Financial Data and Key Metrics Changes - The company's net operating income (NOI) for the first quarter was $26 million, which is $500,000 higher than the previous quarter, driven by higher revenue and lower operating expenses [15] - Core funds from operations (FFO) were reported at $12.3 million or $0.30 per share, an increase of $600,000 from the previous quarter [15] - Adjusted funds from operations (AFFO) were $6.5 million or $0.16 per share, with no single tenant improvement or leasing commission impacting AFFO by more than $500,000 [16] - Same store cash NOI increased by 4.4% or $1.1 million compared to the first quarter of 2024 [16] Business Line Data and Key Metrics Changes - The company completed 144,000 square feet of new and renewal leasing in the first quarter, with the largest lease being a 34,000 square foot new lease at the Papago Tech property in Phoenix [11] - The Greenwood Boulevard property in Orlando was fully leased to a single tenant, with a new 66,000 square foot tenant set to take occupancy later this year [12] - The overall portfolio occupancy ended the quarter at 84.9%, slightly lower than the previous quarter due to known vacates [17] Market Data and Key Metrics Changes - Nationally, office leasing volume was 15% higher than a year ago, with JLL estimating that it has returned to approximately 89% of typical pre-pandemic levels [10] - Higher quality office spaces in Sunbelt markets continue to outperform, with significant leasing activity noted in Phoenix [10][41] Company Strategy and Development Direction - The company is redeveloping its City Center property in downtown St. Petersburg into a 49-story residential condominium and mixed-use tower, partnering with Property Markets Group [6] - The project is expected to capitalize on luxury demand and is anticipated to have significant long-term value creation potential for shareholders [9] - The company is focusing on Sunbelt markets for capital investment, where it sees the most value creation opportunities [41] Management's Comments on Operating Environment and Future Outlook - Management noted a positive trend in overall office real estate fundamentals and expects occupancy to increase as signed leases take effect [10][31] - The company anticipates a decrease in occupancy in the short term due to tenant downsizing but expects to return to guidance ranges by year-end [31][32] - Management expressed confidence in the leasing activity in Phoenix and other Sunbelt markets, indicating strong demand [41][42] Other Important Information - The company has $646 million in total debt as of March 31, with a net debt to EBITDA ratio of 6.7 times [19] - The credit facility matures in November 2025, with an option to extend to November 2026, which the company expects to exercise [20] - Two property debt maturities are scheduled for 2025, with ongoing discussions for term extensions [21] Q&A Session Summary Question: How did the new development project come about? - The project was initiated about two years ago, recognizing the strong market for development in Downtown St. Petersburg [23] Question: What is the timing for the project? - Presales are expected to commence soon, with a construction period of approximately three years following that [26] Question: Will there be any disruption to existing property during the redevelopment? - Alternative parking arrangements are being made for tenants to minimize disruption during the redevelopment [28] Question: What is the pace of occupancy this year? - The company has 143,000 square feet of leases that have yet to take occupancy, which is expected to positively impact occupancy in the coming quarters [30] Question: Will there be any vacancy at Greenwood Boulevard? - There will be a temporary dip in occupancy due to tenant downsizing, but it is expected to return to full occupancy before the end of the year [35] Question: How are the top Sunbelt markets performing? - The company is seeing strong performance in Phoenix and other Sunbelt markets, with significant leasing activity reported [41][42]

Financial Data and Key Metrics Changes - The first quarter of 2025 marked a strong start for the company, highlighted by record leasing activity and stable core financial performance [5][6] - The company has affirmed its previously issued full year 2025 guidance for core FFO, anticipating a stronger second half of the year [10] Business Line Data and Key Metrics Changes - Approximately 70% of 1,600,000 square feet of speculative space greater than 100,000 square feet included in guidance has now been leased, contributing to occupancy growth [17] - The company has approximately $205,000,000 of acquisitions under agreement, representing roughly 2,000,000 square feet at a targeted initial NOI yield of 6.5% to 6.75% [9][19] Market Data and Key Metrics Changes - The company is well positioned to scale its platform with nearly 30% of annual rents rolling in 2025 and 2026 in markets benefiting from sequential rent growth [6] - The company has observed an increase in short-term space requirements driven by tenants responding to inventory adjustments and shifting trade flows [6][31] Company Strategy and Development Direction - The strategic focus remains on acquiring infill industrial properties in dense supply-constrained submarkets, contrasting with larger warehouses that face longer lease-up periods [6][8] - The acquisition strategy is focused on expanding within existing markets, funded largely by proceeds from the Sixth Street transaction [8][10] Management's Comments on Operating Environment and Future Outlook - Management has noted that they have yet to see any material interruptions across the portfolio, but are actively monitoring the impact of geopolitical and trade landscape changes [6] - The company expects a projected year-end same-store occupancy of about 97.3%, despite a temporary 130 basis point vacancy expected in Q4 [17][51] Other Important Information - The company has strong liquidity with over 88% of its debt being fixed and no debt maturities in 2025 [9] - The watch list includes five tenants occupying a combined 290,000 square feet, with a total ABR of less than 1%, and all but one tenant is current on rent [43] Q&A Session Summary Question: Confidence in renewal and backfill prospects - Management confirmed that the renewal for the St. Louis asset has been signed and negotiations for ODW are ongoing [13][14] Question: Key drivers behind acceleration in same-store growth - Management indicated that the St. Louis asset is a key contributor to growth, with a projected year-end same-store occupancy of about 97.3% [16][17] Question: Funding sources for acquisitions - The funding mechanism for acquisitions will primarily be through the line of credit, with an additional $79,000,000 to draw from Series C preferred in May [19] Question: Buyback priorities - Management stated that they did not repurchase shares during Q1 and emphasized a balanced approach to capital deployment [23][25] Question: Changes in collections or bad debt - Management reported no significant changes in collections or bad debt, with 35 basis points of bad debt embedded in guidance [43] Question: Capacity for future acquisitions - Management indicated that there remains ample capacity for acquisitions beyond the current agreements before needing to consider raising equity [54]

Financial Data and Key Metrics Changes - The company reported a Core FFO of $14.4 million for Q1 2025, an increase of $3.7 million compared to $10.7 million in Q1 2024 [15] - On a per share basis, Core FFO was $0.46 in Q1 2025, down from $0.48 in Q1 2024, primarily due to reduced leverage and downtime from re-leasing anchor spaces [16] - The net debt to EBITDA ratio was 6.6 times at the end of the quarter, slightly elevated from the previous quarter but a full turn lower than a year ago [15] Business Line Data and Key Metrics Changes - The company signed over 112,000 square feet of new leases, renewals, and extensions at an average rent of $24.14 per square foot, nearly 25% higher than the portfolio average of $19.41 per square foot [7] - The portfolio was 93.8% leased and 91% occupied at quarter end [9] - The signed but not open leasing pipeline stands at $4 million of annual base rent, representing 4% of cash rents at quarter end [10] Market Data and Key Metrics Changes - The company acquired Ashley Park for $79.8 million, with a cash cap rate near the high end of guidance, indicating strong market interest [5] - There is active tenant interest for nearly half of the 40,000 square feet of vacancy at Ashley Park, with significant potential for lease-up [6] Company Strategy and Development Direction - The company continues to focus on acquiring properties in growth markets in the Southeast and Southwest, with a strong pipeline of potential acquisitions [6] - The management is optimistic about the leasing outlook for anchor spaces previously leased to tenants that filed for bankruptcy, expecting a positive cash leasing spread of 40% to 60% [9] - The company is considering recycling assets into higher yielding properties as capital returns to the market [34] Management's Comments on Operating Environment and Future Outlook - Management noted that leasing activity remains strong despite recent market volatility, with no significant pauses in negotiations [21] - The company is well-positioned with high-quality properties and a diversified tenant base amid tariff uncertainties [10] - Management reaffirmed full-year 2025 guidance for Core FFO per share of $1.80 to $1.86 and AFFO of $1.93 to $1.98 [18] Other Important Information - The company executed two SOFR swaps, fixing SOFR for $100 million of principal at a weighted average rate of 3.32% for five years, reducing the applicable interest rate significantly [12] - The company extinguished $51 million of convertible notes, resulting in a charge of approximately $20.5 million to be recorded in Q2 [14] Q&A Session Summary Question: Can you provide more detail on the anchor space negotiations? - Management indicated that leasing activity has been consistent and strong, with no pauses in negotiations despite market volatility [21] Question: What drove the new lease spreads? - The increase in lease spreads was primarily due to two significant leases that accounted for a large portion of new leasing activity, driving spreads over 80% [22][23] Question: How much CapEx is required for the bankrupt tenant spaces? - The expected CapEx for re-leasing these spaces is in the range of $9 million to $12 million, with little spent so far [30][31] Question: What is the expected timeframe for tenants to start paying rent after signing leases? - A safe estimate for rent commencement is about a year, although some tenants may move in more quickly [32] Question: How does the company plan to fund new acquisitions? - The company plans to handle funding internally with liquidity and is considering selling remaining office properties to enhance capital [33] Question: Have cap rates changed since the tariff announcement? - Management noted that cap rates for traditional core assets have remained stable or decreased, despite wider credit spreads in the bond market [50] Question: What is the timeline for marking to market on recent acquisitions? - Management expects to see movement in marking to market for acquisitions starting in the middle of next year [55]

Financial Data and Key Metrics Changes - The company reported FFO per share for Q1 2025 at $1.64, in line with forecasts [39] - The first quarter leasing volume was over 1,100,000 square feet, which is 25% higher than Q1 2024 and 33% higher than the previous four quarters [6][7] - The company narrowed its 2025 FFO guidance range to $6.80 to $6.92 per share, reflecting increased confidence in leasing activity [43][44] Business Line Data and Key Metrics Changes - The leasing activity included 467,000 square feet on vacant space and 561,000 square feet related to known expirations in 2025, indicating a focus on near-term exposure [20] - The development pipeline saw a significant increase in pre-leasing, with a jump from 50% to 62% pre-leased on the development pipeline [24] - The company signed a 160,000 square foot lease at 1050 Winter Street, contributing to the repositioning of the building [42] Market Data and Key Metrics Changes - The office sales volume in Q1 was $7.6 billion, down approximately 14% from the previous year, indicating market volatility [11] - Direct vacancy for premier workplaces is just over 13%, compared to 19% for the broader market, highlighting the strength of high-quality assets [11] - The overall mark to market on cash basis was up about 5%, with increases in Boston and flat conditions in New York [27] Company Strategy and Development Direction - The company is focusing on high-quality assets, with a strategy to pivot from life science development to office use in response to market demand [17][22] - New developments include a 70-unit multifamily project in Jersey City and a 930,000 square foot office project at 343 Madison, with significant interest from potential tenants [13][15] - The company is evaluating additional asset monetization opportunities, including the sale of land sites expected to generate approximately $250 million [15] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about potential impacts from tariffs and federal funding cuts, but noted that client demand has remained stable [7][10] - The company anticipates that leasing demand may slow if a recession occurs, but expects interest rates to decrease, which could benefit occupancy [10] - Management remains optimistic about future occupancy growth, with only 3.9% portfolio lease rollover in 2026 and 5.1% in 2027 [18] Other Important Information - The company completed over $4.2 billion in financing activity, demonstrating strong access to capital [7] - The company is actively engaged in the debt capital markets, with significant refinancing and new loans completed in Q1 [38][39] - The company is experiencing increased foot traffic and retail activity in certain areas, indicating a positive trend in local markets [10] Q&A Session Summary Question: Regarding 343 Madison, how is the company sizing up the start and pre-lease? - The company aims to pre-lease the building, targeting a yield of 8% and will make a decision on moving forward by July [46][50] Question: How confident is the company in the 4 million square feet leasing plan for 2025? - The company is more than halfway to its leasing goal and is confident in occupancy growth as many leases will commence in 2025 and 2026 [54][57] Question: What are the trends in the life science market? - The company has seen little new demand for lab space but is experiencing interest from life science organizations seeking office space [70][71] Question: What is the outlook for West Coast leasing activity? - The company notes strong activity from law firms and financial services, with smaller AI companies also looking for space [78][80] Question: How is the company addressing leverage and funding? - The company acknowledges a slight increase in leverage but expects it to moderate as developments come online and income increases [82][85]

Financial Data and Key Metrics Changes - Core FFO per diluted share for Q1 2025 was $0.36, down from $0.39 in Q1 2024, primarily due to increased net interest expense and lower rental income from property sales and lease expirations [24] - AFFO generated during Q1 2025 was approximately $23.5 million, consistent with previous quarters, while CapEx returned to normalized levels [24] - The company has no final debt maturities until 2028 and approximately $500 million available under its revolving line of credit [24] Business Line Data and Key Metrics Changes - The company completed approximately 363,000 square feet of total leasing in Q1 2025, with about half related to new tenant leases [5][14] - Lease economics showed a 10-19% roll-up in rents on both cash and accrual bases, with average rental rates near $47 per square foot compared to $38 per square foot in 2023 [16] - The leasing pipeline remains strong with approximately 750,000 square feet executed or in a legal stage, and outstanding proposals at 3 million square feet [20] Market Data and Key Metrics Changes - The occupier market recovery is ongoing, with national employers increasing in-office mandates, although macroeconomic uncertainty has caused a slight slowdown in national gross leasing volume [6][7] - Sublease availability remains around 5%, with only 10,000 square feet expiring in 2025 [16] - The company noted that Atlanta was the most active segment, accounting for a third of the overall leasing volume in Q1 2025 [16] Company Strategy and Development Direction - The company has decided to suspend its dividend to fund long-term growth and retain earnings for capital expenditures related to leasing [11] - Management aims to focus on leasing momentum and increasing rental rates, which are expected to lead to FFO and cash flow growth [26] - The company is cautious about leveraging additional debt, prioritizing retained earnings for internal growth and maintaining a strong balance sheet [11][46] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about leasing prospects, with a strong pipeline and record levels of tour activity [20] - The company anticipates achieving its year-end lease percentage guidance of 89% to 90% [20] - Management is focused on maintaining liquidity and improving the balance sheet while navigating economic uncertainties [46] Other Important Information - The company completed its last refinancing activity in Q1 2025, including paying off a $250 million term loan and extending a $600 million line of credit [6] - The company has a backlog of $67 million in annualized revenue from leases yet to commence or in their free rent period [10] Q&A Session Summary Question: Thoughts on leasing pipeline and guidance maintenance - Management noted a strong leasing pipeline of approximately $750,000, with good momentum in April, but remains cautious due to macro uncertainties [30][32] Question: Historical gap between lease percentage and economic lease percentage - Management indicated that the suspension of the dividend would provide additional cash flow for internal growth, with a focus on leasing momentum [35][36] Question: Insights on the dividend suspension and its implications - Management explained that the decision to suspend the dividend was influenced by the need to fund leasing momentum and maintain a strong balance sheet, with retained earnings earmarked for leasing and capital expenditures [40][44]