Company Overview - Peakstone Realty Trust (PKST) is transitioning its business model by divesting from office properties to concentrate fully on the industrial sector, specifically in the Industrial Outdoor Storage (IOS) segment [1]. Market Context - The shift in focus is influenced by the rise of remote work trends following the COVID-19 pandemic, which has altered the demand for traditional office spaces [1].

Peakstone Realty Trust (PKST -1.22%), a real estate investment trust specializing in industrial and office properties, reported its second-quarter 2025 results on August 7, 2025. The headline news focused on better- than-expected operational earnings, substantial ongoing repositioning of its property portfolio, and a significant non-cash office-related asset impairment that led to a deep net loss. Adjusted funds from operations (AFFO) per share reached $0.61, far outpacing the analyst estimate of $0.05 (non ...

Financial Data and Key Metrics Changes - For Q2 2025, total revenue was approximately $54 million and cash NOI was approximately $43 million [11] - Net loss attributable to common shareholders was approximately $265 million or $7.22 per share, primarily due to noncash impairments of approximately $286 million [11] - FFO was approximately $23.9 million or $0.60 per share on a fully diluted basis, while core FFO was approximately $23.8 million or $0.60 per share [12] - Same store cash NOI increased by 6.3% overall, with a 9.3% increase in the industrial segment and a 4.7% increase in the office segment [12] - Total liquidity at quarter end was approximately $356 million, with a cash balance of approximately $264 million [13] Business Line Data and Key Metrics Changes - The industrial outdoor storage (iOS) segment saw an increase in ABR by over 25% since the beginning of the year [9] - The office segment now represents 35% of the net book value of real estate assets, down from a higher percentage as the company divests office properties [10] Market Data and Key Metrics Changes - The company sold seven office properties for $158 million through quarter end and an additional two properties for $24 million after quarter end, totaling $216 million year to date [10] - The company recognized a noncash impairment of approximately $286 million related to 18 office properties, reflecting updated expectations for sale pricing [10] Company Strategy and Development Direction - The company is focused on transforming into an industrial REIT, emphasizing growth in the iOS subsector through acquisitions and leasing while divesting remaining office assets [5] - The strategy includes reducing leverage and aligning the portfolio with higher growth opportunities in the industrial sector [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy and ability to execute, highlighting the importance of reshaping the portfolio and reallocating capital to higher growth iOS opportunities [17] - The board approved a dividend of 10 cents per common share for Q3, reflecting the ongoing transition to an exclusively industrial strategy [14] Other Important Information - The company has a significant pipeline for acquisitions in the iOS space, with a focus on markets with strong demand growth and supply constraints [46] - The weighted average interest rate on all debt is approximately 5.47% after recent interest rate swaps [14] Q&A Session Summary Question: Can you provide more insight into the Board's thinking around the dividend? - Management indicated that the dividend aligns with the cash flow characteristics of the industrial outdoor storage segment and reflects the transition to an industrial REIT [18] Question: What is the renewal percentage for iOS leases? - Management noted that there is very little rollover, with only 0.4% vacancy in the operating portfolio, and they expect most tenants to renew their leases [20] Question: What are the cap rates for iOS acquisitions and office sales? - Management did not provide individual cap rates but mentioned that aggregated data is available for analysis [25] Question: How will proceeds from office sales be used? - Management stated that they aim to reduce leverage below six times debt to EBITDA while remaining active in the acquisition market [29] Question: Has competition increased in the iOS space? - Management confirmed that the market is active with increased capital for iOS, but their experience and national portfolio provide a competitive advantage [33] Question: What triggered the impairment this quarter? - The impairment was driven by the acceleration of sales and a shorter anticipated hold period, necessitating a fair value calculation [39] Question: What is currently in the iOS pipeline? - Management refrained from disclosing specific details but confirmed a sufficient pipeline with opportunities in markets with strong demand and supply constraints [45]

Business Strategy - The company is accelerating its shift to an Industrial REIT, focusing on Industrial Outdoor Storage (IOS) and traditional industrial assets, with the intention to scale IOS and exit the office sector[12] - The company is committed to selling all remaining office properties, having already completed approximately $2.2 billion in office dispositions since 2022, with an expected acceleration in the pace of sales[13] Portfolio Performance and Acquisitions - The company increased IOS Annualized Base Rent (ABR) by over 25% since the beginning of the year[16] - The company acquired two IOS assets for approximately $52 million, encompassing approximately 36.2 usable acres and generating $3.2 million in ABR, with an estimated 13% mark-to-market opportunity[5] - The company completed $158 million in sales during the quarter and an additional $24 million subsequent to quarter-end, bringing the year-to-date sales total to $216 million[5] Financial Position - The company is targeting a Net Debt / EBITDAre ratio at or below 6.0x and is using interest rate swaps to manage floating-rate exposure[13] - The company's Net Debt / Adjusted EBITDAre was 7.0x in Q1 2025, 6.4x in Q2 2025, and a pro forma 6.6x for Q2 2025[5] - The remaining office net book value is $615 million, representing approximately 35% of the real estate net book value[5] Industrial Portfolio Composition - The industrial portfolio consists of 53 IOS properties and 19 traditional industrial assets[48] - The industrial portfolio is approximately 100% leased, with a weighted average lease term (WALT) of 5.1 years and in-place ABR of $78.7 million[43] - The industrial portfolio has embedded growth potential, driven by an estimated 38% mark-to-market opportunity and contractual rent escalations averaging 2.5%[43]

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements reflect a significant net loss driven by real estate impairments and a strategic portfolio shift [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $264,392 | $146,514 | $117,878 | | Total real estate, net | $1,706,264 | $2,264,048 | ($557,784) | | **Total assets** | **$2,190,570** | **$2,676,232** | **($485,662)** | | Debt, net | $1,246,767 | $1,344,619 | ($97,852) | | **Total liabilities** | **$1,414,333** | **$1,524,210** | **($109,877)** | | **Total equity** | **$776,237** | **$1,152,022** | **($375,785)** | - The significant decrease in total assets and equity is primarily driven by **property dispositions and real estate impairment charges**, reflecting the company's strategic shift away from office properties[16](index=16&type=chunk) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Rental income | $54,026 | $55,952 | $110,997 | $115,179 | | Real estate impairment provision | $286,126 | $6,505 | $338,083 | $7,881 | | **Net (loss) income** | **($286,760)** | **($4,101)** | **($340,162)** | **$1,369** | | **Net (loss) income attributable to common shareholders** | **($265,300)** | **($3,768)** | **($314,683)** | **$1,257** | | **Net (loss) income per share, basic and diluted** | **($7.22)** | **($0.11)** | **($8.57)** | **$0.03** | - The company reported a substantial net loss for the three and six months ended June 30, 2025, primarily due to a significant increase in real estate impairment provisions, which rose to **$338.1 million** for the six-month period compared to just **$7.9 million** in the prior year period[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $39,740 | $40,728 | | Net cash provided by investing activities | $197,206 | $67,870 | | Net cash used in financing activities | ($118,444) | ($48,312) | - Investing activities provided a significant source of cash (**$197.2 million**) in the first six months of 2025, largely from **$187.0 million** in proceeds from property dispositions[29](index=29&type=chunk)[30](index=30&type=chunk) - This cash was partly used for financing activities, including a **$100.0 million** paydown of the credit facility[29](index=29&type=chunk)[30](index=30&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes cover the strategic transition to an industrial-only REIT, significant impairments, and segment performance shifts - The Company is executing a strategic transition to become an industrial-only REIT, focusing on growth in the industrial outdoor storage (IOS) sector while actively divesting its office properties[32](index=32&type=chunk) Real Estate Dispositions - Six Months Ended June 30, 2025 | Segment | Number of Properties | Gross Sales Price | Gain (Loss) | | :--- | :--- | :--- | :--- | | Office | 9 | $192,431 | ($1,545) | Real Estate Impairments - Six Months Ended June 30, 2025 | Segment | Number of Properties | Impairment Amount | | :--- | :--- | :--- | | Office | 24 | $334,924 | | Industrial | 1 | $3,159 | | **Total** | **25** | **$338,083** | - Subsequent to quarter-end, the company acquired two IOS properties for **$52.4 million** and sold two Office segment properties for **$23.6 million**, continuing its strategic portfolio reshaping[140](index=140&type=chunk)[141](index=141&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift to an industrial REIT, portfolio performance, non-GAAP measures, and capital resources [Overview and Business Environment](index=36&type=section&id=Overview%20and%20Business%20Environment) - The company is strategically transitioning to become an industrial-only REIT, targeting growth in the Industrial Outdoor Storage (IOS) sector while divesting office properties[144](index=144&type=chunk)[164](index=164&type=chunk) - Management believes long-term demand for industrial real estate will remain strong due to onshoring trends, e-commerce growth, and supply constraints[166](index=166&type=chunk)[167](index=167&type=chunk) Top 5 Tenants by Annualized Base Rent (ABR) as of June 30, 2025 | Tenant | ABR (in thousands) | % of Total ABR | | :--- | :--- | :--- | | Keurig Dr. Pepper | $11,897 | 7.1% | | Amazon | $10,003 | 6.0% | | Southern Company Services | $9,597 | 5.7% | | Maxar | $7,916 | 4.7% | | Freeport McMoRan | $7,867 | 4.7% | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Same Store NOI Change - Q2 2025 vs Q2 2024 (in thousands) | Segment | Q2 2025 Same Store NOI | Q2 2024 Same Store NOI | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Industrial | $12,918 | $12,854 | $64 | 0% | | Office | $22,447 | $22,018 | $429 | 2% | | **Total** | **$35,365** | **$34,872** | **$493** | **1%** | Total Portfolio NOI Change - Six Months Ended June 30 (in thousands) | Segment | H1 2025 NOI | H1 2024 NOI | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Industrial | $41,887 | $25,369 | $16,518 | 65% | | Office | $51,704 | $54,843 | ($3,139) | (6)% | | Other | $0 | $12,838 | ($12,838) | (100)% | | **Total** | **$93,591** | **$93,050** | **$541** | **1%** | - The net loss of **$340.2 million** for H1 2025 was primarily driven by a **$330.2 million** year-over-year increase in real estate impairment charges related to the planned disposition of office properties[192](index=192&type=chunk)[198](index=198&type=chunk) - The significant **65% increase in Industrial NOI** for H1 2025 was driven by the acquisition of the IOS Portfolio in late 2024, while the decrease in Office and Other NOI reflects the impact of property dispositions[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [Non-GAAP Financial Measures](index=49&type=section&id=Non-GAAP%20Financial%20Measures) FFO, Core FFO, and AFFO per Share/Unit | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | FFO per share/unit | $0.60 | $0.65 | $1.22 | $1.18 | | Core FFO per share/unit | $0.60 | $0.65 | $1.22 | $1.30 | | AFFO per share/unit | $0.61 | $0.70 | $1.24 | $1.40 | - FFO is significantly higher than net income primarily due to the exclusion of large non-cash charges for real estate impairment (**$286.1M in Q2 2025**) and depreciation[213](index=213&type=chunk) Total Cash NOI (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $43,196 | $44,002 | | Six Months Ended June 30 | $88,798 | $91,333 | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$264.4 million in cash** and cash equivalents and **$91.4 million of available undrawn capacity** under its Revolving Credit Facility[219](index=219&type=chunk)[220](index=220&type=chunk) Consolidated Debt Summary as of June 30, 2025 (in thousands) | Debt Type | Amount | | :--- | :--- | | Total Secured Debt | $360,326 | | Total Unsecured Debt | $900,000 | | **Total Debt** | **$1,260,326** | | Unamortized Costs & Discounts, net | ($13,559) | | **Total Debt, net** | **$1,246,767** | - In April 2025, the company made a **$100.0 million paydown** of its Revolving Loan and was in compliance with all debt covenants as of June 30, 2025[233](index=233&type=chunk)[232](index=232&type=chunk) - On August 5, 2025, the Board declared a quarterly dividend of **$0.10 per common share**, a reduction from the previous quarter's **$0.225 per share** dividend[139](index=139&type=chunk)[226](index=226&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk from variable-rate debt, which is managed through interest rate swaps - The company's primary market risk exposure is to interest rate changes on its variable-rate debt[238](index=238&type=chunk) - As of June 30, 2025, the company's debt consisted of approximately **$1.1 billion in fixed-rate debt** (including swaps) and **$150.0 million in variable-rate debt**[241](index=241&type=chunk) - A hypothetical **100 basis point increase** in interest rates would decrease annual earnings and cash flows by approximately **$3.3 million**, after accounting for interest rate swaps[241](index=241&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[243](index=243&type=chunk) - No changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[244](index=244&type=chunk) [PART II. OTHER INFORMATION](index=59&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that there are no material pending legal proceedings to which it is a party - The company reported no material legal proceedings[245](index=245&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - There were no material changes to the risk factors from the company's most recent Form 10-K[246](index=246&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no sales of unregistered securities or repurchases of its equity securities during the relevant periods - During the six months ended June 30, 2025, there were no sales of unregistered securities[247](index=247&type=chunk) - The Company did not repurchase any of its shares during the three months ended June 30, 2025[248](index=248&type=chunk) [Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None reported[249](index=249&type=chunk) [Other Information](index=59&type=section&id=Item%205.%20Other%20Information) No trustee or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter - No trustee or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[251](index=251&type=chunk) [Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and interactive data files

EXHIBIT 99.1 Peakstone Realty Trust Reports Second Quarter 2025 Results - Accelerating Shift to an Industrial REIT - - Continued Growth in the Industrial Outdoor Storage ("IOS") Subsector - - Sold $216 Million of Office Properties Since the Start of 2025 - El Segundo, Calif. (August 7, 2025) - Peakstone Realty Trust (the "Company") (NYSE: PKST), a real estate investment trust that is focused on owning and operating industrial assets, with a strategic emphasis on industrial outdoor storage, today announced i ...

To break things down more, Axos Financial belongs to the Financial - Miscellaneous Services industry, a group that includes 93 individual companies and currently sits at #93 in the Zacks Industry Rank. Stocks in this group have gained about 8.2% so far this year, so AX is performing better this group in terms of year-to-date returns. For those looking to find strong Finance stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Axos Financial (AX) been one of thos ...

Core Viewpoint - Peakstone Realty Trust (PKST) is showing strong technical indicators for a potential bullish breakout, highlighted by a recent "golden cross" in its moving averages [1][3]. Technical Analysis - PKST's 50-day simple moving average has recently crossed above its 200-day moving average, indicating a bullish trend [1]. - The golden cross is a significant technical chart pattern that suggests a strong breakout potential, particularly when involving longer time periods like the 50-day and 200-day moving averages [1][2]. - The stock has moved 8.1% higher over the last four weeks, suggesting upward momentum [3]. Earnings Outlook - PKST is currently rated as a 1 (Strong Buy) on the Zacks Rank, indicating positive market sentiment [3]. - The earnings outlook for PKST is favorable, with no downward revisions in earnings estimates over the past two months and one upward revision, leading to an increase in the Zacks Consensus Estimate [3]. Investment Consideration - Given the technical indicators and positive earnings estimate revisions, PKST may present a good investment opportunity for potential gains in the near future [5].

Group 1 - Peakstone Realty Trust (PKST) is currently outperforming its peers in the Finance sector, with a year-to-date gain of approximately 20.6% compared to the sector average of 7.2% [4] - The Zacks Rank for Peakstone Realty Trust is 1 (Strong Buy), indicating a positive earnings outlook and strong analyst sentiment [3] - Over the past 90 days, the Zacks Consensus Estimate for PKST's full-year earnings has increased by 16.2%, reflecting improving analyst sentiment [4] Group 2 - Peakstone Realty Trust is part of the REIT and Equity Trust - Other industry, which has 96 individual stocks and is currently ranked 142 in the Zacks Industry Rank [6] - The average gain for stocks in the REIT and Equity Trust - Other industry this year is 4.8%, indicating that PKST is performing better than its industry peers [6] - Another stock in the Finance sector, Banco Bilbao (BBVA), has a year-to-date return of 57.6% and a Zacks Rank of 2 (Buy), showing strong performance within the sector [5]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Peakstone Realty Trust (PKST) - PKST currently holds a Momentum Style Score of B, indicating potential for solid momentum [3] - The company has a Zacks Rank of 1 (Strong Buy), which historically outperforms the market when combined with a Style Score of A or B [4] Performance Metrics - Over the past week, PKST shares increased by 3.5%, while the Zacks REIT and Equity Trust - Other industry rose by only 0.19% [6] - In a longer timeframe, PKST's monthly price change is 11.19%, significantly outperforming the industry's 3.99% [6] - Over the last quarter, PKST shares rose by 6.82%, and over the past year, they increased by 22.54%, compared to the S&P 500's gains of 5.61% and 10.35%, respectively [7] Trading Volume - PKST's average 20-day trading volume is 142,862 shares, which serves as a baseline for price-to-volume analysis [8] Earnings Outlook - Recent earnings estimate revisions for PKST show one upward revision in the past two months, raising the consensus estimate from $2.18 to $2.50 [10] - For the next fiscal year, there has been one upward revision with no downward revisions during the same period [10] Conclusion - Considering the performance metrics and earnings outlook, PKST is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a promising near-term investment option [12]