Financial Data and Key Metrics Changes - Funds from operations (FFO) per share for Q3 2025 was $2.27, representing a 6.6% increase compared to the same quarter last year [7][13] - Quarter-end leasing was at 96.7% with occupancy at 95.9%, while average quarterly occupancy was 95.7%, down 100 basis points from Q3 2024 [7][8] - Cash same store revenue rose by 6.9% for the quarter and 6.2% year to date [8] - The company has a diversified rent roll, with the top 10 tenants accounting for only 6.9% of rents, down 60 basis points from the previous year [8] Business Line Data and Key Metrics Changes - Quarterly releasing spreads were 36% GAAP and 22% cash for leases signed during the quarter, with year-to-date results slightly higher at 42.7% GAAP and cash respectively [7][8] - The retention rate for tenants rose to almost 80%, indicating a cautious nature among tenants [10] Market Data and Key Metrics Changes - The market remains somewhat bifurcated, with improved activity in smaller spaces (50,000 square feet and below) but larger spaces experiencing delays in leasing [9][10] - The company is reforecasting 2025 starts to 200,000,000 due to current demand levels and a decline in the supply pipeline [11] Company Strategy and Development Direction - The company aims to capitalize on development opportunities earlier than private peers, leveraging its balance sheet strength and existing tenant expansion needs [12] - The focus is on geographic and tenant diversity as strategic paths to stabilize earnings regardless of economic conditions [8] - The company is excited about acquiring properties in Raleigh, North Carolina, and new development land in Orlando [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about macroeconomic conditions improving, which could strengthen consumer and corporate confidence [16] - The company is positioned to benefit from long-term trends such as population migration and evolving logistics chains [18] - Management noted that while construction costs have come down, demand remains a critical factor for development starts [33] Other Important Information - The company has a strong balance sheet with a debt to total market capitalization of 14.1% and an unadjusted debt to EBITDA ratio of 2.9 times [14] - Tenant collections remain healthy, with uncollectible rents estimated to be in the 35 to 40 basis point range as a percentage of revenues [15] Q&A Session Summary Question: Can you expand on leasing and the development pipeline? - Management noted that conversations regarding leasing have improved since May, with a high retention rate benefiting the portfolio [22][24] Question: How have construction costs trended recently? - Construction pricing has come down by about 10% to 12%, but demand remains the primary constraint on starting new projects [31][33] Question: What is the outlook for releasing spreads? - Management believes they can maintain releasing spreads in the mid-30s, with low supply and high demand expected to drive future rent increases [48][50] Question: How are different regional markets performing? - The Eastern Region, particularly Florida and Raleigh, has shown strength, while California and Denver have been slower markets [58][60] Question: What is the current status of bad debt and tenant watch lists? - Bad debt remains low at around 30 to 35 basis points relative to total revenue, with no significant changes in the tenant watch list [84] Question: What interest rate would prompt a change in leverage levels? - Management indicated that they are monitoring interest rates and equity opportunities, with plans to potentially issue $200,000,000 to $250,000,000 in unsecured term loans [85][86]