LXP Industrial Trust

Good morning and welcome to the LXP Industrial Trust second quarter conference call and webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Heather Gentry, IOR at LXP. Please go ahead.

Thank you, Operator. Welcome to LXP Industrial Trust's second quarter 2022 conference call and webcast. The earnings release was distributed this morning, and both the release and quarterly supplemental are available on our website in the investor section and will be furnished to the FCC on a form 8K. Certain statements made during this conference call regarding future events and expected results may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. LXP believes that these statements are based on reasonable assumptions. However, certain factors and risks, including those included in today's earnings press release, and those described in reports that LXP files with the SEC from time to time could cause LXP's actual results to differ materially from those expressed or implied by such statements. Except as required by law, LXP does not undertake a duty to update any forward-looking statements. In the Earnings Press Release and Quarterly Supplemental Disclosure Package, LXP has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure. Any references in these documents to adjusted company FFL refer to adjusted company funds from operations available to all equity holders and unit holders on a fully diluted basis. Operating performance measures of an individual investment are not intended to be viewed as presenting a numerical measure of LXP's historical or future financial performance, financial position, or cash flows. On today's call, Will Eglin, Chairman and CEO, Beth Bulleris, CFO, Brenda Mullenix, CIO, and Executive Vice President James Dudley will provide a recent business update and commentary on second quarter results. I will now turn the call over to Will.

Thanks, Heather. Good morning, everyone. Our core business continues to operate consistently and extremely well in a volatile capital markets environment. We're pleased with our second quarter financial and operating results, which reflect the success of our investment strategy and the value of owning warehouse distribution facilities. Tenant demand in our markets remains healthy, as evidenced by rent growth on average of 21% year-over-year in our target markets through quarter end. We completed approximately 1 million square feet of new leases and lease extensions during the quarter in our warehouse distribution portfolio, resulting in strong base and cash-based rental increases of 21% and 19%, respectively, with average annual escalations of 3%. Currently, we believe our portfolios in place warehouse distribution leases are estimated to be approximately 17% below market based on independent brokers estimates. Our mark to market opportunity remains compelling as we move towards a heavy period of lease rollover from 2024 to 2028, in which 51% of our industrial ABR expires. Based on the independent brokers estimates, Our industrial portfolio cash rents today are forecasted to grow on average approximately 47% for lease expirations through 2028 or 36% when adjusted for rent escalations. We also expect our average annual industrial rent escalations of 2.4% to continue to improve as the majority of leases in our markets are being executed with 3% or higher annual escalations. further enhancing our embedded growth opportunity. Our active asset management strategy has improved the overall quality of our industrial portfolio. Tenant credit is strong with more than 59% of the portfolio investment grade. The average age of our facilities is 8.9 years and our weighted average lease term is 6.7 years. which provides some protection if tenant demand were to soften in a recessionary environment. From a capital allocation perspective, sales proceeds and other sources of liquidity will be utilized to fund our development pipeline, repurchase shares, and pay down debt. While acquisitions are useful in the context of deferring tax gain, currently we do not see a need to complete any further 1031 exchanges this year. On the development front, our outlook for our pipeline remains extremely favorable. We commenced development on a new project in central Florida during the quarter, and we have a total of six development projects now underway. We also increased our land bank to 637 acres this quarter, making investments in Atlanta and Indianapolis, which further broaden our opportunity for prospective development projects. Year to date, we've repurchased 7.9 million common shares at an average price of $11.27 per share. And today we announced that the board authorized the repurchase of an additional 10 million shares. We continue to view share repurchases as an attractive use of capital to drive value creation for shareholders and intend to act on the new authorization of shares as market conditions warrant. In July, we appointed Derek Johnson to serve as an independent trustee on our board. Disappointment was part of our ongoing board refreshment process and consistent with our previously outlined goals. Derek's extensive expertise across strategy, marketing, business development, finance, and operations at various organizations, including 20 years spent at UPS, aligns very well with our warehouse distribution focus. We are pleased to welcome Derek formally to our board and believe his skills and experience will be of great value to shareholders. Additionally, on the ESG front, we recently submitted to GRESD for the 2021 calendar year and plan to publish our second corporate responsibility report this fall. We've been busy improving our current ESG program, including enhancing disclosure, and we look forward to continuing down the path of establishing and maintaining best-in-class ESG practices. In summary, we believe our portfolio is positioned to perform consistently well in the current environment. Our focus remains on maximizing shareholder value through all opportunities, including share repurchases, asset monetization, completing and stabilizing our development pipeline, and capitalizing on other releasing opportunities. With that, I'll turn the call over to Brendan to discuss investments in more detail.