Portfolio Overview - LXP Industrial Trust has gross assets of $4.8 billion and owns 112 properties [7] - The stabilized portfolio is 96.8% leased [12, 17] - 48% of the tenancy is investment grade [9] - The portfolio's weighted average lease term (WALT) is 4.9 years [17] Financial Performance - The company generated Adjusted Company FFO of $0.16 per share in the third quarter [12] - Same-store NOI growth was 4% year-to-date and 2% in the quarter [12] - The company repaid $140 million of outstanding 6.75% Senior Notes due 2028 [12] - Net Debt to Adjusted EBITDA was reduced to 5.2x [12, 13] Growth Opportunities - Approximately 64% of the portfolio is expiring through 2030, with current mark-to-market on rents estimated to be approximately 17% [15, 64] - The average annual rental escalations are 2.9% [15, 60] - The company has 1.8 million square feet of first and second-generation space available for lease [15, 60] Strategic Initiatives - The company sold two vacant development projects totaling 2.1 million square feet for $175 million, representing a 20% premium over the gross book value [12] - The company acquired one property for $30 million at a cash capitalization rate of 6.5% [12] - The company announced a reverse stock split of common shares at a ratio of 1-for-5 [12]

Core Insights - STAG Industrial, Inc. reported strong financial performance for Q3 2025, highlighting portfolio stability and market health, with expectations for continued growth and value creation [1][2]. Financial Performance - Net income attributable to common stockholders for Q3 2025 was $48.6 million, a 16.2% increase from $41.8 million in Q3 2024 [4][8]. - Basic and diluted net income per common share for Q3 2025 was $0.26, up 13.0% from $0.23 in Q3 2024 [4][8]. - Cash NOI for Q3 2025 reached $162.3 million, a 9.3% increase from $148.4 million in Q3 2024 [4][21]. - Same Store Cash NOI for Q3 2025 was $145.7 million, reflecting a 3.9% increase compared to $140.2 million in Q3 2024 [4][21]. - Adjusted EBITDAre for Q3 2025 was $152.5 million, a 9.9% increase from $138.7 million in Q3 2024 [4][21]. - Core FFO for Q3 2025 was $124.7 million, up 12.6% from $110.8 million in Q3 2024 [4][21]. Acquisition and Disposition Activity - In Q3 2025, the company acquired two buildings for $101.5 million, with a total square footage of 986,410 and an occupancy rate of 100% upon acquisition [6][8]. - The company also acquired a vacant land parcel for $2.9 million during the same period [6]. - Total acquisition activity for 2025 through October 28 included 1.6 million square feet across six buildings for $163.2 million [7]. Leasing Activity - The company commenced leases totaling 2.2 million square feet in Q3 2025, achieving a Cash Rent Change of 27.2% and a Straight-Line Rent Change of 40.6% [8][10]. - Retention rate for leases expiring in Q3 was 63.4% for 2.5 million square feet [8][10]. - Year-to-date leasing activity included 11.3 million square feet across 90 leases, with a weighted average lease term of 5.0 years [12]. Capital Markets Activity - The company refinanced a $300 million term loan, extending the maturity to March 15, 2030, with a fixed interest rate of 1.70% until February 2026, then 3.94% until maturity [14][15]. - As of September 30, 2025, the Net Debt to Annualized Run Rate Adjusted EBITDAre was 5.1x, with liquidity reported at $904.1 million [15].

Core Insights - FIBRA Prologis reported strong financial and operational results for Q3 2025, despite ongoing trade uncertainties, highlighting the resilience of its diversified portfolio and focus on high-quality logistics assets [4][9]. Financial Performance - Net earnings per CBFI for Q3 2025 were Ps. 1.0027 (US$0.0540), a decrease from Ps. 6.4415 (US$0.3424) in Q3 2024 [3]. - Funds from operations (FFO) per CBFI for the quarter were Ps. 1.0268 (US$0.0561), up from Ps. 0.8343 (US$0.0437) in the same period last year [3]. Operating Results - Period-end occupancy was 98.0%, slightly down from 98.1% in Q3 2024, while average occupancy remained stable at 97.9% compared to 97.8% in the previous year [4]. - Customer retention improved significantly to 81.7% from 52.7% year-over-year [4]. - Net effective rent change was 47.2%, with notable contributions from Mexico City, Reynosa, and Tijuana [4][7]. - Same store cash NOI increased by 14.8%, driven mainly by rent changes and annual rent increases [4][7]. Financial Position - As of September 30, 2025, FIBRA Prologis had a leverage ratio of 22.6% and liquidity of approximately Ps. 19.9 billion (US$1.1 billion), which included Ps. 18.4 billion (US$1.0 billion) of available capacity on its unsecured credit facility [5]. Updated Guidance - The company updated its guidance for 2025, increasing the expected building acquisitions from US$150 million to US$250 million, while building dispositions were adjusted from US$100 million to US$400 million [6].

Financial Data and Key Metrics Changes - Total income for Q3 2025 reached $72.4 million, a 13.7% year-over-year increase, while total income excluding energy reached $69.9 million, a 14.5% increase [6][17] - Adjusted net operating income increased 14.7% to $66.1 million, with an adjusted NOI margin of 94.4%, reflecting higher operating leverage [17] - Adjusted EBITDA totaled $59.7 million, a 15% increase year-over-year, with a margin expansion of 34 basis points to 85.3% [17] - FFO, including current tax, increased 16.5% year-over-year to $47.4 million [17] - The company revised its full-year 2025 guidance, expecting EBITDA margin to reach 84.5% and revenue growth between 10% and 11% [16][17] Business Line Data and Key Metrics Changes - Total leasing activity for Q3 2025 reached 1.7 million sq ft, with 597,000 sq ft in new leases and 1.1 million sq ft in renewals [7] - The overall portfolio occupancy reached 89.7%, with stabilized and same-store occupancy at 94.3% and 94.8% respectively [8] - The retention rate remains high, and rents on rollovers continue to trend upward, indicating strong tenant relationships [5] Market Data and Key Metrics Changes - In Monterrey, the company completed construction of Apodaca Park, with strong interest from advanced manufacturing and logistics companies [9] - Ciudad Juárez saw a market turnaround with a 130 basis point contraction in overall vacancy and 1.3 million sq ft of net absorption [10] - Tijuana is experiencing slower recovery due to high vacancy from recent supply influx, but early signs of reactivation are noted [11] - Guadalajara maintained a healthy 2.8% vacancy rate, while Mexico City reported record absorption year-to-date, with a low vacancy of 2% [12] Company Strategy and Development Direction - The company is focused on its Route 2030 growth strategy, emphasizing land acquisitions and infrastructure readiness [9][15] - Vesta aims to be selective in tenant selection, particularly in high-demand areas like Monterrey [9] - The company is prioritizing markets with visible tenant demand and plans to direct capital towards land and infrastructure readiness [15] Management's Comments on Operating Environment and Future Outlook - Management noted encouraging signs of improvement in leasing momentum and tenant demand, indicating a normalization of the market [5] - The company is confident in its ability to capture anticipated demand in 2026, supported by improving demand indicators [8] - Management highlighted the importance of energy supply and collaboration with federal authorities to enhance reliability for industrial users [14][58] Other Important Information - The company completed a $500 million senior unsecured notes offering, enhancing liquidity and extending maturity profiles [18] - Vesta sold an 80,604 sq ft building in Ciudad Juárez for $5.5 million, aligning with its strategy to recycle assets [15][19] - The company has nearly completed its land bank to support the Route 2030 strategy [9] Q&A Session Summary Question: Long-term development pipeline acceleration - Management indicated positive demand signals across most markets, with a focus on mid to long-term growth for Route 2030, while being cautious ahead of the USMCA review [21][23] Question: Demand from existing vs. new tenants - Demand is coming from both existing tenants and new companies, particularly in sectors like electronics and aerospace [24][26] Question: Update on leasing activity in October - Management confirmed leasing activity has picked up, with successful leases in various regions [30][31] Question: Sustainability of improved EBITDA margins - Management expects EBITDA margins to remain strong, with a focus on maintaining a low-cost base [40][41] Question: Indicators for launching new developments - Decisions are based on internal data, occupancy trends, and demand from existing tenants [64][66] Question: Trends in real estate taxes and insurance costs - No major adjustments in insurance costs or real estate taxes are expected, with costs being competitive for tenants [88][90]

Financial Data and Key Metrics Changes - Total income for Q3 2025 reached $72.4 million, a 13.7% year-over-year increase, while total income excluding energy reached $69.9 million, a 14.5% increase [5][6] - Adjusted net operating income increased 14.7% to $66.1 million, with an adjusted NOI margin of 94.4%, up 16 basis points from the prior year [16] - Adjusted EBITDA totaled $59.7 million, a 15% increase year-over-year, with a margin expansion of 34 basis points to 85.3% [16] - FFO, including current tax, increased 16.5% year-over-year to $47.4 million [16] - The company revised its full-year 2025 guidance, expecting EBITDA margin to reach 84.5%, up from 83.5% [15] Business Line Data and Key Metrics Changes - Total leasing activity for Q3 2025 reached 1.7 million sq ft, with 597,000 sq ft in new leases and 1.1 million sq ft in renewals [6] - The overall portfolio occupancy reached 89.7%, while stabilized and same-store occupancy reached 94.3% and 94.8% respectively [7] - The retention rate remains high, and rents on rollovers continue to trend upward, indicating strong tenant relationships [5] Market Data and Key Metrics Changes - In Monterrey, the company completed construction of Apodaca Park, with strong interest from advanced manufacturing and logistics companies [8] - Ciudad Juárez saw a market turnaround with a 130 basis point contraction in overall vacancy and 1.3 million sq ft of net absorption during the quarter [9] - Tijuana is experiencing slower recovery due to high vacancy from recent supply influx, but early signs of reactivation are noted [10] - Guadalajara maintained a healthy 2.8% vacancy rate, while Mexico City reported record absorption year-to-date at the highest in five years, with a low vacancy of 2% [11] Company Strategy and Development Direction - The company is focused on its Route 2030 growth strategy, prioritizing markets with visible tenant demand and ensuring capital allocation is tied to quality and timing [14] - The company is cautious about new developments, with only one project under construction, but plans to resume new development starts by the end of 2025 and beginning of 2026 [14] - The company is actively engaging in land acquisitions to support future growth, having acquired 330 acres in Monterrey [8] Management's Comments on Operating Environment and Future Outlook - Management noted encouraging signs of improvement in leasing momentum and tenant demand, indicating a recovery in the industrial real estate market [4] - The company is confident in its ability to capture demand as market conditions improve, particularly in key regions [7] - Management emphasized the importance of energy supply and collaboration with government authorities to support industrial parks [13] Other Important Information - The company completed a $500 million senior unsecured notes offering, enhancing liquidity and extending maturity profiles [17] - The company sold an 80,604 sq ft building in Ciudad Juárez for $5.5 million, aligning with its strategy to recycle assets [14] Q&A Session Summary Question: Are you comfortable accelerating Route 2030 projects in the first half of 2026? - Management highlighted positive demand signals across most markets, particularly in Mexico City and Guadalajara, and will analyze market trends before resuming new operations [20][22] Question: Are the positive demand signals coming from existing tenants or new tenants? - Demand is coming from both existing and new tenants, with interest from various industries including electronics and aerospace [25] Question: Can you provide an update on leasing activity in October? - Management confirmed leasing activity has picked up, with successful leases in Ciudad Juárez and Tijuana [30] Question: How sustainable is the improvement in EBITDA margins? - Management expects EBITDA margins to remain strong, projecting them to stay in the 83%-85% range as the company continues to grow [40] Question: What indicators are used to decide on new developments? - The company relies on internal data and market trends, focusing on occupancy trends and demand from existing tenants [62] Question: What is the trend in real estate taxes and insurance costs? - Management noted that insurance costs are secured for the next couple of years, and real estate taxes have not seen major adjustments [88]

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 [6][10] - Quarter-end leasing was at 96.7%, with occupancy at 95.9%, and average quarterly occupancy was 95.7%, down 100 basis points from Q3 2023 [6][10] - Cash same-store NOI rose 6.9% for the quarter and 6.2% year-to-date [7] 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 at 42% and 27% GAAP and cash, respectively [6][10] - The company reported a quarterly retention rate of almost 80%, indicating a cautious nature among tenants [8] 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 decision-making [7][8] - The company is reforecasting 2025 starts to $200 million based on current demand levels, with a noted decline in the supply pipeline [9] 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 [9] - The focus is on geographic and tenant diversity to stabilize earnings regardless of economic conditions [7] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improved market activity and the potential for a stronger leasing environment in the future [15] - The company is seeing signs of macro uncertainty subsiding, which could strengthen consumer and corporate confidence [13] Other Important Information - The company has a flexible balance sheet with a debt-to-total market capitalization of 14.1% and an unadjusted debt-to-EBITDA ratio of 2.9 times [11] - Tenant collections remain healthy, with uncollectible rents estimated to be in the 35 to 40 basis point range as a percentage of revenues [13] Q&A Session Summary Question: Expansion on leasing and development pipeline - Management noted that conversations regarding leasing have improved since May, with a high retention rate indicating tenant stability [18][19] Question: Construction costs and market rents - Construction pricing has decreased by 10% to 12%, and current construction pricing is still yielding acceptable returns [25][26] Question: Development pipeline availability and leasing activity - Management indicated that while there is activity in the development pipeline, the pace of leasing has been slower than desired [31][32] Question: Average rent per square foot and GAAP same-store NOI - Average rent per square foot can vary significantly by market, but management remains optimistic about strong rental rate growth [76][79] Question: Bad debt levels and tenant watchlist - Bad debt remains a non-factor, with consistent levels around 30 to 35 basis points relative to total revenue [68] Question: Interest rates and leverage levels - Management is monitoring interest rates and plans to utilize debt as opportunities arise, maintaining a strong capital position [70] Question: Regional market strengths and weaknesses - The eastern region, particularly Florida and Raleigh, has shown strength, while California markets, especially LA, have been slower [48][50]

Financial Data and Key Metrics Changes - Funds from operations (FFO) per share for Q3 2025 was $2.27, an increase of 6.6% compared to the same quarter last year [6][10] - Quarter-end leasing was at 96.7%, with occupancy at 95.9%, and average quarterly occupancy was 95.7%, down 100 basis points from Q3 2023 [6][7] - Cash same-store revenue rose by 6.9% for the quarter and 6.2% year-to-date [7] 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 at 42% and 27% GAAP and cash, respectively [6][10] - The company reported a quarterly retention rate of almost 80%, indicating a cautious nature among tenants [8] Market Data and Key Metrics Changes - The market remains somewhat bifurcated, with improved activity in smaller spaces (50,000 sq ft and below) but larger spaces experiencing delays in leasing [7][8] - The company is reforecasting 2025 starts to $200 million based on current demand levels, with a noted decline in the supply pipeline [9] 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 [9] - The focus is on geographic and tenant diversity to stabilize earnings regardless of economic conditions [7][9] - The company is excited about acquiring properties in Raleigh, North Carolina, and new development land in Orlando, as well as new buildings in Northeast Dallas [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improved market activity and the potential for future growth, despite current delays in leasing [8][9] - The company anticipates that as demand stabilizes, upward pressure on rents will occur due to limited availability of new modern facilities [9][10] - Management highlighted the importance of maintaining a strong balance sheet and being patient in evaluating capital sources [11] Other Important Information - The company’s debt-to-total market capitalization was 14.1%, with an unadjusted debt-to-EBITDA ratio of 2.9x and interest coverage at 17x [11] - Tenant collections remain healthy, with uncollectible rents estimated to be in the 35 to 40 basis point range as a percentage of revenues [13] Q&A Session Summary Question: Expansion on leasing and development pipeline - Management noted that conversations regarding leasing have improved since May, with a high retention rate benefiting the portfolio [18][19] Question: Construction costs and market rents - Construction pricing has decreased by 10% to 12%, and current construction pricing is still yielding acceptable returns [26][27] Question: Development pipeline availability and leasing activity - Management indicated that while there is activity in the development pipeline, the pace of leasing has been slower than desired [31][33] Question: Regional market strengths and weaknesses - The eastern region, particularly Florida and Raleigh, has shown strength, while California markets, especially L.A., have been slower [47][49] Question: Impact of economic conditions on leasing spreads - Management believes that a shift in demand could quickly impact rents, with a low supply environment supporting potential rent increases [55][60] Question: Bad debt levels and tenant watchlist - Bad debt remains low at around 30 to 35 basis points, with no significant changes in the tenant watchlist [68] Question: Interest rates and leverage levels - Management is monitoring interest rates and plans to utilize debt as opportunities arise, maintaining a flexible capital strategy [70][71] Question: Average rent per square foot and GAAP same-store NOI - Management indicated that rental rates remain sticky despite some moderation, with a strong operating year expected to continue [78][80]

Financial Data and Key Metrics Changes - Total income for Q3 2025 reached $72.4 million, a 13.7% year-over-year increase, while total income excluding energy reached $69.9 million, a 14.5% increase [5][17] - Adjusted net operating income increased 14.7% to $66.1 million, with an adjusted NOI margin of 94.4%, reflecting higher operating leverage as revenue growth outpaced costs [17] - Adjusted EBITDA totaled $59.7 million, a 15% increase year-over-year, with a margin expansion of 34 basis points to 85.3% [17] - FFO, including current tax, increased 16.5% year-over-year to $47.4 million [17] - The company revised its full-year 2025 guidance, expecting EBITDA margin to reach 84.5% and revenue growth between 10% and 11% [15][17] Business Line Data and Key Metrics Changes - Total leasing activity for Q3 2025 reached 1.7 million square feet, with 597,000 square feet in new leases and 1.1 million square feet in renewals [5] - The retention rate remains high, and rents on rollovers continue to trend upward, indicating strong tenant relationships [5] - The overall portfolio occupancy dipped slightly to 89.7%, while stabilized and same-store occupancy reached 94.3% and 94.8% respectively [6] Market Data and Key Metrics Changes - In Monterrey, the company completed construction of Apodaca Park, with strong interest from advanced manufacturing and logistics companies [6] - Ciudad Juárez saw a market turnaround with a 130 basis point contraction in overall vacancy and 1.3 million square feet of net absorption during the quarter [9] - Tijuana is experiencing slower recovery due to high vacancy from recent supply influx, but early signs of reactivation are noted [10] - Guadalajara maintained a healthy 2.8% vacancy rate, while Mexico City reported record absorption year-to-date, with a low vacancy of just 2% [11] Company Strategy and Development Direction - The company is focused on its Route 2030 growth strategy, prioritizing markets with visible tenant demand and ensuring capital allocation is tied to quality and market visibility [15] - The company is highly selective in determining future tenants, particularly in Monterrey, which is a key nearshoring destination [7] - The company aims to maintain a conservative capital allocation strategy, focusing on asset recycling and reinvesting in higher growth opportunities [15] Management's Comments on Operating Environment and Future Outlook - Management noted encouraging signs of improvement in leasing momentum and tenant demand, indicating a normalization of the market [4] - The company is confident in its ability to capture anticipated demand in 2026, supported by improving demand indicators [6] - Management emphasized the importance of energy supply and collaboration with federal authorities to enhance reliability for industrial users [12][13] Other Important Information - The company successfully completed a $500 million senior unsecured notes offering, enhancing liquidity and extending maturity profiles [18] - The company sold an 80,604 square feet building in Ciudad Juárez for $5.5 million, approximately 10% above appraised value [15][19] Q&A Session Summary Question: Long-term development pipeline acceleration - Management indicated positive demand signals across most markets, with a focus on mid to long-term plans for Route 2030, analyzing demand trends carefully [22][24] Question: Demand from existing vs. new tenants - Demand is coming from both existing tenants and new tenants, with interest from various industries including electronics and aerospace [25][26] Question: Update on leasing activity in October - Management confirmed leasing activity in various regions, including logistics operations in Ciudad Juárez and Tijuana [29][30] Question: Sustainability of improved EBITDA margins - Management expressed confidence in maintaining strong EBITDA margins due to a focus on expense control and operational efficiency [35][36] Question: Indicators for launching new developments - Decisions are based on internal data, occupancy trends, and direct communication with clients, ensuring alignment with market demand [53][56] Question: Trends in real estate taxes and insurance costs - No major adjustments in insurance costs or real estate taxes were noted, with costs being competitive for tenants [73][75]

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]

Financial Data and Key Metrics Changes - Total income for Q3 2025 reached $72.4 million, a 13.7% year-over-year increase, while total income excluding energy was $69.9 million, reflecting a 14.5% increase [7][23] - Adjusted net operating income (NOI) increased 14.7% to $66.1 million, with an adjusted NOI margin of 94.4%, up 16 basis points from the prior year [24] - Adjusted EBITDA totaled $59.7 million, a 15% year-over-year increase, with a margin expansion of 34 basis points to 85.3% [24] - Funds from operations (FFO), excluding current tax, increased 16.5% year-over-year to $47.4 million [24] Business Line Data and Key Metrics Changes - Total leasing activity for Q3 2025 reached 1.7 million square feet, with 597,000 square feet in new leases and 1.1 million square feet in renewals, showing a trailing twelve-month average spread of 12.4% [7][8] - Portfolio occupancy reached 89.7%, while stabilized and same-store occupancy reached 94.3% and 94.8% respectively [8] Market Data and Key Metrics Changes - In Monterrey, strong interest from advanced manufacturing and logistics companies was noted, with the completion of new facilities in Apodaca Park [9][10] - Ciudad Juarez showed early signs of market recovery, with a 130 basis point contraction in overall vacancy and a 190 basis point decline in Class A vacancy [11] - Tijuana experienced slower recovery due to high vacancy rates from recent supply influx, but early signs of reactivation were observed [12][13] - Guadalajara maintained a healthy 2.8% vacancy rate, supported by foreign direct investment in advanced manufacturing sectors [15] Company Strategy and Development Direction - The company is focused on its Route 2030 strategy, aiming to build a diversified industrial platform across key corridors in Mexico [21] - A cautious approach to capital allocation is being maintained, with only one project under construction currently [20] - The company is prioritizing markets with visible tenant demand and is committed to asset recycling to reinvest in higher growth opportunities [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving demand signals across most markets, particularly in Mexico City and Guadalajara, where vacancy rates are low [5][29] - The company is confident in its ability to capture future demand cycles, especially in light of the upcoming USMCA review [30][56] - Management highlighted the importance of energy supply and collaboration with federal authorities to support industrial parks [17][18] Other Important Information - The company completed a €500 million senior unsecured notes offering to enhance liquidity and extend maturity profiles [25] - An acquisition of 330 acres of land in Monterrey was announced, strategically located near the Monterrey International Airport [10][26] Q&A Session Summary Question: Long-term development pipeline acceleration - Management noted positive demand signals across most markets and emphasized careful analysis before resuming new operations [29][30] Question: Demand from existing vs. new tenants - Demand is coming from both existing tenants and new companies, with interest from various industries including electronics and aerospace [33][34] Question: Leasing activity in October - Management confirmed leasing activity in Ciudad Juarez and the Bajio region, with expectations for continued absorption [39][40] Question: Sustainability of EBITDA margin improvement - Management indicated that the focus on maintaining a low cost base will support sustainable EBITDA margins in the future [47][49] Question: Indicators for new development launches - Decisions are based on internal data, occupancy trends, and direct communication with existing tenants [73][76] Question: Trends in lease spreads - Management acknowledged a slight decline in leasing spreads but remains optimistic about sustaining double-digit increases going forward [94][97] Question: Cap rate of recently sold building - The cap rate for the sold building was 6.2%, with a sale price reflecting a 10% premium to appraisal value [104]