Q4 2023 Plymouth Industrial REIT Inc Earnings Call

Operator: Good day, and welcome to the Plymouth Industrial REIT 4th Quarter 2023 resolved conference call. All participants will be in listen-only mode.

Good day and welcome to the premise industrial Reed fourth quarter 2000, twenty-three resolved conference call all participants will be and listen only mode should you need assistance. Please signal conference specialists by pressing the star key followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key, then 1 on your telephone keypad.

After today's presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then too.

Operator: To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Tripp Sullivan. Please go ahead. Thank you. Good morning.

Please note this event is being recorded.

I would now like to turn the conference over to trip Sullivan. Please go ahead.

Good morning, walking through the <unk> call to review the company as a result.

Tripp Sullivan: Welcome to the Plymouth and Just a Reap conference call to review the company's results for the fourth quarter of 2023. Yesterday afternoon, we issued our earnings release and posted a copy of our prepared commentary and a supplemental deck in the quarterly results section of our Investor Relations page. In addition to these earnings documents, a copy of prior Form 10-Ks, when filed, can be found on the SEC Filings page of the IR site.

The fourth quarter of 2023.

Yesterday afternoon, we issued our earnings release and posted a copy of our prepared commentary supplemental deck on my quarterly results section of our Investor Relations page.

In addition to these earnings documents a copy of prior Form 10-K, one files can be found on the S. A C. H a V I R site.

Tripp Sullivan: The change in timing of our disclosures to yesterday afternoon was in response to previous feedback we received to allow more time to digest the earnings results and supplementary information. We also thought it might be even more beneficial for you to read through our prepared commentary ahead of time. Our supplemental deck includes our full-year 2024 guidance assumptions, detailed information on our operations, portfolio, and balance sheet, as well as definitions of non-GAAP measures and reconciliations to the most comparable GAAP measures. We will reference this information in our remarks. With me today is Jeff Witherell, Chairman and Chief Executive Officer, Anthony Saladino, Executive Vice President and Chief Financial Officer, Kim Conley, Executive Vice President of Asset Management, and Anne Hayward, General Counsel.

The change and timing of Rd disclosures to yesterday afternoon. Once in response to previous feedback we received to allow more time to digest, there and as a result of supplemental we also thought it might be even more beneficial for you to read through our prepared commentary ahead of time.

[noise] supplemental that includes our full year 2024 guidance assumptions detailed information operations portfolio and balance sheet and definitions of non-GAAP measures and reconciliation most comparable GAAP measures.

References to information in our remarks.

With me today is Jeff Weatherill, Chairman and Chief Executive Officer.

Can you tell a Dinah executive Vice President and Chief Financial Officer.

Currently executive Vice President and manager and an Hayward General counsel.

Tripp Sullivan: I would like to point everyone to our forward-looking statements on page one of our supplemental presentation and encourage you to read them carefully. They apply to statements made in this call, our press release, our prepared commentary, and in our supplemental financial information. I'll now turn the call over to Jeff. Thanks, Tripp. Good morning, and thank you for joining us today.

Like to point everyone's who are forward looking statements on page one of our supplemental presentation encourage you to read them carefully the applied to statements made in this call a press release I prepared commentary and in our supplemental financial information I'll now turn the call over to Jack.

Thanks trip good morning, and thank you for joining us today.

Jeff Witherell: I hope that everyone had a chance to review the commentary and supplemental information we posted last night. We believe this will provide for an efficient use of time during a busy earning cycle. Our intent is to adopt this practice going forward, and as always, we're open to input on how we can improve. There are several themes I want to highlight this morning from our reported results for 2024. First, the Golden Triangle is a region that we believe can continue to benefit from on-shoring and near-shoring of manufacturing to the U.S., Mexico, and Canada, as well as the complementary wave of suppliers and distributors. The data we've gleaned from a number of independent sources indicates that our markets are in front of a trend that could be measured in terms of decades, not years.

I hope that everyone had a chance to review the commentary and supplemental information we posted last night.

We believe this will provide for an efficient use of time during a busy earnings week.

Our intent is to adopt this practice going forward and as always we're open to input on how we can improve.

There are several themes I want to highlight this morning from a reported results in 2024 outlook.

First the Golden Triangle is a region that we believe can't continue to benefit from onshoring in near shoring manufacturing to the U S, Mexico, and Canada as well as the complimentary wave of suppliers and distributors.

The data we've gleaned from a number of independent sources indicates that our markets are in front of a trend that could be measured in terms of decades not years.

Jeff Witherell: Second, our balance sheet is the strongest it's been in the history of the company, with seven straight quarters of reducing leverage to 6.5 times and a half turn ahead of where we thought at year end. With a long-term target of 5 to 7 times net debt to EBITDA, we anticipate operating in the 6 times range during 2021. Third, we're focused on accretive growth in 2024 that translates into FFO growth. We're projecting a 3-plus percent increase in FFO per share at the midpoint, primarily driven by improved portfolio operations, leasing, and same-store NOI growth.

Second our balance sheet is the strongest it's been in the history of the company.

That's seven straight quarters of reducing leverage to 6.5 times and a half turn it had where we thought we could be at year end.

With a long term target the five to seven times net debt to EBITDA, we anticipate operating in the six times range during 2024.

Third we're focused on accretive growth in 2024 that translates into F. F O growth.

We're projecting a three plus per cent increase in F. F O per share at the midpoint, primarily driven by improved portfolio operations leasing and same store NOI growing.

Jeff Witherell: With the transaction market starting to come to life, we will look to be more active as the year progresses. We expect fund growth through a combination of asset sales, use of the credit facility, potentially tapping the investment grade unsecured notes market, and or selective ATM. And lastly, I'd like to highlight the board's decision to increase our dividends by 6.7% effective with the first quarter. Together, with a better recognition of the value we've created in our portfolio, we anticipate this could help provide an attractive total return to our investors while maintaining an FFO payout ratio of 50 to 51 percent based on our 2024 guidance. I would now like to turn it over to the operator.

With the transaction market starting to come to life, we will look to be more active as the year progresses.

We expect to fund growth with a combination of asset sales use of the credit facility potentially tapping the investment grade unsecured notes market indoor selective a T M usage.

And lastly, I'd like to highlight the board's decision to increase our dividend by 6.7% effective with the first quarter.

Together with a better recognition of the value we've created in our portfolio. We anticipate this could help provide an attractive told her we turned to our investors while maintaining an F. F O payout ratio of 50% to 51% based on our 2024 guidance.

I would now like to turn it over to the operator for question.

Operator: Thank you. We will now begin our question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key.

Thank you we will now begin our question and answer session to ask a question do you May Press Star then one on your telephone keypad.

If you're using a speaker phone please pick up your handset before pressing the case if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then too.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then down. And our first question will be from Todd Thomas from KeyBank Capital Markets. Please go ahead. Hi, good morning. This is AJ on behalf of Todd.

And our first question will be from Todd Thomas from Keybanc capital markets. Please go ahead.

Hi, Good morning. This is a J on for Todd. We appreciate the detail provided last night ahead of the call just the first one for me as I as I understand the Fedex facility at the low end of the guide is assumed to be vacant beginning August 1st and the midpoint of the range assumes theater no just what other factors are embedded in the guy.

AJ: We appreciate the detail provided last night ahead of the call. Um, just the first one for me, as I understand the FedEx facility at the low end of the guide is assumed to be vacant beginning August 1st, and the midpoint of the range assumes they renew. Uh, just what other factors are embedded in the guidance range around development leasing and other non-same-store leasing, and what gets you to the high end of the range? Thanks for the question.

[noise] and strange around developmentally, saying and other non same-store at least thing and what gets you to the high end of the range.

Thanks for the question at the mid point, we assume as you mentioned Saint Louis property remains attended an addition.

There was about 25 bps of non specific portfolio vacancy and credit loss assumed on top of the drag associated with spaces in Chicago and the other Saint Louis property, which we are confident will be leased up in the second half of the year.

Anthony Hau: At the midpoint, we assume, as you mentioned, St. Louis property remains tenanted. In addition, there's about 25 bips of nonspecific portfolio vacancy and credit loss assumed on top of the drag associated with spaces in Chicago and the other St. Louis property, which we are confident will be leased up in the second half of the year, and the Upper Bound. That captures accelerated lease-up of Chicago and the other St. Louis property, coupled with savings in interest and general expenses. And then, just a clarification on the lower bound, A.J.

Now the upper bound.

Ah that captures accelerated lease up of Chicago and the other Saint Louis property, coupled with savings in interest and general expenses.

And then just a a clarification on the lower bound they J the lower end reflects vacancy at the St. Louis property.

But this outcome is buffered by about 125 improvement and portfolio expense recovery.

Oh that's helpful.

Oh Boy and then just as it pertains not only to the aesthetics facility, but also the other Saint Louis facility in Chicago would you just discuss about the entrance interests that you're seeing in those facilities and you're leasing strategy going for it.

Anthony Hau: The lower end reflects vacancy at the St. Louis property, but this outcome is buffered by about a 125 BIP improvement in portfolio expense. Ah, that's helpful.

Yes.

Jeff Witherell: Well, and then just as it pertains not only to the FedEx facility but also the other St. Louis facility and Chicago. Would you just discuss the interest that you're seeing in those facilities and your leasing strategy going forward? Yes. Let's take on the FedEx property first. So that's 3919 Lakeview Corporate Drive.

Take on the Fedex property for us so.

So that 39th 19 like like they view corporate drive.

I plan is obviously, we'd like to have a single user as we laid out in our in our prepared document that there are other options were potentially.

They could they could renew our.

You know take a portion of the space ideally, it's one or two tenants.

And.

You know where where on that and there has been some interest to date, even though it's not bacon until August in Chicago at 16, 801 exchange, where we've been walking there for awhile, we do have a long list of prospects and we expect or a piece out of that very shortly.

Jeff Witherell: Our plan is obviously to have a single user, but as we laid out in our prepared document, there are other options where, potentially... They could renew or..., you know, take a portion of the space. Ideally, it's one or two tenants, and, you know, we're on that, and there has been some interest to date, even though it's not vacant until August. In Chicago, at 16-801-EXCHANGE, we've been mocking that for a while.

I'd rather property in Saint Louis.

150, Lady have we we have a prospect that we're negotiating a lease on right now they're working with the city on some incentives and it pretty much committed to this building and we expect that to be signed very soon.

Okay. That's helpful. And then last one for me just what what was the exact timing of the Chicago outside and how much N. O. I was included in the fourth quarter for that asset just asked if you think about the run rate heading into 2024.

Jeff Witherell: We do have a long list of prospects, and we expect to receive RFPs out of that very shortly. Our other property in St. Louis, 9150 Latty Ave., we have a prospect that we're negotiating a lease on right now. They're working with the city on some incentives, and they're pretty much committed to this building, and we expect that to be signed very soon. Okay, that's helpful. And then last one for me, just what was the exact timing of the Chicago asset and how much NOI was included in the fourth quarter for that asset, just as we think about the run rate heading into 2025? About $300 per quarter.

About 300 per quarter.

Perfect. That's that's it for me thanks, guys. Thank.

Thank you.

And the next question is from Eric Burdon from BMO capital markets. Please go ahead.

Hey, good morning out there and appreciate the the change in reporting style.

Cause my first question for you is on the transaction market That'd be noted 500 million dollar pipeline in a pure play potential opportunities. But also noted you know you're also seeing an increase in J V opportunities. You know do you have a preference between the two you know what is more attractive today between.

AJ: Perfect. That's it for me. Thanks, guys. Thank you. And the next question is from Eric Borden from BMO Capital Markets. Please go ahead.

<unk> acquisitions and potential GB solutions.

Hey, Eric it's Jeff.

I think we're agnostic as we always have been so it's really good it's going to be about the opportunity said and as as you know the JV. We did in Memphis, a few years back has worked out significantly.

Eric Borden: Hey, good morning out there, and I appreciate the change in reporting style. My first question for you is on the transaction market. You know, you noted a $500 million pipeline for pure play opportunities, potential opportunities, but you also noted, you know, you're also seeing an increase in JV opportunities. You know, do you have a preference between the two?

For us so.

Again, it really comes down to if the asset needs significant capex and leasing and it's true value add something.

Something like that would would sit outside the REIT inside of a J V. So what we're focused on.

For wheat acquisitions are gonna be you know more than likely small one off deals and that's how we built the company we get we get the the higher cap deals when we do that we put them into the portfolio drop them into our property management platform, we pick up the recoveries on that.

Jeff Witherell: You know, what is more attractive today between, you know, traditional acquisitions and potential JVs? Hey Art, it's Jeff. I think we're agnostic, as we always have been, so it's really just going to be about the opportunity set, and as you know, the JV we did in Memphis a few years back has worked out significantly for us. Again, it really comes down to if the asset needs significant CapEx and leasing and it's a true value add. You know, something like that would sit outside the REIT inside of a JV.

So you don't really have a preference as we sit here today, but the transaction market as we as we put in the prepared remarks, there are a lot of things opening up in fact, we're tracking.

No two or three portfolios that we haven't seen in a while.

Okay. That's helpful and is there is there any new market opportunities within that potential cool.

You know, we we've identified that you know, Texas would be a place we'd like to be at some point in the future, but we're we're very focused on the markets were in you know primarily within the Golden Triangle. I think you you saw that we sold off New Jersey, but we had one asset there I think we've indicated to the marketplace that we might sell a few.

Jeff Witherell: So what we're focused on for REIT acquisitions is going to be, you know, more than likely small one-off deals, and that's how we built the company. We get the higher-capitalization deals when we do that, we put them into the portfolio, drop them into our property management platform, and we pick up the recoveries on that. So, we don't really have a preference as we sit here today.

Other assets, where we don't have scale.

So I think that's really you know we're going to focus on the market's oriented and eventually someday will will probably be in Texas.

Jeff Witherell: But the transaction market, as we put in the prepared remarks, there are a lot of things opening up. In fact, we're tracking two or three portfolios that we haven't seen in a while. That's helpful.

Okay. That's helpful and then last one for me.

I understand we're only two months into 2024 and you still have some blood laughter shop on the 24 expiration just kind of looking a little bit into 25, you have a couple larger lease expirations coming due or have you had any cough initial conversations with.

Jeff Witherell: And are there any new market opportunities within that potential pool? You know, we've identified that, you know, Texas would be a place we'd like to be at some point in the future, but we're very focused on the markets we're in, you know, primarily within the Golden Triangle. I think you saw that we sold off New Jersey. We had one asset there.

These tenants about potentially either renewing our lease or vacating.

Yeah, we have discussions with all of our tenants.

The larger ones that you're talking about we've we've had direct conversations with them.

We expect them to say, but we expect them to you know try to negotiate as hard as they can and will negotiate back.

Jeff Witherell: I think we've indicated to the marketplace that we might sell a few other assets where we don't have scale. So I think that's really... We're going to focus on the markets we're in, and eventually, someday, we'll probably be in Texas. That's helpful.

Okay. Thanks, I'll leave it there.

Thank you and the next question is from Nick Tilman from Bird. Please go ahead.

Good morning, maybe touching a little bit more kind of your markets in the Golden triangle.

And ER Onshoring Nearshoring trends does this change the type of product that you're willing to own like I know like 25%.

Jeff Witherell: And then last one for me is I understand we're only two months into 2024 and you still have some wood left to chop on the 24 expirations, but kind of looking a little bit into 25, you have a couple of larger lease expirations coming due. Have you had any initial conversations with these tenants about potentially either renewing their lease or vacating? Yeah, well, we have discussions with all of our tenants. The larger ones that you're talking about, we've had direct conversations with. We expect them to stay, but we expect them to, you know, try to negotiate as hard as they can, and we'll negotiate back. Thanks.

Has some specific part of like like manufacturing is that a product type that you guys, who would like to own more of going forward or is that included in like this acquisition pipeline are you more looking at the distribution like supporting these type of onshoring. These facilities gotta coming back to the states.

Hey, Nick.

It's kind of the same story, we're not really making a pivot if you will.

So are the buildings, we own a rectangle right the very utilitarian and so the manufacturing that you can do in them. You know is is is conducive to warehousing and other things. So as you know there's a variety of a type of building some are more conducive with crossed dark for high throughput distribution.

A lot of our buildings are warehousing, you know, they're not logistic centers, which is what which are a little different.

Nick Thelman: I'll leave it there. Thank you. And the next question is from Nick Thelman from Baird. Please go ahead. Hey, good morning.

So it really just depends on on the property that is in front of us the opportunity to sit in front of us. So we want to make money in each building. We buys you know so what we're not going to do is we're not gonna own pure manufacturing facilities right buildings that are that are specifically built for manufacturing.

Jeff Witherell: Maybe touching a little bit more on some kind of your markets in the golden triangle in the on-shoring, near-shoring trends. Does this change the type of product that you're willing to own? Like I know, about 25% has some specific part of like manufacturing. Is that a product type that you guys would like to own more of going forward, or is that included in like this acquisition pipeline or even more looking at the distribution like supporting these types of on-shoring and these facilities kind of coming back to the states? Hey Nick,

And cause that limited to use.

Right. So what we what we what we are interested in and I think you can see this in Memphis in Jackson, Tennessee, where at 40 setup Blue Oval City, it's where we're not going to benefit from Ford manufacturing facilities, but we are going to benefit from all the ancillary services that are provided to afford so that.

Filled out is we don't we own a large facility in Jacksonville with additional land I'm, sorry, Jackson, not Jacksonville, Jackson, Tennessee, and we're starting to see some benefits in Jackson as well so.

Jeff Witherell: You know, it's kind of the same story; we're not really making a pivot, if you will. So the buildings we own are rectangles, right? They're very utilitarian. And so the manufacturing that you can do in them, you know, is conducive to warehousing and other things. So, as you know, there's a variety of types of buildings; some are more conducive to crosstalk, for high-throughput distribution; a lot of our buildings are warehousing, you know; they're not logistics centers, which is a little different. And so it really just depends on the property that's in front of us, the opportunity that's in front of us. And we want to make money on each building we buy, as you know. So what we're not going to do is we won't own pure manufacturing facilities, right, buildings that are specifically built for manufacturing, because that limits its use.

It runs of course.

That's helpful. And then maybe it's we're looking at deployment hearing 20th 20th floor based on like development versus acquisitions are you seeing more opportunity one bucket or the other and maybe what markets are most interesting today.

So from our standpoint, we're not we're not seeing a lot of development activity. We we we we continue to have a full array of built to suit across our property. So we've got packages out are on every piece of vacant land. So we certainly will entertain a build a suited the right yield.

I think we've proven out that we can build buildings on budget and on time.

So I I think development will really just be driven by built to suit scenario. So acquisitions are are really the key and again really within our markets.

Jeff Witherell: So, what we are interested in, and I think you can see this in Memphis, in Jackson, Tennessee, where Ford has set up Blue Oval City, we're not going to benefit from Ford's manufacturing facilities, but we are going to benefit from all the ancillary services that are provided to Ford. So, that build-out is, you know, we own a large facility in Jacksonville with additional land. I'm sorry, Jackson, not Jacksonville, Jackson, Tennessee, and we are starting to see some benefits in Jackson as well. It runs the course.

You know.

We're seeing opportunities starting to percolate.

Across all of our markets. So again as I sit here today I don't think we'd say well, we're not gonna buy here, but we will buy there it's really just going to be driven by the opportunity set and.

And the.

Variety of of deals that are out there are really starting to open up I mean, there's there's value add you you've got some some short term waltz, you've got some longterm product. That's that's now priced right. So the world has changed.

And we're looking forward to the opportunities coming up here at the end of this year and into 225.

Jeff Witherell: That's helpful. And then maybe as we're looking at deployment here in 2024, based on like development versus acquisitions, are you seeing more opportunity in one bucket or the other? And maybe what markets are most interesting today? So, from our standpoint, we're not seeing a lot of development activity. We continue to have a full array of build-to-suit across our property, so we've got packages out on every piece of vacant land, so we certainly will entertain a build-to-suit at the right yield. I think we've proven that we can build buildings on budget and on time. So I think development will really just be driven by build-to-suit scenarios.

That's helpful. Jeff and then maybe last one for me Anthony any changes or maybe give us an update on what the tenet watch list is about and what kind of baked in for Baghdad expectations for the same store guide this year.

Certainly the.

The assumptions about 25 bps and guidance.

And twenty-three.

I think we realized about maybe maybe 12 beeps the watch list.

Hasn't materially change in terms of its composition or size.

There's a handful of tenants.

There's been a trade out of one or two.

But if.

All of those did not come to fruition.

We're talking about lesson 10 bps in terms of a write off.

Thanks for that.

Thank you and our next question is from Mitch Germaine from citizens J M. P. Please go ahead.

Jeff Witherell: So acquisitions are really the key, and again, really within our markets. We're seeing opportunities start to percolate across all of our markets. So again, as I sit here today, I don't think we would say, and the variety of deals that are out there are really starting to open up. I mean, there's this value add.

Thank you and thanks again for all the information last night Uhm, Jeff you talk a lot about [noise] onshore.

By ensuring trends and and and the Golden triangle.

I'm curious if you're seeing how this is having an impact on demand.

In your leasing pipeline.

Hey, Mitch Thanks, Thanks for the question.

Jeff Witherell: You've got some, you know, some short-term walls. You've got some long-term product that's now priced right. So the world has changed, and we're looking forward to the opportunities coming up here at the end of this year and into 25. That's helpful, Jeff.

As we sit here today.

I would say result has been limited as to you know we've leased to this company based on onshoring what.

If we go back over the last two years, especially in Atlanta, we had quite a bit of activity on the new building.

That we the two buildings that we build that are now fully lease we had quite a bit of activity with foreign companies that.

Anthony Hau: And then maybe last one for me, Anthony, any changes or maybe give us an update on what the tenant watch list is and then what is kind of baked in for bad debt expectations for the same store guide this year? Certainly, the assumption is about 25 bips and guidance, and 23. I think we realized about maybe 12 bips. The watch list hasn't materially changed in terms of its composition or size.

Our our manufacturing oriented I'd say light manufacturing oriented so we had quite a few rfps out on foreign companies.

We had one from Belgium, and a few other ones that were interested in setting up shop in it.

Part of Atlanta is a magnet for.

For light manufacturing opportunities.

I think you know the American Nitrile story in Grove City, Ohio that was quite a few years back and we leave that up to Ah nitrile basically latex glove manufacturer. The first one in the United States in 50 years. So we've seen it and we're we're starting to see more of that I know in Chicago, we're starting to.

Anthony Hau: There are a handful of tenants. There's been a trade-out of one or two. But if all those did not come to fruition, we're talking about less than 10 bips in terms of a ride-on.

To see some of it.

But to say that we've leased a building to this particular company I don't think it hasn't hasn't happened in our portfolio yet.

Anthony Hau: Thanks for that. Thank you. And our next question is from Mitch Germain from Citizens JMP. Please go ahead.

Great. That's Super helpful. You mentioned dispositions I know, obviously Jersey was a market where he didn't really have much size and scale is there any sort of region that stands out to you as one that might.

Mitch Germain: Thank you, and thanks again for all our information last night. Jeff, you talk a lot about ensuring trends and the Golden Triangle. I'm curious if you're seeing how this is having an impact on demand in your leasing pipeline. Hey Mitch, thanks for the question. As we sit here today...

Have properties that you're looking to queue up her disposition.

No I wouldn't say, it's regional based I mean, I think we've we've message to the market that we might be interested in getting ready Milwaukee and Kansas City, and then anything other than that I mean, we have scale in the market. So it's really just for real estate reason.

If you look back in.

Jeff Witherell: I would say results have been limited as to, you know, we've leased to this company based on on-shoring. But, you know, if we go back over the last two years, especially in Atlanta, we had quite a bit of activity on the new buildings that we... the two buildings that we built that are now fully leased. We had quite a bit of activity with foreign companies that are manufacturing oriented. I'd say light manufacturing oriented. So we had quite a few RFPs out for foreign companies. We had one from Belgium and a few others that were interested in setting up a shop. And that part of Atlanta is a magnet for light manufacturing opportunities. I think you know the American Nitrile story in Grove City, Ohio; that was quite a few years ago, and we leased that up to a Nitrile, basically, latex glove manufacturer, the first one in the United States in 50 years. So we've seen it, and we're starting to see more of that. I know in Chicago, we're starting to see some of that.

No. The Chicago asked that we sold last year that was to you know owner user. So some buildings are more conducive to an owner user owning them, whether there's parking restrictions or or whatever it might be so.

I Wanna users tend to pay a little bit more I mean, we're not really in the business of selling decent real estate that we want one but it's an older user wants to come in and pay for it because they want it and need. It then we certainly entertain that but we don't have we don't have a region that we're looking to unload.

Great and last one for me I know you just need some development leasing Atlanta, I believe some cincinnati's either executed or soon to be executed some others and in need in the prior quarter's from a cadence in terms of how the impact is on.

2024, it seems to be somewhat back later is that the way to think about it here.

Yes that is.

That is how we reflected in in guidance and as I mentioned, the the upper bound to the extent that there's some acceleration around the remaining.

Ah development square footage there could be an incremental pick up above the midpoint.

Gotcha and Anthony while I have you I guess, some one more question Uhm last Ah year. There was some cadence issues with regards to the same property growth. Obviously I think there was some expenses that eight three Q. Then then you were able to collect and four Q and hadn't acceleration, how how should we think about.

Jeff Witherell: But to say that we've leased a building to this particular company isn't something that has happened in our portfolio yet. Great, that's super helpful. You mentioned dispositions. I know, obviously, Jersey was a market where you didn't really have much size and scale. Is there any sort of region that stands out to you as one that might have properties that you're looking to queue up for disposition? No, I wouldn't say it's regionally based.

The cadence is there anything that you want to point out.

<unk> with regards to the results that you know what kind of my impact alright.

Our analysis of of your earnings or you're seeing property results.

Yeah, that's a good question.

We do anticipate the quarterly cadence.

The trend very similarly to 2000 twenty-three with Q1 being.

Jeff Witherell: I mean, I think we've messaged to the market that we might be interested in getting ready Milwaukee and Kansas City and then anything else other than that. I mean, we have scale in the market, so it's really just for real estate. I think if you look back at the Chicago asset we sold last year, that was to an owner-user. Some buildings are more conducive to an owner-user owning them, whether there's parking restrictions or whatever it might be. Owner-users tend to pay a little bit more. I mean, we're not really in the business of selling decent real estate that we want to own, but if an owner-user wants to come in and pay for it because they want it and need it, then we certainly entertain that. But we don't have a region that we're looking to unload.

A bit more muted as a result of weather related impacts and the timing of professional fees than ramping up during the second half of the year is the balance of phase one development.

<unk> and we continue to execute on the remainder of 2024 Luis explorations.

Second.

And again as a final reminder, if you wish to ask a question. Please press Star then one.

The next question is from Brian Marr from be Riley Securities. Please go ahead.

Great. Thank you and good morning, most of my questions have already been asked and answered, but you know maybe as we sit here Jackson and you've laid out in in your prepared information last night, which was appreciated kind of the parameters.

Upon which you would transact, but can you maybe talk a little bit in your view as you sit here today with the probability is that you think you transact and what the sweet spot would be of what it is and the 500, you're looking for that would really compel you to move.

Anthony Hau: Great. And last one for me, I know you just did some development leasing in Atlanta, I believe some Cincinnati's either executed or soon to be executed, some others in the prior quarters. From a cadence in terms of how the impact is on 2024, it seems to be somewhat back-weighted.

Hey, Brian.

Yeah. So I mean, we were tracking some some smaller one off deals in our markets that for a variety of reasons are are trading at some pretty high cap rates.

I think what we're starting to see now is.

Gets coming due or you're starting to see leases burn off and someone's gonna have to you know refinance in conjunction with finding new tenants that that's going to be something.

Anthony Hau: Is that the way to think about it here? Yes, that is how we've reflected it in guidance. And as I mentioned, the upper bound: to the extent that there's some acceleration around the remaining development square footage, there could be an incremental pickup above the midpoint. Gotcha. And Anthony, while I have you here, I have one more question. Last year, there were some cynical issues with regard to sustained property growth. Obviously, I think there were some expenses that hit in 3Q and then you were able to collect in 4Q and had an acceleration. How should we think about the cadence?

People that have held these properties for awhile are probably not going to want to get involved in so we're really starting to see a lot of opportunities where would.

Who would you like to see them in class a big box stuff that we don't play in but we're starting to see people.

People, who bought properties two or three years ago.

Selling them at what they paid for them or or even or even at a law. So I think it's going to be very interesting for us to be able to take advantage of our.

<unk> the property, we buy in our market.

That had fairly attractive cap rates and I said drop them into our property management and get right. After them. So that's probably what we're going to be interested in buying we are monitoring the portfolio is going to be very interesting to see where those trade. It's been a few years since we see decent trades on that and then.

Anthony Hau: Is there anything that you want to point out with regard to the results that, you know, might impact our analysis of your earnings or your sustained property results? Yeah, it's a good question. We do anticipate the quarterly cadence to trend very similarly to 2023, with Q1 being a bit more muted as a result of weather-related impacts and the timing of professional fees, then ramping up during the second half of the year as the balance of Phase 1 developments stabilize and we continue to execute on the remainder of the 2024 lease expiration. Thank you. And again, as a final reminder, if you wish to ask a question, please press star then 1. The next question is from Brian Maher from B. Reilly Securities. Please go ahead.

Again anything height heavy value add we are starting to see some value add Ah deals you know maybe small portfolios pop up that could be very attractive in a JV for us we liked the fee income I think we look back I keep talking about Memphis, all the time that you're aware of which was.

Heavy value add portfolio that we bought.

Put our property management team on it right away and within a couple of years, we bought it back in.

And into the Reed and that is paying dividends to us to this day still a lot of mark to market left on there we continue to improve the quality of the buildings as we go forward and so.

Either one of those.

Works well I do think it's gonna be small deals and I think there'll be a JV at some point.

Perfect. Thank you that's helpful.

Thank you.

Okay. The next question is from Mike Mohler from J P. Morgan. Please go ahead.

Yeah, Hi, I guess going back to St. Louis.

Bryan Maher: Great, thank you, and good morning. Most of my questions have already been asked and answered, but, you know, maybe as we sit here, Jeff, and you laid out in your prepared information last night, which was appreciated, kind of the parameters. So, we're really starting to see a lot of opportunities where, and we're starting to see them in class A, big box stuff that we don't play in, but we're starting to see people who bought properties two or three years ago, you know, selling them at what they paid for them or even at a loss. So, I think it's going to be very interesting for us to be able to take advantage of the properties we buy Either one of those works well.

And the guidance range when I think of you know a guidance midpoint I tend to think of you know the most likely outcome and then you kind of deviate up and down from there. So I guess, what Saint Louis you.

Staying in place and having no disruption being the mid point is it safe to say that you think that's kind of the most likely outcome at this point.

Cause it.

I guess in the transcript just didn't read that way.

Yeah, I think at the mid point, specifically as it relates to Fedex, we don't have any further clarity beyond.

What we articulated as a range of outcomes and so we held the midpoint because there there could be the possibility of that.

That is less disruptive than we.

We accounted for on on the downside Mike.

Okay, and then I guess, it's just a quick seems to work question I know that's not included in the same store range, but if if it wasn't there do you have a sense as to what the sensitivity would've been bye.

Jeff Witherell: I do think they're going to be small deals, and I think there'll be a JV at some point. Yeah, hi. I guess going back to St. Louis and the guidance range, when I think of, you know, a guidance midpoint, I tend to think of, you know, the most likely outcome, and then you kind of deviate up and down from there. So I guess with St. Louis, Yeah, I think at the midpoint, specifically as it relates to FedEx.

Say, a fedex move out.

Certainly yeah. So if if that Saint Louis property was included in the same store pool.

The the range would have been six to six and a half.

Okay. That's helpful. Thank you.

Certainly.

And ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Jeff where the rail for any closing remarks.

Operator: Thank you all for joining us today, and we look forward to talking to you next quarter. Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Thank you all for joining us today, and we look forward to talking to you next quarter.

Thank you Sir the conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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Yeah.

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