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H.S. senior Avg
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New words:
abatement, agreed, automatic, balloon, Blackstone, classification, consumption, Coronado, declining, degree, delinquent, delisting, deliverable, dissolution, doubt, Dupont, external, fifteen, fundamental, geopolitical, global, heightened, holder, immaterial, Kingsview, Lane, leaseback, nonaccrual, notice, Oxnard, Pacifica, Paine, past, Penrose, Platino, prepayment, prorated, Quay, Rancho, repay, repurchase, repurchased, resale, reserve, resiliency, restored, reversed, securitized, situation, submitted, submitting, Subtopic, susceptible, suspended, Tireco, title, unrest, volatility
Removed:
absorption, appointed, Avalon, Bank, Beach, Call, certified, closed, commercial, declare, delayed, Department, deterioration, eighteen, exceeded, excise, FDIC, Fe, fix, Greenstone, hold, Indenture, Innovation, insolvent, involving, Knott, Knox, lending, Lon, macroeconomic, Manhattan, matured, month, Notwithstanding, occupying, Par, port, priced, Protection, receiver, remained, renewing, requiring, Santa, show, Silicon, sufficient, systemic, tighter, transacting, troubled, turn, twelve, uninsured, Valley, Vine, warehouse, Woodwind
Financial report summary
?Risks
- Our portfolio of properties is concentrated in the industrial real estate sector, and our business would be adversely affected by an economic downturn in that sector.
- Our portfolio of properties is dependent upon regional and local economic conditions and is geographically concentrated in Southern California infill markets, which causes us to be especially susceptible to adverse developments in those markets.
- The impact from a pandemic, including governmental emergency declarations with emergency powers, may impact our ability to collect rent and could adversely impact our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations.
- Our properties are concentrated in certain industries that make us susceptible to adverse events with respect to those industries.
- We may be unable to identify and complete acquisitions of properties that meet our criteria, which may impede our growth.
- Our acquisition activities may pose risks that could harm our business.
- We may be unable to source off-market or lightly marketed investment opportunities in the future.
- Our future acquisitions may not yield the returns we expect.
- We may not be able to control our operating costs or our expenses may remain constant or increase, even if our revenues do not increase, causing our results of operations to be adversely affected.
- Many of our costs, such as operating expenses and general and administrative expenses, interest expense and real estate acquisition and construction costs, could be adversely impacted by periods of heightened inflation.
- An increase in interest rates would increase our interest costs on variable rate debt and new debt and could adversely affect our ability to refinance existing debt, conduct repositioning, redevelopment, and acquisition activity, recycling of capital and leasing activity.
- The potential impacts of current and future climate change and governmental initiatives remain uncertain at this time but could result in increased operating costs.
- Adverse U.S. and global market, economic and political conditions, including the ongoing conflict between Ukraine and Russia, recent events in the Middle East and other events or circumstances beyond our control could have a material adverse effect on us.
- We may be unable to renew leases, lease vacant space or re-lease space as leases expire, or renewing existing leases may require significant concessions, inducements and/or capital expenditures.
- We face significant competition in the leasing market, which may decrease or hinder opportunities to increase the occupancy and rental rates of our properties.
- A substantial majority of the leases at our properties are with tenants who have non-investment grade credit ratings, which may result in our leasing to tenants that are more likely to default in their obligations than a tenant with an investment grade credit rating.
- We may acquire properties or portfolios of properties through tax-deferred contribution transactions, which could result in stockholder dilution and limit our ability to sell such assets.
- Our real estate development, redevelopment and repositioning activities are subject to risks.
- Potential losses, including from adverse weather conditions and natural disasters, such as earthquakes, may not be covered by insurance, and we may be unable to rebuild our existing properties in the event of a substantial or comprehensive loss of such properties.
- Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers.
- We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (“IT”) networks and related systems.
- Some of our financing arrangements involve balloon payment obligations, which may adversely affect our financial condition and our ability to make distributions.
- Our debt level reduces cash available for distribution and may expose us to the risk of default under our debt obligations.
- Mortgage and other secured debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt.
- Failure to hedge effectively against interest rate changes may adversely affect us.
- Our unsecured credit facility, unsecured notes and certain of our other secured loans contain, and any other future indebtedness we incur may contain, various covenants, including business activity restrictions, and the failure to comply with those covenants could materially adversely affect us.
- Our performance and value are subject to risks associated with real estate assets and the real estate industry.
- Illiquidity of real estate investments could significantly impede our ability to sell a property if and when we decide to do so or to respond to adverse changes in the performance of our properties and resulting in harm to our financial condition.
- Declining real estate valuations and impairment charges could materially adversely affect us.
- Acquired properties may be located in new markets where we may face risks associated with investing in an unfamiliar market.
- We may choose not to distribute the proceeds of any sales of real estate to our stockholders, which may reduce the amount of our cash distributions to stockholders.
- If any of our insurance carriers becomes insolvent, we could be adversely affected.
- Our property taxes could increase due to property tax rate changes or reassessment, which could adversely impact our cash flows.
- We face certain risks in connection with Section 1031 Exchanges.
- We could incur significant costs related to government regulation and litigation over environmental matters.
- Our properties may contain lead based paint, contain or develop harmful mold or suffer from other air quality issues, which could lead to liability for adverse health effects and costs of remediation.
- We may incur significant costs complying with various federal, state and local laws, regulations and covenants that are applicable to our properties.
- The commercial loan that we originated is subject to the risk of delinquency and foreclosure, which could result in a significant loss to us and a material adverse effect on our results of operations.
- Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of common units, which may impede business decisions that could benefit our stockholders.
- Some of our directors and executive officers have outside business interests, including interests in real estate-related businesses, and, therefore, may have conflicts of interest with us.
- We could increase the number of authorized shares of stock, classify and reclassify unissued stock and issue stock without stockholder approval.
- Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest.
- Certain provisions in the partnership agreement of our Operating Partnership may delay or prevent unsolicited acquisition of us.
- Tax Matters Agreements limit our ability to sell or otherwise dispose of certain properties, even though a sale or disposition may otherwise be in our stockholders’ best interest.
- Tax Matters Agreements may require our Operating Partnership to maintain certain debt levels that otherwise would not be required to operate our business.
- Our board of directors may change our investment and financing policies without stockholder approval and we may become more highly leveraged, which may increase our risk of default under our debt obligations.
- Our rights and the rights of our stockholders to take action against our directors and officers are limited.
- We are a holding company with no direct operations and, as such, we will rely on funds received from our Operating Partnership to pay liabilities, and the interests of our stockholders will be structurally subordinated to all liabilities and obligations of our Operating Partnership and its subsidiaries.
- Our Operating Partnership may issue additional common units to third parties without the consent of our stockholders, which would reduce our ownership percentage in our Operating Partnership and would have a dilutive effect on the amount of distributions made to us by our Operating Partnership and, therefore, the amount of distributions we can make to our stockholders.
- Failure to maintain our qualification as a REIT would have significant adverse consequences to us and the per share trading price of our common stock.
- If our Operating Partnership failed to qualify as a partnership for federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences.
- Our taxable REIT subsidiaries will be subject to federal income tax, and we will be required to pay a 100% penalty tax on certain income or deductions if our transactions with our taxable REIT subsidiaries are not conducted on arm’s length terms.
- To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions.
- Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
- The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes.
- Complying with REIT requirements may affect our profitability and may force us to liquidate or forgo otherwise attractive investments.
- Legislative or other actions affecting REITs could have a negative effect on us.
Management Discussion
- Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
- We make statements in this quarterly report that are forward-looking statements, which are usually identified by the use of words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “might,” “plans,” “estimates,” “projects,” “seeks,” “should,” “will,” “result” and variations of such words or similar expressions. Our forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by our forward-looking statements are reasonable, we can give no assurance that our plans, intentions, expectations, strategies or prospects will be attained or achieved and you should not place undue reliance on these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and may be affected by a variety of risks and factors including, without limitation:
- •other events outside of our control.