Mobile Infrastructure Corporation

Good afternoon and welcome to the Mobile Infrastructure Corporation second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, we'll open up for questions. To ask a question during the session, you need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw a question, please press star 1-1 again. Please be advised that today's call is being recorded. I will now turn the conference over to Casey Cotterie. Investor Relations representative. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us to review Mobile's second quarter 2025 performance. With us today from Mobile are Stephanie Hogue, CEO, Manuel Chavez, Executive Chairman, and Paul Gore, CFO. In a moment, we will hear management statements about the company's results of operations as of the second quarter of 2025. Before we begin, we would like to remind everyone that today's discussion includes forward-looking statements, including projections and estimates of future events, business or industry trends, or business or financial results. Actual results may vary significantly from those statements and may be affected by the risks Mobile has identified in today's press release and those identified in its filings with the SEC, including Mobile's most recent annual report on Form 10-K and its most recent quarterly report on Form 10-Q. Mobile assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. Today's discussion also contains references to non-GAAP financial measures that Mobile believes provide useful information to its investors. These non-GAAP measures should not be considered in isolation from or as a substitute for GAAP results. Mobile's earnings release and the most recent quarterly report on Form 10-Q provide a reconciliation of those measures to the most directly comparable GAAP measures and a list of the reasons why Mobile uses these measures. I will now turn the call over to Mobile's CEO, Stephanie Hogue, to discuss second quarter 2025 performance. Stephanie?

Thank you, Casey. Good afternoon, everyone, and thank you for joining us today. Today, I will start with a business overview. Manuel Chavez will provide an update on our asset optimization strategy, and Paul Gore will be presenting an overview of the quarterly financial information. Let me now turn to our results for the second quarter. To provide context, several of our key markets continue to face temporary defined headwinds that over time should shift to tailwinds, enhancing the long-term value of our assets. Renovations of marquee properties, event centers, and business centers are disruptive to near-term performance, but extremely positive catalysts as we think about durable demand drivers. Construction delays impacts the timing of corporate contracts demands and disrupts transient traffic. Coupled with adverse weather conditions, mobile navigated a complex operating environment in the second quarter, and we are pleased to have delivered performance that was generally in line with expectations and stable year over year, which is a testament to our diversified portfolio and the secular growth trends in most of our markets. Business trends in the second quarter were similar to the first quarter. As expected, transient volumes remained somewhat soft year over year, but improved meaningfully over the first quarter. Adverse weather was a contributing factor to lower year over year transient traffic. In addition, several markets saw fewer marquee events, and sporting attendance has been mixed. Our markets have seen an uneven rebound of activity in the first half of the year, influenced both by weather as well as a consumer that felt economic uncertainty through the first half of 2025. On a positive note, we saw a year-over-year increase in transient pricing, a reflection of the positioning of our garages, and our ability to drive rate even in a lower volume environment, specifically for assets that are near multiple demand drivers. Encouragingly, contract parking continued to grow. Monthly contracts increased 2.5% during the quarter and are up over 6.5% year to date, with particularly strong growth in residential monthly contracts, which are up 44% since year end. This has been a major focus for the team, and we are optimistic that both the volume and the quality of business being secured are green shoots of the opportunities ahead, as residential development gains momentum around many of our assets. Monthly parking is slowly picking up, offering long-term stability and providing a more predictable foundation for future utilization and pricing decisions. Our objective is to continue to grow this important metric over the medium term. There are several markets in the portfolio that highlight the importance of this trend. In Cleveland, we have found strong partnership with our operator in focusing on residential parking. While transient traffic in our Cleveland assets has been mixed year to date, The focus on contracts, specifically residential parking, has been successful. Contract revenue is up nearly 30% year over year, representing both residential and traditional office. A similar trend is occurring in St. Louis, where transient traffic in several of our assets has been constrained, given attendance of Cardinal schemes. We have spent much of the first half of the year on building monthly contracts and are seeing significant progress. A return to office in the market has seen an increase of monthly contracts, as well as provided an environment for rate expansion due to utilization rates that are near stabilized. And finally, Oklahoma City highlights the continued importance in our portfolio of marquee events for the long-term viability of both central business districts and parking assets. With both the NBA finals and the NCAA Women's Softball World Series finals in early June, Bricktown saw its year-over-year utilization 15% higher than its ongoing stabilized performances. While Bricktown's performance may not be indicative of the future, it does illustrate that a stabilized garage can still achieve substantial upside throughout the year, almost all of which falls directly to NOI. Overall, our portfolio level utilization was slightly below last year's utilization, with the decline primarily concentrated in three markets. While uncomfortable in the short term, the construction and development around key mobile assets in Cincinnati, Detroit, and Denver should add meaningful value to the portfolio over time. In Cincinnati, our assets have held up remarkably well despite the temporary closure of the Cincinnati Convention Center, which has meaningfully reduced transient hotel and event demand in this micro market. Despite near-term disruption, we are pleased that our three Cincinnati garages have maintained stable year-over-year performance, which is a commendable accomplishment of our team's focus on driving residential and commercial contract volume, which is up 9% since the end of 2024. As the Convention Center reopens in January 2026 and the surrounding district continues its revitalization, we see multiple demand drivers for a step change in Cincinnati demand. As we discussed in recent earnings calls, one of the largest assets in our portfolio is a 1200 space parking garage in Detroit. where we have experienced a year-over-year decline in utilization driven by a decrease in monthly contracts. The Renaissance Center, which was home to General Motors headquarters and a beacon of economic activity in Detroit, is undergoing a large-scale redevelopment that will ultimately reshape 5.5 million square feet of real estate into a modern riverfront mixed-use destination comparable to Hudson Yards in New York City or the Boston Seaport District. As that redevelopment progresses over the next three to five years, we believe that the long-term value accretion of our adjacent asset will be substantial. In the meantime, we believe that this asset is largely near expected performance for the construction phase. And once construction is completed in 2028 to 2030, we expect a significant increase in this asset's net operating income. And finally, turning to Denver, the 16th Street Mall redevelopment A $175 million project aimed at revitalizing one of the city's central corridors is slated for full opening in the fall of 2025. Through the second quarter, the downtown corridor remained under construction, and traffic was lighter for hotels and leisure travel. However, as this market reopens in the fall, our garage is well positioned to benefit from the increase in transient and event-based demand that should follow. As we shared earlier this year, we expected 2025 to be more back end loaded as we scaled monthly contract volumes and projects around certain assets concluded. While that contract growth is happening and certain micro market projects are wrapping up, the pace is slower than we originally forecasted. Coupled with lighter than expected transient volumes in a few markets for the year, we expect full year results to track towards the low end of our full year guidance range. That said, a shift rate of new monthly contracts and a return of transient traffic by market in no way changes our fundamental view of the company's value. We would much prefer incremental NOI to be realized in the third quarter of 2025 as opposed to the first or second quarter of 2026. However, this timing delta has no bearing on the value of Movil's portfolio. While redevelopment efforts and construction surrounding our key assets dampens short-term performance, We are extremely optimistic about the positive NAV impacts on our portfolio over time. Combined with the long-term secular growth trends, such as return to office mandates and the conversion of downtown office buildings into residential rentals, we continue to believe that mobile's portfolio is materially misvalued in the marketplace. With that said, I am pleased to turn the call over to Manuel, who will provide an update on progress made to date on our asset rotation strategy. Manuel?