Industrial Logistics Properties Trust — Call Transcript 2026

All right, great. Thanks everybody. Appreciate your time. My name is Mitch Germain. I'm a Sell-Side Analyst with Citizens Bank. It's my pleasure and honor to introduce you to the Industrial Logistics Properties Trust presentation. Joining me on the stage with the management team, I have Yael Duffy, right next to me, President and CEO, Tiffany Sy, Chief Financial Officer and Treasurer. Management's going to take five or seven minutes to talk about background on the company. We're going to shift over to Q&A. If you have a question, just raise your hand, and I'll make sure it gets answered. Thank you very much. Thanks, Mitch. For those of you who aren't familiar with our story, we own 409 properties in 39 states, about 60 million square feet. The portfolio is 95% leased, with a weighted average lease term of just under 7.5 years. I think part of what makes our portfolio unique is our Hawaii footprint. We have about 226 properties in Hawaii that are mostly ground leased. I know Mitch is going to ask me more about that later, so I'm going to wait for that question to give you more about what makes Hawaii unique for us. Our largest tenant is FedEx. They represent about 20% of our annualized revenue, followed by Amazon at just under 7%. Included in our portfolio is a 61% ownership of our Mountain Industrial joint venture, which we spun out as part of the acquisition of Monmouth in 2022. That portfolio is about 94 properties, 100% leased, 21 million square feet, and a WALT of just under six years. I think, just for a little history on ILPT, we were spun out of Select Income REIT in January of 2018 to unlock value of our industrial and logistics properties that were mostly in Hawaii and some on the mainland. At the time of our IPO, our portfolio was 266 properties and just under 29 million square feet. Really, we grew the portfolio significantly when we acquired Monmouth in 2022. We had had some portfolio acquisitions, 13-property portfolio and an eight-property portfolio prior to that. It was really with Monmouth that we grew our scale to where it is today. I think really the story of ILPT, we've had really great success over the last year. We have been top three of the best-performing REITs. This year we're on trend to be the second best performing, at least so far. Not to toot our own horns, we're very proud of that. I think a lot of what has sparked that increase in shareholder sentiment is we've been able to fix some of our floating rate debt. We did two big financings, one last year and one just in April. I think that's really the big stories, I guess the big headlines for ILPT. Great. Thank you for that. You said I was going to ask about Hawaii. Let's start there. I actually think that your Hawaii exposure is underappreciated and often overlooked. Let's talk about the market. Let's talk about what you own. Maybe provide some history of the portfolio and what is so unique about the Hawaii market when it comes to industrial assets or commercial real estate. Yep. We've actually, through different ownerships before they've actually ended up with ILPT, we've owned this portfolio of properties since 2003. We have really two large portfolios. One that is in really the CBD, the seaport, the airport, so prime location to Honolulu. All of those are ground lease, so we have very little exposure to any operating expenses because the tenants are responsible for everything. If insurance, real estate taxes, the tenants are responsible for all of that, and we're just getting paid ground rent. Over the years, a lot of industrial zone land has been converted to highest and best use. It's become a hotel or a shopping center. Really for businesses and even mainland tenants that are looking to be on the island, there is very little place for them to lease land. Historically, we've had a concept which is really unique to Hawaii, where a tenant will lease a parcel for 30 years, 40 years, 50 years, depending. Every 10 years usually, there's something called a rent reset, and with that rent reset, their rent, while they're not adding any new term, is going to market. They have a fixed rent for the first 10 years, and then it goes to market. The market isn't necessarily for ground lease. It's just the highest and best use. Over the years, we've seen 30%, 50%, 60% rent roll-ups as part of this rent reset. We've really tried, I think over the last five, six years, trying to get away from that and go to more normalized annual rent increases because it's better for us because we see continued rent growth, but also better for our tenants who aren't getting sticker shock when this rent reset comes up. That's the concept that we have for all of our Hawaii land leases, we also have another parcel of group of properties where it is much more heavily zoned industrial land. Really it's same concept, but it's just a little bit further away from the CBD, the airport, and the port, and so the rents are very different. In Mapunapuna, you can get $8, $9 per square foot on the ground lease. In Kapolei, it could be $1-$1.50. Really a big discrepancy in rent. Still we've been very successful, and we've generally have been very well leased on in Hawaii in huge rent roll-ups. Yeah. Just making sure I understand this. You guys are the largest industrial landlord in Hawaii, right? Correct. And- Apart from the government. Yes. If I'm not mistaken, single-digit percent of the land is earmarked for commercial. The rest of it is really conservation, right? Correct. Yep. That's really the opportunity to grow rents is not near term or not previous, but probably going forward as well. Correct. Yeah. One of the things, some of our tenants in Hawaii are more local users, and I think within our portfolio, we have really good tenant credit, but sometimes some of these smaller Hawaii tenants sometimes default on their leases. If we have any AR issues within our portfolio, it's usually in Hawaii. Since there's such little land available, just in general, the Hawaii vacancy rate is under 1%. If a tenant fails, there's usually someone right behind it looking to lease the space, and we're usually able to lease it, terminate the lease of the failing tenant, sign the lease of the new tenant the next day, and usually see 20%-30% roll-up in rent. For us, when tenants default in Hawaii, it's usually good news versus bad news. Great. I wanted to talk a little bit about the balance sheet strengthening. You mentioned, there are two really big loans, right? One which was executed back in 2025. Yep. Other of which, in your consolidated joint venture earlier this year. Maybe if we can just discuss those two transactions, and what it's meant for the company. Sure. Great. Last year in 2025, spring of 2025, we had $1.235 billion of floating rate debt that was on the consolidated balance sheet. It was floating rate. We were subject to volatility, especially with what's going on or what has been going on in the market with interest rates. We were required to buy interest rate caps, and the pricing of those fluctuated. At one point, we bought a $26 million cap. They went down to $3 million. There was a lot of volatility there. Last year, we were able to fix that. We paid that down $75 million. Overall, we're able to really reduce our interest expense, not only from a GAAP perspective, but also from a cash flow perspective. This year, we had $1.4 billion of floating rate debt that sat at our consolidated joint venture. Similar issue, right? We've got floating rate debt. We've got to buy caps. We just in May refinanced that. Not only did we take that $1.4 billion of floating rate debt that was coming due next year, but we also packaged that up with $200 million of amortizing debt that did sit at the consolidated joint venture, which we were spending around $20 million of cash annually to reduce the principal. We packaged that all up into $1.62 billion of fixed rate debt. It's interest only, along with the other one that I mentioned. We're able to free up $20 million of cash in our joint venture. Now we've fixed our entire debt portfolio. All in, we have $4.2 billion on a consolidated basis. Our weighted average rate is now 5.48%, and our next maturity date isn't until 2029. We feel really good about these recent transactions. It's allowing us to be able to avoid the volatility in the market and really plan around that. Obviously preserve more cash, which is certainly key. Preserve more cash. Yes. The leverage is still a little bit high, right? It is. These balance sheet-enhancing transactions will help create a little bit more cash flow. Your property operations have been strong, so you're creating more EBITDA. Maybe just talk a little bit about the long-term strategy with regards to what's next for the balance sheet. I think for us, doing these two financings were really imperative for us just because, as Tiffany mentioned, we had just so much volatility with the interest rates. Just as a little history, when we had first bought Monmouth, our business plan had been that if we're going to buy the properties, we're going to spin off a joint venture, for 94 properties, which we did. We brought in one partner, we had been pretty heavily marketing for a second partner, that could take maybe another 39% stake. We have one partner that has 39% already. As we were going through that marketing process, Russia invaded Ukraine, interest rates went up, and people got a little bit squeamish about investing, just where we had floating rate debt. I think now that we've fixed the rate on this Mountain debt, I think it presents an opportunity where it might be attractive for a potential second partner. We haven't started marketing it yet, just because, as Tiffany said, we just executed last month. I think this could be a good opportunity, and it could organically help us de-lever. I think it could be in a better position to be with our peers. Great. Let's talk about the operating portfolio. I know, if you look at some of the year-to-date achievements, on the operating side, one has been on the leasing side, right? So, obviously you backfilled the largest vacancy you had in the mainland, right, which was over 500,000 sq ft in Indianapolis. I know it was obviously a key pillar to your plan. Maybe just talk a little bit about how that process evolved. Yeah. We have really, I think for the past six or seven quarters, we've been talking about two major vacancies within our portfolio that really have been needle movers for us. One, as you said, Mitch, is a 532,000 sq ft property in the suburbs of Indianapolis. That one has been vacant since 2024. We've had some start and stops with some leasing efforts. We actually, last month, signed FedEx for a 10-year lease there. It's great for us because FedEx is a large tenant in our portfolio. We know them. We have some properties that are this size with FedEx, which they use it as a distribution or 3PL, and then we have some last-mile facilities that are much smaller. Kind of within FedEx, we have the whole gamut of portfolio size. I think it was a big lease for us, and I think we're really happy with the execution there. I think the other major vacancy that we talk about all the time. I didn't ask about it. I know, but you were going to ask. You volunteered this one. You were going to ask. We have a 2.2 million square foot parcel in Hawaii. I know 10 minutes ago, I was telling you how we have tenants lining up on our doorsteps to lease our Hawaii properties, but this one is a little bit of a unique situation. It's 2.2 million square feet, and for those who can't wrap their head around that's about 50 acres. It's undeveloped. It is really an open field, trees. I think we've had tenants or prospective tenants go, and they see pigs running around on the site. It is, when I say undeveloped land, it is really undeveloped land. We've had that one. We had previously, that had been leased to a tenant that had really leased it just for a defensive purpose, and so they had leased it for 30 years and had done nothing with it, hence why vegetation is growing. We, in 2022, had signed a lease with Home Depot, who had a right to terminate their lease as they kind of went through their diligence process. I think it wasn't really the site, but it was just operating fundamentals for their own business that they ended up terminating the lease. We've been working really hard to try to lease that property, and we've had a lot of interest, but it just takes a lot of work for somebody to get comfortable with how big of a project it's going to be. I think anybody who's investing could be investing not tens of millions, but hundreds of millions of dollars. It isn't such an easy thing for somebody to just get comfortable with. We've actually, in the last couple of months, have gotten a little more traction and a group really digging in. I'm hopeful that we might actually be able to get this one leased sometime in the near future. It's actually the leasing momentum in the portfolio has been pretty strong. I think it's 6 million or so square feet year-to-date. That doesn't include kind of Indianapolis. Yeah. Clearly that number continues to rise. You've got a pretty large pipeline, 6 or so million square feet. Yep. Maybe just talk about overall demand trends that you're seeing, please. Our process is that we really try to get ahead of these lease expirations of our tenants pretty much as far in advance as we can get them to start talking to us. It's very hard for a 1 million square foot tenant to decide, three months left on their lease, if they're going to stay or go. It's also hard for us to try to lease it if we don't know what their plans are. We're always talking to our tenants, but we try to talk to them and try to understand their plans. If it seems to be going like 50/50, we hire brokers, we start trying to market the property in advance. I think that's really given us good success because we've been able to, if a tenant decides to leave, we usually have enough runway to find another tenant to backfill the space. I think generally what we've been seeing in the market is that tenants. They're engaging, but they just don't know. I think some are blaming, they don't know what's going on geopolitically and the impacts to their business. They're concerned. I always laugh a little bit because rent is such a small portion for some of these industrial tenants, because labor and fuel is much bigger needle movers for them. I think they're just being a little gun-shy to make decisions that are for a five or 10-year lease. There have been some tenants that are just kind of kicking the can and wanting to do short-term renewals. Depending on the market, we could be open to that, just because we've been seeing great market rent growth. In other cases, I think we try to hold their feet to the fire and have them exercise their renewal options that they have, because it just is better security for us. It's funny you say that, because broadly speaking, we're hearing a little bit more active or maybe more abrupt decision-making, particularly when you compare it to early 2025, when we had all the threat about what the tariffs were going to be. Yeah. The impact of the tariffs. Would you say it's a little bit better, or would you say it's still? It's definitely better, but I think it's taking longer than it did in 2022, where people just couldn't get enough. They were gobbling up the space, and they couldn't get enough, and they wanted to make sure they locked it in before the rents went up higher. Yeah. I think they're just being a little more- Yeah. cautious, but I think tariffs, I don't know. I think there was a lot of talk of tariffs, but I don't know that it necessarily made its way through the decision-making ultimately. I think it was the reason that tenants delayed, but I don't know that it changed their decision-making. Now, despite the slower decision-making, the economics around the leases have been pretty spectacular. Rents increasing, I think it's four consecutive quarters north of 20%? Six. Okay. I'll let you take it from here then. Again, not to go back to COVID, but I think part of during COVID, I think a lot of our peers were seeing this enormous growth in their portfolios. For us, our WALT is seven and a half years. We, in some ways, have the benefit of a long-term WALT because we know that we have consistent annualized revenue that we're going to be getting. We really missed a lot of the opportunity in 2022 and 2023, where our peers were seeing these huge rollovers in their leases, and they were capitalizing on that market rent growth. For us, it's just taking longer for it to come to fruition because these leases that were signed in 2020 or 2019 are just starting to roll. We're seeing tenants are having sticker shock because they signed a $375 per square foot. Now their market rent is $9. It is what it is. It is what it is. Yeah. I think it's just taken a while for it to come through our financials. Also, as I mentioned, we're getting ahead of some of these leases ahead of their expiration. If we sign a lease today for a tenant in 2027, we're not going to see the benefit of that cash NOI until 2027. Takes a little bit longer to hit. We definitely have been, the last six quarters, benefiting from that. You've been providing guidance on a quarterly basis. This past quarter, you offered us full-year guidance. Yes. I'd love to get some insight on, A, what prompted the change, and maybe you can highlight some of the parameters of what your expectations are. Sure. We felt as though investors and analysts would appreciate the transparency. We have the capability to give that guidance. We feel pretty comfortable about our ability to forecast, especially with the interest rate volatility being locked down, now we feel pretty comfortable with that. Hopefully, it seems as though it was appreciated. It definitely was. It definitely was. Do you want me to speak specifics? Please. Sure. NOI for this year, this is what you're looking for? Just- All right. NOI for this year. Just hit on it. We're forecasting $357 million-$362 million. Our adjusted EBITDAre, we expect to be between $344 million and $349 million. Normalized FFO between $84 million and $89 million. Per share, we expect to be around $1.34. All of that being growth from the prior year. All of that being growth from the prior year. I'll point out the ranges are pretty tight in our guidance. We do feel pretty comfortable in our ability to forecast there. Hopefully, that's helpful. Great. Anybody? Great. Go ahead. If you were to either sell or lease that property in Hawaii, how much of an impact would it be to your guidance? That would be a $0.03 per share annual improvement. If we were to replace it with what was previously there, right? We don't know if that's what would happen, but it's $0.03. I don't know if we've said this or not, but it is a much larger impact on occupancy or occupancy percentage than it is on our actual revenues. I mean, from a revenue perspective, it was 0.79% of our annualized revenue. It represents 3.6% of occupancy. It's a big headline for us because it's just such a big number from a occupancy impact, and so much more meaningful occupancy versus revenue. Right. On the bottom line, the Indianapolis lease has a real meaningful impact. Exactly right. Yeah. Less on occupancy. It's the complete opposite. That's right. Yeah. Backdrops improving, balance sheet strengthening. Final thoughts for everybody? I think we have more room. We were just talking about this earlier. I think there's much more room in the share price. I think, again, we continue to see market rent growth. Our portfolio's very strong in its performance, operating performance. We're not denying that we have a lot of leverage, but we're working on it, and I think there's more to come. Great. Thank you so much. It's an honor to be up here, and I appreciate everyone's time. Thank you. Thank you.

Speaker 1: All right, great. Thanks everybody. Appreciate your time. My name is Mitch Germain. I'm a Sell-Side Analyst with Citizens Bank. It's my pleasure and honor to introduce you to the Industrial Logistics Properties Trust presentation. Joining me on the stage with the management team, I have Yael Duffy, right next to me, President and CEO, Tiffany Sy, Chief Financial Officer and Treasurer. Management's going to take five or seven minutes to talk about background on the company. We're going to shift over to Q&A. If you have a question, just raise your hand, and I'll make sure it gets answered. Thank you very much. All right, great. all right great Thanks everybody. thanks everybody Appreciate your time. appreciate your time My name is Mitch Germain. my name is mitch germain I'm a Sell-Side Analyst with Citizens Bank. i'm a sell-side analyst with citizens bank It's my pleasure and honor to introduce you to the Industrial Logistics Properties Trust presentation. it's my pleasure and honor to introduce you to the industrial logistics properties trust presentation Joining me on the stage with the management team, I have Yael Duffy, right next to me, President and CEO, Tiffany Sy, Chief Financial Officer and Treasurer. joining me on the stage with the management team i have yael duffy right next to me president and ceo tiffany sy chief financial officer and treasurer Management's going to take five or seven minutes to talk about background on the company. management's going to take five or seven minutes to talk about background on the company We're going to shift over to Q&A. we're going to shift over to q&a If you have a question, just raise your hand, and I'll make sure it gets answered. if you have a question just raise your hand and i'll make sure it gets answered Thank you very much. thank you very much

Speaker 3: Thanks, Mitch. For those of you who aren't familiar with our story, we own 409 properties in 39 states, about 60 million square feet. The portfolio is 95% leased, with a weighted average lease term of just under 7.5 years. I think part of what makes our portfolio unique is our Hawaii footprint. We have about 226 properties in Hawaii that are mostly ground leased. I know Mitch is going to ask me more about that later, so I'm going to wait for that question to give you more about what makes Hawaii unique for us. Our largest tenant is FedEx. They represent about 20% of our annualized revenue, followed by Amazon at just under 7%. Included in our portfolio is a 61% ownership of our Mountain Industrial joint venture, which we spun out as part of the acquisition of Monmouth in 2022. Thanks, Mitch. thanks mitch For those of you who aren't familiar with our story, we own 409 properties in 39 states, about 60 million square feet . for those of you who aren't familiar with our story we own 409 properties in 39 states about 60 million square feet The portfolio is 95% leased, with a weighted average lease term of just under 7.5 years. the portfolio is 95% leased with a weighted average lease term of just under 7.5 years I think part of what makes our portfolio unique is our Hawaii footprint. i think part of what makes our portfolio unique is our hawaii footprint We have about 226 properties in Hawaii that are mostly ground leased. we have about 226 properties in hawaii that are mostly ground leased I know Mitch is going to ask me more about that later, so I'm going to wait for that question to give you more about what makes Hawaii unique for us. i know mitch is going to ask me more about that later so i'm going to wait for that question to give you more about what makes hawaii unique for us Our largest tenant is FedEx. our largest tenant is fedex They represent about 20% of our annualized revenue, followed by Amazon at just under 7%. they represent about 20% of our annualized revenue followed by amazon at just under 7% Included in our portfolio is a 61% ownership of our Mountain Industrial joint venture, which we spun out as part of the acquisition of Monmouth in 2022. included in our portfolio is a 61% ownership of our mountain industrial joint venture which we spun out as part of the acquisition of monmouth in 2022 That portfolio is about 94 properties, 100% leased, 21 million square feet, and a WALT of just under six years. I think, just for a little history on ILPT, we were spun out of Select Income REIT in January of 2018 to unlock value of our industrial and logistics properties that were mostly in Hawaii and some on the mainland. At the time of our IPO, our portfolio was 266 properties and just under 29 million square feet. Really, we grew the portfolio significantly when we acquired Monmouth in 2022. We had had some portfolio acquisitions, 13-property portfolio and an eight-property portfolio prior to that. It was really with Monmouth that we grew our scale to where it is today. I think really the story of ILPT, we've had really great success over the last year. That portfolio is about 94 properties, 100% leased, 21 million square feet , and a WALT of just under six years. that portfolio is about 94 properties 100% leased 21 million square feet and a walt of just under six years I think, just for a little history on ILPT, we were spun out of Select Income REIT in January of 2018 to unlock value of our industrial and logistics properties that were mostly in Hawaii and some on the mainland. i think just for a little history on ilpt we were spun out of select income reit in january of 2018 to unlock value of our industrial and logistics properties that were mostly in hawaii and some on the mainland At the time of our IPO, our portfolio was 266 properties and just under 29 million sq uare feet. at the time of our ipo our portfolio was 266 properties and just under 29 million sq uare feet Really, we grew the portfolio significantly when we acquired Monmouth in 2022. really we grew the portfolio significantly when we acquired monmouth in 2022 We had had some portfolio acquisitions, 13-property portfolio and an eight-property portfolio prior to that. we had had some portfolio acquisitions 13-property portfolio and an eight-property portfolio prior to that It was really with Monmouth that we grew our scale to where it is today. it was really with monmouth that we grew our scale to where it is today I think really the story of ILPT, we've had really great success over the last year. i think really the story of ilpt we've had really great success over the last year We have been top three of the best-performing REITs. This year we're on trend to be the second best performing, at least so far. Not to toot our own horns, we're very proud of that. I think a lot of what has sparked that increase in shareholder sentiment is we've been able to fix some of our floating rate debt. We did two big financings, one last year and one just in April. I think that's really the big stories, I guess the big headlines for ILPT. We have been top three of the best-performing REITs. we have been top three of the best-performing reits This year we're on trend to be the second best performing, at least so far. this year we're on trend to be the second best performing at least so far Not to toot our own horns, we're very proud of that. not to toot our own horns we're very proud of that I think a lot of what has sparked that increase in shareholder sentiment is we've been able to fix some of our floating rate debt. i think a lot of what has sparked that increase in shareholder sentiment is we've been able to fix some of our floating rate debt We did two big financings, one last year and one just in April. we did two big financings one last year and one just in april I think that's really the big stories, I guess the big headlines for ILPT. i think that's really the big stories i guess the big headlines for ilpt

Speaker 1: Great. Thank you for that. You said I was going to ask about Hawaii. Let's start there. I actually think that your Hawaii exposure is underappreciated and often overlooked. Let's talk about the market. Let's talk about what you own. Maybe provide some history of the portfolio and what is so unique about the Hawaii market when it comes to industrial assets or commercial real estate. Great. great Thank you for that. thank you for that You said I was going to ask about Hawaii. you said i was going to ask about hawaii Let's start there. let's start there I actually think that your Hawaii exposure is underappreciated and often overlooked. i actually think that your hawaii exposure is underappreciated and often overlooked Let's talk about the market. let's talk about the market Let's talk about what you own. let's talk about what you own Maybe provide some history of the portfolio and what is so unique about the Hawaii market when it comes to industrial assets or commercial real estate. maybe provide some history of the portfolio and what is so unique about the hawaii market when it comes to industrial assets or commercial real estate

Speaker 3: Yep. We've actually, through different ownerships before they've actually ended up with ILPT, we've owned this portfolio of properties since 2003. We have really two large portfolios. One that is in really the CBD, the seaport, the airport, so prime location to Honolulu. All of those are ground lease, so we have very little exposure to any operating expenses because the tenants are responsible for everything. If insurance, real estate taxes, the tenants are responsible for all of that, and we're just getting paid ground rent. Over the years, a lot of industrial zone land has been converted to highest and best use. It's become a hotel or a shopping center. Really for businesses and even mainland tenants that are looking to be on the island, there is very little place for them to lease land. Yep. yep We've actually, through different ownerships before they've actually ended up with ILPT, we've owned this portfolio of properties since 2003. we've actually through different ownerships before they've actually ended up with ilpt we've owned this portfolio of properties since 2003 We have really two large portfolios. we have really two large portfolios One that is in really the CBD, the seaport, the airport, so prime location to Honolulu. one that is in really the cbd the seaport the airport so prime location to honolulu All of those are ground lease, so we have very little exposure to any operating expenses because the tenants are responsible for everything. all of those are ground lease so we have very little exposure to any operating expenses because the tenants are responsible for everything If insurance, real estate taxes, the tenants are responsible for all of that, and we're just getting paid ground rent. if insurance real estate taxes the tenants are responsible for all of that and we're just getting paid ground rent Over the years, a lot of industrial zone land has been converted to highest and best use. over the years a lot of industrial zone land has been converted to highest and best use It's become a hotel or a shopping center. it's become a hotel or a shopping center Really for businesses and even mainland tenants that are looking to be on the island, there is very little place for them to lease land. really for businesses and even mainland tenants that are looking to be on the island there is very little place for them to lease land Historically, we've had a concept which is really unique to Hawaii, where a tenant will lease a parcel for 30 years, 40 years, 50 years, depending. Every 10 years usually, there's something called a rent reset, and with that rent reset, their rent, while they're not adding any new term, is going to market. They have a fixed rent for the first 10 years, and then it goes to market. The market isn't necessarily for ground lease. It's just the highest and best use. Over the years, we've seen 30%, 50%, 60% rent roll-ups as part of this rent reset. Historically, we've had a concept which is really unique to Hawaii, where a tenant will lease a parcel for 30 years, 40 years, 50 years, depending. historically we've had a concept which is really unique to hawaii where a tenant will lease a parcel for 30 years 40 years 50 years depending Every 10 years usually, there's something called a rent reset, and with that rent reset, their rent, while they're not adding any new term, is going to market. every 10 years usually there's something called a rent reset and with that rent reset their rent while they're not adding any new term is going to market They have a fixed rent for the first 10 years, and then it goes to market. they have a fixed rent for the first 10 years and then it goes to market The market isn't necessarily for ground lease. the market isn't necessarily for ground lease It's just the highest and best use. it's just the highest and best use Over the years, we've seen 30%, 50%, 60% rent roll-ups as part of this rent reset. over the years we've seen 30% 50% 60% rent roll-ups as part of this rent reset We've really tried, I think over the last five, six years, trying to get away from that and go to more normalized annual rent increases because it's better for us because we see continued rent growth, but also better for our tenants who aren't getting sticker shock when this rent reset comes up. That's the concept that we have for all of our Hawaii land leases, we also have another parcel of group of properties where it is much more heavily zoned industrial land. Really it's same concept, but it's just a little bit further away from the CBD, the airport, and the port, and so the rents are very different. In Mapunapuna, you can get $8, $9 per square foot on the ground lease. In Kapolei, it could be $1-$1.50. Really a big discrepancy in rent. We've really tried, I think over the last five, six years, trying to get away from that and go to more normalized annual rent increases because it's better for us because we see continued rent growth, but also better for our tenants who aren't getting sticker shock when this rent reset comes up. we've really tried i think over the last five six years trying to get away from that and go to more normalized annual rent increases because it's better for us because we see continued rent growth but also better for our tenants who aren't getting sticker shock when this rent reset comes up That's the concept that we have for all of our Hawaii land leases, we also have another parcel of group of properties where it is much more heavily zoned industrial land. that's the concept that we have for all of our hawaii land leases we also have another parcel of group of properties where it is much more heavily zoned industrial land Really it's same concept, but it's just a little bit further away from the CBD, the airport, and the port, and so the rents are very different. really it's same concept but it's just a little bit further away from the cbd the airport and the port and so the rents are very different In Mapunapuna, you can get $8, $9 per square foot on the ground lease. in mapunapuna you can get $8 $9 per square foot on the ground lease In Kapolei, it could be $1- $1.50. in kapolei it could be $1- $1.50 Really a big discrepancy in rent. really a big discrepancy in rent Still we've been very successful, and we've generally have been very well leased on in Hawaii in huge rent roll-ups. Still we've been very successful, and we've generally have been very well leased on in Hawaii in huge rent roll-ups. still we've been very successful and we've generally have been very well leased on in hawaii in huge rent roll-ups

Speaker 1: Yeah. Just making sure I understand this. You guys are the largest industrial landlord in Hawaii, right? Yeah. yeah Just making sure I understand this. just making sure i understand this You guys are the largest industrial landlord in Hawaii, right? you guys are the largest industrial landlord in hawaii right

Speaker 3: Correct. Correct. correct

Speaker 1: And- And- and-

Speaker 3: Apart from the government. Apart from the government. apart from the government

Speaker 1: Yes. If I'm not mistaken, single-digit percent of the land is earmarked for commercial. The rest of it is really conservation, right? Yes. yes If I'm not mistaken, single-digit percent of the land is earmarked for commercial. if i'm not mistaken single-digit percent of the land is earmarked for commercial The rest of it is really conservation, right? the rest of it is really conservation right

Speaker 3: Correct. Yep. Correct. correct Yep. yep

Speaker 1: That's really the opportunity to grow rents is not near term or not previous, but probably going forward as well. That's really the opportunity to grow rents is not near term or not previous, but probably going forward as well. that's really the opportunity to grow rents is not near term or not previous but probably going forward as well

Speaker 3: Correct. Yeah. One of the things, some of our tenants in Hawaii are more local users, and I think within our portfolio, we have really good tenant credit, but sometimes some of these smaller Hawaii tenants sometimes default on their leases. If we have any AR issues within our portfolio, it's usually in Hawaii. Since there's such little land available, just in general, the Hawaii vacancy rate is under 1%. If a tenant fails, there's usually someone right behind it looking to lease the space, and we're usually able to lease it, terminate the lease of the failing tenant, sign the lease of the new tenant the next day, and usually see 20%-30% roll-up in rent. For us, when tenants default in Hawaii, it's usually good news versus bad news. Correct. correct Yeah. yeah One of the things, some of our tenants in Hawaii are more local users, and I think within our portfolio, we have really good tenant credit, but sometimes some of these smaller Hawaii tenants sometimes default on their leases. one of the things some of our tenants in hawaii are more local users and i think within our portfolio we have really good tenant credit but sometimes some of these smaller hawaii tenants sometimes default on their leases If we have any AR issues within our portfolio, it's usually in Hawaii. if we have any ar issues within our portfolio it's usually in hawaii Since there's such little land available, just in general, the Hawaii vacancy rate is under 1%. since there's such little land available just in general the hawaii vacancy rate is under 1% If a tenant fails, there's usually someone right behind it looking to lease the space, and we're usually able to lease it, terminate the lease of the failing tenant, sign the lease of the new tenant the next day, and usually see 20%-30% roll-up in rent. if a tenant fails there's usually someone right behind it looking to lease the space and we're usually able to lease it terminate the lease of the failing tenant sign the lease of the new tenant the next day and usually see 20%-30% roll-up in rent For us, when tenants default in Hawaii, it's usually good news versus bad news. for us when tenants default in hawaii it's usually good news versus bad news

Speaker 1: Great. I wanted to talk a little bit about the balance sheet strengthening. You mentioned, there are two really big loans, right? One which was executed back in 2025. Great. great I wanted to talk a little bit about the balance sheet strengthening. i wanted to talk a little bit about the balance sheet strengthening You mentioned, there are two really big loans, right? you mentioned there are two really big loans right One which was executed back in 2025. one which was executed back in 2025

Speaker 2: Yep. Yep. yep

Speaker 1: Other of which, in your consolidated joint venture earlier this year. Maybe if we can just discuss those two transactions, and what it's meant for the company. Other of which, in your consolidated joint venture earlier this year. other of which in your consolidated joint venture earlier this year Maybe if we can just discuss those two transactions, and what it's meant for the company. maybe if we can just discuss those two transactions and what it's meant for the company

Speaker 2: Sure. Sure. sure

Speaker 1: Great. Great. great

Speaker 2: Last year in 2025, spring of 2025, we had $1.235 billion of floating rate debt that was on the consolidated balance sheet. It was floating rate. We were subject to volatility, especially with what's going on or what has been going on in the market with interest rates. We were required to buy interest rate caps, and the pricing of those fluctuated. At one point, we bought a $26 million cap. They went down to $3 million. There was a lot of volatility there. Last year, we were able to fix that. We paid that down $75 million. Overall, we're able to really reduce our interest expense, not only from a GAAP perspective, but also from a cash flow perspective. This year, we had $1.4 billion of floating rate debt that sat at our consolidated joint venture. Similar issue, right? Last year in 2025, spring of 2025, we had $1.235 billion of floating rate debt that was on the consolidated balance sheet. last year in 2025 spring of 2025 we had $1.235 billion of floating rate debt that was on the consolidated balance sheet It was floating rate. it was floating rate We were subject to volatility, especially with what's going on or what has been going on in the market with interest rates. we were subject to volatility especially with what's going on or what has been going on in the market with interest rates We were required to buy interest rate caps, and the pricing of those fluctuated. we were required to buy interest rate caps and the pricing of those fluctuated At one point, we bought a $26 million cap. at one point we bought a $26 million cap They went down to $3 million. they went down to $3 million There was a lot of volatility there. there was a lot of volatility there Last year, we were able to fix that. last year we were able to fix that We paid that down $75 million. we paid that down $75 million Overall, we're able to really reduce our interest expense, not only from a GAAP perspective, but also from a cash flow perspective. overall we're able to really reduce our interest expense not only from a gaap perspective but also from a cash flow perspective This year, we had $1.4 billion of floating rate debt that sat at our consolidated joint venture. this year we had $1.4 billion of floating rate debt that sat at our consolidated joint venture Similar issue, right? similar issue right We've got floating rate debt. We've got to buy caps. We just in May refinanced that. Not only did we take that $1.4 billion of floating rate debt that was coming due next year, but we also packaged that up with $200 million of amortizing debt that did sit at the consolidated joint venture, which we were spending around $20 million of cash annually to reduce the principal. We packaged that all up into $1.62 billion of fixed rate debt. It's interest only, along with the other one that I mentioned. We're able to free up $20 million of cash in our joint venture. Now we've fixed our entire debt portfolio. All in, we have $4.2 billion on a consolidated basis. Our weighted average rate is now 5.48%, and our next maturity date isn't until 2029. We feel really good about these recent transactions. We've got floating rate debt. we've got floating rate debt We've got to buy caps. we've got to buy caps We just in May refinanced that. we just in may refinanced that Not only did we take that $1.4 billion of floating rate debt that was coming due next year, but we also packaged that up with $200 million of amortizing debt that did sit at the consolidated joint venture, which we were spending around $20 million of cash annually to reduce the principal. not only did we take that $1.4 billion of floating rate debt that was coming due next year but we also packaged that up with $200 million of amortizing debt that did sit at the consolidated joint venture which we were spending around $20 million of cash annually to reduce the principal We packaged that all up into $1.62 billion of fixed rate debt. we packaged that all up into $1.62 billion of fixed rate debt It's interest only, along with the other one that I mentioned. it's interest only along with the other one that i mentioned We're able to free up $20 million of cash in our joint venture. we're able to free up $20 million of cash in our joint venture Now we've fixed our entire debt portfolio. now we've fixed our entire debt portfolio All in, we have $4.2 billion on a consolidated basis. all in we have $4.2 billion on a consolidated basis Our weighted average rate is now 5.48%, and our next maturity date isn't until 2029. our weighted average rate is now 5.48% and our next maturity date isn't until 2029 We feel really good about these recent transactions. we feel really good about these recent transactions It's allowing us to be able to avoid the volatility in the market and really plan around that. It's allowing us to be able to avoid the volatility in the market and really plan around that. it's allowing us to be able to avoid the volatility in the market and really plan around that

Speaker 1: Obviously preserve more cash, which is certainly key. Obviously preserve more cash, which is certainly key. obviously preserve more cash which is certainly key

Speaker 2: Preserve more cash. Yes. Preserve more cash. preserve more cash Yes. yes

Speaker 1: The leverage is still a little bit high, right? The leverage is still a little bit high, right? the leverage is still a little bit high right

Speaker 2: It is. It is. it is

Speaker 1: These balance sheet-enhancing transactions will help create a little bit more cash flow. Your property operations have been strong, so you're creating more EBITDA. Maybe just talk a little bit about the long-term strategy with regards to what's next for the balance sheet. These balance sheet-enhancing transactions will help create a little bit more cash flow. these balance sheet-enhancing transactions will help create a little bit more cash flow Your property operations have been strong, so you're creating more EBITDA. your property operations have been strong so you're creating more ebitda Maybe just talk a little bit about the long-term strategy with regards to what's next for the balance sheet. maybe just talk a little bit about the long-term strategy with regards to what's next for the balance sheet

Speaker 3: I think for us, doing these two financings were really imperative for us just because, as Tiffany mentioned, we had just so much volatility with the interest rates. Just as a little history, when we had first bought Monmouth, our business plan had been that if we're going to buy the properties, we're going to spin off a joint venture, for 94 properties, which we did. We brought in one partner, we had been pretty heavily marketing for a second partner, that could take maybe another 39% stake. We have one partner that has 39% already. As we were going through that marketing process, Russia invaded Ukraine, interest rates went up, and people got a little bit squeamish about investing, just where we had floating rate debt. I think for us, doing these two financings were really imperative for us just because, as Tiffany mentioned, we had just so much volatility with the interest rates. i think for us doing these two financings were really imperative for us just because as tiffany mentioned we had just so much volatility with the interest rates Just as a little history, when we had first bought Monmouth, our business plan had been that if we're going to buy the properties, we're going to spin off a joint venture, for 94 properties, which we did. just as a little history when we had first bought monmouth our business plan had been that if we're going to buy the properties we're going to spin off a joint venture for 94 properties which we did We brought in one partner, we had been pretty heavily marketing for a second partner, that could take maybe another 39% stake. we brought in one partner we had been pretty heavily marketing for a second partner that could take maybe another 39% stake We have one partner that has 39% already. we have one partner that has 39% already As we were going through that marketing process, Russia invaded Ukraine, interest rates went up, and people got a little bit squeamish about investing, just where we had floating rate debt. as we were going through that marketing process russia invaded ukraine interest rates went up and people got a little bit squeamish about investing just where we had floating rate debt I think now that we've fixed the rate on this Mountain debt, I think it presents an opportunity where it might be attractive for a potential second partner. We haven't started marketing it yet, just because, as Tiffany said, we just executed last month. I think this could be a good opportunity, and it could organically help us de-lever. I think it could be in a better position to be with our peers. I think now that we've fixed the rate on this Mountain debt, I think it presents an opportunity where it might be attractive for a potential second partner. i think now that we've fixed the rate on this mountain debt i think it presents an opportunity where it might be attractive for a potential second partner We haven't started marketing it yet, just because, as Tiffany said, we just executed last month. we haven't started marketing it yet just because as tiffany said we just executed last month I think this could be a good opportunity, and it could organically help us de-lever. i think this could be a good opportunity and it could organically help us de-lever I think it could be in a better position to be with our peers. i think it could be in a better position to be with our peers

Speaker 1: Great. Let's talk about the operating portfolio. I know, if you look at some of the year-to-date achievements, on the operating side, one has been on the leasing side, right? So, obviously you backfilled the largest vacancy you had in the mainland, right, which was over 500,000 sq ft in Indianapolis. I know it was obviously a key pillar to your plan. Maybe just talk a little bit about how that process evolved. Great. great Let's talk about the operating portfolio. let's talk about the operating portfolio I know, if you look at some of the year-to-date achievements, on the operating side, one has been on the leasing side, right? i know if you look at some of the year-to-date achievements on the operating side one has been on the leasing side right So, obviously you backfilled the largest vacancy you had in the mainland, right, which was over 500,000 sq ft in Indianapolis. so obviously you backfilled the largest vacancy you had in the mainland right which was over 500,000 sq ft in indianapolis I know it was obviously a key pillar to your plan. i know it was obviously a key pillar to your plan Maybe just talk a little bit about how that process evolved. maybe just talk a little bit about how that process evolved

Speaker 3: Yeah. We have really, I think for the past six or seven quarters, we've been talking about two major vacancies within our portfolio that really have been needle movers for us. One, as you said, Mitch, is a 532,000 sq ft property in the suburbs of Indianapolis. That one has been vacant since 2024. We've had some start and stops with some leasing efforts. We actually, last month, signed FedEx for a 10-year lease there. It's great for us because FedEx is a large tenant in our portfolio. We know them. We have some properties that are this size with FedEx, which they use it as a distribution or 3PL, and then we have some last-mile facilities that are much smaller. Kind of within FedEx, we have the whole gamut of portfolio size. Yeah. yeah We have really, I think for the past six or seven quarters, we've been talking about two major vacancies within our portfolio that really have been needle movers for us. we have really i think for the past six or seven quarters we've been talking about two major vacancies within our portfolio that really have been needle movers for us One, as you said, Mitch, is a 532,000 sq ft property in the suburbs of Indianapolis. one as you said mitch is a 532,000 sq ft property in the suburbs of indianapolis That one has been vacant since 2024. that one has been vacant since 2024 We've had some start and stops with some leasing efforts. we've had some start and stops with some leasing efforts We actually, last month, signed FedEx for a 10-year lease there. we actually last month signed fedex for a 10-year lease there It's great for us because FedEx is a large tenant in our portfolio. it's great for us because fedex is a large tenant in our portfolio We know them. we know them We have some properties that are this size with FedEx, which they use it as a distribution or 3PL, and then we have some last-mile facilities that are much smaller. we have some properties that are this size with fedex which they use it as a distribution or 3pl and then we have some last-mile facilities that are much smaller Kind of within FedEx, we have the whole gamut of portfolio size. kind of within fedex we have the whole gamut of portfolio size I think it was a big lease for us, and I think we're really happy with the execution there. I think the other major vacancy that we talk about all the time. I think it was a big lease for us, and I think we're really happy with the execution there. i think it was a big lease for us and i think we're really happy with the execution there I think the other major vacancy that we talk about all the time. i think the other major vacancy that we talk about all the time

Speaker 1: I didn't ask about it. I didn't ask about it. i didn't ask about it

Speaker 3: I know, but you were going to ask. I know, but you were going to ask. i know but you were going to ask

Speaker 1: You volunteered this one. You volunteered this one. you volunteered this one

Speaker 3: You were going to ask. We have a 2.2 million square foot parcel in Hawaii. I know 10 minutes ago, I was telling you how we have tenants lining up on our doorsteps to lease our Hawaii properties, but this one is a little bit of a unique situation. It's 2.2 million square feet, and for those who can't wrap their head around that's about 50 acres. It's undeveloped. It is really an open field, trees. I think we've had tenants or prospective tenants go, and they see pigs running around on the site. It is, when I say undeveloped land, it is really undeveloped land. We've had that one. You were going to ask. you were going to ask We have a 2.2 million square foot parcel in Hawaii. we have a 2.2 million square foot parcel in hawaii I know 10 minutes ago, I was telling you how we have tenants lining up on our doorsteps to lease our Hawaii properties, but this one is a little bit of a unique situation. i know 10 minutes ago i was telling you how we have tenants lining up on our doorsteps to lease our hawaii properties but this one is a little bit of a unique situation It's 2.2 million square feet, and for those who can't wrap their head around that's about 50 acres. it's 2.2 million square feet and for those who can't wrap their head around that's about 50 acres It's undeveloped. it's undeveloped It is really an open field, trees. it is really an open field trees I think we've had tenants or prospective tenants go, and they see pigs running around on the site. i think we've had tenants or prospective tenants go and they see pigs running around on the site It is, when I say undeveloped land, it is really undeveloped land. it is when i say undeveloped land it is really undeveloped land We've had that one. we've had that one We had previously, that had been leased to a tenant that had really leased it just for a defensive purpose, and so they had leased it for 30 years and had done nothing with it, hence why vegetation is growing. We, in 2022, had signed a lease with Home Depot, who had a right to terminate their lease as they kind of went through their diligence process. I think it wasn't really the site, but it was just operating fundamentals for their own business that they ended up terminating the lease. We've been working really hard to try to lease that property, and we've had a lot of interest, but it just takes a lot of work for somebody to get comfortable with how big of a project it's going to be. We had previously, that had been leased to a tenant that had really leased it just for a defensive purpose, and so they had leased it for 30 years and had done nothing with it, hence why vegetation is growing. we had previously that had been leased to a tenant that had really leased it just for a defensive purpose and so they had leased it for 30 years and had done nothing with it hence why vegetation is growing We, in 2022, had signed a lease with Home Depot, who had a right to terminate their lease as they kind of went through their diligence process. we in 2022 had signed a lease with home depot who had a right to terminate their lease as they kind of went through their diligence process I think it wasn't really the site, but it was just operating fundamentals for their own business that they ended up terminating the lease. i think it wasn't really the site but it was just operating fundamentals for their own business that they ended up terminating the lease We've been working really hard to try to lease that property, and we've had a lot of interest, but it just takes a lot of work for somebody to get comfortable with how big of a project it's going to be. we've been working really hard to try to lease that property and we've had a lot of interest but it just takes a lot of work for somebody to get comfortable with how big of a project it's going to be I think anybody who's investing could be investing not tens of millions, but hundreds of millions of dollars. It isn't such an easy thing for somebody to just get comfortable with. We've actually, in the last couple of months, have gotten a little more traction and a group really digging in. I'm hopeful that we might actually be able to get this one leased sometime in the near future. I think anybody who's investing could be investing not tens of millions, but hundreds of millions of dollars. i think anybody who's investing could be investing not tens of millions but hundreds of millions of dollars It isn't such an easy thing for somebody to just get comfortable with. it isn't such an easy thing for somebody to just get comfortable with We've actually, in the last couple of months, have gotten a little more traction and a group really digging in. we've actually in the last couple of months have gotten a little more traction and a group really digging in I'm hopeful that we might actually be able to get this one leased sometime in the near future. i'm hopeful that we might actually be able to get this one leased sometime in the near future

Speaker 1: It's actually the leasing momentum in the portfolio has been pretty strong. I think it's 6 million or so square feet year-to-date. It's actually the leasing momentum in the portfolio has been pretty strong. it's actually the leasing momentum in the portfolio has been pretty strong I think it's 6 million or so square feet year-to-date. i think it's 6 million or so square feet year-to-date That doesn't include kind of Indianapolis. That doesn't include kind of Indianapolis. that doesn't include kind of indianapolis

Speaker 3: Yeah. Yeah. yeah

Speaker 1: Clearly that number continues to rise. You've got a pretty large pipeline, 6 or so million square feet. Clearly that number continues to rise. clearly that number continues to rise You've got a pretty large pipeline, 6 or so million square feet. you've got a pretty large pipeline 6 or so million square feet

Speaker 3: Yep. Yep. yep

Speaker 1: Maybe just talk about overall demand trends that you're seeing, please. Maybe just talk about overall demand trends that you're seeing, please. maybe just talk about overall demand trends that you're seeing please

Speaker 3: Our process is that we really try to get ahead of these lease expirations of our tenants pretty much as far in advance as we can get them to start talking to us. It's very hard for a 1 million square foot tenant to decide, three months left on their lease, if they're going to stay or go. It's also hard for us to try to lease it if we don't know what their plans are. We're always talking to our tenants, but we try to talk to them and try to understand their plans. If it seems to be going like 50/50, we hire brokers, we start trying to market the property in advance. Our process is that we really try to get ahead of these lease expirations of our tenants pretty much as far in advance as we can get them to start talking to us. our process is that we really try to get ahead of these lease expirations of our tenants pretty much as far in advance as we can get them to start talking to us It's very hard for a 1 million square foot tenant to decide, three months left on their lease, if they're going to stay or go. it's very hard for a 1 million square foot tenant to decide three months left on their lease if they're going to stay or go It's also hard for us to try to lease it if we don't know what their plans are. it's also hard for us to try to lease it if we don't know what their plans are We're always talking to our tenants, but we try to talk to them and try to understand their plans. we're always talking to our tenants but we try to talk to them and try to understand their plans If it seems to be going like 50/50, we hire brokers, we start trying to market the property in advance. if it seems to be going like 50/50 we hire brokers we start trying to market the property in advance I think that's really given us good success because we've been able to, if a tenant decides to leave, we usually have enough runway to find another tenant to backfill the space. I think generally what we've been seeing in the market is that tenants. They're engaging, but they just don't know. I think some are blaming, they don't know what's going on geopolitically and the impacts to their business. They're concerned. I always laugh a little bit because rent is such a small portion for some of these industrial tenants, because labor and fuel is much bigger needle movers for them. I think they're just being a little gun-shy to make decisions that are for a five or 10-year lease. There have been some tenants that are just kind of kicking the can and wanting to do short-term renewals. I think that's really given us good success because we've been able to, if a tenant decides to leave, we usually have enough runway to find another tenant to backfill the space. i think that's really given us good success because we've been able to if a tenant decides to leave we usually have enough runway to find another tenant to backfill the space I think generally what we've been seeing in the market is that tenants. They're engaging, but they just don't know. i think generally what we've been seeing in the market is that tenants. they're engaging but they just don't know I think some are blaming, they don't know what's going on geopolitically and the impacts to their business. i think some are blaming they don't know what's going on geopolitically and the impacts to their business They're concerned. they're concerned I always laugh a little bit because rent is such a small portion for some of these industrial tenants, because labor and fuel is much bigger needle movers for them. i always laugh a little bit because rent is such a small portion for some of these industrial tenants because labor and fuel is much bigger needle movers for them I think they're just being a little gun-shy to make decisions that are for a five or 10-year lease. i think they're just being a little gun-shy to make decisions that are for a five or 10-year lease There have been some tenants that are just kind of kicking the can and wanting to do short-term renewals. there have been some tenants that are just kind of kicking the can and wanting to do short-term renewals Depending on the market, we could be open to that, just because we've been seeing great market rent growth. In other cases, I think we try to hold their feet to the fire and have them exercise their renewal options that they have, because it just is better security for us. Depending on the market, we could be open to that, just because we've been seeing great market rent growth. depending on the market we could be open to that just because we've been seeing great market rent growth In other cases, I think we try to hold their feet to the fire and have them exercise their renewal options that they have, because it just is better security for us. in other cases i think we try to hold their feet to the fire and have them exercise their renewal options that they have because it just is better security for us

Speaker 1: It's funny you say that, because broadly speaking, we're hearing a little bit more active or maybe more abrupt decision-making, particularly when you compare it to early 2025, when we had all the threat about what the tariffs were going to be. It's funny you say that, because broadly speaking, we're hearing a little bit more active or maybe more abrupt decision-making, particularly when you compare it to early 2025, when we had all the threat about what the tariffs were going to be. it's funny you say that because broadly speaking we're hearing a little bit more active or maybe more abrupt decision-making particularly when you compare it to early 2025 when we had all the threat about what the tariffs were going to be

Speaker 3: Yeah. Yeah. yeah

Speaker 1: The impact of the tariffs. Would you say it's a little bit better, or would you say it's still? The impact of the tariffs. the impact of the tariffs Would you say it's a little bit better, or would you say it's still? would you say it's a little bit better or would you say it's still

Speaker 3: It's definitely better, but I think it's taking longer than it did in 2022, where people just couldn't get enough. They were gobbling up the space, and they couldn't get enough, and they wanted to make sure they locked it in before the rents went up higher. It's definitely better, but I think it's taking longer than it did in 2022, where people just couldn't get enough. it's definitely better but i think it's taking longer than it did in 2022 where people just couldn't get enough They were gobbling up the space, and they couldn't get enough, and they wanted to make sure they locked it in before the rents went up higher. they were gobbling up the space and they couldn't get enough and they wanted to make sure they locked it in before the rents went up higher

Speaker 1: Yeah. Yeah. yeah

Speaker 3: I think they're just being a little more- I think they're just being a little more- i think they're just being a little more-

Speaker 1: Yeah. Yeah. yeah

Speaker 3: cautious, but I think tariffs, I don't know. I think there was a lot of talk of tariffs, but I don't know that it necessarily made its way through the decision-making ultimately. I think it was the reason that tenants delayed, but I don't know that it changed their decision-making. cautious, but I think tariffs, I don't know. cautious but i think tariffs i don't know I think there was a lot of talk of tariffs, but I don't know that it necessarily made its way through the decision-making ultimately. i think there was a lot of talk of tariffs but i don't know that it necessarily made its way through the decision-making ultimately I think it was the reason that tenants delayed, but I don't know that it changed their decision-making. i think it was the reason that tenants delayed but i don't know that it changed their decision-making

Speaker 1: Now, despite the slower decision-making, the economics around the leases have been pretty spectacular. Rents increasing, I think it's four consecutive quarters north of 20%? Now, despite the slower decision-making, the economics around the leases have been pretty spectacular. now despite the slower decision-making the economics around the leases have been pretty spectacular Rents increasing, I think it's four consecutive quarters north of 20%? rents increasing i think it's four consecutive quarters north of 20%

Speaker 3: Six. Six. six

Speaker 1: Okay. I'll let you take it from here then. Okay. okay I'll let you take it from here then. i'll let you take it from here then

Speaker 3: Again, not to go back to COVID, but I think part of during COVID, I think a lot of our peers were seeing this enormous growth in their portfolios. For us, our WALT is seven and a half years. We, in some ways, have the benefit of a long-term WALT because we know that we have consistent annualized revenue that we're going to be getting. We really missed a lot of the opportunity in 2022 and 2023, where our peers were seeing these huge rollovers in their leases, and they were capitalizing on that market rent growth. For us, it's just taking longer for it to come to fruition because these leases that were signed in 2020 or 2019 are just starting to roll. We're seeing tenants are having sticker shock because they signed a $375 per square foot. Now their market rent is $9. Again, not to go back to COVID, but I think part of during COVID, I think a lot of our peers were seeing this enormous growth in their portfolios. again not to go back to covid but i think part of during covid i think a lot of our peers were seeing this enormous growth in their portfolios For us, our WALT is seven and a half years. for us our walt is seven and a half years We, in some ways, have the benefit of a long-term WALT because we know that we have consistent annualized revenue that we're going to be getting. we in some ways have the benefit of a long-term walt because we know that we have consistent annualized revenue that we're going to be getting We really missed a lot of the opportunity in 2022 and 2023, where our peers were seeing these huge rollovers in their leases, and they were capitalizing on that market rent growth. we really missed a lot of the opportunity in 2022 and 2023 where our peers were seeing these huge rollovers in their leases and they were capitalizing on that market rent growth For us, it's just taking longer for it to come to fruition because these leases that were signed in 2020 or 2019 are just starting to roll. for us it's just taking longer for it to come to fruition because these leases that were signed in 2020 or 2019 are just starting to roll We're seeing tenants are having sticker shock because they signed a $375 per square foot. we're seeing tenants are having sticker shock because they signed a $375 per square foot Now their market rent is $9. now their market rent is $9

Speaker 1: It is what it is. It is what it is. it is what it is

Speaker 3: It is what it is. It is what it is. it is what it is

Speaker 1: Yeah. Yeah. yeah

Speaker 3: I think it's just taken a while for it to come through our financials. Also, as I mentioned, we're getting ahead of some of these leases ahead of their expiration. If we sign a lease today for a tenant in 2027, we're not going to see the benefit of that cash NOI until 2027. Takes a little bit longer to hit. We definitely have been, the last six quarters, benefiting from that. I think it's just taken a while for it to come through our financials. i think it's just taken a while for it to come through our financials Also, as I mentioned, we're getting ahead of some of these leases ahead of their expiration. also as i mentioned we're getting ahead of some of these leases ahead of their expiration If we sign a lease today for a tenant in 2027, we're not going to see the benefit of that cash NOI until 2027. if we sign a lease today for a tenant in 2027 we're not going to see the benefit of that cash noi until 2027 Takes a little bit longer to hit. takes a little bit longer to hit We definitely have been, the last six quarters, benefiting from that. we definitely have been the last six quarters benefiting from that

Speaker 1: You've been providing guidance on a quarterly basis. This past quarter, you offered us full-year guidance. You've been providing guidance on a quarterly basis. you've been providing guidance on a quarterly basis This past quarter, you offered us full-year guidance. this past quarter you offered us full-year guidance

Speaker 2: Yes. Yes. yes

Speaker 1: I'd love to get some insight on, A, what prompted the change, and maybe you can highlight some of the parameters of what your expectations are. I'd love to get some insight on, A, what prompted the change, and maybe you can highlight some of the parameters of what your expectations are. i'd love to get some insight on a what prompted the change and maybe you can highlight some of the parameters of what your expectations are

Speaker 2: Sure. We felt as though investors and analysts would appreciate the transparency. We have the capability to give that guidance. We feel pretty comfortable about our ability to forecast, especially with the interest rate volatility being locked down, now we feel pretty comfortable with that. Hopefully, it seems as though it was appreciated. Sure. sure We felt as though investors and analysts would appreciate the transparency. we felt as though investors and analysts would appreciate the transparency We have the capability to give that guidance. we have the capability to give that guidance We feel pretty comfortable about our ability to forecast, especially with the interest rate volatility being locked down, now we feel pretty comfortable with that. we feel pretty comfortable about our ability to forecast especially with the interest rate volatility being locked down now we feel pretty comfortable with that Hopefully, it seems as though it was appreciated. hopefully it seems as though it was appreciated

Speaker 1: It definitely was. It definitely was. It definitely was. it definitely was It definitely was. it definitely was

Speaker 2: Do you want me to speak specifics? Do you want me to speak specifics? do you want me to speak specifics

Speaker 1: Please. Please. please

Speaker 2: Sure. NOI for this year, this is what you're looking for? Sure. sure NOI for this year, this is what you're looking for? noi for this year this is what you're looking for

Speaker 1: Just- Just- just-

Speaker 2: All right. NOI for this year. All right. all right NOI for this year. noi for this year

Speaker 1: Just hit on it. Just hit on it. just hit on it

Speaker 2: We're forecasting $357 million-$362 million. Our adjusted EBITDAre, we expect to be between $344 million and $349 million. Normalized FFO between $84 million and $89 million. Per share, we expect to be around $1.34. We're forecasting $357 million-$362 million. we're forecasting $357 million-$362 million Our adjusted EBITDAre, we expect to be between $344 million and $349 million. our adjusted ebitdare we expect to be between $344 million and $349 million Normalized FFO between $84 million and $89 million. normalized ffo between $84 million and $89 million Per share, we expect to be around $1.34. per share we expect to be around $1.34

Speaker 1: All of that being growth from the prior year. All of that being growth from the prior year. all of that being growth from the prior year

Speaker 2: All of that being growth from the prior year. I'll point out the ranges are pretty tight in our guidance. We do feel pretty comfortable in our ability to forecast there. Hopefully, that's helpful. All of that being growth from the prior year. all of that being growth from the prior year I'll point out the ranges are pretty tight in our guidance. i'll point out the ranges are pretty tight in our guidance We do feel pretty comfortable in our ability to forecast there. we do feel pretty comfortable in our ability to forecast there Hopefully, that's helpful. hopefully that's helpful

Speaker 1: Great. Anybody? Great. Go ahead. Great. great Anybody? anybody Great. great Go ahead. go ahead

Speaker 4: If you were to either sell or lease that property in Hawaii, how much of an impact would it be to your guidance? If you were to either sell or lease that property in Hawaii, how much of an impact would it be to your guidance? if you were to either sell or lease that property in hawaii how much of an impact would it be to your guidance

Speaker 2: That would be a $0.03 per share annual improvement. If we were to replace it with what was previously there, right? We don't know if that's what would happen, but it's $0.03. I don't know if we've said this or not, but it is a much larger impact on occupancy or occupancy percentage than it is on our actual revenues. I mean, from a revenue perspective, it was 0.79% of our annualized revenue. That would be a $0.03 per share annual improvement. that would be a $0.03 per share annual improvement If we were to replace it with what was previously there, right? if we were to replace it with what was previously there right We don't know if that's what would happen, but it's $0.03. we don't know if that's what would happen but it's $0.03 I don't know if we've said this or not, but it is a much larger impact on occupancy or occupancy percentage than it is on our actual revenues. i don't know if we've said this or not but it is a much larger impact on occupancy or occupancy percentage than it is on our actual revenues I mean, from a revenue perspective, it was 0.79% of our annualized revenue. i mean from a revenue perspective it was 0.79% of our annualized revenue

Speaker 3: It represents 3.6% of occupancy. It's a big headline for us because it's just such a big number from a occupancy impact, and so much more meaningful occupancy versus revenue. It represents 3.6% of occupancy. it represents 3.6% of occupancy It's a big headline for us because it's just such a big number from a occupancy impact, and so much more meaningful occupancy versus revenue. it's a big headline for us because it's just such a big number from a occupancy impact and so much more meaningful occupancy versus revenue

Speaker 2: Right. Right. right

Speaker 1: On the bottom line, the Indianapolis lease has a real meaningful impact. On the bottom line, the Indianapolis lease has a real meaningful impact. on the bottom line the indianapolis lease has a real meaningful impact

Speaker 3: Exactly right. Exactly right. exactly right

Speaker 2: Yeah. Yeah. yeah

Speaker 3: Less on occupancy. It's the complete opposite. Less on occupancy. less on occupancy It's the complete opposite. it's the complete opposite

Speaker 2: That's right. That's right. that's right

Speaker 1: Yeah. Backdrops improving, balance sheet strengthening. Final thoughts for everybody? Yeah. yeah Backdrops improving, balance sheet strengthening. backdrops improving balance sheet strengthening Final thoughts for everybody? final thoughts for everybody

Speaker 3: I think we have more room. We were just talking about this earlier. I think there's much more room in the share price. I think, again, we continue to see market rent growth. Our portfolio's very strong in its performance, operating performance. We're not denying that we have a lot of leverage, but we're working on it, and I think there's more to come. I think we have more room. i think we have more room We were just talking about this earlier. we were just talking about this earlier I think there's much more room in the share price. i think there's much more room in the share price I think, again, we continue to see market rent growth. i think again we continue to see market rent growth Our portfolio's very strong in its performance, operating performance. our portfolio's very strong in its performance operating performance We're not denying that we have a lot of leverage, but we're working on it, and I think there's more to come. we're not denying that we have a lot of leverage but we're working on it and i think there's more to come

Speaker 1: Great. Thank you so much. It's an honor to be up here, and I appreciate everyone's time. Thank you. Great. great Thank you so much. thank you so much It's an honor to be up here, and I appreciate everyone's time. it's an honor to be up here and i appreciate everyone's time Thank you. thank you

Speaker 2: Thank you. Thank you. thank you