LXP Industrial Trust

have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star one. As a reminder, today's call is being recorded. I would now like to hand today's call over to Heather Gentry. Please go ahead.

Thank you, Operator. Welcome to LXP Industrial Trust's fourth quarter 2023 earnings conference call and webcast. The earnings release was distributed this morning and both the release and quarterly supplemental are available on our website at www.lxp.com in the investor section and will be furnished to the SEC 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 FFO 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, Brendan Mullenix, CIO, and Executive Vice President James Dudley will provide a recent business update and commentary on fourth quarter results. I will now turn the call over to Will.

Thanks, Heather. Good morning, everyone. Our fourth quarter results were strong, propelled by robust leasing volume and excellent leasing spreads. We also took advantage of refinancing opportunities that will effectively extend our debt maturities to 2027. Our fourth quarter leasing activity built on the strong momentum we maintained throughout the year, in which we leased 6.8 million square feet at attractive base and cash-based rental increases of approximately 52% and 37%, respectively, excluding fixed renewals. Over half of our 2024 industrial expirations were addressed in 2023, and we expect good results on the remaining 2.9 million square feet. We are in negotiations for the majority of these 2024 expirations and anticipate that renewals will result in a 20% to 30% cash rental increase based on current market conditions. Our two remaining office assets in Fort Mill, South Carolina are currently under contract for a total of approximately $16 million, subject to certain closing conditions. We expect to collect approximately $1.8 million of rent for these assets in 2024 prior to their projected sale in the second quarter. On the capital market side, we continue to strengthen our balance sheet position and maintain considerable financial flexibility. During the quarter, we extended the maturity of our $300 million term loan from 2025 to 2027 and raised $300 million in a bond offering with the proceeds currently earmarked for our remaining development funding needs and the repayment of our 2024 senior notes maturing in June of this year. With the expected payoff of the 2024 notes, we'll have no debt maturing until 2027 and a pro forma weighted average interest rate of 3.8% and a weighted average term of 6.5 years. Approximately 7.2% of our debt is currently floating, which is expected to increase to 27% at the beginning of 2025. we may consider swapping some of this exposure or other long-term fixed rate options later this year or early next year. Our full year 2023 adjusted company FFO of 70 cents per diluted common share was driven by strong leasing outcomes, the 2.6 million square feet of recent development that began contributing revenue, and the delay in office sales. The revenue loss from our office sales The timing of development leasing and increased interest expense are reflected in our 2024 adjusted company FFO guidance we announced this morning in the range of 61 to 65 cents per diluted common share. The low end of our guidance assumes we don't lease any of the big box development projects this year that are available for lease. As we look ahead, we believe the building blocks for steady growth are strongly in our favor. including average annual fixed rental escalations of 2.6% below market rents and occupancy gains in our development pipeline. Based on our estimate of current market rents, leases expiring through 2029 are 23% below market, which represents an increase of $36 million in initial annual cash rent, or 12 cents per share. The stabilization of the 3.7 million square feet of non-lease development in our pipeline is also estimated to result in approximately $20 million of initial annual cash rent, or 7 cents per share. Moreover, market dynamics such as lower new spec construction starts and potential interest rate declines offer the backdrop for a more favorable leasing and valuation environment. As new built-to-suit opportunities arise, We believe our long track record in this area and strong merchant-builder relationships maximize our ability to execute on a creative investment that further enhance revenue and shareholder value. With that, I'll turn the call over to Brendan to discuss our investments in more detail.