Good morning, ladies and gentlemen, and welcome to the Chartwell Retirement Residences Q1 2024 Financial Results Conference Call. I would now like to turn the meeting over to the CEO, Vlad Volodarski. Please go ahead.

Thank you, Giselle. Good morning 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. Joining me are Karen Sullivan, President and Chief Operating Officer; Jeff Brown, Chief Financial Officer; and Jonathan Boulakia, Chief Investment Officer and Chief Legal Officer. Before we begin, I direct you to the cautionary statements on slide two, 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 Q1 2024 MD&A under the headings 2024 Outlook and risks and uncertainties and forward-looking information for a discussion of risks and uncertainties. These documents can be found on our website and on the SEDAR+ website. Turning to slide three, our teams successfully carried the strong momentum of occupancy and cash flow growth into Q1 2024 with occupancy increasing 610 basis points year over year. Same property NOI growing 24.7%, generating FFO increase of 61.2%. We expect this occupancy growth momentum to continue and forecast June 2024 same property occupancy of 87.3%. Our teams continue to methodically execute our operational, sales, and marketing strategies, focusing as always on delivering personalized memorable experiences to our resident, peace of mind to their loved ones, and supporting each other. As I meet with our residents and team members in our residences across the country, I feel firsthand the kindness, warmth, and dedication to the residents' well being that are the key components of the Chartwell experience. It makes me proud to be part of this great team. I will now turn the call to Karen to provide an operational update.

Thanks, Vlad. Moving on to slide four, in Q1 2024, our marketing strategies led to an increase in personal tours from marketing sources of 33% compared to Q1 2023. Total personal tours from all sources increased by 13% quarter-over-quarter. In Q1, we had nine weeks of net positive activity leases minus notices, eliminating our typical winter occupancy dip. We saw an increase in all sale KPIs in Q1 2024 compared to Q1 2023. Initial contacts were up 16%, personal tours up 13%, permanent move-ins up 16%, and signed leases up 13%. Since our website launch last year, we have consistently driven better quality conversions. Our new digital strategies including continuous optimization of Google search and analytics resulted in higher quality of calls to our contact center. We have improved our website performance particularly in content, feed, security, accessibility, and search engine optimization. Our Open House in January was very successful in driving new leads. ICs generated from this event were 1384, an increase of 400 prospects in comparison to January 2023. We've already held our first Open House of Q2 in April, with very strong traffic further increasing our pool of qualified prospects. Plans are underway for another Open House event in June. We continue to use a diverse range of digital and traditional media channels to support our Open House campaign. In order to continue to enhance our prospect pool, our dedicated business development managers are working with hospital discharge planner and local seniors group. Other strategies for the coming months include exclusive presentations at several key conferences including the Economic Development of Alberta Conference, the Independent Financial Brokers of Canada Conference, the Elder Planning Issues Conference, and the Alberta Retired Teachers Association Conference. Turning to slide five, we reduced our staffing agency costs by 60% in Q1 2024 compared to Q1 2023 through focused recruitment and retention activities. We continue to concentrate on a targeted nursing strategy that incorporates a referral bonus program, agency staffing versions, reaching out to non-practicing nurses that recently left the profession, exploring strategic partnerships with expert immigration organizations and campus outreach activities for recent graduates. We've now fully implemented an electronic health record in our residences in Ontario and BC and have begun the process to roll this out in our Quebec homes, which should be completed by the end of the year. Not only will this assist our frontline care staff with assessments and care plans, but it's already having a positive impact on our care revenue, which increased by 23% in Q1 2024 compared to Q1 2023. We announced the closure of Heritage Glen Retirement Residence on March 19th. And to date, we have found alternative accommodation for 155 of the 187 residents. We are continuing to work with our third-party placement consultants on plans for the remaining residents. We also continue to focus on locally driven property-specific strategies to improve occupancy and drive overall performance of each of our residences. One example of this is the repositioning of Chartwell Rouge Valley in Markham, Ontario to better serve the Chinese community. We have made changes to our programs and activities and dining services and have a number of staff and managers who are able to speak Cantonese and/or Mandarin. This strategy resulted in a 2,900 basis point occupancy growth in the last 12 months with current occupancy at 96%. I'll now turn it over to Jeff to take you through our financial results.

Thank you, Karen. As shown on slide six in Q1 2024, net loss was $2 million compared to a $9.3 million loss in Q1 2023, primarily due to higher resident revenue, lower depreciation of property, plants and equipment, higher net income from joint ventures and lower G&A expenses. Partially offset by deferred tax expense in Q1 2024 as compared to a deferred tax benefit in Q1 2023, higher direct property operating expenses, absence of income from discontinued operations due to the completed LTC transactions, lower gain on asset sales and higher negative changes in fair value of financial instruments, primarily due to increases in trading prices of our trust units. FFO from continuing operations increased 87.6% and FFO from total operations increased 61.2% in Q1 2024 compared to Q1 2023. As operating results in our core property portfolio continue to show strong improvement. In Q1 2024, our same property occupancy increased 610 basis points to 86.1% and our same property adjusted NOI increased by 11.3 million or 24.7%. FFO growth benefited from $1 million of lower G&A expenses, primarily due to lower compensation costs as we continue to execute on our plan to achieve efficiency improvements. Q1 2024 G&A included 0.6 million of severance related to these efficiency initiatives. Slide seven summarizes our same property operating platform results. All our platforms posted occupancy gains in Q1 2024 compared to Q1 2023, which positively impacted our results. Our Western Canada platform, same property adjusted NOI increased 3.1 million or 20.1%. Our Ontario platform, same property adjusted NOI increased 6.5 million or 25.8%. Our Quebec platform, same property adjusted NOI increased 1.7 million or 33.3%. Turning to slide eight, at May 9, 2024, liquidity amounted to approximately $279.5 million, which included $37.5 million of cash and cash equivalents and $242 million of borrowing capacity on our credit facilities. For the remainder of 2024, we have $141.1 million of mortgage debt maturing at the weighted average interest rate of 3.32%. We expect to renew or refinance these loans during the year. We also have $125 million term loan maturing in May 2024. We expect to refinance or repay this loan with proceeds from CMHC financing on our unencumbered properties. At May 9, 2024, 10 year CMHC insured mortgage rates are estimated at approximately 4.57% and five year conventional mortgage financing is available at approximately 5.75%. Moving to slide nine, with the continuing strong prospect traffic and leasing activity, we expect occupancy to continue to grow in 2024. We now forecast to achieve 87.3% same property occupancy by June of this year. We've been using targeted incentives in certain markets to support this rapid occupancy growth. As more residences achieve higher occupancy rates, we expect to gradually reduce the use of these incentives. We believe that improving occupancies combined with lower new supply coming to market will support higher than historical market rate increases over the next several years. We expect these dynamics will result in the growth of our adjusted operating margins above the current levels. I will now turn the call back to Vlad to wrap up.

Thank you, Jeff. There's never been a better time to be in the senior living business in Canada. With strong demand for our services driven by the demographic growth of the senior population, lower pace of construction activity, continuing shortages of long-term care beds and the obsolescence of some of the existing inventory, our sector is poised for sustainable long-term growth. Our teams are hard at work to position Chartwell to be at the forefront of this growth. As illustrated on slide 10, our company continues to focus on three key areas to accelerate this growth. We are in business of providing seniors with a great place to live. We strive to provide our residents with personalized memorable experiences because we believe that these experiences will result in high resident satisfaction rates. Very satisfied residents are four times more likely to refer their friends to Chartwell. With over 50% of our move-ins coming from referrals, increasing the volume of referrals will drive and sustain high occupancy rates, which in turn will improve profitability. We believe that only highly engaged, caring and dedicated employees can deliver these personalized memorable experiences to their residents. That is why we focus most of our time and investment on employee engagement, resident satisfaction and occupancy growth. We're also in the process of transitioning our management operations to a more agile and scalable platform. Over the last four challenging years, we learned that we could do things faster. We're doing more to empower those closest to the customer to make decisions, to take actions and experiment. We're leveraging our platform to provide them with the necessary tools, including various technology solutions, training and targeted support to help them outperform. We're reviewing all our corporate support processes and eliminating low value at work, implementing technology solutions to enhance efficiency of our support services and re-imagining our corporate support functions to align with this new way of working. We continue driving our portfolio optimization and growth initiative, investing in our existing properties to ensure their long-term competitiveness, pursuing acquisitions of newer high growth properties and strong markets and divesting non-core residences. To date in 2024, we completed the acquisition of one property, expect to close on the second acquisition from Batimo in the next few weeks and announce an operation closure of another non-core property. We continue to investigate several other strategic growth opportunities in our market. I will now close our prepared remarks with a story from one of our residences as pictured on slide 11. I'm thrilled to share a recent media story about our incredible residents at Chartwell Allandale Station in Barrie. Residents [Shirley Monger, Christine McSaminco and Eleanor Ball] (ph) put their baking skills to the test, turning out more than a dozen apple pies as a thank you to local first responders. With the assistance of general manager, Kyla Krachuk and armed with their freshly baked goods, the group set out to hand deliver these pies to the local fire hall, police station, hospital and ambulance station. This act of kindness is part of Chartwell Allandale Station's HOPE initiative, helping others to purposeful engagement, allowing residents to utilize their skills and lifelong hobbies while giving back to their communities. Kyla said, it's best when our seniors give to our community, it allows them to experience fulfillment, autonomy and connection to their community. This is just one example of the amazing contributions that our residents and employees are making in their communities across the country. I invite you to visit our media center page on Chartwell.com to read more stories about our residents making headlines across the country. Thank you for your attention this morning. We will now be pleased to answer your questions.

Thank you. [Operator Instructions] Thank you for your patience. The first question is from Lorne Kalmar from Desjardins. Please go ahead.

Thanks. Good morning, everybody.

Good morning.

On the Heritage Glen closure, and apologies if I might've missed it, what type of pricing do you expect? And I believe you're selling it. And what would be the NOIimpact once it's closed?

Thanks for the question. It's Jonathan here. So, you would know that we were operating it as a retirement residence at less than 60% occupancy for many years. And so, it's being repurposed and renovated as a multi-residential building. The property wasn't well-suited to continue as a retirement home. And when you look at the vacancy rate in the region of retirement homes versus multi-res, it made a lot of sense for everyone for it to be repurposed as multi-residential. But the sale is still conditional. And as such, we're not giving details just yet on price and impact.

Fair enough. And then, I think there was a mention of another operational closure. Could you maybe give us a little bit of detail around that? And may be also just an outlook in terms of how many of these are kind of left in the portfolio and the pace at which you expect to close them maybe on an annual basis, if you can?

There was no other operational closures that we mentioned. We meant Heritage Glen. That's the only one that is in progress now. And in terms of the future, there are no immediate plans of doing any other closures of the homes. We continue to look at our portfolio and performance and continue to evaluate each other on its merits. At this time, there are no other plans.

Okay, fair enough. And then, lastly, just on the announcement around the Ballycliffe sale, I think the original disposition proceeds were 64.5 million. Can you give us an idea of what you think you can get now with the revisions to the LTC funding model?

Yes, so the building's still not fully constructed or handed over to operations. We will relaunch the sale process, as we said, once it is. And we are in discussions with the original buyer in terms of their interest to buy it. Like you said, we think it's going to be worth more than the $64 million that was in the forward purchase agreement. I don't have a number for you now, but the new funding model is going to -- is going to positively affect its value. Other considerations also come into play for a buyer, including financing costs and what other considerations they might have. But certainly, the funding model is going to help the value.

Okay, great. Thank you so much for taking my questions. I'll turn it back.

Thank you. The next question is from Jonathan Kelcher from TD Cowen. Please go ahead.

Thanks. Good morning.

Good morning.

Just to close out on Heritage Glen, I guess at 60% occupancy, it wouldn't have been contributing much of any NOI. Is that fair to say?

That's correct.

Okay. On the Batimo, you're acquiring the two properties this quarter. There's two more where they have the right to put the assets to you. Do you expect to be acquiring those later this year?

We're working with Batimo. We have been continuously on finding the right strategy and the right timing to acquire these properties. Right now, we're focused on the one that we just closed last week and the one that we expect to close in the next few days. There might be one more down the pipe, but we're not actively working on anything that's imminent.

Okay. And then, I think if I recall correctly, in the MD&A, both those ones you're acquiring have north of 8% debt. I think on the one you've acquired, you said the debt is due December 1st and you can refinance it, but what about the other asset? Should we think about that as a similar timeframe in terms of refinancing?

We're going to be pursuing -- hey, Jonathan, we're going to be pursuing financing with CMHC on both of those. And so, we'll kickstart that as soon as the second closes. So, the timing may even be earlier than December. That's just the maturing of the existing facility.

Okay, but both will get done this year. That's fair to say.

Yes, we anticipate both being done this year.

Okay. And then, last for me, just on the, Karen, on the electronic health records, and could you maybe walk us through how you sort of translate to more use of that as increasing the care revenue? And then, what's the potential going forward there? And lastly, how material is it? What's sort of the dollar amount we're talking about?

So, because we're capturing it electronically, we can track it so much better and we do assessments on a regular basis, and that's when we can determine whether people need additional care services, and then add those to the assessment, which hooks directly to the billing. So, that's what I think is helping us, rather than it all being paper-based and more disjointed from the billing portion. So, that's sort of the practical application of that.

And Jonathan, it's a combination of electronic health records and the care assist program, Karen's team rolled out over the last couple of years. There are homes that makes access to this additional care a lot easier for the consumer. It's much more clear than what ourselves and other competitors had in place in the past. And so, I think the pickup in the care revenue is a combination of those two things, not just electronic health records. And in terms of materiality, it is not a significant portion of our overall revenue, but it is significant for improving the lives of our residents and helping them to stay longer with us, which is very important.

Okay, that's great color. I'll turn it back, thanks.

Thank you. [Operator Instructions] The next question is from Himanshu Gupta from Scotiabank. Please go ahead.

Thank you and good morning.

Good morning, Himanshu.

So on the sales KPI, I think you mentioned permanent move-ins were up 13% in Q1. Can you tell how many actual move-ins were there in the quarter? And then how they are trending in Q2 so far?

We don't have the absolute numbers at our fingertips. In terms of the trends, they continue to be very positive and we continue to see pretty strong traffic. Karen mentioned the open houses. Both January and April saw the highest number of initial contacts and people coming in, checking us out that we've ever seen. And that gives us a lot of encouragement that the positive trends will continue for the remainder of the year and beyond.

Got it, okay. So, I think in Q4, you disclosed something like I think 2200. Would that be in the ballpark or maybe even higher than that? Or you can come back to me on that.

Yes, we'll have to come back to you.

Okay, fair enough, fair enough, okay. And then, on the -- speaking to occupancy, good occupancy momentum on the same property portfolio. But is there a reason why there was no occupancy growth in the growth portfolio in Q1?

We'll have to take a look at it and get back to you on that as well. There may be some specific properties that are being repositioned or the composition of portfolio.

Yes, some properties moved out of the growth portfolio into the same property portfolio as well. But we can follow up with you on that.

Yes, these ones are harder to compare, right, because their properties get added and taken out of the growth portfolio over the years. It's not the same subset of properties there. That's why the focus always is on the same property, which that property that we own for a continuous period of time. So, the comparison is apples to apples. In the growth portfolio, it's not the case.

Okay, so maybe, let's clarify here. The repositioning portfolio is the one which you are going to sell to Welltower. So, that category goes away, kind of goes away from Q2.

Not all of it.

Not all of it, but most of it.

The majority of it is that. But there are also properties that we either changing the capacity or investing significant capital or that are seeing some other activities on the side.

Okay, okay. So, that's repositioning. And now the growth portfolio is the one which you are retaining from Welltower in the June.

That and also properties that were recently acquired that were not stabilized or that were recently developed that are in lease up still.

Okay. And do you think the growth portfolio should ideally outperform the same property portfolio in the next one year in terms of the upside on NOI?

Yes, probably this will be newer properties in that portfolio that higher growth and we should see higher growth on that. Having said that, as I just mentioned in my remarks, the environment out there is very positive for everybody who is in the sector and we still have quite a bit of room to grow in the same property portfolio, so, our intent to realize on both these opportunities in both portfolios.

Okay, okay. Fair enough. And then, maybe just turning to the margins, same property NOI margins, I think if I recall last time you mentioned same property margins could go to 38% this year. Is that still the view?

We did have strong margin growth in Q1 2023 over Q1 2024 -- over 2023 at 35% versus 32%. So, we are tracking towards growth. We still believe we can attain the 38% by year end.

Which is basically the full-year 2024 at 38%.

That's our expectation.

That's okay. So, that is unchanged. So, just clarify that, okay. Okay, fantastic. Last question is on the balance sheet. I think $125 million term loan. I think that is due in May, right, from this month itself.

Yes.

And so do you have CMHC debt financing room available? I think you mentioned you want to access CMHC for that?

Yes, we have a number of financings in the pipeline with CMHC that they're just working through the process. So, depending on timing, we will either use those to repay the $125 million loan that's due at the end of this month or may extend that loan for a short duration while those financings get completed.

Okay, okay, fantastic. Thank you. And I'll turn back.

Thank you. Next question is from Pammi Bir, RBC Capital Markets. Please go ahead.

Thanks, good morning. You had specifically cited, I guess, the $15 million of investments in the portfolio and the same property portfolio, I guess, to modernize it. Just I'm curious, do you see that as sort of the -- is that maintenance related, and just curious how you see that spending -- trending over the next year or so.

I think, Pammi, you should assume that we will continue to invest in our property portfolio at about similar levels that we have been doing in the past, so, about anywhere between $70 million and $90 million a year, depending on the year. These investments are in upgrades of common areas and resident suites. In some cases, you have to do them because suites are not rentable in any other condition. In other cases, we're accelerating these upgrades because we think we can generate higher rate increases from new residents moving in and the upgraded suites. And so, it's really difficult to differentiate which is which. Therefore, we're just showing you the total amount that we're investing back in our properties in these particular areas.

Okay. So, yes, sounds like a mix of both in terms of that bucket. I'm not sure if you can answer this one, but with respect to the consolidated sort of class action claim, now that it's been certified, what can you share in terms of what's happening there and next steps, if any, and ultimately, do you expect this to really get covered by the Recovery Act? And I'm just curious if you can shed some light on that?

Sure, I can take that. It's Jonathan's. So, I guess at the outset, what I would say is we're still very confident that our handling of the pandemic both on the corporate side and in our residences was appropriate. And, we always had the health and safety of our residents as our number one consideration. And, that gives a lot of confidence on this class action. You noted and it's correct that the class action was certified. There were some issues that were resolved in the certification process including the fact that the standard is a gross negligence standard, which is a higher bar to cross, obviously, than just a negligence standard which was sought by the plaintiff. And there are some specifics that I am not going to get into because they are quite technical related that certification that we object to. So, we filed for leave to appeal. We haven't heard back on that yet. The next step in the process, assuming we get that lead to appeal, would to hear our appeal on those technical issues. Otherwise, we will go forward with the class action trial. For which, we are insured. Q – Pammi Bir: Okay. So, yes, I guess if this were to result in any sort of damage awards, your insurance proceeds would cover that type of outcome? A – Jonathan Boulakia: We believe we are adequately covered, yes. Q – Pammi Bir: Yes. Okay, all right. Thanks very much. I'll turn it back.

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

Thank you. That wraps up our today's conference call. Thank you for joining us. As a reminder, our AGM will be held virtually and in person on Tuesday, June 4th at 5 p.m. Further details will be posted on our website later today. We are looking forward to you joining us then. As always if you have any further questions, please do not hesitate to give any one of us a call. Goodbye.

Thank you. The conference has now ended. Please disconnect your lines at this time. And, we thank you for your participation.