Financial Data and Key Metrics Changes - Total revenues increased by 6.8% year over year, reaching $67 million, primarily driven by rental income from new leases and inflationary adjustments [14] - Adjusted net operating income rose by 7.2% to €61.8 million, with an adjusted NOI margin of 94.5% [15] - Adjusted EBITDA increased by 9% year over year to €55 million, with a margin expansion of 137 basis points to 84.1% [15] - Pre-tax income decreased to $54.5 million compared to $131.8 million in 2024, mainly due to lower gains on investment property valuations [16] - Funds from operations (FFO), excluding current tax, increased to $43.1 million from $38.2 million in Q2 2024, a 12.9% year-over-year increase [17] - Cash and cash equivalents stood at $65.2 million, while total debt increased to $900 million [17][18] Business Line Data and Key Metrics Changes - New leasing activity totaled 1.8 million square feet, including 411,000 square feet in new contracts, reflecting a sequential increase from Q1 [6][7] - Retention rates remained strong at 84%, with successful rent increases of 20% to 30% in some cases [7] - The tracking 12-month spread reached 13.7%, indicating a significant increase in the mark-to-market portfolio strategy [7] Market Data and Key Metrics Changes - The portfolio ended the quarter with a stabilized occupancy rate of 95.5%, with rents indexed to inflation [10] - The company noted a cautious leasing environment, particularly in export-linked markets, but highlighted resilience in renewals and releasing activity [5][6] - The company acquired 128.4 acres in Guadalajara and 20.2 acres in Monterrey, enhancing its strategic footprint [9][18] Company Strategy and Development Direction - The company is focused on long-term growth, emphasizing tenant retention, strategic positioning, and the intrinsic value of its existing portfolio [10] - The strategy includes completing existing projects and strategically expanding the land bank in line with Route 2030 [9] - The company aims to reinforce its foundation to scale confidently when the environment normalizes, including accelerating energy infrastructure planning [10][12] Management's Comments on Operating Environment and Future Outlook - Management views the current slowdown in leasing as a temporary deceleration rather than a structural change, with companies exercising caution rather than canceling plans [12] - The company expects recent deliveries of income-producing properties to contribute to revenues in the second half of 2025 [13] - Management remains optimistic about the long-term outlook, citing trade policy stabilization and manufacturing resilience as positive indicators for future growth [14] Other Important Information - The company paid a cash dividend of $0.38 per ordinary share for Q2 2025 [19] - The company maintains a healthy leverage position with a net debt to EBITDA ratio of four times and a loan to value ratio of 22.4% [18] Q&A Session Summary Question: Development pipeline progress ahead of USMCA review - Management noted an uptick in vacancy in some markets but expressed confidence in stable or increasing rents, indicating pent-up demand [20][22] Question: Leasing in Monterrey with weak net absorption - Management highlighted strong net absorption in Monterrey and expressed confidence in leasing up new properties due to their prime locations [28] Question: Yield on cost for projects under construction - Management confirmed attractive yield on costs above 10% and noted stable construction costs with minor adjustments [36][38] Question: Land acquisitions and leverage by year-end - Management reassured that leverage remains healthy and that land acquisitions align with their long-term strategy [42][46] Question: Increase in leasing activity pipelines - Management observed increased visits to industrial parks and anticipated more leasing activity in the second half of the year [50] Question: Leasing spreads expectations - Management expects continued strong leasing spreads and proactive management of tenant relationships [58] Question: Priorities for regional footprint and new starts - Management emphasized leasing up existing properties as a priority before considering new developments [90] Question: Impact of exchange rates on net income - Management clarified that most properties are dollar-denominated, and the impact on net income is primarily from financial adjustments rather than exchange rates [96][99] Question: Expected leasing activity from upcoming projects - Management expects high-quality assets to attract leasing activity within three to twelve months after delivery [104] Question: Exposure to manufacturing and logistics - Management indicated a balanced strategy between manufacturing and logistics, with a focus on long-term leases with high credit-rated companies [112] Question: Vertical integration and tenant demands - Management confirmed existing vertical integration and expressed interest in renewable energy solutions for tenants [120][122]

Financial Data and Key Metrics Changes - The company reported FFO per diluted share of $0.52 for Q1 2025, a decrease of approximately $0.03 compared to Q4 2024, primarily due to the impact of the Del Monte Center disposition [16] - Same store cash NOI increased by 3.1% year over year in Q1 2025, with all sectors reporting positive growth except for the mixed-use sector [16][17] - The company ended Q1 with liquidity of approximately $544 million, including $144 million in cash and cash equivalents [20] Business Line Data and Key Metrics Changes - The office portfolio's same store NOI increased by 5.4% in Q1 2025, driven by the expiration of a rent abatement [17] - The retail portfolio's same store NOI also increased by 5.4%, supported by new leases and contractual rent escalations [17] - The multifamily portfolio's NOI was flat year over year, primarily due to lower rental income in Portland, while San Diego properties showed growth [17][12] - The mixed-use portfolio's NOI declined by approximately 11.6%, mainly due to lower occupancy at the Embassy Suites Waikiki [18] Market Data and Key Metrics Changes - The office portfolio ended Q1 at 85.5% leased, with an increase in average base rents and an 8% increase in cash basis spreads [8] - The retail portfolio ended the quarter 97% leased, with strong collections and an all-time high average base rent [10] - The San Diego multifamily properties ended the quarter approximately 95% leased, with a blended rent increase of 2% [12] Company Strategy and Development Direction - The company focuses on thoughtful capital allocation, operational discipline, and enhancing asset quality to ensure long-term stability [5][6] - The strategy includes pursuing organic growth through leasing and value-add improvements while maintaining strong liquidity [6][14] - Recent capital recycling includes the sale of Del Monte Center and the acquisition of Genesee Parks Apartments, aligning with the strategy to concentrate on core markets [13][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the complex operating environment, including inflation, interest rate volatility, and geopolitical uncertainty, but sees opportunities for growth [4][5] - The company remains cautiously optimistic about the office sector's recovery, particularly in high barrier coastal markets [9] - Management reaffirms full-year 2025 guidance of $1.87 to $2.10 per FFO share, reflecting confidence in the portfolio's strength [21][22] Other Important Information - The Board approved a quarterly dividend of $0.34 per share for Q2, reflecting confidence in the company's outlook [14][15] - The company is closely monitoring economic conditions and tenant performance, particularly in the multifamily and retail segments [23] Q&A Session Summary Question: Update on Bellevue assets and occupancy outlook - Management highlighted recent leasing activity, including a 29,000 square foot lease at Timber Ridge, bringing it to 97% leased, and ongoing negotiations for additional leases [27][28] Question: Impact of Proposition 1A on tenant interest in Downtown Seattle - Management noted increased inbound tenant inquiries in Bellevue, partly due to the proposition, indicating a positive trend [30] Question: Plans for redeploying proceeds from Del Monte Center sale - Management confirmed they are actively looking for additional acquisitions but are also comfortable holding cash for liquidity during economic uncertainty [32][33] Question: Update on leasing pipeline and market conditions in La Jolla - Management reported a tight submarket with a direct vacancy of 7.4%, and ongoing efforts to enhance leasing activity through new amenities and spec suites [34][38]