LXP Industrial Trust

and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I'd like to turn the conference over to Heather Gentry, Investor Relations. Please go ahead.

Thank you, Operator. Welcome to LXP Industrial Trust's second quarter 2025 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 8-K. 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, and Nathan Brunner, CFO, will provide a recent business update and commentary on second quarter results. Brendan Melanix, CIO, and James Dudley, Executive Vice President and Director of Asset Management, will be available for the Q&A portion of this call. I will now turn the call over to Will.

Thanks, Heather. Good morning, everyone. We produced strong second quarter results highlighted by the lease up of our 1.1 million square foot development facility in Greenville Spartanburg, same store NOI growth of 4.7%, and continued progress reducing our leverage with net debt to adjusted EBITDA of 5.8 times at quarter end. Our performance reflects the resilience of our core business amid a continuing soft industrial real estate environment and uncertain macroeconomic backdrop. Overall U.S. net absorption was approximately 30 million square feet in the second quarter. Of this absorption, 20 million square feet was in our 12 target markets indicating our markets held up relatively well compared to the broader market, with net absorption in five of our markets exceeding 2 million square feet. Large corporate users and 3PLs were the primary drivers of overall absorption, favoring higher quality properties. This trend bodes well for our portfolio, which is 92% comprised of Class A facilities with an average age of just over nine years. New deliveries are at a five-year low and are expected to continue declining. The construction pipeline in our 12 target markets is approximately 90 million square feet, down nearly 75% from the 2022 peak of approximately 330 million square feet. On the leasing front, year-to-date, we've leased approximately 2.4 million square feet with second-generation base and cash-based rent spreads of approximately 41% and 46% respectively. We reached a significant milestone this quarter with the lease of our 1.1 million square foot development facility in the Greenville Spartanburg market to a U.S. subsidiary of a global logistics company. This was a great outcome that resulted in immediate occupancy and low TI with annual cash base rent of approximately $6 million. Since 2019, we've developed 15 facilities, totaling 9.1 million square feet, of which 74% has been leased at an average estimated stabilized cash yield of 7.1%. We have had users touring our other big box facilities in Indianapolis and Central Florida, with the Indianapolis market much more active when compared to a year ago. Many of our 2025 expirations were addressed previously, And the remaining lease role this year represents just 1.2% of our ABR with rents that are approximately 30% to 35% below market. We're forecasting lower tenant retention for 2025 with year-end same-store occupancy of approximately 97% to 99%. And our current mark-to-market on leases expiring through 2030 remains attractive with in-place rents 17% below market based on brokers' estimates. On the investment front, during the quarter, we sold a property in Chillicothe, Ohio to a user buyer for approximately $40 million at a cash capitalization rate of 4.3%. This sale, along with another sale in the first quarter, bolstered our cash position. We accretively redeployed a portion of the Chillicothe sales proceeds to fund the repurchase of approximately $28 million of our floating rate trust preferred securities at a 5% discount to par. Based on the discounted purchase price, the current yield on the repurchase securities was approximately 6.6%. The transaction market for individual properties and small portfolios has been resilient. Given the stability we are seeing in the investment sales market, we are evaluating some modest capital recycling opportunities outside of our target markets for reinvestment that we would expect to be largely earnings neutral. We continue to concentrate our investment strategy in 12 target markets in the Sun Belt and select lower Midwest states, which account for approximately 85% of our gross assets. With a more focused geographic approach, we have the ability to scale and continue deepening our expertise and relationships within these markets, which provides both investment and operational advantages. Our target markets are experiencing positive demographic trends and are continuing to see investment in the onshoring of advanced manufacturing, reflecting business-friendly government policies and high-quality logistics infrastructure, among other attributes. In fact, in a recent CNBC report ranking the top states for business, 10 of our 12 target markets are in the top 10 states, and all 12 are in the top 20. further validating our investment thesis that our target markets stand to outperform. With that, Nathan will now discuss our financials, leasing, and balance sheet in more detail.