Good morning, welcome to the City Office REIT Inc's 2nd quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, you may press Star, then 1 on your touchtone phone. If you are 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 now begin. Good morning. Before we begin, I'd like to direct you to our website at cioreit.com, where you can view our second 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 give no assurance that these expectations will be achieved. Please see the forward-looking statements disclaimer in our second 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, and thanks for joining today. Through the first half of 2023, our portfolio has continued to perform in line with our expectations. Our second quarter results reflect our focus on steadily progressing leasing as we continue to upgrade and position our premium Sun Belt portfolio. We believe that this strategy will generate strong future results as we execute on our property-level business plans. Utilization levels of our properties continued to trend slightly higher throughout the quarter, ending at approximately 61%. In 2022, we experienced an uptick in utilization after Labor Day, and we anticipate that will also be a catalyst for further return to the office policies this year after the summer vacation season. Our focus on driving leasing activity paid off during the quarter after a slow start to the year. During the second quarter, we completed 224,000 sq ft of total leasing activity, with a healthy 7.2% improvement in renewal cash rents versus the expiring rents. quarter-over-quarter, we achieved an increase in occupancy at nine of our properties, maintained occupancy at 11, and experienced a decline at only four assets. As we've mentioned on prior calls, our continued focus is on enhancing overall occupancy, particularly at our best assets with the highest rental rates. In that regard, our ready-to-lease modern spec suites continued to be a driver for leasing activity. We've leased 16,000 sq ft of spec suites this year, which is a function of the limited spec suite inventory that we had available. Our expectation is that as we continue to deliver spaces under construction, the spec suite leasing totals will accelerate. As of June 30th, with our recent deliveries, we have a 54,000 sq ft of built spec suites in our inventory. We also have approximately 31,000 sq ft under construction or delivery, and over 69,000 sq ft planned to commence construction during the second half of 2023. We focused our new inventory decisions at locations that we believe will be absorbed the fastest. We expect that this program will continue to drive long-term results. Of note, related to property upgrades, during the second quarter, renovations to the park amenity connected to our Circle Point campus in Denver were completed. We led the transformation of the adjacent 2.6 acre park with new hardscaping, landscaping, amenity areas, and outdoor work pods. Accessibility to the park from our buildings was also enhanced, making this incredible garden-like amenity truly integrated with our buildings. The approximately $4 million renovation was completed with funds from a special tax district financing, we were able to secure these major property improvements without coming out of pocket for the costs. With the park upgrades, the existing tenant lounge, restaurant, and high-end fitness amenity, Circle Point is well positioned from a leasing perspective. From a high level point of view, there continue to be headwinds across the commercial real estate industry and in particular, the office real estate sector. Nonetheless, we believe our portfolio of premium Sun Belt properties is well positioned to weather these headwinds and outperform. As we move into the second half of the year, we will continue to focus on optimizing our properties to achieve leasing. We will also continue to operate in a strategic and conservative manner to ensure ample liquidity and to provide ourselves with the flexibility to pursue opportunities as they arise. I look forward to providing future updates on our progress, and will hand the call over to Anthony Maretic to discuss our financial results. Thanks, Jamie. The most significant accounting transaction during the quarter was related to our 190 Office Center property in Dallas. As we had indicated, was likely to occur on previous calls, during the quarter, we consented to hand possession of 190 Office Center to the lender. We made this strategic decision based on our opinion of value of the property and its future prospects relative to the non-recourse loan balance. As a result of this transaction, we deconsolidated the asset value associated with the property, as well as the corresponding debt of $38.6 million. As we had written down the property's value in 2022, this transaction resulted in a minor book loss of $134,000 during the quarter. Moving on to our financial results. Our net operating income in the second quarter was $27.4 million, which is $800,000 lower than the amount we reported in the first quarter. This decrease is primarily attributable to the deconsolidation of 190 Office Center during the second quarter. Related to net operating income, we have seen recent increases in operating expenses. On a year-over-year, same-store basis, operating expenses increased 7%. This is a result of both inflation across various operating cost categories, but also a function of the increased utilization at our buildings year-over-year. We reported core FFO of $14.2 million or $0.35 per share, which was $800,000 lower than in the first quarter. This decrease was also primarily a result of lower NOI from 190 Office Center. Our second quarter AFFO was $7.3 million or $0.18 per share. The largest impact to AFFO was continuing investment in ready-to-lease spec suites and vacancy conditioning, which is a key part of our business plan. The total investment in spec suites and vacancy conditioning in the second quarter was $1.9 million or $0.05 per share. Moving on to some of our operational metrics. Our second quarter same-store cash NOI change was positive 7.5% or $1.7 million as compared to the second quarter of 2022. Block 83 in Raleigh and Park Tower in Tampa had the largest year-over-year increases due to slightly higher occupancy and free rent in the prior year comp period as a result of signed leases. We expect our same-store results will moderate during the second half of the year as prior year comparable free rent periods burn off. Overall, for 2023, we are tracking towards a 3%-4% increase in same-store cash NOI, which is the higher end of our previous guidance range. Our portfolio occupancy ended the quarter at 85.6%, including 83,000 sq ft of signed leases that have not yet commenced. Our occupancy was 87% as of quarter end. Our total debt as of June 30th was $678 million. Our net debt, including restricted cash to EBITDA, was 6.5 times. The deconsolidation of our 190 Office Center property in Dallas and its non-recourse mortgage reduced our total debt by $38.6 million. We have two smaller maturities in the fall of 2023. Both of these loans are secured by high-quality properties. We are currently in late stages of renewing these loans, each on five-year terms with our existing lender. The effective interest rate we expect will be in the high 6% range. As far as liquidity, as of June 30th, we had approximately $90 million of undrawn authorized on our credit facility. We also had cash and restricted cash of $53 million as of quarter end. Last, we have provided updated guidance to reflect year-to-date performance and our expectations for the balance of the year. Our revised guidance ranges are all within the initial guidance ranges we provided at the beginning of the year. We tightened each of these ranges around the most likely outcome based on information we have today. Leasing volumes through the first half of the year were slower, and as a result, we have reduced our expectations for income from speculative leasing in the second half of the year. Our guidance adjustments have a net effect of lowering the top end of our prior core FFO per share range, lowering the midpoint by $0.015. That concludes our prepared remarks, and we will 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. If you choose to withdraw a question, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question today goes to Rob Stevenson. Rob, please go ahead. Your line is open. Good morning, guys. Tony, any additional known move-outs that we haven't talked about on previous calls at this point? Hello? Ladies and gentlemen, please stand by as we reconnect the speakers. Ladies and gentlemen, we have reconnected with our speakers. If you can please continue with your question. Thank you. Hi, Rob. Your line is open. ... You know, the math behind that is if you offset the, the known move-ins versus the known move-outs, we're expecting occupancy to effectively remain flat to the end of the year. Okay. Then you talked on the, the, the prepared comments about some of the debt coming up on FRP and Carillon Point later this year. Is there anything in the pipeline at this point where you're looking at and you're saying, "Hey, you know, if things don't turn around materially, we may wind up turning keys in on anything else?" Or is those two assets that you've done thus far pretty much, you know, likely to be it in the near term? We talked about the 190 on the call, Rob, and previously we mentioned Cascade Station in Portland, which we took an asset write down at the end of last year. We're in the midst of a marketing process there, so it's a little early to comment. We'll probably have more of an update next quarter on what our strategy is gonna be around that asset. Yeah. That loan does mature in May of 2024. Okay. Then, Jamie, I mean, I guess the last one for me is that you talked about the utilization coming back up. Expenses are increasing, you know, the office REIT stocks have had a little bit of a bounce back here over the, you know, the last, you know, 30, 60 days, et cetera. You know, I, I guess, how are you guys thinking about, you know, the, the next, you know, six to 12 months and, you know, the current state of the office industry? So it's a good question. I think you've, you've hit on a couple of the highlights there. There really are a few important factors I think that investors really need to consider when they gauge both the macro position of the office industry as, as well as how each company's position. The first, which has had some changes recently, is really understanding the loan renewal environment. What we've seen is the banking sector has actually started to stabilize, and I think lenders are far more willing to work with quality borrowers. That's a big improvement that will help overall stability for strong borrowers, but not everyone falls in that category. When you look at CMBS loans, which require working with servicers, those are likely to have a much greater challenge. In terms of securing new loans, that remains extremely difficult. Lenders generally want to reduce their overall office exposure, and they've been working with existing loans and seem to have little appetite for making new loans. Why that's important, it means an owner must refinance, you know, effectively with their existing lender. There really isn't much of a bid outside of that. It also means there's very little debt available for buying new office assets today, and many sellers, if they want to transact and have unencumbered properties, really are trying to look at providing seller financing in, in order to be able to transact in today's environment. Bottom line, you know, we think this situation is likely to result in limited trades in the time period you talked about, Rob. It's gonna also add stress to owners who are unable to finance or refinance or, or work with their existing lenders. As a result, we think there's gonna be a lot more assets that are likely to go back to lenders over the next year. I suspect you're not gonna see many of the, you know, the trophy or best quality assets going back to lenders. It's gonna be concentrated probably on properties with lower occupancy, lower utilization, or assets that really aren't well-positioned in today's leasing world. In the lender's hands, those assets are likely to bleed tenants. So the, the third kind of main factor, which really is impacted by the, the two things I just mentioned there, is leasing. Overall, we're starting to feel better about this part of our business for well-located and well-positioned assets. What we've seen is tenants have really deferred a lot of their leasing decisions over the last 3.5 years since COVID started, and they continue to express the desire to have employees come back for the majority of their time. That's an important differentiator that really impacts how each company's positioned. In our case, you know, we have over 300 tenants across our portfolio. We generally have smaller average tenant sizes, which is a stronger subsector of the market. We average around 15,000 feet. We have well-located and amenitized buildings in great cities and a strong financial position. We're feeling like we're in a good spot here, but what we believe is gonna happen is tenants are gonna continue to firm up their leasing plans. They're really gonna focus on the best locations, the best amenitized buildings, focus on buildings that have a strong financial position, and that's gonna be an area we think we're gonna benefit from. You know, across the office industry, there are a lot of properties that have high leverage, less well-capitalized owners, and as some of those properties go back to lenders, we think leasing is really gonna concentrate into a limited subset of the overall industry, and it's gonna happen at a time when there's virtually no new development starting. You know, a lot said there. To summarize all that, I think you're gonna see refinancing challenges and limited sales outside of lender repossessions for the next while. I think assets that are quality and well-located in the hands of well-capitalized owners are going to result in a good opportunity to really drive their rent roll and win tenancy. Everybody has some tenant rightsizing that they're gonna need to do over the next little while. If you're strongly capitalized, I think it's gonna create an opportunity to grow your overall cash flow and, and your, your position. Okay. I, I guess one follow-up, you know, given the comments about debt renegotiation, et cetera. Tony, the, the renewals that you're looking at, that you're renegotiating now on the high 6 range, is that impacted in the updated interest expense guidance, the $32.5-$33, or is that in addition to that, that we need to be thinking about earnings wise? No, it's included in that range. Depending on where rates fall when we... We're, we're gonna be doing a 5-year floating rate debt with a corresponding swap to effectively fix the rate. Depending on where that lands, when we close, we'll land, you know, we're either lower or at the top end of that range. Okay. Thanks, guys. Have a great weekend. Thanks, Rob. Thank you. The next question goes to Barry Oxford of Colliers. Barry, please go ahead. Your line is open. Great. Thanks, guys. Looking at the spec suite, you said you had $69,000 planned for construction in the second half. Have you put most of those dollars to work, or are we gonna see those dollars being put to work in the back half of the year? Yeah. just to clarify-- Hey, Barry, it's Tony here. Yep. We have 31,000 sq ft that is currently under construction. Under. There is another 69- Right, I got that. ... 1,000 sq ft. Yeah, so another 69,000 in addition to that, that's in- Yeah planning stages now, that we expect to commence before the end of the year, but probably not complete all. In terms of what that translates into dollars, we, we have budgeted about $6 million more that will be spent in the second half of the year. Okay, that's the number I was looking for. Now, are you getting the rents on these spec suites that justify the IRRs that, that, that you're looking for? Are you still getting, you know, fairly healthy rental rates? Hey, hey, Barry, it's Jamie. Yeah, we've been pleased. Yeah ... with the rental rates, particularly when you're building quality spec suites. We've been happy with where rates are landing for those. Then again, we've concentrated our program in kind of our, our, you know, better assets, highly leasable assets, and so, you know, the rent rate that we're achieving is in line with where we expected it to be. Right. It's a lease up, but, but it feels like you, at least, it, it looked like you indicated that the leasing was a little slower than what you had anticipated. Yeah, I, I think that's fair on the spec suite side. The delivery has been a little slower as well. Okay. Does... is that just kind of an aberration, or is it something to be concerned about? Yeah, well, again, at the beginning of the year, if you remember, we had, bank failures, and basically when that happened, leasing just kind of froze, right? Right. Right. ... what we're seeing with the stability over the last few months, we seem to be getting back onto a trend of kind of normal business, and we've delayed kind of our own thoughts of what we're going to achieve on leasing and pushed it out a bit, but it seems to be improving. Okay. Loosely translated, foot traffic is picking up? Yes. Perfect. All right. Thanks, guys, for the color on that. Thanks for the questions, Barry. Yep. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. Our next question goes to Craig Kucera of B. Riley Securities. Craig, please go ahead. Your line is open. Yeah, thanks. Good morning, guys. Appreciated the color on the second half of 2023 spec suite spending. I think you mentioned $6 million. Can you give us a sense of, of what was expensed through AFFO in the second quarter? Yeah, sure. We have spent a total of $3.2 million year-to-date on those spec suites and vacancy conditioning. $1.3 million in Q1, $1.9 million in Q2. As I mentioned, we're expecting approximately another $6 million for the second half of the year. Effectively what that, what that shows is, you know, we had a little bit of delays in terms of permitting and construction delays, but expect to catch up by the second half. Okay, great. That, that's helpful. Are the renovations at Pima and Camelback, have they been expensed or have those been capitalized? In terms of, you asked about Pima and? Camelback. I think they're highlighted on your investor presentation, each at three... Yeah ... $3 million, I believe. Yeah. Camelback was effectively finished last year and it isn't in this year's numbers. Right. The Pima renovation is, is currently ongoing, and there's a portion that hit the first half of the year and the remainder in the second half. Okay, got it. You know, there's, there's obviously been some pretty extreme heat in the Southwest, in particular, Phoenix. Are you expecting to have that meaningful impact on NOI this quarter, or you think you'll largely be able to pass that through? Yeah, we're, we're not anticipating, you know, a, a major change because of that, Greg. A lot of these leases have pass-throughs, so it's, it's probably not going to impact us too much. Okay, great. Thanks. That's it for me. Thanks, Greg. Thank you. We have no further questions. I'll now hand back to Mr. James Farrar for any closing comments. Thanks for joining today. We look forward to updating you on our progress next quarter. Goodbye. Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.