Q3 2025 Modiv Industrial Inc Earnings Call
Speaker #1: Welcome to MODIV.
Speaker #1: MODIV INDUSTRIAL, INC. Q3 2025 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker #1: On today's call, management will provide prepared remarks, and then we will open up the call for your questions. To ask a question, analysts may press star, then one on your touch-tone phone.
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Speaker #1: Please note that this event is being recorded. I would now like to turn the conference over to John Raney, Chief Operating Officer and General Consultant.
Speaker #1: Please go ahead,
Speaker #1: Sir, thank you, Chloe, and thank you everyone.
Speaker #2: Thank you for joining us for the MODIV INDUSTRIAL Q3 2025 earnings call. We issued our earnings release after the market closed today, and it's available on our website at MODIV.com.
Speaker #2: I'm here today with Aaron Halfacre, Chief Executive Officer, and Ray Pacini, Chief Financial Officer. Before we begin, I would like to remind you that today's comments will include forward-looking statements under the federal securities laws.
Speaker #2: Forward-looking statements are identified by words such as "will," "be," "intend," "believe," "expect," "anticipate," or other comparable words and phrases. Statements that are not historical facts, such as statements about our expected acquisitions or dispositions and business plans, are also forward-looking statements.
Speaker #2: Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause or result in differences materially from these forward-looking statements is contained in our SEC filings, including our reports on Form 10-K and 10-Q.
Speaker #2: With that, I'd like to turn the call over to Aaron.
Speaker #2: Aaron? Thanks, John.
Speaker #3: Hello, everyone. Hope you're doing well. This time, we're going to do it—we're doing everything a little bit differently. Certainly, I had the call on a Friday in the afternoon.
Speaker #3: I'm surprised to see as many of you dialed in as you did. Hopefully, you have a cocktail in your hand. But we're not going to do prepared remarks.
Speaker #3: I put a little more context into the press release. So we're going to prefer all the questions, but I think what I'll say is kind of an iteration.
Speaker #3: It's really grindy, and I really like that. We purposely waited toward the end of the earnings season because some of the early reporters—it was interesting to see them come out.
Speaker #3: It's like, "Wow, this is pretty solid." And then they just got sh*t on in the markets. And I was like, "Okay, let's see what else comes out." So, it was really—I really wanted to spend some time observing because I candidly don't really move the needle when we come out.
Speaker #3: And typically, when we come out, you're stacked four deep, and you guys don't have a chance to breathe. I wanted to give you a chance to breathe.
Speaker #3: And so that's the only reason. So there's nothing else to it other than that. We won't do this that often, but I feel generally optimistic.
Speaker #3: I mean, look, no one knows where December or PAL will be in December. Are they done or not? But I think we all probabilistically underwrite that there's going to be a new Fed regime come May.
Speaker #3: And that regime has a high propensity to be easing. So at some point in the future, we should see easing. And so MODIV share price is very easy to predict in a five-minute pattern.
Speaker #3: And probably on a five-year pattern, but not sort of in between. But if you think you've got easing, you think you've got a long period of capitulation.
Speaker #3: We started to see sort of non-equity—and when I say non-common equity, I guess—we've seen preferred and debt deals being done. I think our tea leaves of capital market activity—July—we saw, I think at least I got a palpable sense that there was some interest, and we saw the deals like we saw with the fundamental deal, and we saw the pre-version of the employment deal announced, and we saw the sort of Elm Tree, and we were starting to see pipeline.
Speaker #3: And then it kind of went sideways in late August, September, and early October, where it’s just like people got spooked and their shadows were seen.
Speaker #3: For instance, we were in the process of bidding on a pipeline deal that we liked. It was a company that was doing a PropCo sell along with an OpCo transaction.
Speaker #3: And they were like guns ablaze, and then they pulled it. We've seen some of that stuff over the course of the last quarter. So it was a bit of sort of a ballpark quarter where people thought they had a look, and then the market gave them a head fake, and then they were like, "Oh, pausing on the margin." But I think we get this real palpable sense that there's still a lot of money on the sidelines.
Speaker #3: I think still right now, a lot of people just want bloodbath returns. They want to—they really want to shiv people who they think are desperate.
Speaker #3: And some of those people are being picked off, right? We're seeing more REIT stuff that I think either they waved a white flag or they just didn't have the wherewithal or whatever.
Speaker #3: But, so I think that capital is still really sort of—let's just be patient and let's just only get the super, super sweetheart deals. But if we start to see real easing and we start to see some consistent trends for REITs, I don't know if that means we need consolidation on the sort of the rest of the S&P and NASDAQ to get that or not.
Speaker #3: It's hard to say because you could argue that until tech and some of these names cool off, then no one's really going to ever consider boring REITs.
Speaker #3: But at the same time, if they force a correction, is that just going to drag everyone back down? So it remains to be seen. It's pretty cloudy, but even despite that cloudiness, I feel pretty optimistic about what I'm seeing.
Speaker #3: And again, it's because I'm gritty and grindy, and I like that. So that doesn't mean we're off to the races, but it does feel like—I mean, for us, we're like a goddamn cockroach that could survive a nuclear war.
Speaker #3: There's no real fundamental reason why we should be as durable as we are given how small we are now in the context. I mean, there's a reminder.
Speaker #3: And I've said this before. We came out two weeks before Putin invaded Ukraine, and we came out, like—what was it? Three and a half weeks before the Fed started raising rates.
Speaker #3: So the entire publicly traded existence of us has been like dogshit. Yet I feel like our balance sheet is stronger. I feel like our AFMO is better.
Speaker #3: I have much more clarity now than I did even a year ago, and so I think that leads to optimism. But enough of me rambling.
Speaker #3: Let's open it up to questions, shall
Speaker #3: we? Can you send
Speaker #2: Gentlemen, we will now begin the question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad.
Speaker #2: You will hear a tone acknowledging your request. And if you are using a speakerphone, please pick up your handset before pressing any keys. So withdraw your question, please press star to the number two.
Speaker #2: We'll pause for a moment as callers join the queue. Our first question comes from the line of Craig Coutero from Lucid Capital Markets. Your line is open.
Speaker #2: We'll pause for a moment as callers join the queue. Our first question comes from the line of Craig Coutero from Lucid Capital Markets. Your line is open.
Speaker #3: So Craig. Yeah, hey, guys.
Speaker #4: Good afternoon. Just a few questions for me. Were there any one-time revenue adjustments in your other property income, and how should we think about that going forward?
Speaker #3: Craig?
Speaker #4: Yes. Can you hear
Speaker #3: Yeah.
Speaker #2: Yeah, I'm trying to get Ray to me.
Speaker #2: respond.
Speaker #3: Yeah, there was a
Speaker #3: $300,000 fee that we obtained for terminating some easement rights for our Northrop property. And that's it.
Speaker #2: So, did you add a little clarity to that? Our Northrop property, which is in Melbourne Space Coast, there was a large piece of sort of underutilized, near-vacant land.
Speaker #2: And it was a former, I don't know what to call it, like a kids' park or something, like an amusement park. And that's getting redeveloped into a housing project.
Speaker #2: A townhouse type of arrangement. And the prospective buyer had come to us because there were certain easements, and they wanted certain rights. And so we negotiated it took a while, candidly.
Speaker #2: I would say we probably negotiated for nine to twelve months, and they basically gave us a fee to sign a paper. And so that's what that was.
Speaker #4: Got it. Was that all recognized here in the third quarter, or will we expect any additional fees going forward?
Speaker #2: That's it. One time. Yeah, one time.
Speaker #4: Okay. Okay. Got it. It looks like you added another asset to the Help for Sale bucket. Can you give us some color on what you're looking to sell here?
Speaker #4: And are you actively marketing that for sale as?
Speaker #4: well? Yeah.
Speaker #2: So obviously, we've had Costco in the help for sale up until this point. And then, I guess about six weeks ago, we formally engaged a broker to sell Calera.
Speaker #2: So Calera is up for sale, and we're in the process right now. Our anticipation is that we would try to get this sold either by the end of the year or probably early January.
Speaker #2: So that's the other property that's in the help for.
Speaker #2: sale. Got it.
Speaker #4: And speaking of the Costco property, I think KB Home was expected to extend a couple of times until maybe December. Are you getting any change in sort of their viewpoint on the asset?
Speaker #4: Are they still expected to? Yeah.
Speaker #4: close?
Speaker #2: So they did extend to December. We've had some conversations recently about their wanting to time the closing for a demolition permit. But they've got to go through their process.
Speaker #2: But as it stands right now, per the agreement, we have not been heard if they're going to extend beyond December 15th. So they have one more extension that would take us through to, I think, February. Right now, it's through December 15th.
Speaker #2: But Got
Speaker #2: 15th.
Speaker #4: Got it.
Speaker #2: then.
Speaker #4: Okay. Fair enough. is they'll close by last quarter you were saying you were seeing an increasing number of acquisition opportunities. And just sort of curious, based on your opening commentary, it sounds like things are maybe more loosening up, but now sort of ceased.
Speaker #4: What’s your— is that sort of your viewpoint currently, or do you think things are coming?
Speaker #4: back? Yeah.
Speaker #2: So, it's interesting. I would say that we were seeing some stuff in the July timeframe, and then we started throwing out some bids.
Speaker #2: And then it kind of contracted because we got a little sideways. I would say we've seen more in the last week and a half than we had probably in the prior month and a half.
Speaker #2: So, I don't know what it was about it. I mean, the markets were this volatile. Maybe it was because of the end of summer.
Speaker #2: September decision. I'm not sure. Maybe it was because we knew we had the surety, but it kind of—we didn't see much. And now we're starting to see more.
Speaker #2: Now it actually feels like I'm measuring it by quantity, not quality. It's starting to feel healthier. There's definitely—I mean, I think John Raney, we've probably looked at four or five deals in the last...
Speaker #2: week. Right? Yeah, Quantity is—yeah,
Speaker #3: now.
Speaker #2: Quantity is balanced. I mean, quality is still challenging, right? I think the one thing that, if you imagine us as a steel blade or a knife, we're constantly sort of sharpening and sharpening on a grindstone.
Speaker #2: And getting better at what we want and knowing better what we want. So our box—our buy box—has probably gotten a lot tighter.
Speaker #2: And there are things that I probably would have been willing to bid on two years ago. I'm like, fuck it, I'm out. I don't want to bother. So we've become much more selective.
Speaker #2: But that said, it feels right now, at least, and it's usually odd because, candidly, you don't see a fee a lot at year-end. You tend to see them waiting until early January.
Speaker #2: Right? That's where the pipeline tends to pick up normally. Now, you would generally think it's going to slow down because these take anywhere from 30 to 60 days to close.
Speaker #2: And so then you're smack in the holidays, and you're like, "So I think that's an interesting sign." I think some of—I think what we are seeing sort of tea leaf-wise is there's probably more PE activity going on.
Speaker #2: Which I think is always an indicator, an early indicator, right? PE and hedge funds sometimes tend to—you generally construe them as to be smarter capital and maybe not smart capital.
Speaker #2: Then, sort of people who have just got long bias or are doing 1031s or something like that, where they're forced by mandate to do something. These guys are looking for something.
Speaker #2: So we have seen a little bit of PE activity pick up.
Speaker #2: up. Okay.
Speaker #4: Great. Thank you.
Speaker #2: Mm-hmm. Our next
Speaker #5: question is from Goyov Meta from Alliance Global Partners. Your line is
Speaker #6: Yeah, thank you. Following up on your comments about acquisition, can you comment on where the cap rates are for the kind of properties you're looking at?
Speaker #2: Cap rates are mainly seven handles. That's first year. Right? We've seen some eight, but mainly seven handles. Not necessarily low seven handles, but seven handles.
Speaker #2: I think brokers are certainly asking for the moon, and that's their job, and I get it. On a weighted average basis, those are probably tens.
Speaker #2: Right? So now, I guess, in fairness, we've seen some wider ones, but you're like, I don't want to own that. Have we seen any tighter ones at all?
Speaker #2: I don't know that I have, right now, to be honest with you.
Speaker #6: Okay, thanks for that color. Second question on, I guess, asset recycling. As the acquisition market picks up for your target assets, should we expect that you may sell more assets?
Speaker #6: To fund those
Speaker #6: acquisitions? You
Speaker #2: You should expect that we will be deliberate and systematic about asset recycling. If you think back, right, we did the asset recycling, the GIPR, which is a large bulk.
Speaker #2: And so just by for everyone's education purposes, generally speaking, if you sell—if you do seven individual transactions to seven individual buyers in a given year, that's sort of the limit for an IRS perspective.
Speaker #2: Over that, you tend to have to get what is called a private letter ruling to sort of get exemptive relief because otherwise, it might be deemed a trader.
Speaker #2: You're dealing. And so when we sold that big bunch of office and dollar stores to GIPR, that was one transaction. And then that sort of kicked it off in earnest.
Speaker #2: We sold the one in Nashville. We sold one out in California. And then it got really super volatile. We've been sitting on the KB thing for the Costco purchase for a while.
Speaker #2: Closing soon. As I said, OES has this purchase option, so we can't do anything with that until we actually have conversations with them. Looking forward to that.
Speaker #2: And their process is they have time on their clock. So that one just wasn't going to happen immediately. And then the solar property, we've been four years trying to get a lot split.
Speaker #2: So, San Diego is really difficult to work with in terms of doing anything. So, that's taken long. It has felt really long in the tooth.
Speaker #2: We haven't really shown much recycling, and I think at the same time, we have other assets we could fly off the shelf. Right? They would just immediately go.
Speaker #2: And what I say to these other assets is, obviously, there's the Kia asset, which is a non-core, but we also have in our industrial bucket some legacy assets.
Speaker #2: There's a handful, one handful that are not absolute that I don't like because there's leakage, and it's not scale efficient. Some of them are just not the very focused sharpened knife blade of manufacturing that we want.
Speaker #2: And so those would have flown off the shelf in this period of time. But at the same time, we're saying they're not hurting us.
Speaker #2: They're very comfortable credits. Let's see if we get a little bit of more stability in the cap rate markets. If cap rates start to tighten, then we can comfortably roll those off, and we're not leaving a lot of chips on the table.
Speaker #2: And so I think what you'll see over the next period of time is we will continue to do that, start recycling those. And I think it'll be systematic, and we'll use and be, since those have a long legacy that we'll have to in terms of a low basis.
Speaker #2: We've held them for a long time that they will be 1031, or they'll be tax sensitive. So we will be sort of timing rolling into new acquisitions with the advent of those being sold.
Speaker #2: Does that make sense?
Speaker #6: Okay. Thanks for that color. That's all I had.
Speaker #2: Cool.
Speaker #5: Our next question is from John Masoka from BYLE Securities. Your line is open.
Speaker #5: open. Good
Speaker #7: Hey. Good afternoon.
Speaker #2: So as we think about maybe how's it going? As we think about maybe over a longer time horizon, the outlook for true growth, what's kind of interesting maybe is the Fed dynamic changes a little bit in terms of a sources of capital perspective.
Speaker #2: And I just maybe harp in on your preferred stocks had a little bit of a run. There's been some smaller REITs that have been out there in the preferred market.
Speaker #2: But that would, in some people's minds, be a leveraging transaction if you did raise in that market. So, just kind of curious where we should be thinking about sources of external growth capital in the future, if and when the market gets a little more favorable.
Speaker #2: accommodative. Well, I
Speaker #7: I think when we know the market is accommodative, that will be a better time to ask that question. For us, and I've kind of alluded to this, that question predates it.
Speaker #7: We have to grow, and we have to find sources for it. Right? And I kind of rebel against that question in general right now.
Speaker #7: And I know, I know the answer is underwhelming. Like, "Oh, if you don't have external growth capital, you can't really grow." And I was like, "Yeah, I have several assets that you're going to can trade low sixes, and I'm going to rotate them into mid to high sevens." And so that's growth.
Speaker #7: Right? And that's something to do in the near term until it makes it clear what the trend is. Because you think about it—we're in a downward trend in REITs, or we have been, generally speaking.
Speaker #7: And it's correlated to rates. And so until we have clarity on where rates are, then I think we'll start to see where pricing is.
Speaker #7: And another way I think about it, and a couple of ways I think about it, right? I'll talk about the preferred stuff too in a second.
Speaker #7: But look at ORWG. I mean, I think their dividend yields are high fives, right? Big fives. And we're what? 8. So we're roughly 250 basis points off of them—250 basis points.
Speaker #7: That doesn't seem terrible to me. I don't like it. I think we're certainly undervalued, right? From a standpoint. But arguably, everyone is, right? I mean, it was O forever.
Speaker #7: It was like sub four dividend yield. And they're trading fairly wide. I mean, that's much wider than a money market. And do they have a lot of risk in them?
Speaker #7: I mean, they have the risk that they may not grow. But I think we need to see the broader, more liquid, the more easily bought, and the easily loved names.
Speaker #7: Right? The big names are starting to see some love from the broader institutional community, which they haven't seen because flows into REITs have not been good.
Speaker #7: Once you start to see that, then the next sign would be, "Okay. Are we where the tail? Do we start to see that?" Right?
Speaker #7: So obviously, the price of our share price, if it's at a realm that's accretive, then we would start to access that. But we're not there yet.
Speaker #7: And so until it is, I can't do anything with that. Right? The strategic capital stuff, look, we're always looking. I think we've seen three preferred deals really in the last week.
Speaker #7: GMRE, we saw Pine, and we saw Frontview. I thought the deal that Preston and Fitzgerald did was really I liked that. It was clever.
Speaker #7: Right? I'd love to have conversations with them, and I've reached out to them to do it. But I think that was a clever deal.
Speaker #7: Right? I think that one is a constructive deal that'll cause growth. If I look at GMRE's and Pine, look, I get it. It's cheaper.
Speaker #7: That 8% preferred is cheaper than your equity was. But you got to step back. And so that answers the question, which source of capital do I want to use?
Speaker #7: And I want to step back to the primary question and say, "Should I be using either of those?" And if I have a hammer and the hammer says, "Hammer every nail that says growth on it," then you're going to use capital.
Speaker #7: But think about it. If you just pull back on a time horizon and underwrite that we could be in an easy environment, this time next year our share prices could be better as a category.
Speaker #7: Then won't it feel a little like a chump to have issued a bunch of perpetual preferred at 8% when you could have just waited and maybe your dividend yield and your equity could have been issued at 7.5% or 7?
Speaker #7: But clearly, I get that they will make that accretive. So it's not like it's bad. It's not like they're going to destroy themselves by no means.
Speaker #7: I mean, they're probably finding paper that's, I mean, investments that are wider than that 8. So it's going to be accretive. But they are also just burdening ing their franchise with this thing that they got to have to deal with.
Speaker #7: And so, to me, I just want to step back and say, "Hey, what does it really make sense? Do I need to post stats for the quarter because that's what everyone else does?" But that was kind of my framework about being a small REIT. The bigger guys, yeah, I get it.
Speaker #7: They got super low-cost of capital. They do need to show activity. Right? But our smaller folks, I mean, is that the right blueprint? So many small-cap REITs just try to follow this bigger mantra of the normalized REIT, and they're just not.
Speaker #7: And I know it's a circular thing. Like you said, "Well, if you don't grow, then you're never going to get capital. And therefore, you're always going to be small." And I'm like, "Well, maybe.
Speaker #7: "But maybe you could actually create a really valuable franchise that people will buy. And but that just—that's it. That's an experiment that we're doing."
Speaker #7: I fundamentally take the view that if I improve the durability and quality of the income coming in, and I sort of right-size the balance sheet and make it stronger, not weaker, and that I continuously do the right things over time, that, as I think Warren Buffett says, "When the tide goes out, you'll see who doesn't have their swim trunks on." And so right now, I don't know where those buckets of—I know the categories of where those buckets of capital are, but I don't have a line of sight to tell you, "Yeah, I've got someone who's going to give me equity at $18 a share." Because if I did, I would just—I would take it, and I would go put it to work.
Speaker #7: But I haven't seen any—I haven't seen it happen in the big REITs, so I don't expect it to happen for us necessarily right now.
Speaker #1: Okay. With the in-place portfolio, just kind of broadly, what's the feeling amongst tenants as you reach out, given we have a little more certainty even versus the last earnings call around the tariff outlook?
Speaker #1: I know there's still some uncertainty, but I'm kind of curious how they're feeling and if there's anything notable from a tenant credit perspective worth calling out.
Speaker #2: No. Look, most of these operators, quarters don't move that much, right? They look annually. They look at cycles. They're getting orders. I think the tariff news is—if anything, it's old.
Speaker #2: Right? I mean, the volatility certainly tempered. I mean, you tell me. I don't think we've heard of the verdict yet on the Supreme Court, and even if we do, there are two other tariffs that he can implement.
Speaker #2: And so, no one knows, right? But what we do know is, there hasn't been—there's been no blood in the streets, and our businesses are operating.
Speaker #2: I mean, most of our businesses buy U.S. and sell U.S., right? We own a lot of durable businesses. So we haven't seen anything—we haven't seen anything new on the radar that says, "Oh, oh, no."
Speaker #2: These tariffs are going to squeeze us. I think, look, people would love to have clarity on tariffs. I think tariffs do economically impact you.
Speaker #2: But the near-term noise is that there hasn't really been anything in the way we kind of said, I think, two quarters ago, that most of our—the vast majority of our tenants learned from COVID, and then the first Trump administration. It's not the first time he's talked about tariffs; they didn't want to have dependencies on places that could get squeezed, aka China.
Speaker #2: Right? And so a lot of them, over the ensuing years, have mitigated that risk, as this is good business practice. And that happens to look like a good reaction to the near-term conversations about tariffs.
Speaker #2: But we haven't heard anything recently, or at all, since our first conversations. I think everyone was alarmed because of Liberation Day; people are charged, right?
Speaker #2: And now it's like, "Yeah, okay. Let's wait until we actually know something else, and then maybe that's—then maybe we can sort of reforecast." But nothing yet.
Speaker #1: Okay. And then, on just kind of a line item by line item basis, probably more likely into 2026, what's the potential impact to property operating expense, maybe particularly like a net property operating expense from completing the former Costco headquarters transaction and even maybe even the Clara if you're able to sell Clara's former property?
Speaker #2: So, I would give you characteristics that right now, as we roll, I'd say that Costco Delta on operating expense needs to be the fee.
Speaker #2: Right? So the extension fees—we're probably bleeding about $40,000 a month on that property, right? So you're not going to—there's a fair amount of CapEx, but we have also gotten these extension fees that sort of offset that from an AFO perspective.
Speaker #2: But there's probably about $40,000 a month bleed on that. How we think about it in sort of third quarter. Yeah. Clara actually is—it's been lumpy.
Speaker #2: It's—you've got security fences in there, things like that. If we get that flushed out, I don't think you're going to see—and Ray, you correct me if I'm wrong.
Speaker #2: I don't think we're going to see world-changing property expenses go down just because those clear out. We're fairly neutral on that. But, I mean, there's a little bit of movement in 2026.
Speaker #2: I think as we get rid of some of—we have a hand, like I said, a small handful of non-absolute triple nets, I think, on the margin that could reduce property expense next year.
Speaker #2: But Ray, what are your thoughts on property expense?
Speaker #3: Well, I think it'll go down a bit. Maybe 100K or so. But I think as we sell some of the other properties, as we do the recycling, there are some others that where there's some leakage and so over time, it'll probably go down a little bit further.
Speaker #3: Does that
Speaker #3: help? Yeah.
Speaker #1: It's very helpful. I appreciate all that detail. That's it for me. Thank you very much.
Speaker #2: Great. Thanks.
Speaker #4: Our next question is from Steve Chick from Savvy's Garden Capital. Your line is open.
Speaker #5: Hey, thanks. Guys, I'm wondering if you could, or if you know, what the same-store rental income would be. Now, rental income is down 2%, but I think there's an overhang.
Speaker #5: Costco and solar are probably in there as well. Do you calculate what same-store rental income would be or a figure like that, obviously, from that?
Speaker #2: We don't. And I think the general reason why is because there's so much movement in our portfolio that we complete a recycling. That would be—and we have—but I think it's fair that once we think we're largely baked, particularly if we don't have external growth capital.
Speaker #2: I think it's fair that we would start implementing same-store. We may try to run that for you and publish that sometime before the year-end or something like that, but I don't think we have a handy tool.
Speaker #3: No, but I'd say that our overall average is 2.5% rent growth a year just based on escalations in the leases. gives you some idea of what's happening So that there.
Speaker #5: To characterize it as we recycle those. A lot of the legacy ones have the lower bumps, right? They're $2s, things every five years.
Speaker #5: To characterize it as we recycle those. A lot of the legacy ones have the lower bumps, right? They're twos or they're every five kind of. So I think that if you look at, there's a pie chart on our website that shows kind of the weighting of those.
Speaker #5: A lot of the stuff that we put in the last two years or the last three years sort of averaged north of 2.5%. So, I think over time, that could trend our same-store that way.
Speaker #5: Okay, that's helpful. And then can you say, I didn't catch it. On solar, did you say when you thought that property would be resolved or?
Speaker #5: sold? We're a lot, lot
Speaker #2: Literally started this process in closer than we ever were. I mean, so we are in 2021, where we engaged consultants and went through the process. So, we're four years into it.
Speaker #2: We're doing some last-minute negotiations, so we had to get the split and negotiate certain easements, and then have the city look at it. Ultimately, I don't have the details 100%, but at a high level, we had to do some modest construction work at the entrance of the driveway to meet the new ADA compliance standards of the city.
Speaker #2: And so it took us a while to get them to give us the green light to do the construction. The construction is now underway, which is not a very long job.
Speaker #2: It's probably a couple of weeks. But then we have to stuff. But my guess right now, it's been a constant debate go back and then get approval of all that internally.
Speaker #2: There are some people who think we can get it done by year-end, and I generally sort of hedge the downside. So I think it's a first quarter event.
Speaker #2: Ideally, it's the early first quarter event, but who knows? Once we're locked and loaded, that property will be taken to market. So, that'll be another health for sale.
Speaker #2: And the tenant has just finished. They left in September, and their lease ended in September. They cleaned it all out. It's a beautiful box inside.
Speaker #2: It's good. We've had brokers come in to lease it, but it's to sell it to an investor looking at it. Our intent is not owner-user.
Speaker #2: And we think that's the best end result for that.
Speaker #2: property.
Speaker #5: Okay. All right.
Speaker #5: Thanks. That's helpful. I appreciate it.
Speaker #4: Is there no questions at this time? I would now like to turn the conference back to Mr. Halfacre. Please go ahead.
Speaker #1: Thank you, everyone. We appreciate you dialing in and listening. We look forward to giving you updates as time goes on. I hope you have a great weekend, and I hope you can all rest up for the Thanksgiving holiday.
Speaker #1: And for those who are curious, we will not be at NARE. I don't want to go to Dallas in December, and it's just not relevant for us, I think, at this point.
Speaker #1: Conference, and I wish you guys all the best. But enjoy the...
Speaker #1: Best. This concludes today's conference call.