Financial Data and Key Metrics Changes - Adjusted company FFO for Q2 2025 was $0.16 per diluted common share, totaling approximately $47 million, with guidance for 2025 adjusted company FFO tightened to a range of $0.62 to $0.64 [14][20] - Same store NOI growth for Q2 was 4.7%, with the same store portfolio 98% leased at quarter end [14][15] - Net debt to adjusted EBITDA was 5.8 times at quarter end, down 0.4 turns over the last twelve months [20] Business Line Data and Key Metrics Changes - The company leased approximately 2.4 million square feet year to date, with second generation base and cash based rent spreads of approximately 41% and 46% respectively [8][14] - The company achieved a significant milestone by leasing a 1,100,000 square foot development facility in Greenville Spartanburg, contributing approximately $6 million in annual cash base rent [9][14] Market Data and Key Metrics Changes - Net absorption in the U.S. was approximately 30 million square feet in Q2, with 20 million square feet occurring in the company's 12 target markets [7] - The construction pipeline in the target markets is approximately 90 million square feet, down nearly 75% from the 2022 peak [8] Company Strategy and Development Direction - The company continues to focus on its investment strategy in 12 target markets in the Sunbelt and select Lower Midwest states, which account for approximately 85% of gross assets [12] - The company is evaluating modest capital recycling opportunities outside of target markets for reinvestment, expecting to be largely earnings neutral [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the core business amid a soft industrial real estate environment and uncertain macroeconomic backdrop [6] - The company anticipates lower tenant retention for 2025, with year-end same store occupancy expected to be approximately 97% to 99% [10][15] Other Important Information - The company sold a property in Chillicothe, Ohio for approximately $40 million at a cash capitalization rate of 4.3%, bolstering its cash position [11] - The company has approximately $71 million of cash on the balance sheet at quarter end [20] Q&A Session Summary Question: What drove the low cap rate on the sale? - The sale execution was better than if sold into the investor marketplace, as it involved finding a user that wanted to own [23] Question: Can you provide a sense of the magnitude of dispositions in the near term? - The company would test the market with about $100 million of dispositions going forward, optimistic about creating liquidity from assets outside of target markets [24] Question: What traffic has been like for leasing up some of the larger empty boxes? - Activity in Indianapolis has picked up significantly, with several good deals signed, while Central Florida has seen renewed interest but remains slower [26][28] Question: Can you provide an update on lease expirations? - The company expects to backfill the 380,000 square foot facility in Indianapolis quickly, with good activity noted [33] Question: Any update on the land bank and build-to-suit opportunities? - There is continued interest in build-to-suit projects, particularly in Columbus, where the market has tightened significantly [39] Question: Are there any known move outs worth discussing? - The move outs were primarily due to competitive buildings offering better terms, such as tax abatements [60] Question: Is there a point where the company would consider buying back shares? - The priority is to generate more EBITDA and reduce net debt to EBITDA, with share repurchase being part of the mix if feasible [50]