ft. You know, some might be a little bit higher depending on the condition, and some are lower depending on the condition. What we're finding, though, is when you build out suites and you're opening up the ceilings, you know, you're creating really cool, modern space, lots of glass, polished concrete, the cost is a little higher. When the lease comes due, and if you have to backfill it's very economical to backfill it. The floors are already polished concrete, the ceiling's already open, and so it's changing some color. We found, you know, particularly in the first roll or two of those spends, even though they're a bit higher up front, it's far more economical long term. Okay. What are you spending? You talked about the other type of improvements that you're doing, the sort of improved space, or I forget what your terminology was, where it wasn't the spec suites, but it was the other. What are you guys spending, you know, per square foot to do that type of building? Right now, the one example that we highlighted on the call was our 190 Center. If you have a chance, slide 9 in our presentation kinda shows before and after. When you go into the space, you know, the lobby looked good before. It looks like a brand-new building today when you go into it. Then right off the lobby, you've got spectacular built-out tenant suites and incredible fitness facility. I wish the pictures that we put in here did justice to it. We just, you know, we haven't done the professional photography yet. Incredible conference room tied into a food service. You know, this particular building's been a slow sub-market. Doing this, we've immediately seen the tour activity pick up, and we've already done 2 sizable lease deals. You know, that was a modest $2.1 million, $7 a foot. I'd say in some cases, it's gonna be around that range or a little more. In a few other cases, we think it could be above that, but we're gonna get a much bigger payoff in the rent differential. I think that's probably on average, you know, a good number with some being a little higher and some being a little lower. Where we're at. Okay For the bulk of these, we're really focusing in on nailing the plans, and we spent a lot of time with our design team, who are fabulous. We think we've pretty much are getting there, and now we're gonna go out and bid and value engineer. I can't quote exactly where we are yet, but it'll should be in that range. The only other thing. Okay I wanna add to that, Rob, is on the call, I think you may have referenced the when we talk about vacancy conditioning or space conditioning, where we leased up some space, and that's typically kind of the equivalent of, you know, what we often refer to as white boxing, and that's a much lower cost. That's, you know, $10 to $12 to $15 a sq ft. Okay, that's helpful. Then last one from me, you know, the 254,000 sq ft of leases that you guys signed, when do the bulk of that start producing revenue or commencing? It's really staggered over the next number of quarters pretty equally. You know, I'd have to go and look, but it's equally staggered over the next four quarters. Okay. Is there any big quarters coming up from previous quarter signings where it's abnormal, or is it fairly smooth when we go back and look at the Q1 signings, et cetera? Is there anything big coming up in terms of third or fourth quarter or Q1 of next year in terms of lease commencements? Yeah. I mean, we can Yeah. I mean, we can focus on. Sure. To focus on one property, and specifically, if you look at our new acquisition in Raleigh, we expect that the occupancy in that property will move into the eighties by Q4. So you'll see a movement in that property specifically. That's a significant amount of the increases. Okay, perfect. Thanks, guys. Appreciate the time. You're welcome. Our next question comes from Craig Kucera from B. Riley Securities. Please go ahead, Craig. Yeah. Hey, good morning, guys. You know, you mentioned some changes in your leasing assumptions during the back half of this year, and I'd be curious, are there any particular markets that are maybe running a little slower than you had expected, or is it a little bit more broad-based? I'd say it's more broad-based. I mean, the return to office when we went back to our original assumptions was starting to, you know, pick up. I'd say we've seen definitely an improvement in our own utilizations kind of in the mid-40s% in the summer, which actually means it should be a fair bit higher than that, right? You're at kind of peak vacation time, and we're still in the mid-40s%. We think it's gonna continue to pick up through the balance of the year. In talking to our tenants, we're seeing, you know, good thoughts on returning back in the fall, so we're feeling good about that. As far as getting leases inked, it's been a little slower than we initially thought. We thought Q4 would pick up a little bit more, and we're pushing some of those based on our latest discussions into early next year. I'd say it's broadly spread. Got it. Just kind of circling back to your comments on kind of pushing things a little bit into 2023, is that? You know, are tenants now requiring more free rent, or is it just a period that kind of they're ready to start and take occupancy from their perspective? Yeah. I don't think really metrics have changed that much. I mean, construction costs were elevating, so TIs were going up. That's leveled off a little bit, I would say recently, so, you know, we're feeling better there. Free rent's still a little elevated from where it's been historically. That really hasn't changed. It's really a function of, you know, getting lease discussions across the finish line and then looking at the build-out time to get people in. It's gonna push into next year in probably a number of cases. Okay. Thanks for the color. Our pleasure, Craig. Today's Q&A session has come to an end. I'm gonna hand it back to James Farrar for any final remarks. Thanks for joining today, and we look forward to updating you on our progress next quarter. Goodbye. This concludes today's call. Thank you for joining. You You may now disconnect your line.