Financial Data and Key Metrics Changes - Funds from operations (FFO) for Q2 2025 were $0.76 per fully diluted share, an increase from $0.66 per share in Q2 2024 [12] - Cash same store net operating income (NOI) growth for the quarter was 8.7%, driven by rental rate increases and new and renewal leasing [12][13] - In-service occupancy at the end of the quarter was 94.2%, down 110 basis points from the previous quarter [13] Business Line Data and Key Metrics Changes - Overall cash rental rate increase for new and renewal leasing was 33%, and 38% when excluding a large fixed-rate renewal in Central Pennsylvania [8] - Approximately 2,500,000 square feet of leases commenced during the quarter, with 400,000 being new leases and 2,100,000 being renewals [13] Market Data and Key Metrics Changes - Vacancy in Tier one U.S. markets was 6.3% at the end of Q2, up 30 basis points from the prior quarter [6] - Year-to-date net absorption nationally totaled 16,000,000 square feet, with 5,000,000 square feet in target markets [7] - New construction start volume was 62,000,000 square feet in Q2, down from 66,000,000 square feet in Q1 2025 and 72% lower than the peak in Q3 2022 [7] Company Strategy and Development Direction - The company is focused on securing and serving existing and new customers to drive long-term cash flow growth [17] - The company plans to continue executing new starts in markets with good fundamentals and unmet demand [21] - The company remains cautious about new development starts due to the need for more consistent development lease signings [21] Management's Comments on Operating Environment and Future Outlook - Management noted that uncertainty around tariffs continues to dampen decision-making momentum [5] - There is an expectation for improved confidence and timely decision-making once the tariff situation becomes clearer [17] - The company anticipates a higher interest expense in the second half of the year due to funding its development pipeline and the recent bond offering [24] Other Important Information - The company was upgraded by Fitch to BBB+ in early May, which facilitated a public bond offering of $450,000,000 at a coupon rate of 5.25% [11] - The guidance range for NAREIT FFO for the year remains at $2.92 per share at the midpoint, with a narrowed range of $2.88 to $2.96 per share [14] Q&A Session Summary Question: How attractive are incremental development starts today compared to three or six months ago? - Management indicated that they would like to see more consistent development lease signings before increasing new starts [20] Question: Is there anything abnormal in the second quarter FFO? - Management noted that higher interest expense in the second half is expected due to funding the development pipeline and the recent bond offering being slightly dilutive [24] Question: Can you clarify the new lease that was not in the $1,600,000 target? - Management confirmed that the new lease announced has positively impacted their guidance, reducing the expected drag on FFO [31] Question: What is the current demand for build-to-suit projects? - Management stated that while they do execute on build-to-suit projects, their platform is more targeted towards speculative development [51] Question: How are private industrial developers behaving in the current environment? - Management observed that where there are more choices, concessions have increased, but there is no material difference across the landscape for developers [67] Question: What is the outlook for specific markets? - Nashville and certain submarkets in Dallas and Houston are performing well, while Southern California saw a 5% decline in market rents from Q1 to Q2 [99][103]