Financial Data and Key Metrics Changes - The second quarter and first half of the year results exceeded initial guidance, with revenue growth driven by higher occupancy and rental revenue [5][6] - Core FFO growth was reported at 3.3% year to date, positioning the company toward the top of the sector [9] - Operating expenses growth is now forecasted at 3.1%, 100 basis points better than original guidance, leading to higher NOI growth projected at 2.7% for 2025 [6][12] Business Line Data and Key Metrics Changes - Same store NOI growth is projected at 2.7%, which is 30 basis points above initial expectations, driven by a reduction in expense growth [12][13] - New development projects started in the first half of the year totaled $610 million, with a revised target of $1.7 billion for the full year [9][13] Market Data and Key Metrics Changes - Total market occupancy in established regions stands at 94.8%, while the Sunbelt region is at 89.5% due to elevated standing inventory [10] - Economic occupancy in New York, New Jersey averaged 96.3% during Q2, while Seattle achieved 96.6% [19][21] Company Strategy and Development Direction - The company is focused on acquiring $900 million of assets this year, primarily funded by capital from dispositions [8] - Development projects are expected to generate differentiated external growth, with ongoing projects trending above pro forma stabilized yields [7][9] Management's Comments on Operating Environment and Future Outlook - Management noted that job growth expectations for the second half of the year are more muted, but demand remains healthy across most of the portfolio [6] - The company anticipates that new supply in established regions will continue to decline, supporting healthy operating fundamentals [6][10] Other Important Information - The company raised $1.3 billion of capital year to date at an initial cost of 5%, which is attractive relative to yields on new development projects [9] - The CEO acknowledged the retirement of the Head of Investor Relations, Jason Reilly, after 21 years with the company [10][11] Q&A Session Summary Question: What is impacting the pace of leasing in Denver communities? - The leasing pace is averaging about 30 homes per month, which is in line with expectations, but some delays are due to elevated concessions in competitive submarkets [30][32] Question: What gives confidence in achieving the same number of occupied units by year-end? - The company has seen good velocity in leasing, averaging 30 homes per month, and expects to push harder on concessions to maintain occupancy [34][36] Question: What caused the leveling off in asking rent trends? - Demand has softened due to weaker job growth, with about 100,000 fewer jobs than originally projected impacting rent growth [41][42] Question: Why is bad debt running higher compared to peers? - The company charges for all amounts due under lease terms, including late fees and utilities, which may contribute to higher bad debt figures [44][45] Question: How is the Dallas acquisition performing? - The acquisition is trending as expected, with increased resources being allocated to asset management [52][54] Question: What regions are expected to underperform in rent change? - The Mid Atlantic and Southern California are projected to underperform due to weaker job environments and pricing power [58][60] Question: What is the outlook for the DC asset sales? - The DC market is challenging due to unique laws, but the company is comfortable with current pricing and values for the assets [91][94]

Financial Data and Key Metrics Changes - Core FFO per share for the quarter was $0.25, up 4.2% compared to Q1 2024 [8] - Same store net operating income (NOI) growth was 4.8%, near the top of the forecasted range [9] - Straight line leasing spreads were 20.3%, marking the twelfth consecutive quarter with spreads exceeding 17% [9] - Annual net effective average base rent (ABR) per square foot increased by 4% over Q1 2024 [9] - Debt to EBITDAre ratio improved to 7.2 times from 7.8 times a year ago [24] Business Line Data and Key Metrics Changes - Redevelopment efforts contributed to a 1% lift in same store NOI growth, with $8 million spent in capital above 2023 levels [7] - The company anticipates redevelopment projects will create up to 100 basis points of same store NOI growth lift in 2026, 2027, and 2028 [7] - Total lease value signed for the quarter was $31 million, the highest first quarter amount in a decade, representing a 40% increase over the average of the last decade [13] Market Data and Key Metrics Changes - Green Street's population forecast for the company's footprint is 50 to 70 basis points higher than the national average, with job growth CAGR forecasted to be 40 basis points above the national average [11] - Phoenix, the largest market for the company, leads the country in industrial construction underway [11] Company Strategy and Development Direction - The company is focused on capitalizing on the reshoring dynamic, with a strategy designed to benefit from economic changes [6] - The operational model is set up to provide accelerated growth and greater durability of cash flows in varying economic conditions [5] - The company aims for a long-term core FFO growth target of 5% to 7%, supported by redevelopment and acquisitions [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to perform in different economic cycles, despite current macroeconomic uncertainties [67] - The company is optimistic about the future of service-based businesses in the Sunbelt region [11] - Management is closely monitoring tenant performance and market trends, indicating no significant pullback in sales yet [48][52] Other Important Information - The company has approximately $50 million in acquisitions in the current pipeline, primarily financed through cash flow and dispositions [24] - The dividend payout ratio remains nearly 50%, with expectations for strong dividend growth in line with earnings growth [25] Q&A Session Summary Question: Why did occupancy decline? - The decline in occupancy was primarily due to a retenanting effort at Terra Vida, where a low-paying tenant was replaced by higher-performing tenants [27][28] Question: Is the $50 million in acquisitions already under contract? - The $50 million is an estimate of current opportunities being pursued, not necessarily under contract yet [29][30] Question: What are the expectations for leverage levels this year? - The company expects to end the year in the low sixes for the debt to EBITDA ratio, with improvements anticipated from increased earnings and cash flow [32][34] Question: What redevelopment projects are contributing to same store NOI growth? - Key projects include Lions Square and Williams Trace, with ongoing efforts to improve tenant quality and revenue [39][42] Question: Are tenants seeing any consumer pullback? - While there are indications of changing consumer behavior, particularly in restaurant sales, overall traffic and sales have not significantly declined [48][52]