Financial Data and Key Metrics Changes - The company reported a 4.3% growth in same-store cash NOI and a 6.3% increase in core FFO per share for 2025 [5][11] - Core FFO per share was $0.66 for Q4 and $2.55 for the year, reflecting a 6.3% increase compared to 2024 [11] - The company incurred a cash credit loss of 22 basis points in 2025, with a retention rate of 75.8% for the quarter and 77.2% for the year [12] Business Line Data and Key Metrics Changes - In Q4, the company commenced 31 leases totaling 3 million sq ft, generating cash and straight-line leasing spreads of 16.3% and 27.4%, respectively [11] - The company achieved cash and straight-line leasing spreads of 24% and 38.2% for the year [12] - The acquisition volume for Q4 totaled $285.9 million, consisting of 7 buildings with cash and straight-line cap rates of 6.4% and 7%, respectively [7][8] Market Data and Key Metrics Changes - The company expects national vacancy rates to peak in the first half of 2026, with an inflection point in the back half of the year [6] - The company anticipates 180 million sq ft of deliveries in 2026, significantly lower than the 225 million sq ft expected in 2025 [100] - The Midwest markets, particularly Minneapolis, Chicago, and Indianapolis, are showing strong demand, while Southeast port markets like Jacksonville and Savannah are experiencing weakness [68][70] Company Strategy and Development Direction - The company plans to initiate a core FFO per share range between $2.60 and $2.64 for 2026, with same-store cash NOI growth expected between 2.75% and 3.25% [14] - The company raised its dividend by 4%, the largest increase since 2014, and modified the payment cadence from monthly to quarterly [10] - The company is focusing on maintaining high occupancy levels and is optimistic about leasing activity in 2026, driven by a record amount of square footage expiring [7][21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about economic growth and increased tenant activity, expecting net absorption to improve in 2026 [6][21] - The company is not concerned about new supply coming online, as it believes developers are prudent and that any new developments will take time to materialize [33] - Management noted that the demand from tenants is real, with a broad base of interest from various sectors, including data centers [29][31] Other Important Information - The company has a strong acquisition pipeline valued at $3.6 billion, with expectations for acquisition volume in 2026 to range between $350 million and $650 million [14][22] - The company is budgeting for 957,000 sq ft of leasing in 2026, with a significant portion expected to come from build-to-suit projects [63] Q&A Session Summary Question: Inquiry about leasing environment and occupancy guidance - Management acknowledged the potential for upside in leasing activity if the current momentum continues, despite budgeting for a 9-12 month lease-up period for assets [18][20] Question: Discussion on acquisition visibility and timing - Management indicated that while the first quarter is typically slower, they are underwriting more transactions than in the previous year, with a strong pipeline [22][23] Question: Clarification on tenant activity and demand - Management confirmed that the current tenant activity reflects real demand, with a broad base of interest from various sectors, including data centers [28][29] Question: Concerns about potential overbuilding - Management expressed confidence that new supply will be introduced prudently and not until late 2027, alleviating concerns about overbuilding [33] Question: Update on market performance and rent growth - Management noted that while some markets are performing well, overall rent growth is expected to be modest, with stronger markets seeing 2-3% growth [71][75]