Financial Data and Key Metrics Changes - The company reported adjusted funds from operations (AFFO) of $71.8 million or $0.36 per share for Q1 2025, benefiting from recent investments and lower operating expenses [21] - The company maintained its 2025 AFFO guidance range at $1.45 to $1.49 per share, reflecting approximately 3% growth at the midpoint [9][23] - The pro forma leverage at the end of the quarter was 5.0 times net debt, with approximately $826 million available on the revolving credit facility [22] Business Line Data and Key Metrics Changes - The company invested $103.9 million in new property acquisitions, build-to-suit developments, and revenue-generating CapEx, with a weighted average initial cash cap rate of 7.2% [16] - The committed build-to-suit developments pipeline stands at approximately $305.9 million, with an expected initial cash cap rate in the 7s and straight-line yields in the mid-8s to mid-9s [6][13] - The company has $132.9 million of acquisitions under control and $4.5 million of commitments to fund revenue-generating CapEx with existing tenants [16] Market Data and Key Metrics Changes - The company reported 99.1% occupancy and 99.1% rent collection for the first quarter, indicating a resilient and diversified portfolio [9] - The company has minimal near-term rollover concerns, with only 1% of its annual base rent (ABR) remaining to be addressed for 2025 [17] Company Strategy and Development Direction - The company focuses on a differentiated strategy that includes a robust pipeline of build-to-suit projects, aiming to add at least $500 million in additional developments to its committed schedule [11][42] - The company emphasizes the importance of maintaining a flexible balance sheet and proactive portfolio management to navigate macroeconomic uncertainties [9][10] - The company is expanding its developer relationships to enhance its build-to-suit pipeline, with a recent partnership with Prologis for a $78.2 million project [7][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the risks presented by the current macroeconomic environment, including potential tariffs and consumer spending trends, but expressed confidence in the company's ability to manage these challenges [8][10] - The management team remains optimistic about the long-term growth potential, citing a strong pipeline and disciplined execution as key drivers for shareholder value [5][8] Other Important Information - The company has a watch list focusing on consumer-centric tenants and is closely monitoring the performance of certain tenants, including Zips and Stanislaus Surgical [18][20] - The company plans to maintain its dividend at $0.29 per share, payable to holders of record as of June 30, 2025 [23] Q&A Session Summary Question: How is the company monitoring credit risk related to industrial exposure and tariffs? - The management team is taking a top-down and bottom-up approach to assess individual tenants and industries affected by tariffs, emphasizing that manufacturing is not uniform and some tenants are well-positioned to manage these challenges [25][27] Question: What is the guidance for bad debt this year? - The company started the year with a bad debt guidance of 125 basis points and plans to maintain this figure, reassessing after Q2 [30][33] Question: What is the company's exposure to Claire's and how are they managing it? - The company owns Claire's sole distribution facility in the U.S., representing about 78 basis points of exposure, and is optimistic about their ability to navigate tariff-related challenges [36][39] Question: What is the status of the build-to-suit pipeline? - The company remains committed to its goal of $500 million in build-to-suit developments and is actively pursuing additional developer partnerships to enhance its pipeline [41][42] Question: How does the company plan to fund its existing build-to-suit pipeline? - The company has ample capacity on its credit facility and does not intend to seek permanent financing for its current projects, focusing on self-funding through its portfolio [46][48] Question: What is the nature of the relationship with Prologis? - The relationship with Prologis is expected to yield repeat business, with ongoing discussions about future projects, highlighting the importance of strong developer relationships [49][78]

Financial Data and Key Metrics Changes - The company reported adjusted funds from operations (AFFO) of $71.8 million or $0.36 per share for the quarter, benefiting from recent investments and lower operating expenses [20][23] - The company maintained its 2025 AFFO guidance range at $1.45 to $1.49 per share, reflecting approximately 3% growth at the midpoint [9][10] Business Line Data and Key Metrics Changes - The company invested $103.9 million in new property acquisitions, build-to-suit developments, and revenue-generating capital expenditures, with a weighted average initial cash cap rate of 7.2% and a weighted average straight-line yield of 8.3% [16][20] - The committed build-to-suit developments pipeline stands at approximately $305.9 million, with an expected initial cash cap rate in the 7s and straight-line yields in the mid-8s to mid-9s [5][12] Market Data and Key Metrics Changes - The company has approximately $132.9 million of acquisitions under control and $4.5 million of commitments to fund revenue-generating CapEx with existing tenants [16] - The company reported 99.1% occupancy and 99.1% rent collection for the first quarter, indicating a resilient and diversified portfolio [9] Company Strategy and Development Direction - The company emphasizes a differentiated strategy focused on disciplined growth, with a goal of adding at least $500 million in additional build-to-suit developments to its committed schedule [10][11] - The company is expanding its developer relationships, recently partnering with Prologis for a $78.2 million project, which is expected to enhance its pipeline and growth opportunities [6][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the macroeconomic uncertainties, including potential tariffs and consumer spending trends, but expressed confidence in the company's ability to manage risks [8][9] - The company remains vigilant in monitoring tenant credit risks, particularly in consumer-centric industries, while maintaining a diversified portfolio to mitigate impacts from individual credit events [17][18] Other Important Information - The company amended its $1 billion revolving credit facility, extending the maturity date to March 2029 and reducing the all-in borrowing rate by 10 basis points [21][22] - The company ended the quarter with pro forma leverage of 5.0 times net debt and approximately $826 million available on its revolving credit facility, providing ample capacity for future investments [22][23] Q&A Session Summary Question: How is the company monitoring credit exposure in the industrial sector due to tariffs? - The company is taking both top-down and bottom-up approaches to assess individual tenants and industries affected by tariffs, emphasizing that manufacturing is not uniform and varies by tenant [25][26] Question: What is the guidance for bad debt this year? - The company started the year with a bad debt guidance of 125 basis points and plans to maintain that figure, reassessing after Q2 and into Q3 [29][32] Question: What is the exposure to Claire's and how is the company managing it? - The company owns Claire's sole distribution facility in the U.S., which accounts for 78 basis points of exposure, and is actively monitoring their logistics and inventory sourcing due to tariff impacts [34][36] Question: Can you provide an update on the build-to-suit pipeline? - The company remains confident in its goal of $500 million in build-to-suit developments for the year, with a robust pipeline despite some macroeconomic uncertainties [39][40] Question: How does the company plan to fund its existing build-to-suit pipeline? - The company has ample capital available and does not intend to put permanent financing on any of the current deals, focusing on controlling its own destiny [43][46] Question: What is the nature of the relationship with Prologis? - The relationship with Prologis is expected to yield repeat business, with ongoing discussions for future projects, highlighting the value of their partnership [76][78]