LXP Industrial Trust

The speaker's remarks, there will be a question and answer session. To ask a question, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Heather Gentry, Investor Relations. Please go ahead.

Thank you, Operator. Welcome to LXP Industrial Trust's first quarter 2021 earnings 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 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. LXB 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 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 positions, or cash flows. On today's call, Will Eglin, Chairman and CEO, Beth Fulleris, CFO, Brendan Mullenix, CIO, and Executive Vice President James Dudley will provide a recent business update and commentary on first quarter results. I will now turn the call over to Will.

Thanks, Heather. Good morning, everyone. First quarter results were consistent with our expectations, and we continue to focus our efforts on development leasing, marking rents to market, and capitalizing on build-to-suit investment opportunities while we manage towards lower leverage. After a slow start to the year, we leased approximately 1.6 million square feet after quarter end, and we anticipate continued strong second quarter volume with active lease renewal negotiations in process on approximately 1.4 million square feet. In addition, we are responding to RFPs or further negotiation on approximately 1.3 million square feet in our development pipeline. This activity is promising, although there is no guarantee that any leases will be executed. Renewals continue to take longer to negotiate, partly due to the continued uncertainty in the macroeconomic environment and the disconnect between market rents versus tenants' perspectives on the bargaining power. Overall, we believe that we are in a position of negotiating strength due to our high-quality Class A properties that feature modern specs including high clear height, ample dock doors, and auto and trailer parking spots, and easy access to highways, airports, and ports, all of which make our assets among the most desirable in our target market. As a result of second quarter leasing, we now expect our 2024 same store NOI will be in the range of 4 to 5%, an increase from our previous range of 3.5% to 4.5%. On another positive note, our average annual escalators increased to 2.7% in the quarter, up from 2.6%. In addition to these contractual escalators, future earnings growth is supported by our estimates of below-market rents through 2029 in our portfolio and the stabilization of our remaining spec development pipeline. Based on our current estimates of below-market rents, As of quarter end, these mark-to-market outcomes are estimated to increase initial cash rent by $36 million, or 12 cents per share, through 2029, while stabilization of the development pipeline is estimated to produce initial cash rent of $20 million, or 7 cents per share, as the developments lease up. On the investment side, during the quarter, we committed to an approximately 625,000 square foot build-to-suit project in Greenville Spartanburg. This investment provides us the opportunity to recycle capital into a newly constructed asset in one of our target markets on accretive terms. The bill-to-suit market is our main area of focus, and we will continue to pursue and act on growth opportunities that fit our investment criteria. Moving to the balance sheet, we have good liquidity and have effectively extended our maturities out to 2027. We ended the quarter at 6.1 times net debt to adjusted EBITDA, and we are focused on moving towards the low end of our target leverage range of five to six times, which will be driven by occupancy gains in our development pipeline and rent growth. With that, I'll turn the call over to Brendan to discuss investment activity in more detail.