Mobile Infrastructure Corporation

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

Thank you, operator. Good afternoon, everyone, and thank you for joining us to review Mobile's third quarter 2025 performance. With us today from Mobile are Stephanie Hogue, CEO, Paul Gore, CFO, and Manuel Chavez, executive chairman. In a moment, we will hear management statements about the company's results of operations, as of the third 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 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 an 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 third quarter 2025 performance. Stephanie?

Thank you, Casey. Our third quarter results were comparable to the second quarter, representing resilient performance against a challenging backdrop. Portfolio level utilization in the quarter was comparable to last year's levels, although revenue and NOI were lighter than expected, as ongoing construction and longer redevelopment timelines continue to have a short-term impact on key assets. Our focus continues to be on controlling what we can control, capturing as many monthly consumers as possible, and ensuring the portfolio is in a position to capture the growth and activity around our assets from central business district redevelopment efforts in many of our markets. In the third quarter, contract parking volumes continued to trend higher, increasing 1.4% sequentially and growing 8% year to date. While pricing remained competitive, higher utilization typically leads to long-term pricing power, and we expect to see the benefits of these volume gains as business conditions strengthen. Transient volumes, while up sequentially, were down approximately 5% year over year largely driven by softness in hotel and event traffic. Several of our core downtown markets continue to experience temporary defined headwinds, including long construction cycles, event cancellations, and lower hotel occupancy, all of which pressure near-term results. While construction is affecting assets in a handful of our most important micro markets in the short term, we remain optimistic about the opportunities for long-term value creation at these locations as these projects reach completion and traffic increases. Our internal data indicates that hotels in several of our markets saw a decline in occupancy this quarter, including Houston, Denver, Cincinnati, and Nashville, among others. In addition, event activity was later across our portfolio, influenced by both consumer uncertainty and construction in Fort Worth, Nashville, Cincinnati, and Detroit. four markets that together represent approximately one-third of our stalls and a slightly higher share of the portfolio's transient demand base. During the quarter, transient rates expanded modestly, though not enough to offset the decline in transient traffic. Monthly parking remained a buyer's market, with rates modestly down year over year, but there are encouraging signs of continued demand as residential activity strengthens around our assets. In today's fluid work environment, mobile has benefited from a strategic emphasis on residential parking. Capitalizing on multiple demand drivers continues to be one of the strongest indicators of the portfolio's long-term health. And we believe that there is a long runway to continue driving residential mix within garages that were historically reliant on monthly employee parking. While the leasing pace that recently converted downtown rental properties is ramping slowly, we are capturing an increased share of current demand and the unit economics on these parkers is desirable. Our residential monthly contracts have increased approximately 75% year over year and are up nearly 60% since year end. Residential and commercial monthly parking now represent approximately 35% of trailing 12 months management agreement revenue, providing a stable base of recurring income and giving us greater optionality to experiment with the pricing lever over time. As we noted in today's earnings release, we are pleased with the improved performance of several of our assets. We've seen particularly positive trends in Cleveland. Transient growth of 8% in the quarter over 2024's third quarter has been complementary with strong growth in residential and commercial monthly contracts, up over 50% year over year. Importantly, because assets in Cleveland are approaching stabilized utilization, we've seen an average of 5% rate expansion in monthly contract users allowing us to hold transient rates stable in a somewhat uncertain environment. Downtown Oklahoma City continues to thrive as well. The city's successful metropolitan area projects have committed over $1 billion to 16 projects through 2028. These projects include new sporting arenas, a new entertainment district, and a dense mixed-use urban environment. As the 20th largest market in the United States, its ability to host marquee events has driven hotel, event, and transient traffic. and staying ahead of market events has allowed us to drive volumes to stabilize levels of performance. The team has continued to focus on creating the best possible customer experience at this garage by engaging with our parking operators on ways to offer a secure and seamless in-and-out experience. These examples continue to reinforce our broader point. Transient traffic will ebb and flow, but our focus of recurring contract-based parking creates the foundation for durable performance. In Cincinnati, a market in which we have three core assets, transient traffic continues to be significantly impacted by the temporary closure of the Convention Center. Despite the disruptions, our assets have performed remarkably well. Contract volume is up 15% year over year, supported by residential demand, and we anticipate a step change in performance beginning in the first quarter of 2026, when the Convention Center is scheduled to reopen. Of course, while we expect a material step change in that district's activities, we note that construction projects near many of our assets simply have taken longer than original schedules dictated. In Detroit, as we've previously discussed, monthly parkers have been leaving faster than expected ahead of the Renaissance Center's multi-year redevelopment, which is scheduled to begin in early 2026. During the construction period, we expect this asset to operate as a transient heavy garage, serving both visitors and the construction workforce. Over the longer term, we remain confident that this asset will benefit significantly once the redevelopment is complete. To this point, a recent appraisal on this asset supports our belief that the value of Rentzen Garage could increase by more than 50% when the project is completed. Earlier this year, we shared mobile strategy to unlock substantial value by segmenting the portfolio into core and non-core assets. From a balance sheet perspective, this strategy had a nuanced hurdle because several of the non-core assets in our legacy portfolio were captured in CMBS debt, which restricted our ability to rotate assets out and add more creative assets to the portfolio. We announced last week that we completed an ABS transaction, which Paul will discuss more fully. This transaction provides the needed flexibility for our plan to optimize our portfolio. Consistent with the asset rotation strategy, we closed on the sale of a small non-core lot last week, and I am pleased to report that we expect to have sold or be in contract to sell approximately $30 million in non-core assets by the end of the year, consistent with the capital plan we announced earlier this year. With a robust acquisition pipeline, we will strategically balance acquiring new assets with optimizing the balance sheet through debt paydowns where appropriate. And finally, as we think about diversification of revenue streams, we are seeing a growing recognition that EV charging is no longer simply an amenity to be offered to tenants. Historically, this appealed to consumers but generated no return on investment for owners, as parkers would simply park and stay rather than move their vehicles, a dynamic that limits profitability in EV charging because it relies upon vehicle turnover. Our best EV partners are helping us manage the retraining of the consumer in this space. We continue to make measured investments in this area, focusing on locations where utilization and pricing support longer-term profitability. This will continue to evolve as the industry shifts from viewing EV charging as a cost center to viewing it as a contributor to net operating income. With that, I'll turn it over to Paul Gore for a financial review.