Good morning, ladies and gentlemen. Welcome to the Chartwell Retirement Residences Q4 and Year End 2022 Financial Results Conference Call. I would now like to turn the meeting over to the CEO, Vlad Volodarski. Please go ahead, sir.

Thank you, Valarie. Good morning everybody and thank you for joining us today. There is a slide presentation to accompany this conference call available on our website at chartwell.com under the Investor Relations tab. Here at Chartwell joining me are Karen Sullivan, President and Chief Operating Officer; Sheri Harris, Chief Financial Officer; Jonathan Boulakia, Chief Investment and Chief Legal Officer. Before we begin, I direct you to the cautionary statements on Slide 2, because during this call, we will make statements containing forward-looking information and non-GAAP and other financial measures. Our MD&A and other securities filings contain information about the assumptions, risks and uncertainties inherent in such forward-looking statements, and details of such non-GAAP and other financial measures. More specifically, I direct you to the disclosures in our 2022 MD&A under the heading 2023 Outlook for a Discussion of Risks and Uncertainties and Forward Looking Information, for a discussion of risks and uncertainties relating to the ongoing effect of the pandemic on our business. These documents can be found on our website or at sedar.com. Turning to Slide 3. I am grateful to our teams for delivering a strong finish to another vice challenging year. Their fast execution of our innovative sales, marketing, operations and asset management strategies produced 17.3% fourth quarter growth in funds from operations driven by 80 basis points growth in our same property occupancy, 2% growth in same property adjusted net operating income, and the growing contribution from our acquisition and development portfolio. With our team's unwavering focus on delivering exceptional resident experience, they also had done an excellent job building a strong foundation for the acceleration of our growth in 2023 and beyond. The enhancements to our care dining and activities programs, local property specific marketing strategies, new technology solutions, enhancements to our recruitment and performance based compensation programs, new training and development programs are just a few examples of these building blocks that I believe will facilitate our growth in the years to come. We've also been making progress in our portfolio repositioning. We completed the sale of two BC long-term care residences in Q4 2022 entered into an agreement to sell a small non-core residence in Ontario, closed operations in two other non-core Ontario properties, while successfully relocating most of the residents to other travel properties. The completion of the sale of our Ontario long-term care portfolio is now expected in the second or early third quarter of this year due to the delays in the government license transfer process. Several other properties are undergoing specific asset management activities, ranging from large capital upgrades to changes in their operating model for a better alignment with specific demand in their markets and improving efficiencies. Having visited nearly 50 of our residences in 2022 and especially after spending three days with our general managers at our leadership conference in February, I feel confident that our teams have the skills, passion, and drive to deliver exceptional resident experience to their residents and growth in occupancy and cash flows in the years to come. They also have the tools and supports they need to be successful in this journey. I will now turn the call to Karen to talk about specifics of this work. Karen.

Thanks Vlad. Moving to Slide 4. In Q4 2022, our initial contacts grew by 20% compared to Q4 2021 an increase 25% year over year. Our permanent move-ins increased quarter over quarter by 17% and were slightly higher by 1% compared to pre-pandemic 2019. In November, 2022, we launched a new customer relations management system. You already senior CRM, which has increased functionality including real-time sales KPI dashboards, and built-in pricing and customer quote workflows. In April of 2023, we will launch added features including system generated leases. We used the launch of the CRM to hold a sales blitz, encouraging prospects to attend our November open house event. We also included a PMI commission bonus for our retirement living consultants designed to assist us with move-ins in Q1 of this year. We followed this up in mid-January with another open house event as we continue to focus on the importance of prospects coming into our retirement residences to understand the Chartwell experience and the benefit of seniors living now that the pandemic restrictions have been eased. Other sales strategies introduced in Q4 included a Chartwell gives thanks day in October to recognize community partners and encourage initial contact generation. We also continue to focus on resident referrals through Club Chartwell as these have the highest closing ratios at 22%. Our retirement residences across the country will be having monthly club Chartwell events throughout 2023 to encourage our current residents to make a friend a neighbor. In Q4, we also introduce experience stays as a tool for RLCs to invite prospects who may be hesitant but curious or deciding between multiple residences to experience Chartwell for a two-day complimentary stay. Our 12 business development managers across the country who interacts with hospitals, physicians, hope and care agencies, realtors, financial planners, and other community influencers, had a successful 2022 increasing their initial contact by 11.5% compared to 2021, and increasing PMIs from these lead sources by 21%. In order to drive leads, we're also working more closely with resident referral agencies in Quebec where these services are well established and testing this service in the very competitive Ottawa region. Also in Ottawa, we have added a community care coordinator to work directly with discharge planners to assist residents with timely assessments for both shorts stay and permanent move-ins in our 14 area retirement residences. Our marketing team continued to remain agile by developing property specific campaigns with personalized residence specific copy and photography, and a personalized call to action using a range of advertising mediums including print, radio, direct mail, and digital ads. Our social advertising strategy now includes Facebook, Instagram, and LinkedIn driving a book, a tour call to action. We're also in the midst of a full chartwell.com refresh that will deliver an enhanced digital customer experience in terms of education and decision making, content enhanced property pages, and an improved visual design to increase conversions. We've also added starting ad prices and will be adding even more pricing transparency by suite when the full website refresh is completed in April. Finally, we have just launched our new brand campaign this February, designed to differentiate Chartwell and Demystify retirement living. Turning to Slide 5, our operations teams continue to focus on recruitment and retention of staff and reducing the use of staffing agency workers. In addition to the RFPs that we did in Ontario to significantly reduce the number of agencies, we were using which resulted in better rates, reduced surge pricing and standard contract language. We are now underway with a similar RFP in Quebec for service workers. Our recruitment team continues to assist our residences in areas with high staffing agency use, and we have deployed some of these talented individuals directly in communities to help with hiring events, interviews, and offers. We're also working with agencies to employ foreign workers and established partnerships with a number of educational institutions as well as organizations that assist people with special needs with work placements. In Q4, we put in place an enhanced employer referral program then compensates our current staff if they recommend a new staff member who stays for at least three months. In addition, we continue to use shift callout software to encourage our own staff to take open and available lines, and we have been addressing wage increases in light of current market conditions through our collective bargaining process. We also continue to develop tools and training to assist our retirement residences with the competitive ground game, a recruitment ground game, including speed to lead when we receive qualified resumes. All of these efforts are resulting in early signs of reducing agency spend in 2023. I would now like to turn it over to Sheri to discuss our financial results.

Thank you, Karen. As shown on Slide 6 in 2022, net income was 49.5 million compared to $10.1 million in 2021. For 2022 FFO from continuing operations was $102 million or $0.43 per unit compared to $117.9 million or $0.53 per unit in 2021. This decrease was due to a number of factors. Adjusted NOI from continuing operations declined $9 million, which was made up of lower same property adjusted NOI of $15.6 million on higher net pandemic expense staffing agency, utilities, food and supplies expenses, and lower occupancy, which were partly offset by increased revenue from rental and service rates, lower NOI by $7.4 million related to dispositions and repositioning activities and higher adjusted NOI of $14 million from our position and development portfolio. In addition, our G&A expenses were higher by $5.3 million and we experienced higher finance costs of $4.1 million. These factors were partially offset by lower depreciation of PP&E and amortization of intangible assets used for administrative purposes of $3.1 million. Total FFO was $126.9 million or $0.53 per unit for 2022 compared to $132.3 million or $0.59 per unit in 2021. Long term care discontinued operations contributed $0.10 per unit to total FFO for 2022, an increase of $0.04 per unit compared to 2021, primarily as a result of government reimbursements for prior year's direct operating expenses and higher ancillary preferred and retirement accommodation revenues. Turning to Slide 7. Although occupancy declined slightly year-over-year at 0.3 percentage points, our in-year 2022 occupancy trends significantly improved through the year and compared to 2021. The decline experienced at the beginning of 2022 was lower than our typical pre-pandemic seasonal decline and significantly improved compared to 2021. In 2022, our same property occupancy started growing in April and increased 2.1 percentage points by the end of the year, with the majority of our markets showing recovery in occupancies. In our top 15 markets, 11 markets gained 3.1 percentage points from April to December 2022, while four markets Calgary, Durham, Ottawa and Quebec are particularly competitive and these markets are taking longer to recover. In Q4 2022, occupancy in Quebec City began to increase. Calgary and Ottawa occupancy stabilized and Durham continues to be challenged with occupancy continuing to decline in this market. Overall, occupancy trends were positive through 2022 with increasing monthly move-in activity through the year, higher move-ins in aggregate for 2022 compared to 2021 and lower move-out activity in aggregate for 2022, compared to 2021. As shown on Slide 8, in Q4 2022, net income was $47.5 million compared to a net income of $18.7 million in Q4 2021. For Q4 2022, FFO from continuing operations was $27.7 million or $0.12 per unit compared to $23.9 million or $0.10 per unit in Q4 2021. This was due to $4.7 million higher adjusted NOI from our acquisition and development portfolio and $1 million higher adjusted NOI from our same-property portfolio. Lower depreciation of PP&E and amortization of intangible assets used for administrative purposes of $2.7 million, these factors were partially offset by lower NOI of $1.6 million from our dispositions and repositioning portfolio and higher finance costs of $3.3 million. Total FFO was $33.4 million or $0.14 per unit per Q4, 2022 compared to $28.4 million or $0.12 per unit in Q4 2021. Long-term care discontinued operations contributed $0.02 per unit to total FFO for Q4 2022 and Q4 2021. Slide 9 summarizes our same property operating platform's results. Our same property adjusted NOI increased by $1 million or 2% in Q4 2022 compared to Q4 2021 on higher revenue of 4% as a result of rental and service rate increases and higher occupancy partially offset by higher direct property operating expenses from higher agency, staffing, uitilities and foods costs. Same property occupancy was 78.4% for Q4 2022 compared to 77.6% for Q4 2021, an increase of 0.8 percentage points. Our Western platform achieved strong growth of 2.4 percentage points. Ontario increased 0.5 percentage points, and Quebec increased 0.4 percentage points. All platforms also delivered occupancy gains compared to Q3 2022. In Q4 2022 transfer, move-in and move-out activity were comparable to pre-pandemic levels. Turning to Slide 10, you'll see our monthly same property of retirement occupancies. Our same property weighted average occupancy rate continued to increase in January 2023 with a 0.1 percentage point increase compared to December of 2022. In February, 2023, same property weighted average occupancy decreased 0.4 percentage points primarily due to seasonally lower move-in activity. Our previous monthly occupancy forecasts were based on known leases and notices on hand. We consistently experienced mid-month move-ins, which have averaged 0.3 percentage points in the last three months and 0.2 percentage points in the last 12 months. We have changed our forecast methodology to include in addition to known leases and notices on hand mid-month move-ins based on the last 12 months average. Based on this methodology, we are expecting our same property weighted average occupancy to decrease by 0.4 percentage points in March, 2023, primarily due to lower seasonal move-in activity. For December, 2022 to March, 2023, we are estimating an occupancy decline of 0.7 percentage points. This is an improvement from pre-pandemic declines, which averaged 1.5 percentage points from December to March. Again, this is primarily due to seasonality of move-ins. Turning to Slide 11, since 2019, minimum wage in three of the four provinces we operate in increased between 10% and 14%. This combined with high inflation and government intervention and labor markets during the pandemic resulted in significant increases in our labor costs. In addition, the pandemic exacerbated staffing shortages previously limited to certain markets and are now more prevalent to sustain service delivery to our residents. We increased our reliance on staffing agencies, which charge premiums of 50% to 200% over the prevailing market compensation rates. In 2022, high inflation also impacted the costs of goods supplies and other goods and services used in our operations. We will continue to balance the needs of our residents and the sustainability of our business, and in 2023, we expect to increase rates above previous levels. Rental and service rates for our existing and new residents are expected to be between 4% and 7%. In addition, optional service rates will increase between 8% and 10%. The rate increases for our existing residents take place on their individual lease anniversary date occurring throughout the year. Expected rate increases for each of our operating platforms for 2023 are as follows. For Western Canada 3.5% to 4% which is a blend of both private pay and government funded increases, Ontario 4.5% to 5%, and for Quebec 4% to 4.5%. Moving to Slide 12, same property adjusted NOI was 39% of adjusted revenue in 2019 and has declined to 31% of adjusted revenue in 2022, primarily due to lower occupancy and higher adjusted direct operating expenses. In 2022, total cost paid to staffing agencies amended to 5% of adjusted resident revenue compared to 3% of adjusted resident revenue in 2019. As Karen described, we have implemented numerous recruitment, retention and agency management initiatives to reduce our reliance on agency workers and expect to gradually see improvements through 2023 and 2024. In 2023, we do expect to improve our NOI margins through occupancy recovery, rental and service rate growth and expense control. In 2023, we will continue to improve our management platform to enhance our ability to grow our business and support our operations teams. We are refocusing our resources on our priorities to grow occupancy and reduce agency premiums, and we expect our G&A to remain consistent with 2022 levels. Turning to Slide 13, at March 2, 2023, liquidity amounted to approximately $184 million, which included $54 million of cash and cash equivalent, and $130 million of borrowing capacity on our credit facilities. In addition, our share of cash and cash equivalent held in our equity accounted JVs with 16.7 million. We finance our operations primarily through long-term fixed straight mortgage debt and generally have access to low cost CMHC insured mortgage financing. We intend to continue financing our properties through this program, including accessing their mortgage financing top up programs, and for those properties operating at high occupancy levels, converting conventional mortgages to CMHC debt, and placing mortgages on certain currently unencumbered properties. Our mortgage maturities remain well staggered with an average term to maturity of 6.1 years at December 31st, 2022. In 2023, we have 121.5 million of debt maturing bearing interest at a weighted average rate of 3.68%, of which 39.6% is CMHC insured and bears an average rate of 3.92%. Refinancing of our mortgages is proceeding in the normal course. At the date of this MD&A, 10 year CMHC insured mortgage rates are estimated at approximately 4.4%, and five year conventional mortgage financing is available at 5.6%. In December, 2023, our senior unsecured debentures for the face value of $200 million will mature. We expect to refinance these debentures with new senior unsecured debentures, other unsecured or secured debt instruments, subject to market conditions. The previously announced sale of our Ontario LTCs is expected to generate net proceeds of approximately $268.2 million, which we intend to use to pay down our credit facilities. On closing of the LTC transactions, our unencumbered asset pool currently valued at $1.1 billion will decline by approximately $49.9 million and certain of the sold properties will be removed from the borrowing base collateral for the secured credit facility, which will result in a reduction in availability of approximately $26.9 million. We expect the LTC transactions to close in late Q2 or early Q3 2023. We expect that with growth in EBITDA and redeployment of the proceeds from asset sales to reduce our debt level, our credit metrics will improve over the course of 2023. I will now turn the call back to Vlad to wrap up.

Thank you, Sheri. The dedication, ingenuity and drive of our people, give me the most confidence that we are on the path of strong future growth and value creation. As you can see on Slide 14, this growth will also be supported by the favorable demographic trends with the growth of the senior population accelerating to 4.3% per annum for the next 10 years and growing at 2.9% thereafter. With the continuing shortages of long-term care accommodation across the country, this population growth will generate significant demand for retirement accommodation. Every year, as part of our brand awareness research conducted by IPSOS, we asked the survey participants about their interest in exploring retirement residence options in the next two years. This gives us an indication of consumer sentiment toward retirement living. As you can see on Slide 15, not surprisingly during the peak of the pandemic, consumer sentiment declined significantly in 2020 and 2021. In 2022, our survey shows the recovery of this sentiment back up to the pre-pandemic levels. Turning to Slide 16, the combination of rapid growth in construction costs and the impact of the pandemic resulted in a decline in new construction starts. Based on the recently published research conducted by Sean Macquarie and their team at Cushman & Wakefield, both units under construction as a percentage of inventory and new construction starts as a percentage of inventory in 2022 where at their lowest level in seven years. Accelerating growth in senior population, ongoing shortages of long-term care bed, improving consumer sentiment, and low level of new construction starts are creating a strong foundation for occupancy and cash flow growth in our sector. I'd like to finish by telling you a story of one of our residents, pictured on Slide 17. I find the stories of our residents and staff heartwarming. They are also important because they speak to the impact that we have on our residents' lives, the lives of their families and the communities in which we operate. They speak to the kind of company Chartwell is and the kind of culture we have. They're deserving to be shared. Lauren, a retired high ranking RCMP officer had complex care needs, experiencing life as a law enforcement officer comes with many pitfalls, some of which last a lifetime. For Lauren, dementia, delirium and confusion were working against his ability to transition from the hospital, and other retirement home denied his residency. Now in his 80s, Lauren and his devoted family needed our help. The teams at Chartwell Waterford were able to see the individual behind the medical charts and were willing to invest countless hours working with Lauren and his family to develop an action plan. Once it was developed, Lauren moved to our memory living neighborhood. As time passed, Lauren improved daily and became one of the most positive and active residents. One day, he asked our staff, do you think I can graduate from memory living to having my own larger apartment on the other side? This is not the question we get often, if ever. With teamwork, family support and commitment to make his life better, on February 9, Lauren moved into his own independent supportive living apartment with a view of the escarpment and the ability to make more choices for himself. Today, Lauren can often be seen around the community participating in various activities and never missing an opportunity to express his gratitudes to our team. This gratitude goes both ways, as Lauren has taught us all an invaluable lesson, that hard work, resilience and positivity goes a long way, even in the most challenging circumstances, irrespective of one's age. We would now be pleased to answer your questions.

Thank you. We will now take questions from telephone lines. [Operator Instructions] First question is from Jonathan Kelcher with TD. Please go ahead.

First question just on occupancy and trends you're seeing. I guess, it looks positive with new supply and all that and you have a 95%, I guess, aspirational target for 2025. But do you -- how do you see it trending over the course of this year and into 2024?

So based on our leading indicators, we do expect the seasonal decline in occupancy to begin to reverse in April. And we are optimistic based on the lower construction starts, the demographic growth and our many sales, marketing and customer experience initiatives that I mentioned that we can achieve growth higher than last year. Also, I want to add that we are seeing significantly lower outbreak activity this year. And just to be clear, we had three times the number of days in outbreak in our homes in 2022 compared to 2020 and 2021 combined albeit with less severe symptoms in 2022. And again, this lower outbreak activity makes us also optimistic with respect to higher occupancy growth.

And then, I guess that outbreak commentary feeds into my next question just on I guess agency and your other net pandemic expenses. I guess, Sheri, from your comments, it sounds like agency will drift from 5% of revenues down. Do you see it getting back to the 3% it was pre-pandemic this year or is that going to take a couple years?

I think it'll trend down each quarter in 2023. There are very specific action plans to reduce those costs. And as Karen mentioned, we are seeing lower outbreak activity, which are improves our ability to execute on those initiatives. I would certainly hope that in 2024 we are back towards pre-pandemic levels.

And then the other net pandemic expenses, is there anything permanent in those or do they sort of go away as outbreaks go away?

I believe it'll dissipate.

Next question is from [indiscernible] with CIBC. Please go ahead.

So, the disclosed 80.4% payout ratio under your current credit agreement that looks like it's a bit closer to a 100% when you exclude discontinued ops. Where do you see that going in 2023 and does the disposition affect that agreement from a collateral perspective?

Yes. So, the number that was quoted in the MD&A is adjusted for a number of things as we negotiated the amendments with our lenders. In terms of the overall distributions coverage, our expectation is that by closer to the end of this year, we will be very close to covering our distributions with AFFO, and we'll continue to reduce that payout ratio as 2024 and 2425 rolls out.

Okay. And then, so in Quebec, how long do you think it'll take to push occupancy and rental rate growth to a level where they can offset any elevated cost?

The elevation in costs in Quebec is primarily related to agency staffing, so I do feel that bringing down those agency staffing costs will result in us getting to positive NOI growth in Quebec as those costs come down.

Okay. And then I know margins improved in correlation with occupancy, but are you targeting specific growth in margins for 2023?

So, as the occupancy recovers and with the increased pace of the rental rate increases and services increases that Sheri just mentioned, our expectation is that we will be able to get to back to pre-pandemic margins once we get closer to those occupancy levels that we had in 2019 before the pandemic hit.

Thank you. Our next question is from Himanshu Gupta with Scotiabank. Please go ahead.

Sheri, you mentioned agency staffing costs and other pandemic expenses will come down kind of every quarter this year and back to pre-pandemic levels in 2024. Is that correct?

In 2024.

Okay. And would you say that agency staffing and other pandemic expenses will come down more of a second half of the year or do you expect recovery improvement in Q1 as well, like this quarter and the next quarter as well?

I think, we'll see the recovery gradually through the year, and definitely would look towards the back half of the year being improved. When we come into January, we are still in have staff holidays and flu season. So, typically, we would have more staff vacancies in a normal January, February, March timeframe. Q2 tends to lighten up a little bit, and then we have summer vacancy coverage, as well where we'll need to have more agency staff. So, it'll profile down through the year with these initiatives.

Okay. And then when you say, like kind of back to pre-pandemic next year, are you betting in a certain occupancy gains also in that assumption?

So back to pre-pandemic levels in terms of agency costs is what we are expecting for 2024. In terms of targeting a specific percentage of revenue in the current year, I would look at it more we are targeting to get back to dollars in 2024 that we had set aside previously in our budgets.

Okay. And just to clarify further, I think, what was your agency and other starting expenses this year? Was it around like $16 million, $17 million, roughly, what was the amount? So that amount can go over next year, something like that? Is that what you are getting to?

The majority of it -- our expectation is that majority of that will go away next year.

Okay. That's great, yes. Thank you. Thank you for that. My next question is on the land increases, projected rent increases of 4% to 7% this year. So just wondering when was the last time you managed like a 7% rent increase. And do you think it will impact occupancy, especially in the market with new supply or over supply there?

Yes. I can't recall whether we ever had 7% rent increases other than in some specific properties and some specific circumstances. But we also have been operating for the last 20 years in a very different inflationary environment. And so, those increases are reflective of the cost increases that we are experiencing over the last number of years now. And so, that's really the reflection of that. Whether this will impact occupancy? We are looking at occupancy rates, potentially incentives based on individual properties and individual specific markets. So overall, no, we do not think that these increases will impact the occupancy. We are being selective. That's why we have these ranges. We are being selective for the increased level of increases that we are applying in different markets or some competition exists, then it may be lower, where we have lower competition than we have the ability to increase rates faster.

Correct. So, you are basically balancing the rent increases as well as the occupancy at the same time. So, maybe that gets me to the next question on kind of a high level question. So, what is the number one goal or target for -- to actually achieve this year? Is it like getting to a certain occupancy number, margin number or FFO number or certain leverage? Like, what is number one priority for the sale projected?

There is two, one is occupancy, two is reduction of agency spend. That's what all team here is focused on and that's what we are dedicated to do this year.

Okay. And the last like, how much occupancy you need to be at the end of the year to, call it, a successful year for Chartwell?

As Karen pointed out, our expectation is to exceed the growth from April to December that we had last year. I think we have all the indicators that we will be able to do it and then grow from there in 2024 and 2025.

Awesome. Okay. And then one final question from me on balance sheet, I think $200 million of unsecured debentures coming due next year or end of this year rather. Any thoughts there, and when is your credit rating review now?

Yes. Thanks, Himanshu. Certainly, we are positive on the credit review. We started to see signs of things improving, with revenue growth, same property, occupancy growth, same property NOI growth. And so we do feel that we are turning the corner and the fundamentals in the industry are very strong, lots spoken about consumer sentiment returning, back up almost pre-pandemic levels at pre-pandemic levels. So, we are certainly looking forward in that direction. We do have the annual review that typically takes place in the spring in Q2. And DBRS, we are hoping we'll take that into account.

In terms of the renewal of the denatures, the maturity is in December of 2023, and we would look at unsecured denatures, other unsecured debt or secured debt. The unencumbered pool is 1.1 billion right now, so there's a lot of balance sheet room from that perspective.

And Sheri, if I look at, the CMHC insured mortgage financing, I think that's at a much lower rate. What probably can we achieve in the unsecured dementia market? Will that come into consideration? Like what rate you can get from CMHC versus unsecured market?

Yes, absolutely, Himanshu. There are a number of properties in the unencumbered pool that are now leased up and doing very well and are really good candidates for CMHC financing, which is more cost effective.

Thank you. Next question is from Tal Woolley with National Bank. Please go ahead.

Just on the agency usage, is it like a broad based kind of across the system you see it? Or is it really in like a handful of places where…

Yes, there are definitely some markets that stand out Quebec City, Ottawa, Collingwood, places like that. So, we actually don't have much of an issue in Western Canada. So, it is to some extent, specific now. When homes went into outbreak, they would've had to use it. I wouldn't say regardless, but they did have to use it and then could go back on track as soon as they came out of the outbreak, but there are definitely more challenging markets for recruitment.

And so, I guess in your answer there, you're sort of saying it's a death of -- it's the death of the labor pool is the problem? It's not like an operational issue that's creating the need for agency?

No, it's the labor pool.

And then just to go back to, I think it was time I was asking about, rent growth flat. I was wondering longer term just to sort of beyond the near over the next few years. Should we be expecting to see more aggressive rental rent and service rate increases and sort of what we were used to seeing in the past? Because I think everyone's operations are somewhat similar in the industry and the inflation kind of hits everyone.

Yes, absolutely. I mean, we will always balance the interests of our residents. And so in place rent increases, I think we'll always be cognizant and measured about how we go about doing that. When it comes to market rates, they are just that market rate. So, it will be market driven and with the low construction starts, the demand growth that we have out there, there's going to be probably more demand than supply and that will create the ability to increase market rates. And now in the last couple of years, projects that are in construction have to be underwritten to the rates that are a lot higher than what is in place today. So, I think those dynamics are already in place now, and as occupancy recovers, I think there'll be a lot opportunity -- a lot more opportunity to drive market rate increases to new residents.

And is your sense in chatting to peers that everyone that everyone's kind of moving or what you're seeing competitively, like everyone's kind of in this boat and approaching it the same way?

I believe so.

Okay. Another quirk that we might have to deal with this year is just the resi housing market is depending on who you talk to, they'll say, actually it's not doing so bad. Or some will still say, I am concerned just sort of about the state of the housing market going forward. It obviously is such a key asset to help fund retirement living. But it's been a long time since we kind of had a bear market in housing. I'm just wondering, do you have an idea of like what sort of the experience would be if we sort of did see a pullback in housing prices? Like do you expect that it would have an impact on your ability to attract new residents? And do you have a sense of the amount?

Yes, Tal, like it's never one factor, right, like it's always a combination of factors. So when we look at the housing market, on the one hand we have our own experience in the U.S. and the studies that a little bit aged now that are coming from the U.S. that would say that, there is no correlation between housing prices and occupancies in retirement living. There is correlation between velocity of sales and occupancy in seniors housing. So as long as the homes are selling, doesn't matter what the price is, at least the U.S. experience and our experience in the U.S. actually confirms that, which shows that the occupancy should not suffer. I think, the reality is if people are unable to sell their home or do not want to sell their home at the price that is currently in the market, it may delay their decision to move into a retirement home. The other reality though is that the majority of our residents moving to us because they need help and that need doesn't disappear whether there is robust residential market or not. So, I think, it's a combination of all of these factors if I sum it all up. And then there is this growth demand because of the more population and fewer units available to them over time. So, all of that to say there's probably going to be a delay, if the prices declined significantly and quickly. But it is just going to be that a delay not sort of a dramatic change in the demands.

Okay. And then just back to Quebec, obviously the group selection process is sort of working its way through the CCAA or it's working its way through CCAA right now. Can you talk to a degree about any interest in assets for sale? And also what impact you could see in the Quebec market if control does change hands here?

Well, I'll answer second question. I'm not sure there's any impact on Quebec market when control changes hands from one operator to another that happens all the time. And so, I don't think there's going to be impact on the market in particular. In terms of our interest, this, we look at this just like at any other potential acquisition opportunity and in this market with our cost of capital, it needs to be extremely attractive for us to even consider deploying capital. So, I would say, the probability of us being the highest bidder or participating in this process at any large scale where it requires significant deployment of capital is low, if it comes with no or low deployment of capital maybe. But this is very early stage in terms of our thinking of that. And this process is in the hands of the monitor right now. So we'll wait and see what happens.

[Operator Instructions] Our next question is from Pammi Bir with RBC Capital Markets. Please go ahead.

Thanks. Good morning. Just you talked about a number of initiatives that it's helped to drive occupancy, some better result. Can you talk maybe or elaborate on some of the initiatives that are having perhaps a particularly positive impact? And I'm curious, especially in Quebec, how much -- I'm not sure if you can quantify, but how much of an impact is the reengagement with the referral agent be having?

Yes. That's certainly having some help in particular with residents who have careening. So, yes, that would be helping. And we are, as I said in my comments, seeing if that's something that could help us in Ottawa. I think overall some of the strategies that are really helping us are -- we have these broad-based strategies for all of our homes, but we are also really focusing property-by-property on what they actually need to succeed in their market. And that's everything from how we how we do our marketing for those homes to more specific pricing et cetera. So I think all of those things have helped. I think our new Senior CRM is helping our sales force. And I think the transparency of pricing through our website is something that the consumer is also looking for. So maybe those are some of the highlights.

Maybe if I may add the focus renewed and expanded focus on referrals, on resident and family referrals, and Karen mentioned in her remarks this success that we have been seeing from the business development managers activities where we get referrals from community influencers, those numbers are up significantly. Those are the highest conversion ratios type of leads and we are seeing more of those coming through. And so we continue to focus on those areas as well.

The other thing just to add, just getting people to come out to the residences has such a positive outcome, I think. And people haven't been coming over the last number of years and you go to the properties and you see that now and that is I think going to help us a lot.

Right, I guess just Western Canadian portfolio has had a pretty good recovery. Ontario and Quebec had lagged. Is the perhaps expectation that Quebec could perhaps maybe outpace the recovery in Ontario? Or is it you kind of see them moving in line with each other over the course of the year?

I mean, early in the year Quebec has been doing pretty good in 2023. So they are ahead now, but its competitive rates. I think our expectation is, we are going to see growth from old platforms which one is going to come first, while it's over to platform leads to compete on that. I think the dynamics in terms of the market dynamics are similar. We have challenging market in Quebec City in Quebec. We have challenging markets of Durham and Ottawa in Ontario. So the teams will have to overcome those concentrations in those markets for them to get ahead of each other. But I think other than that, the dynamics generally in the market are similar and they should both grow fast.

Got it. I thought the consumer sentiment survey was interesting. Now, looking at, I guess, the category for yourself in the 65 plus age cohort, that segment has -- is taking longer to come back versus the other two, I guess categories that you're tracking. So what can you do to do that -- to the actual resident itself or themselves in terms of helping them get over some of the obstacles? Like what's the pushback you're getting? And what's sort of being done to help that?

A couple of thoughts, Pammi, first of all, this is a survey of a certain number of people. So, really looking at the trends as opposed to at absolute numbers and one or two percentage points, I'm not sure how telling, and that's not really how we look at it. The trend is positive in all categories. Now, what can we do to overcome the hesitancy of people to move into retirement living? Remember, we serve 5% of people over the age of 75 in retirement homes in Ontario. So 95% of those do not live with us. And these, objections are not new now, and we don't have them really differently than what we had before. People erroneously I would say, but want to stay in their homes and age in their homes. And so what we are doing is part of it is telling story, like I told you at the -- my prepared remarks. The stories of people who are -- have experienced the retirement living. We're trying to amplify their voices, voices of these people and their families because it doesn't really matter what I say, it doesn't really matter what some kind of educator will tell people to do. I think there's probably better probability for them to listen to somebody like them who experience this living and experience the benefits of this living. So that's what we are trying to do, and I think industry will have to also do a better job at that. We do have series of financial, for example, education for people to explain to them why they can't afford the retirement living. But the reality is I think it's not a rational objection when people say, I can't afford it. They just don't believe that they can afford it. It's sort of, but perception is reality and that's what we need to change. But I think it's more likely that will be changed with the stories of people who experience living with us and in the sector and those voices we're trying to amplify.

Just maybe one last one, coming back to sort of the maybe capital recycling and just how do you see the dispositions shaping up for the balance of this year?

Well, we certainly are expecting to close the sale of the Ontario long-term care properties. You saw us announcing the sale of smaller home retirement residence, that it's non-core. That should close in probably two weeks or so. And then there are a number of other properties that we are looking at potential ways of improved value values of these properties. And historically you've seen us selling a few properties every year. I think we'll continue to do that and continue to evaluate our portfolio. At this point in time, I'm not prepared to give you a number of properties or a dollar -- value right now, but a number of them are under review for various reasons. Some may be capital improvements, some may be repositioning to different operating models, and some may be for dispositions eventually.

Thank you. My next question is from a participant. Please state your name and your company then proceed with your question. Please go ahead.

Hello my name is Lily. I'm an independent investor. I'm wondering what types of metrics are used to track the quality of life of residents? And how is this data aggregated and how is it used to make changes?

So, we have a nursing department that helps support all of the homes. So, they have a consultant that goes out and helps with quality. We also, depending on the jurisdiction, meet the legislative requirements. So in Ontario, that's our RHRA. In Quebec, we have certification. We have quarterly quality compliance and risk committee that meets and looks at the data that's generated from our various reports, and we develop strategies based on that data.

And the other thing, Lily, thank you for your question. We do annual resident satisfaction surveys. And that survey covers, I think, it has 36 questions, give or take. And it covers all areas of resident experience in the home, from dining services to activities programs, to the care services, to the environment that they in. And these surveys are done on an individual home basis. We report overall results in our filing. And in fact, this is one of our targets, strategic targets that we set for ourselves to increase the resident satisfaction scores. Every home then looks at their own report and develop specific action plans to improve the areas where they're falling short or build on the areas where they're doing something good already, and so, those are the ways that we trying to improve.

And we also have what we call brand experience assessments. So our, again, our support teams go out to our properties and do we call BEAs, and that covers care, food, activation, et cetera.

Thank you. And is there any future plan to maybe incorporate more of a technology side for residents as maybe there's especially since COVID feeling of isolation and technology really being the big push towards more collaboration and more being together?

I mean, certainly over time we -- as Sheri speaking, we expect that we will continue our investments in technology initiative, and we are really pleased to your point the pandemic brought about isolation early on in the pandemic. Our teams developed some great tools to help families stay connected. And we are moving forward with a number of initiatives on point of care type technology and certainly would be continuing to focus on making sure we're abreast of the latest technological developments over time.

Thank you. There are no further questions registered at this time. I would like to turn a meeting back over to you, Mr. Volodarski.

Thank you very much. Thanks for joining us today. And as always, if you have any further questions, please do not hesitate to give any one of us a call. Goodbye.

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