Hello, and welcome to The RMR Group Fiscal Third Quarter 2023 Earnings Conference Call. All participants will be in the listen-only mode. Should you need assistance, please speak to a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touchtone phone. To withdraw your question, please press star, then 2. Please note, today's event is being recorded. I'll now turn the conference over to Kevin Barry, Director of Investor Relations. Please go ahead. Good morning, thank you for joining RMR's Third Quarter of Fiscal 2023 Conference Call. With me on today's call are President and CEO;; Adam Portnoy, and Chief Financial Officer, Matt Jordan. In just a moment, they will provide details about our business and quarterly results, followed by a question-and-answer session. I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on RMR's beliefs and expectations as of today, August 10th, 2023, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, which can be found on our website at www.rmrgroup.com. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we may discuss non-GAAP numbers during this call, including adjusted net income, adjusted earnings per share, adjusted EBITDA, and adjusted EBITDA margin. A reconciliation of net income determined in accordance with U.S. Generally Accepted Accounting Principles to adjusted net income, adjusted earnings per share, adjusted EBITDA, and the calculation of adjusted EBITDA margin can be found in our financial results. I will now turn the call over to Adam. Thank you, Kevin, thank you all for joining us this morning. On July thirty-first, RMR announced an agreement to acquire CARROLL, a vertically integrated multifamily platform with approximately $7 billion in assets under management. RMR acquired 100% of the equity interest in CARROLL for $80 million in cash, with a potential earn-out consideration of up to an additional $20 million based on the deployment of future capital. With approximately 700 employees and long-term relationships with high-quality global institutional partners, the CARROLL platform gives us access to market knowledge and expertise. The business also has a pipeline of attractive opportunities to further diversify RMR's capabilities beyond core plus real estate. We expect the transaction to close this fall, at which time the founder will step down and the CARROLL platform will be integrated into our organization, with the current management team remaining in place. As we have discussed in the past, an important aspect of RMR's growth strategy involves utilizing our strong balance sheet to pursue strategic acquisitions. Our focus when assessing these opportunities has been to ensure any transaction complements our already considerable scale by further diversifying our platform, increasing our private capital AUM, and providing us access to new institutional relationships. We believe the CARROLL transaction achieves these objectives and is a great strategic fit for the following reasons. First, the transaction provides us an attractive opportunity to enter the multifamily space, which is the only major commercial real estate sector that we do not have a significant presence. After the closing of the acquisition, multifamily AUM will represent approximately 16% of RMR's total AUM. Outside of the industrial real estate sector, multifamily has some of the strongest tailwinds, given the continued shortage of new housing in the U.S. In addition, CARROLL has been focused on deploying capital for multifamily investments in Sun Belt markets, some of the strongest overall markets in the U.S. Second, expanding our private capital AUM has been a key strategic priority for us, and the CARROLL acquisition doubles our private capital AUM to approximately $15 billion. AUM's RMR's total, total AUM will increase nearly 20% to approximately $44 billion, further advancing our position as a leading alternative asset management platform. Our institutional relationships will also increase substantially from the capital partners that invest in CARROLL's funds and its managed properties. The existing CARROLL Multifamily Venture currently has the potential to make in excess of $3 billion of additional multifamily investments, putting us in a position to continue to scale the platform in the near term. Given the historical track record of generating returns to investors in excess of 30%, we believe deployment of this capital is achievable within the next couple of years. Third, we plan to drive growth by leveraging CARROLL's vertically integrated capabilities that address all aspects of multifamily investments, from acquisitions and property management to asset management and innovative marketing strategies. CARROLL's presence in the markets they operate has been achieved through their successful consumer brand, ARIUM Living, which we believe has strong market awareness and a track record of exceptional resident experiences. The success of its vertically integrated platform has been demonstrated through the growth of CARROLL's Third-Party Management Portfolio, which should only accelerate once this transaction closes. In addition to driving revenue growth, the third-party management business also provides critical insights into the markets in which CARROLL operates. We anticipate that the successful operating aspects of the CARROLL platform will also benefit the broader RMR platform. Lastly, the acquisition is expected to be immediately accretive and presents a tremendous opportunity to create long-term value for our shareholders. Like RMR, CARROLL is a profitable, scalable, and asset-light business with a recurring revenue stream and longer-term upside potential from promote fees on any new investments made after the transaction closes. Over time, we believe there is the potential to create revenue synergies as we integrate capabilities across the broader platform, including multifamily lending and new development opportunities. In summary, we believe this transaction is directly aligned with our strategic objectives to further diversify RMR and drive future growth. It is highly complementary to our current platform and represents a compelling redeployment of the $100 million in proceeds we generated from the recent TravelCenters of America transaction. We have been impressed throughout the diligence process with the management team and their commitment to the platform, their employees, and their capital partners. We think this is an incredible opportunity for both sides, and we are excited to welcome the entire CARROLL organization to RMR. Now turning to our third quarter results. Our results once again highlight RMR's resilient business model, especially amid the current unsettled market conditions and commercial real estate volatility. This quarter, we reported adjusted earnings per share of $0.48 and Adjusted EBITDA of $24.6 million, with our quarterly dividend remaining well covered and a payout ratio of approximately 67% of distributable earnings. From a macro perspective, commercial real estate conditions continued to be impacted by market volatility and interest rate uncertainty during the quarter. While real estate transaction volume remains slower than last year, it is recovering modestly as market participants gain more confidence in transacting with improved visibility to the possible end of the Federal Reserve's current interest rate hike cycle. Our organization's focus continues to be on executing the strategic plans of our clients with the goal of delivering shareholder returns that will ultimately benefit both our clients and RMR. We are highly incentivized to improve the equity values of the public equity REITs we manage, as it has a direct impact on RMR's potential revenue growth. To put this in context, if we close the gap between enterprise value and historical cost of the equity REIT's underlying assets, we could generate approximately $65 million of incremental revenues annually, with close to 100% flow through to Adjusted EBITDA. With respect to operating fundamentals, leasing activity across our platform remained strong as a result of the hard work and commitment of our experienced real estate professionals nationwide. Despite the challenging macro conditions impacting commercial real estate, our team arranged nearly five million sq ft of commercial leases on behalf of our clients, which resulted in over 15% roll-up in rents and a weighted average lease term of more than 10 years. These leasing results continue to demonstrate our organization's ability to deliver value to our managed assets through creative leasing strategies and a continuous focus on tenant retention. In closing, we made some progress on our strategic objectives during the quarter, despite ongoing volatility in the commercial real estate market, and we took an exciting step forward on our private capital growth strategy with the acquisition of the CARROLL platform. With a healthy balance sheet and strong financial profile, we are well positioned to pursue further opportunistic growth strategies, and we remain confident in the long-term trajectory of RMR's business. With that, I'll now turn the call over to Matthew Jordan; our Chief Financial Officer, who will review our financial results for the quarter. Thanks, Adam, good morning, everyone. For the third quarter, we reported adjusted net income of $8 million, or $0.48 per share, and adjusted EBITDA of $24.6 million, with both measures finishing at the higher end of our quarterly guidance. In addition to recurring adjustments for separation costs, equity method investments, and technology transformation costs, adjusted earnings this quarter excludes $1.05 per share of termination and incentive fees, and an add back of $0.03 per share for transaction costs associated with strategic transactions, including the CARROLL platform. As Adam highlighted earlier, we expect the CARROLL transaction to be immediately accretive. In the first full year after closing, it is our expectation that the CARROLL platform's recurring fee business will contribute between $11 million and $13 million of adjusted EBITDA and $0.22-$0.26 of distributable earnings per share. Given the uncertainty of when the CARROLL transaction may close, any guidance for next quarter that I provide will be focused solely on RMR's legacy business. management and advisory service revenues were $47 million this quarter, which was down approximately $1 million sequentially. This decrease was in line with expectations and was primarily attributable to the completion of the TA transaction on May 15. As it relates to next quarter, based upon the current average enterprise values of our managed equity REITs, a full quarter impact of the TA transaction, and lower projected construction volumes, we expect revenues to be between $43 million and $46 million next quarter. Turning to expenses. recurring cash compensation this quarter was approximately $34 million, a decrease of $300,000 sequentially, due primarily to statutory caps being met for taxes and benefits and a favorable headcount mix. Looking ahead to next quarter, we expect recurring cash compensation to be closer to $33 million, based on employees continuing to reach statutory tax and benefit caps, as well as some strategic restructuring of corporate office roles we've undertaken, all of which will help drive an increase in our projected reimbursement rate to 46%. G&A costs of $9.6 million this quarter includes approximately $400,000, or $0.01 per share, of technology transformation costs. On a normalized basis, G&A should be approximately $9 million next quarter, excluding continued technology investments. Aggregating all the prospective assumptions I outlined earlier, next quarter, we expect adjusted earnings per share to range from $0.43-$0.47 per share, and adjusted EBITDA should range from $23 million-$25 million. We closed the quarter with almost $300 million in cash. After the closing of the CARROLL acquisition, we expect to continue to have no debt and over $200 million in cash on hand for further opportunistic growth strategies, which gives us tremendous flexibility to continue to take advantage of additional opportunities to deliver attractive risk-adjusted returns for our shareholders. That concludes our formal remarks. Operator, would you please open the line to questions? Yes, thank you. At this time, we will begin the question-and-answer session. To ask a question, you may press star then one 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. At this time, we will pause momentarily to assemble the roster. The first question comes from Bryan Maher with B. Riley Securities. Thank you, and good morning. Adam, can you maybe touch upon the CARROLL transaction and what set that particular opportunity apart from other multifamily opportunities you were looking at? How quickly do you think you can implement, you know, the EBITDA savings that you discussed in your PowerPoint that you guys put out, which would effectively reduce the, you know, EV/EBITDA multiple costs on the transaction? Sure. Good morning, Bryan. Thanks for that question. You know, look, we've looked at a lot of opportunities over the last several years, as we've talked about in prior calls and in meetings with investors. I think what we really liked about CARROLL is it checked a lot of boxes for us that we've talked about. You know, and I said in my prepared remarks, you know, they're vertically integrated, multifamily platform, so it checks the box that they're vertically integrated like us. You know, we think that's actually a competitive advantage in the marketplace, that we run our real estate. We don't outsource the running of the real estate. They also are obviously, multifamily is the one hole in the piece of the puzzle for our commercial real estate platform. It fills that. They're the right size. You know, $7 billion of AUM is sort of the sweet spot. We've been talking about, you know, sizes of organizations that would be sort of the perfect fit, given where we are in our life cycle. Something between $5 billion and $10 billion was always sort of the sweet spot for us. Their private capital relationships. You know, our strategic objective was to always grow our relationships. They have over 20 very deep relationships with very well-established institutional investors that we hope will become our clients, and we can maybe do more with them in the future. Maybe an aspect that we that was sort of additive, that we maybe weren't necessarily looking for, but is really the fact that they focus the majority in their investments, not all of it, but the majority, on what we would call value add. You know, you buy, you fix, you sell, and that's how you get a return for s- for their investors. We're much more of a long-term hold, core plus, core real estate shop. They do some of that investing, that core real estate investing. I think that sort of expertise that they bring to the table is a real complement to what we do. So I think, you know, it just checked every box possible for us, and that's what just made it very compelling. In terms of the EBITDA, I'll turn it over to Matt to discuss that. Yeah, Bryan, I, I would say we feel pretty good that we're going to hit the $11-$13 in year 1, and we're aligned with the management team in how we're going to get there through a combination of the business performance. You know, getting this transaction behind them will be critical and has been critical because it's put the business on hold in a lot of ways. They are aligned with us in identifying synergies, closing open roles, and looking for economies of scale across the combined platform. I think we feel really good about the numbers we've publicly disclosed and getting that in the first full year of operation. Thanks. Adam, you discussed in your prepared comments, you know, continuing to pursue other growth opportunities. Can you be a little bit more specific there? Would it be more multifamily, or would it be in any other particular sector? Sure. Generally, it's an interesting environment we're in. Given the distress going on more generally in commercial real estate, I would say we are looking at more opportunities now than at any 1 time in the last several years. Meaning there are multiple things that have been presented to us that we are evaluating. We think it's a pretty interesting time, and I'm not sure we'll end up executing on any of the other opportunities, but we are actively looking at other things. To your specific question, would it be in multifamily? I don't think multifamily is the particular focus of what we would do, a follow-on acquisition. You know, CARROLL really fills that void for us. CARROLL will be the basis for our growth of our multifamily investments and platform going forward. You know, sort of to answer your first question a little bit, too. You know, one of the things we really liked about CARROLL, too, that sort of distinguished it from the others, was the management team, and specifically, you know, the management team that's going to be staying on. It was clear to us that they're, you know, they're highly, they're very good at what they do. In meeting with their investors as part of our diligence, it became very clear that they were very highly regarded, and we plan to keep that entire team in place. I think that's also, you know, why, you know, we felt we, we were excited about CARROLL, it's also why I don't think we're looking to, you know, expand more into multifamily. I think we have the right team with the CARROLL platform to grow our multifamily investments. Okay, and thanks. Just last for me, you know, usually in your comments, you talk about kind of the highlights of the four managed REITs during the quarter. I'm going to assume for the sake of this call, that you're probably not going to want to go down the DHC OPI road. Is there anything that stood out, particularly good or bad, among your four managed REITs that you might want to highlight? Touching on all of them, I mean, you, you cover all of our REITs, Bryan Maher. For those listening, you know, look at, I think at SVC, OPI, ILPT, they all had really good quarters for different reasons. You know, at DHC, it sort of, we had some good results in our shopping center portfolio was offset by some unfortunate setbacks and sort of other parts of the portfolio. All I will say about, you know, the OPI-DHC potential merger that is in the market is from RMR's perspective, and we're here talking about RMR, you know, we're really sort of indifferent. We're neutral to whether the transaction were to occur or to not occur. We've been very vocal about that. I think the, the REITs themselves have been very vocal about that, that, you know, we're sort of indifferent and neutral, whether the revenues we would collect as the manager in a merged vehicle versus two separate vehicles would be virtually identical. It's really, we don't really have much dog in that fight from RMR's perspective. Okay. Thank you, Adam. Yep. Thank you. Once again, just a reminder, please press Star and then one, if you would like to ask a question. The next question comes from Ronald Kamdem with Morgan Stanley. Hey, just going back to the CARROLL, I think you provided a little bit more color. It sounds like, so the G&A and the structure and everything is, is, is going to stay the same. Is the idea just, just to grow the platform through more of value-add, sort of multifamily? Just maybe a little bit more color on how, you know, both sort of the operating structure, the G&A and the strategy to grow, the CARROLL would be helpful. Sure. I think, you know, certainly short term, call it the next few years, we're going to continue to run that or have that business run very similar to the way it has been running, with the focus on doing exactly what they've been doing. The reason for that is they're very good at what they do. And what they have been doing and what we expect them to do for the next 2, 3 years is again, to be very focused on, you know, value-add, multifamily investments. That's the nature of their relationships with their partners. I don't see that changing over time. I do think that we could see a complement to that over time, and this could be 2, 3 years out, is that we could really bring to bear on the, on the CARROLL platform, more core, core plus investing. Meaning, you know, one of the things at RMR, through our relationships, is we have some pretty deep relationships with those folks that are LPs that are interested in holding assets for more core, core plus real estate. We think there's an opportunity, perhaps over time, that we could bring some investments to bear at CARROLL that will be in addition to multifamily, core, core plus. So I think, you know, short term, next 2, 3 years, you're going to see it very much focused on, you know, value-add investing, doing very much the similar thing as what they've been doing. Over time, they will continue to do that, but we hope to expand that repertoire and be able to basically do some more investing into core, core plus. Look, obviously, we would hope that we could expand the platform. RMR is a. I'm talking geographically. RMR today is a nationwide operating platform. You know, we have 2,200 assets in every state, in, in Canada and the Caribbean. You know, CARROLL is very focused on the Sun Belt. Again, short to medium term, they're going to stay focused on the Sun Belt. Over time, could we see them expanding into other parts of the country? Yes, that is something that we would hope to maybe also do, is expand their reach and expertise to other parts of, of the country. Great. My follow-up was just on the, so the $11 million-$13 million of Adjusted EBITDA includes $5 million-$6 million of synergies. What, where are those synergies coming from? If it sounds like it's not G&A, maybe what are the other synergies opportunities there? Thanks. Well, a chunk of it will be G&A. I think you're going to see some of that through technology costs, economies of scale on, on different service providers, and I think there'll obviously be some back-office personnel alignments, whether that's through closing open positions that currently exist across CARROLL, and/or putting, mixing and matching the organizations. It's not just on CARROLL's back. There may be ways that we should be rethinking things at RMR to collectively get those synergies. So a lot of that's in process, and will play itself out during the integration phase and, and the ongoing process as we work towards closing. Okay, great. My last one was just on, you know, I think historically, you talked about sort of private capital raise and, and doing sort of joint venture of assets. Wondering if there's any sort of more conversations happening on, on, on sort of JVs of, of assets across any other REITs? Thanks. We're in pretty regular dialogue with our partners about potential things. I would say there's nothing imminent going that is advanced in any sort of real way. I think our partners are open to expanding. They would like to expand. You know, some of the issues are, you know, I think most of the growth in some of our joint ventures that are up and running today is we would like to—both sides would likely grow them more externally through external acquisitions, more than trying to take assets from our existing REITs, let's say. And there's just, as we've talked about, there's not a tremendous amount of transaction activity going on in the marketplace today. Things are getting better, and there's limited asset classes that I think some of our partners are interested in expanding in. Industrial happens to be the one one of the areas that we do have significant capital out, and I think we could grow that possibly through some external acquisitions in those JVs in the coming quarters. There's not a lot of... I mean, there's been a couple of headlines, you know, in the last quarter about some big transactions, you know, specifically with some of the larger private equity firms, but there's not a lot of large transactions occurring out there. Those are sort of one-offs. So I, I don't expect a lot of growth in those joint ventures in, let's say, the next few quarters, but that doesn't mean that they aren't open to growth and we could grow them modestly, or opportunities could present themselves, and we could end up growing them sort of more, more aggressively than what I'm talking about here as well. Got it. Thanks so much. Yeah. Thank you. This concludes the question and answer session. I would like to turn the call to Adam Portnoy, President and Chief Executive Officer, for any closing comments. Thank you all for joining us today. Operator, that concludes our call. Thank you. As mentioned, the conference has concluded. Thank you for attending today's presentation. You may now disconnect your lines.