First Industrial Realty Trust (FR) 18 Apr 242024 Q1 Earnings call transcript

Company Profile

Participants

Art Harmon	executive
Peter Baccile	executive
Scott Musil	executive
Ki Bin Kim	analyst
Johannson Yap	executive
Peter Schultz	executive
Robert Stevenson	analyst
Christopher Schneider	executive
Vikram Malhotra	analyst
Todd Thomas	analyst
Richard Anderson	analyst
Craig Mailman	analyst
Nicholas Yulico	analyst
Nicholas Thillman	analyst
Jessica Zheng	analyst
Blaine Heck	analyst
Caitlin Burrows	analyst
William Crow	analyst
Nikita Bely	analyst
Jonathan Petersen	analyst

Call transcript

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Operator

Good day, and welcome to the First Industrial Realty Trust, Inc.

First Quarter Results Call. [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the conference over to Art Harmon, Senior Vice President of Investor Relations and Marketing. ahead. go Please

Art Harmon

Hello, Dave. welcome our to Thank everybody, call. you, and

our our Before update may let results our assume that These forward-looking statements first expectations, securities and our statements as on and only today's April no of in information by obligation SEC discuss as and We provide. me may could defined differ to and statements our our or everyone sensitive results and are year, accurate other described XXXX Today's which laws. the filings. we statements XX, estimates date, quarter this we other of forward-looking the be federal prospects. may include time for XXXX. are factors updated remind XX-K management's cause based call Actual plans guidance materially statements from our

of SEC discussed earnings and find financial tab. our and supplemental can today's You The firstindustrial.com at report release. non-GAAP reconciliation supplemental in our the under call filings available a Investors are release our earnings measures in report,

call Management. Vice your Yap, Officer; Chief by Asset us we'll of today our are it Executive for and Chief after Jojo with Schneider, Peter Also Musil, Peter and President; Financial Schultz, open begin Executive and remarks Walter, Investment Capital Executive and of Markets Scott Our Executive Bob Chris Operations; President President Vice Vice President Officer; which our up Baccile, Chief with questions. will Officer,

Now let me hand to call the over Peter.

Peter Baccile

all Thank for us and you, joining Art, thank today. you

on increases, discuss which renewals strong our will signed make and team continue X XXXX has big shortly. Since as progress leases, our we rate I last both in development to cash rental of February, call our

projects broadly, to industrial as have the online. that come at about X.X% vacancies new up in started XXXX were development market Looking ticked

XXX approximately of completions projects square million CBRE XXXX, feet. For

in mid-X% those national are to projects quarters. range increase to we delivered, coming the vacancy As the expect

construction doubt with cost that Importantly, to No starts. discipline new of the debt the market has has high respect demonstrated helped. some

below that past peak which which the XXX foot have We've increased of related in in on in starts prospect XX development Nashville million on on into experienced cash of impact First that square leasing full the year at full foot The the of our call. taken increase for traffic near on and been building significant and recent stands our X of have decisions expirations. to end, continued our forecast Including just XXXX leasing, million million provided quarter midpoint California. Updating last XXXX new feet, averaged our XX% signings To Center some of of to at XXXX. currently Northern XXX,XXX square XXXX has XX% made. earnings care we third XX% XX%, to of we level date is rate quarters, For First than our toward we our XX% run that you more Logistics is X end Rockdale rent. the our weighted progress signed the the leases IV Stockton square lease net

Southern X located of expirations, X renewal of are to all a results Our our of California. reflect which in date largest

For X guidance renew. X assumed purposes, we of the have remaining will

consisted $XX the Cincinnati feet The foot million sale square largest call. The located portfolio in of sales of to achieving properties In on and million a for way X full was our remaining This guidance quarter, for to sold on we $XXX XXX,XXX million discussed million. first $XX X-building XXX,XXX well square now comprised of of us feet the Chicago square XXX,XXX our February $XX Moving we puts Detroit. total $XXX our that dispositions. to in year million.

uncertainty, increasing our environment. the call, XXXX and in timing the portfolio to the rapidly the year project geopolitical and markets in of the challenging been noted I volatility has our economic particularly evolving capital outlook leasing As on pace interest last due and a rate to

once tenants weeks, some factors Over few these past have reason again for the given pause.

decided As reflected a leasing updated result, with in respect adjustments, we the to year, assumptions our are which some make broad-based our to guidance. same-store for

I'll it over Scott. turn that, With to

Scott Musil

Thanks, Peter.

results Let $X.XX $X.XX me share the quarter. recap XXXX. NAREIT operations XQ in our for share diluted from compared fully funds per to were per

As a of a of associated a to departing per results reminder, share reimbursement tenant. included accelerated related our first $X.XX with improvement recognition quarter XXXX tenant income the

share per Excluding quarter that was $X.XX. $X.XX per XXXX first share, FFO

were rates leasing, NOI The embedded of renewal our quarter, the excluding growth were bumps was increases in fees, the for results leases on rental termination same-store cash rental XX%. and rate Our lower new by We same in-service by in quarter driven square average and with the Nashville XXXX lease some occupancy free offsetting rate year-end as of the offset partially with XX.X%, move-outs. XXX,XXX lower expected finished occupancy. which our rent, quarter foot

developments, As in-service the expect second our increase we continue the we our up to of half lease occupancy in year. to

fourth earnings of opportunity. the that we in of leased points developments our placed and occupancy quarters in service quarter not fourth that third were approximately XXXX As we basis call, XXX on fully stated had

IV, With at points. these lease-up the Rockdale from basis First the opportunity XXX lease-up of stands developments now

assuming on remind touch options in expenditures you combined positioned after required amount in to the of developments loans. capital exercise that the on our bank I and strongly expected will are let the of XXXX excess our exceed no sales, maturities asset completion with with front, debt cash we guidance, dividends, X process. of until fund Also, me our Before capital XXXX, extension flow our

guidance this $X.XX Peter our Including $X.XX detailed is per $X.XX now updated employees. an excludes compared share is This assumptions our branded of last of adjustment on of prior fully evening. accelerated per discussed, the earnings $X.XX same-store Note, accounting is to guidance our share. guidance. expense require release our our per $X.XX our Due to per some per that share fourth to per our in rules share. we us guidance to equity-based quarter share FFO FFO certain related value earnings call, approximately range expense $X.XX on guidance expense, Moving for for changes to leasing to $X.XX to compensation of tenured our NAREIT range as XXXX that of

the new at on with rates I Key assumptions rental average the a cash fees points at end XX reimbursement and leasing, for to reduction termination X.XX% Same-store midpoint. leases. bumps excludes of same-store tenant of discussed our along X.XX%, points on Note in primarily occupancy guidance that basis of as calculation rental before renewal This XX.XX%, to NOI an XX.XX% by a in earlier. of the follows: basis embedded midpoint. XX growth quarter basis XXXX increases adjustment is driven onetime are the that rate

anticipated our and completed developments construction to at costs March XX. includes XXXX under related the Guidance

For the about share of $X.XX we interest. XXXX, year full expect capitalize to per

excludes and million, expense Our G&A range is expense in accelerated million the to million $X referred roughly $XX.X guidance to earlier. I $XX.X this

the Lastly, starts, guidance repayments development debt repurchases does nor sales, not acquisitions, debt reflect the of issuance equity any issuances, call. after or impact this of potential future

turn it me Let back over Peter. to

Peter Baccile

Thanks, Scott.

very development major kick pleased year. We're wins the X leasing the with off to

is to that with growth team up additional ready success focused on in Operator, on in-service we're leasing that, rent Our with building open development it our portfolio. for signings questions. from and lease capturing

Operator

first comes from with Our Ki question Instructions] Truist. Kim [Operator Bin

Ki Bin Kim

lease. Stockton the Congrats on

in just adjusted So service just these assets couple placed yield just seeing the any I activity I as smaller you noticed near prospect be and/or that these we are you provide projects. projects, your a of portfolio speaking, questions the leasing? more that development other some on development. should lower, margins the of projects into mean, the and had broadly on thankfully, you're couple that if were But that development please? aware I risk update can completion of And of in profit an other

Peter Baccile

you want do to Jojo, take that?

Johannson Yap

yields. is similar. we outlook made every caps, adjustments, We Ki wouldn't I no, of much though, do that Yes, that forecast the the the We pretty -- result quarter. yes. we at look And then, profit Bin, as course, pro is the at of margin. look some Exit say forma and

top overall, points. by cap increased Exit we So level, XX about our basis

about is or which ended about average we conservative. up rate, cap overall So X.XX think appropriate slightly that's

some points forma in actually reduction pro a we forma forma in increase points increase yield. And then [ XX pro what we of of resulted ] pro in -- on i.e., adjusted an rents a about pro of side, basis the XX basis that in on did, forma

that development of our that add about what reduction Ki you together, of supplemental from XX% X points Bin, notice overall on our percentage everything you'll If about terms in in XX%. to our

it's overall. So adjustments slight

Peter Schultz

it's look at on Bin, Peter pipeline, the have California, To Ki in we then Jojo Denver activity good. Florida, what And activity comment and rest you on Pennsylvania, overall second the question is of on can as Schultz. development your

we interest rates his to of the a little on interest. while move timing remarked Peter are others comments, of it all and making the a of see, have the is space. is narrative slowly. I it's people decisions. really those And level prospects issues some headwind continue But about more bit for the of are And as to activity We more would overall moving decisions pretty portions geopolitical good. to the in continue deliberately than active evolving of say some or about

Jojo?

Johannson Yap

adjusted Yes. just except we And the that just that some comments rents. appropriately said to -- I add the to nothing we to need -- Peter's of

Ki Bin Kim

that just Post on not I bit drove occupancy the follow-up I there's Road the timing lower? occupancy sure quick I'm anything noticed dipped rate a about if just curious but Baltimore. else Old sequentially. the little was a And the of lease-up,

Peter Schultz

Ki Bin, it's again. Peter

move-out So That X is submarket, feet. the of year-end in Hagerstown XXX,XXX I-XX Baltimore along known square is corridor. we part have at portfolio, the which our

a as portion in we're in So space of marketing occupancy building. other that a No larger Baltimore. change

on Old question Post. Your

quarter. in So earlier, that the and occupancy the took lease then announced half larger first commenced December that Old last building, the the smaller Post of of building year in we

Operator

next Rob The with from Stevenson question Janney. comes

Robert Stevenson

after Bridge benefiting Just I markets, demand at happened Key know early, any submarkets assets, but a given the additional from the it's port Baltimore. follow-up what's on tragedy?

Peter Schultz

Peter it's change impact to in said, our the any in Rob, Schultz. you or given tenants, as Baltimore. not demand seeing tragedy, So We're

reopened. opened end probably will in in the of full next the a already back have You expectation May. A or of be there know that channels by couple third The ports is been temporary X. the service week that are

while that, from in So in real that resolves itself incident. negative that demand inconvenient or think seeing quickly. term, any it's positive change we near fairly the We're not here

Robert Stevenson

run that happening expense I guidance that rate. than what's quarter year? you've to $X.XX of know then, from the look That's throughout remainder that's what that's additional Okay. in can likely in was I like the that significantly helpful. believe, you the talk I But operating had is Scott, the higher in assume some the about on property there property and the And G&A, the G&A. expenses. sort expenses were of the side

Scott Musil

I'm are it The it's the expenses. $X.XX Scott. turn G&A, to about Yes, Chris in Rob, talk over and going to property to

Christopher Schneider

Yes.

related all was recoverable quarter this snow for expenses expenses to property the up. were ruble on Just that

So and they're it's recoverable. again, all --

that the reason that. is So for

Operator

question Vikram next The from comes Mizuho. Malhotra with

Vikram Malhotra

you've lease-up Maybe on going just there was you've one a development. you what progress that? version us impact on I And -- to like to If that think related I'm -- give development -- the the specifically, you made, want not when with new FFO? your sense all to what back of far, wrong, it just Xs. just your just that, guide. the I is us all high updated first done the see then Could so update can does an of for timing

Scott Musil

Yes.

it's Scott. through walk Vikram, that, I'll So

quarter an call So we it think to it's of what a go but talked fourth through little makes I sense on about in February. answer, our longer

still we call, first of in lease-up million million guidance. leaving The had feet deal was in year. X.X said is pool to the original of development Rockdale majority we the in leasing of that that our on quarter, about assumed leasing square back feet half square this So in development feet up start of our leased forecast. the this the XXX,XXX of included was we square X.X

our The million in that development square was feet First guidance. other was leasing the not of budgeted first quarter Stockton original X in

we In to be beat As we won't. And Peter cases, in mentioned in forecast. some XXXX. will on difficult our going to is development predict last our developments, leasing quarter's call, other

we have of completed some the development of is So our forecast. leasing ahead

some essence, early to have we lease this used other some made changes of benefit So forecast. offset to development timing we, assumption in leasing our

help? that Does

Vikram Malhotra

then And the just helpful. on Yes, that's development. specifically just

in think a big there's XXX,XXX close I feet. square asset to Colorado,

just is Or full that? the past, Can debated do think a in you we on there it. I user? multi-tenant update us you've

Peter Schultz

It's Vikram. Peter Sure, Schultz.

have as the designed you well is signings, built larger continue of we users. for activity to full portions lease a I our see see and users. The I users, as both activity don't give We tends building any said when continue building to be of building to as building for updates to be but have to today decision-making few but there on continue to a full we the slower, minutes expectation couple actionable we multi-tenanted, partial The any which was activity. ago, it.

couple about said we've the that it's and of really timing that we're As the decision-making of on. a times, more pace focused

Vikram Malhotra

more, specifically X you Okay. us remind kind SoCal just X just the X maybe may of those X thinking one And you us about not through X if just just on you if Or just you're Can you I Did then just maybe but out expirations. in and how -- general, -- leases? always renew? assume those of walk update -- can us X may.

Peter Baccile

Peter. it's Yes,

we On renew. X always not the did assume rollovers, would

going Jojo SoCal. and on what's you So we're broader on can with give right those, perspective in a on schedule

Johannson Yap

absorption, Sure, rates did so sure. SoCal, exceeded completions vacancy tick Basically, up. in

renewal discussions would are all And say, active I be across, so to and continue sizes. activity, though,

just Peter their decisions. Schultz though, the time are properties decide both environment leasing New and touring said deferring is prospective more are Baccile before committing like taking to some the and tenants slower, are Peter and more

Port SoCal loaded year. import thing measured XX% higher year and of only containers in QX of is is that last than in of other activity this port Port Beach by Long One as L.A.

positive So forward. a we're hopeful going that impact that has

Peter Baccile

container that XXXX. about about And is equal to traffic

Johannson Yap

XXXX, XXXX, correct.

Peter Baccile

you if pretty Which was good market. recall

Operator

comes Capital with from question Markets. next Thomas The Todd KeyBanc

Todd Thomas

or and you've to we you've Curious moving on you given increase what in just that build-to-suits I in forward. cap. curious, development wanted are little starts just here. for developments XX% is more think quarter, down we leasing to shift spec offense about some markets? most the I'm the and progress more, like timeline should first the in now just the appetite talked Just leasing spec a broadly about saw some that of made about your the How maybe new bit the more ask given

Peter Baccile

Yes.

about in carry what have on of to term, possible $XXX to actually we regular That's So through near it, cap. of number a do from is It call that XXXX, us you'll 'XX. couple our used very similar starts. in 'XX, capacity the million on that's pretty hear a now we basis a

said calls, we've As on Florida. likely are to be in previous those South

we be markets. development made other evaluate largely leasing decisions opportunities those in across we based As on start how proceeding the country, those will see

And those, view decision-making. about existing some have better we'll of demand when stickiness have lease We and assets a in pace markets. the we those the of

confidence So again, as more warranted. are those those deals come to fruition, that starts would give that us markets in

Todd Thomas

Okay. And just the then guidance. on question a

sorry offset revision the terms In in the commentary. the the forecast, made? the just in revision, to offset the a is which -- this of is curious FFO bit decrease if that little what decrease? growth What's But guidance missed than $X.XX that and if was the more I same-store to

Scott Musil

due primarily $X.XX to decrease same is the Well, store.

utilized But to we a some So Todd, utilize leases. We adjust there's we that bit lease-up the ahead leasing, those developments. for on of the have of remaining ahead little also -- development little X budget we're of a of budget assumptions of that.

the that's that So from point view. math of

Todd Thomas

Okay.

lease-up the same on primarily store? it's the development So offsetting

Scott Musil

Yes.

Operator

next with The comes from question Wedbush. Rich Anderson

Richard Anderson

permanent not is lot gives So about that possibility just reaction it at if tenant tenant do talk from you and delayed, of in What could could First have more there's yes, but back but then not? more going just decisions you looking and this, what's we of and that we speculative a we talking push your do, Industrial? you are leasing something raising time, And not demand to condition yourself permanent timing say, the Are behaviors demand. capacity. actually are we're a confidence terms done. depressed in we that people of situation And need every a to more

Peter Baccile

see And about broader and what's you big the I'll we Yes. the a time. what's can are and will overview having thoughts. where then world, it the markets, the inflation, and of we're mean negative discussions, changes a is give of those can from kind the in as Jojo discussions conversations broad happening based getting enthusiasm broader news happening These of been their pretty period give from Peter you long I level otherwise, are impact these on or a on how see you rates, talked markets. Fed by being around aggressively with proceeding. from everything And all that over

when months tenants sense By and have if. want these a We've -- is elsewhere. after away we large, X had and X it's a good come tenants reinvigorate or not like there of a matter It's conversations. trades are doing and to that going and it back not just

if Now a be gets matter a worse, it could of the if. lot world

We right add Peter, now. aren't that? want that to seeing to do you

Peter Schultz

say Indications the would demand I space occupier the Market track largest to last leased Sure. was that are of very they expectations all half they and in to in on very first of year. active double is did broad-based. this particularly the E-commerce in continues year more lease be year. than may last quarter. they first they're what

a tended certainly to sign, which catalyst that's as well. a has making for be other good decisions So companies

waiting we've in some for activity but the retailers. all be lot to food because see some medical the continue on a and We're they're seeing seeing some continue XPLs, talked We're of We reasons commitment before. and those about beverage. elongated of decisions, automotive. customers, to from particular, seeing We're

requirement simply cases, breadth nobody's of, -- choices. more tell So continues do some to activity that matter of people us And in see good. is have It's their a they the rarely the we be canceled.

the the has breadth. held about well. our to there's But But have we that across the pretty We feel larger spaces very market feel varies And more seems just good. urgency. it up from choices today. be less market. spaces and of And slower decision-making about good some feel overall, good activity we So smaller to

Jojo, you want anything else to add?

Johannson Yap

I The part has executions pretty biggest the solid. The last be to is much thing would existing of in buildings, continued renewal been our our that Yes. leasing have same our business, discussions that add activity, there only is the as year. which the

see our button in just You a the rent that well. like change. our expand to of would cash number hit pause could as discussions but And in tenants

our about which give feeling those confidence our our a so lot out of operating portfolio, of bigger And part good business, a us of that is is spaces.

Richard Anderson

really Great. tail pedestrian mark-to-market flatness And point say because and will still mark-to-market of don't or escalators. into it's what's And just let's the move and the Is more mark-to-market I'm terms market simple said the how the And of of know you you? at still contractual of front but as you in rent the then for have XX% growth me, whatever. as second you ongoing here of curious what and that's your is, get sort what escalators. I becomes market space? you your flattish do where it the as situation just like that, in rent the typical

Peter Baccile

there of duration so the that grown mark. much have is Rents in some resiliency that

scenario more, some at mark a duration range. X% of rents Obviously, where time. flat like let's rent that some in looks or that comes are, the down. it significantly that's point, Now for enjoy But as the as in say, fell sector increases good should up rents falling this pretty or if X% much

Art Harmon

given clear, we haven't just to calculation. a be Rich, mark-to-market And

Operator

comes question Craig next Mailman with The from Citi.

Craig Mailman

are or tenants levels like make to hesitancy where Just decisions. mean, rent play coming playing business than square nominal on all, foot the just that how really of hesitancy? of markets this Is certain just -- kind to in Or uncertainty playing just rents markets. kind actual it I rents into L.A. of Jersey the at into a their is point? I New the the at here mean per higher much on basis of back is mentality going other

Peter Baccile

last X that markets that, indicator grew or most, rents year. 'XX to at and obviously, markets in to answer of are that about doubled the decently have the do little a Those have renewal way higher. where that new the practically years, as lower grown question or probably in best where a the -- And and talk development both Craig, 'XX. than lower rent discussions space, the They peak deals tenants best yes, SoCal, probability period they in phenomenon taking is again, done bit of conversation. getting plays -- into rollover is both we and

I affordability impact is an and It not tremendously pace That's some have wouldn't those thing. would discussions. call of issue. that in it grown the markets rents that that the

Craig Mailman

you guys mentioned others Okay. coming the into have clearly, back market. Then mentioned, and Amazon have is

to a of expansion. e-commerce through where could But vertical, maybe the kind as if today in like the industry of feels of more you you of take most So go there's by needing kind decisions to you're kind hesitancy business of trends there period any plan? we're to make gauge where, versus close discernible fund where Is seeing? are X-year kind space to

Peter Baccile

rather for So lessees at next now looking say, served active in history catalyst game, we hey, very most that XXXX, degree very, Amazon to saw took which created a a XX to Time in 'XX, involved, the a a that happen we in know, little have the is negative great than we and will to space good And forward player as combined. tell we others catalyst making you that if the and involved. get numbers more high effect. saw. 'XX year. as it others bit, That is to getting it for large a pretty particular once again others get as this catalyst prospects could don't a be for absorption behaves a certainly move going as but net see That that the

Peter Schultz

Schultz. Peter Craig, it's

waiting their they're earlier, XPL The other are slower I on customers. out, I the thing just would point as decisions mentioned is because

steps process. X that in there's So

for decision where probably we're those customers. the visibility into making. a the have and harder discussions that's to XPL elongated most between seeing it's landlords So And

Peter Baccile

furniture, slower. factor would home improvement, be other the little thing, And bit housing, that is particular, X, a Craig, in sector

Craig Mailman

Or leases. things do like go forced there with XPL still they guys pickup rent side match And of to certain equation? part their seeing were any think in going what the when length? very also I guess Okay. from traditionally others? I on leases Is got you are on they X-year back the their hold shorter-term piece, free to had versus leases, to to the just push strong, And it shorter-term are you markets that concession guys to better side, a contract able to

Peter Schultz

On term, the some years. in years. prospects all XPL market front, in the say, we're are shorter XX said Having we to seen X X that discussions that, have are deals with the

of bit. concessions, terms In we're seeing those come little up a

they've a of it's concessions So It's less to X ticking than X.X. of or supply, little up been wouldn't but half I X.X term per more maybe generally markets month bit year with the And are little universal. say bit. in a

Johannson Yap

Yes, don't XPLs there's be want. that to going the in think material change a the terms overall, we

the biggest XPL. customarily, X-plus is long be but I don't think out to cancelable, a by term. make when want the it's long-term potentially want are they And And a commitment. space reason for to XPLs commitment usually that of and will most the that's their it years. They be customers be a customers' that meeting served needs --

to the So not they back space. want don't be having and to street thrown

pretty So -- so is sticky. that usually term

] significantly. seen like We really it haven't [ accordant

Operator

question comes Scotiabank. Yulico with Nicholas next The from

Nicholas Yulico

affecting -- I like know thinking break of for feel specifically get whether year? you activity kind leases was -- leasing signed, new kind change overall and but leasing how was the like a down it in hoping quarter the about that just new guidance out to about of thinking versus don't volume new activity just the the for of you're I in the budget, first the

Peter Baccile

to growth significant, as and the getting see, X the pretty forma. So pro leases that And quarter. our else? we the respect leasing, that cash provided is what where in rent at? to on you're respect Is we're with are Or we renewal were something development you you first that with asking signed the track there above guidance

Nicholas Yulico

initial if for asking Sorry, how just terms versus quarter, that affected budget that overall of signed I first compared of it year? footage in was guidance was the like change down new the square the leases -- more in occupancy the and

Christopher Schneider

No.

I right our the the projected there. about overall, think of in we at the guidance volume had end for year is what leasing

Scott Musil

Nick, XX for And look we development. renewal at Page new with say the Yes. right would first we quarter, out leasing. I break our and were on of budget new supplemental,

Nicholas Yulico

with don't number it. Got of I I No, was volume, know I new line more commencements. is in leasing there. terms if different there signed. Yes. in leases asking a know that's

Scott Musil

Here's what We would say I to that. statistic. gave a

it care think XX% as -- our was I expirations of of took we yesterday. of

If quarter was back you very in consistent. first look last year, that the number

been to able this the of say material this we've been was before lease change at what there's So year, point in I'd that. no compared to last up even time it what year year to compared

Christopher Schneider

ahead. We actually bit little a are

care about taken we've So of XX%.

time, think of last I year this we had care taken about XX%.

new leases of. So we're on taken actually a little that care ahead bit

Operator

comes with question Nick Thillman Baird. next from The

Nicholas Thillman

bit been when in little maybe there begin renewal of the discussions. urgent any of a would might starting helpful. really quarters to rates or kind so. they on touch little tenant a shift because approaches over? over environmental to to deals wanted kind Has just your a like new X the those that are discussions, Maybe Just commentary be there of less last to feeling Are sign think rental they you roll kind

Peter Baccile

news, Well, most better in little many a won't reps have bit of get a and surprise the big tenant wait those guys representation, to news, -- that global significantly goings the of those economic discussions news, pretty impacted of pace on, rate get And mentioned the market as maybe a does because telling them by you cetera. cases, deal. times, et they'll it couple we are,

going probably And of trigger. to quarter year. time X feeling into there course, that maybe coming the the the a was few like weeks. when in dulled start say is of has the pull get it's into in I optimism, So people or they the would bit quarter first little year the ready were early And about we news evolving. X cuts rate the and to with this last tone were feeling recent fourth last year, would of some

Peter Schultz

you that in as if improve the that -- talked is because be add for considering getting need elongated. on to to tenant they to space, very to I'd thing moving, other if another need about it, they we've calls, plan advance is other modify or well the Nick, do a permits continues

Peter not. So are I staying real say, tenants' or speaking, they than other on no alluded there's weigh timing to. change tone that generally been continues would to in what or But decisions

Nicholas Thillman

buyer That's Maybe -- what placed still bit portfolio on helpful. touching a assets that little out And is more what where pricing getting flavor there a expectations a to premium maybe traded? of the dispositions. what are also pool of the assets? kind bit of of of on little you kind have like? you And a of being shaking relative some is And then

Peter Baccile

that the trade. market active. they're because back have our the of program able targeted really sales what is our to in now is terms users more to XXXX is we the and do in sides So both expectations Remember of market coming

users, So XXXX cetera. buyers, local doctors, dentists, it's investment entities, lawyers, et

to say offers activity of So up that's I profile. also pretty information meaning to robust, people is high. that signing The is the get is the number the would conversion good.

an market. it's So active yes,

be expectation. aggressive yes, are and Still, obviously, depending are going in asset, the pricing, coming aggressive pretty our are In buyers pricing, to particular. in to more terms to on the the on But that market the close XXXX going be of users values on fluctuates pricing. those more

Operator

Next Green question with from Zheng Jessica comes Street.

Jessica Zheng

color portfolio where on on relative could you and you're seeing share weaknesses if level? market wondering the please your strength in was some I

Peter Baccile

respect growth, say, leasing, with You rent anything mean to, specific?

Jessica Zheng

activity. leasing Rent Yes. and growth

Peter Baccile

be we've So are leasing strong. demographics that the now and is said, the to pretty doing well. growth rent market and right to continue markets good Florida, Nashville, there impress activity, showing as south that continues

In time on be about to a spent a the that markets, talking remembering? list SoCal, not terms Anything Seattle little have slower would is lot quiet. that we've of of the I'm there. else

Unknown Executive

No, everything quiet. else is

Peter Baccile

Everything as you steady else go. is kind of

Jessica Zheng

you they're excess Great. some Do was just I there growth levels That's how your very I'm some if curious you in utilization wondering their color helpful. in around sense then today? like capacity among accommodating And share businesses tenants? can properties. also your is

Peter Baccile

that? take Jojo, you want to

Johannson Yap

study space. they're properties, so well. our not our we view And tenants, our lot our properties look their at constantly. of Sure. that our Sure. -- meet our a customers, pretty excess -- on we when is and space utilizing survey There's Based when we

In minimis. de portfolio. fact, very say this our would I situations in very, It's sublease few

Operator

Fargo. Next Blaine Wells Heck with question from comes

Blaine Heck

Just specific little same-store wanted a and that given percent in more spreads XXXX in relatively of was on about XX-ish to bit the guidance flat reduction the talk leases rent increase. commencing there, drivers occupancy

you in those forecasting we're wondering anything in you will baked it's there also to that or guess how now I trying metrics conservatism matter in inflection if and with of rent pause occupancy particular think that So determine or that decrease happen was much don't a just is just you an were guidance? outside gave to just whether

Peter Baccile

Scott?

Scott Musil

in there Sure, Blaine. touched reason, we we on main upon in were pool. of was I that and would it the handful the leasing say assumptions script the that is properties adjusted a the same-store

adjustment So that we was that reason for made. the the

Blaine Heck

Baltimore. to then follow just And on Okay. up That's helpful.

you're progress there done looking good is for and whether there some term? that more slowdown some but made and whether in market remains just a in about your the still the guys there you that seeing Hagerstown. changed chances near leasing now the in also in include given market getting in space year, have space shutdown Can throughout tenants the of talk You you think port last

Peter Schultz

bridge. no There's demand levels in change impact Schultz. been real Peter the of the It's from customers collapse of on or the

an You material Baltimore is probably and know that automobile both primarily ports.

or roll roll on, to So what as refer RORO. we off

container volume East material. ports. is there So the not of Coast about that the X% It's only

an having not the one other. way it's impact or So

leasing in same as that's our little Road along quarter, market long a XXX,XXX moving the where the Old there. balance building Post is That's Hagerstown the is slowly, it's in the Pennsylvania. The earlier. I-XX it's interest, but described of activity, There's about of feet. different a of coming we've are than terms which is double digits Vacancy Hagerstown, out rates soft. market In I-XX

answer you my that's So morning. for this

Operator

live. line your is now Caitlin,

Caitlin Burrows

question that asked a minutes market the to somebody few back ago. just Maybe

Could were and it You drivers you stronger and of more performance? driving mentioned or difference that Like quiet. in both? the South of Seattle, the the some Florida more talk ones, of different supply-related, demand-related through Nashville the what's and X SoCal is markets

Peter Baccile

Florida they're with smaller think markets. and particularly Nashville, Well, I South

better Florida, and levels bit Atlantic lot moving activity a So we're people constrained a are tends other. of lot Everglades talked extremely people the little leasing course, much obviously to the on the past, it. still spaces. the on the -- still side something a of the in the has one we've as of to are those moving smaller land to in in as markets And the That to be Nashville. And on smaller do And demographics, with with the well. tenancy about

those So markets. supporting those are

respect We've I wouldn't there being And I in point would an with that won't get to seeing time anything SoCal. slowdown we as as that there's that. time talked from particular happens of tenant a we're a traffic Seattle, say to there. just issue. about to lot into

Caitlin Burrows

Got it.

back to X mentioned this in not have large renew. is you you to the earlier the And you expirations and Okay. call, how assumed going year, then have X

For informed assumption an that is like, of how tenant that blanket a more the talk like assumption? it it's with one, I based was wondering if is like about or could on you of conversations

Johannson Yap

macro Caitlin. a assumption, It's blanket

Operator

The next question Raymond Crow from with James. comes Bill

William Crow

worse, I'm city, might ahead lead, this are curious poised XX Steady XX be to Angeles' up is California, California's started Peter the list better Eddy was, it Southern just you to see I'm this that Los and ago. it of you and Southern in kind about point feels it's doing And what, like can months follow at say, and of -- there to lead? when cities look while thinking your anything weakness team,

Peter Baccile

that? take to want you do Peter,

Peter Schultz

point chart, top So California have the where Pennsylvania, rents rents say, much. run the at Florida, and we've ran markets earlier, that activity. as that there in certainly Atlanta, seen in not Southern most, of We're in not I seeing the Peter's to where Texas, that's in slower would the is the Nashville, Bill, in

said issue. an headwind. that Peter And affordability So not been a hasn't earlier, as it's

there's of thing some supply that much not to those in markets simply backdrop I'd other of be good. is as continues The say today, fundamental and the

something concerned So about I'm really that's today. not

William Crow

mentioned at Is New You Jersey that. risk?

Peter Schultz

of So in had of New a quarter a little Jersey absorption. net weak bit terms

think so as rent think Southern California. dynamic Jersey, with has about a an Northern Meadowlands similar the example, New I

there's the seeing have they in So a some weakness little don't think you're there. been again, other that markets. I supply But issues

William Crow

about some with a we've any tenant rent pressure lease change me, about But increasing economics of that activity becoming for mentioned more bumps. talked annual reps? concession quite bit. in market No negotiating Lastly rents markets. you point a Is and in under of course, discussion

Peter Baccile

want Chris, that? to do you take

Christopher Schneider

a that of bit so in you back bumps And rent far, But renewal we're negotiating X.X%. becoming signed XXXX, more a is certainly it X at negotiated Yes, was at X.X%. if little point. large XXXX, our we've what out in actually were take

there's -- holding some they're discussions, still still strong. there's relatively So but

Operator

comes with question JPMorgan. The next from Bely Nikita

Nikita Bely

I applicants on now a at asked. came someone maybe I deeper think the discussions leased you had the and with demand were the wanted side, was that Stockton I having same little else that was dig the were demand? indicating the in time? to some on it discussions a or know pool that building. that It's exact been NAREIT, I activity, having took you of some -- company talked was new person you already curious, you you were it's deeper Or about potential and it, it you've And -- that building that

Peter Baccile

bit those had won. that horse of a race property We Yes. a horses for of and one

Nikita Bely

running. curious, people, the many were how So in

Peter Baccile

that get particular group quickly. Multiple for us. into was was hotly We're a property, contested players. though. It more how very to to move a able One going Thanks not great many. for

the they The that so won were the the very terms of deals And similar each day. came down to wire. in

Operator

comes Jefferies. Jon with next from question The Petersen

Jonathan Petersen

correctly California a one if Are of you it Southern they which like reports seems from Phoenix, think guys leases leaving seeing Phoenix? kind press was activity relocation you any of correlating from of them. people of signed and with to can the I distribution for Phoenix, that with California in deciding I'm Steelcase moving do

Peter Baccile

Jojo?

Johannson Yap

confirm I serving it's not you. and still they say and parts the disclosing anything and -- U.S. named expansion we're not of Thank wouldn't serving -- they of footprint, are already we'll growing, since new, the name, it's but are an you it, more

rental that proposals few proposals, company in they're In the for see assignment. SoCal the as terms important. do can up and significant transportation drayage -- in company, costs, of a they needs could particular they costs. we has Long drayage in we If of lower potentially L.A., very of have -- really At involves certain the much whether the -- is as they the X benefit SoCal -- a so ship costs, decision almost that provider cost Port because very makes movement, lower of particular distinct of as don't actually Beach, that the prospect end customers. they a see Phoenix then end transportation day, they from or end If that space kind could

a seen customer So -- replaceable Phoenix to to is SoCal L.A. we or that's I Phoenix. SoCal haven't where really replaceable a or

Jonathan Petersen

it. Got

how ago. go a demand impacting data hot I -- thought Like just is -- couple in of more warehouse land center market I more hot used think let's it of is less I terms was is projects plot the to you X while what for data just color. seeing with past, warehouse And you sold pretty helpful market? like demand it say, in a development seems land in guess sticking guys developer. really That's would know remains data going kind are like seeing land Maybe that years Like are than that you have Phoenix? how Phoenix. are center you of you Okay. Obviously, parcels the actually being of center? that a

Johannson Yap

able to buildings so addition of semiconductor successfully a manufacturing, of That's we consumption growth, we're and a built Phoenix have our from economy for because center continues been been lease. in things, spot there -- that's to will that's a in lease although of of healthy complete JV, data bed Also to and that, and hot lot growth, that power too. hot continue. we've be amount the the still bed centers. why of location That lot Certainly, top for a data we a been that's benefits there to that population Yes. need one we've

the highest of of are centers data Phoenix. value in the term, because best industrial near and the In supply of

Operator

last the And Mizuho. Malhotra Vikram comes question with from

Vikram Malhotra

Just X quick ones.

you can on to made on make SoCal are that give sizes -- in And just not assumption you your want on just renewing. the So renewing. the I sure any statistics box

You tenant. assumption? broader said a big from the it's haven't heard specifically as This or you just

Johannson Yap

question? question, question. tenant the of assumption answer next continue both. we next The the only macro renew to discussions And X it X. first There that with was be to I'll a the

Art Harmon

the the . lease land square One was was many approximately other XXX,XXX. and feet? how

Scott Musil

was like having size... was I do box Vikram to think question his with just

Vikram Malhotra

how up? just you're assets exactly, are big now X Yes, the trying size. lease that to box these Yes,

Peter Schultz

Both the of spaces. the size

Vikram Malhotra

the renewals, the are? just big how boxes Sorry,

Johannson Yap

Oh, the XXX,XXX to range. foot yes, in yes. yes, square XXX,XXX They're

Vikram Malhotra

clear great like then And I out, but getting With on coming your last that Great. as there just still it a still mean, But is development, just just like I pieces? were felt you because some one. sort just about good commentary, this sounds i.e., all or changed? -- of -- the of I big within a like to It last timing move want to along want it pushed well. as one, something make all moving move-outs, progress quarter it Okay. of not. are not to some Is Stockton. just you XXXX, has moving you of feeling sounds lease-up off, be leave

Peter Baccile

when going beginning the has year mentioned been Yes. assets to difficult I I of lease. in certain a project call, as the pretty to mean this are

developments some have are that underway. We

have developments, gone and have we have completed We that into tenants. developments completed service without

a might. we've later Stockton done. they where are assets thought year. bit scenario know turn the is example is conversations ink. are because got continues getting difficult that again, budget of year. going It it's -- going happen to So that these into slower conversations that a impacted elongated And that in this some it's for has And we wasn't great -- And they in our when to -- rather other may than even actually the

we really best So conversations of the to of into to when having we're it's do the use conversations trying our the out information turn these just the ground, from we're all leases. our to tone have on project going teams to

Operator

over conference the closing concludes would like to remarks. for question-and-answer This our turn session. any back to I Peter Baccile

Peter Baccile

to Thank and call for everyone thanks participating on you, operator, today. our

or please many from to you Art, out call, forward follow-ups look If our York. in to in June Scott me. New of with connecting you We have any reach

Operator

The presentation. you attending concluded. today's conference for has now Thank

disconnect. now may You

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