Financial Data and Key Metrics Changes - For Q3 2025, net income per share was $0.03 and core FFO per share grew to $0.76, slightly above expectations [16] - Cash available for distribution was $29.3 million, reflecting steady operational performance [16] - Core FFO growth from 2024 to the midpoint of guidance for 2025 was reported at 3% [10] Business Line Data and Key Metrics Changes - The portfolio occupancy remained near historical highs at 97% with a weighted average lease term of approximately ten years [10] - The recent acquisition of York Space Systems headquarters in Colorado aligns with the goal of 15% government-adjacent exposure [11] Market Data and Key Metrics Changes - The company continues to maintain strong relationships across agencies and has refined its balance sheet with a disciplined approach to capital deployment [10] - The development pipeline remains active, with major projects progressing, including the FDA Atlanta project nearing completion [18] Company Strategy and Development Direction - The company is focused on three long-term priorities: growing core FFO by 2% to 3% annually, increasing same-store performance through diversification, and executing value-creating development opportunities [7] - The strategy aims to balance growth and durability, ensuring consistent performance regardless of economic or policy changes [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the government will not default on leases, viewing shutdowns as part of budget negotiations [5] - The company is optimistic about its growth strategy and the opportunities ahead, emphasizing the importance of mission-critical facilities [14] Other Important Information - The company is targeting a medium-term cash leverage goal of six times, down from historical levels of seven to eight times [13] - The acquisition team has built a robust pipeline, allowing for selective capital deployment [12] Q&A Session Summary Question: Update on Flagstaff warehouse completion - The completion has been pushed out two quarters due to ongoing design work by the government, but the new date is considered achievable [24] Question: Thoughts on capital allocation and funding sources - The company is focused on cost of equity and believes it can develop at a spread above its cost of capital, with strong relationships with sovereign wealth funds [25][27] Question: Acquisition guidance for 2026 - The $50 million acquisition guidance is set low to manage expectations, with a strong pipeline of $1.5 billion identified [31][34] Question: Impact of government shutdown on leasing - The shutdown slows processes but does not diminish portfolio value, with agencies continuing to work effectively [40][42] Question: Achieving six times cash flow leverage - The company plans to leverage attractive development projects and joint ventures to reach its leverage target [46][50] Question: Changes in growth strategy - The focus has shifted to lower leverage with moderate growth to improve cost of capital, while still aiming for 2% to 3% growth [69][76] Question: 2026 guidance and headwinds - The guidance reflects growth from FDA Atlanta and same-store growth, offset by increased G&A expenses [81][84] Question: Government shutdown and lease funding - All leases are funded for six months, and the company expects the government to meet its obligations despite shutdowns [86][88]