LXP Industrial Trust

Thank you for standing by. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the LXP Industrial Trust fourth quarter 2025 earnings call and webcast. All lines 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 would like to ask a question during this time, Simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Heather Gentry, Investor Relations. Please go ahead.

Thank you, Operator. Welcome to LXP Industrial Trust's fourth 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.lxt.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 FCC from time to time, do 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, LXC 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 LXB'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 fourth quarter results. Brendan Mullenix, 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.

Thank you, Heather. Good morning, everyone. Our fourth quarter marked the conclusion of a successful year driven by meaningful achievements in leasing, healthy occupancy gains, strategic property sales, and continued progress strengthening our balance sheet. We delivered on our key operating objectives in 2025, notably reducing leverage from 5.9 times to 4.9 times net debt to adjusted EBITDA, and increasing occupancy 350 basis points to 97.1%. Additionally, we leased nearly 5 million square feet in 2025 with attractive mark-to-market outcomes of approximately 28% on a cash basis, excluding fixed-rate renewals. We were encouraged to see market fundamentals continue to improve during the fourth quarter, with our target markets driving over 66% of the overall U.S. net absorption of about 54 million square feet. Larger users made up the bulk of the demand, favoring facilities exceeding 500,000 square feet that were built within the last five years. Several of our target markets, including Phoenix, Indianapolis, and Houston, led this demand. Reflective of an improving leasing market, in the fourth quarter, we leased over 2 million square feet at attractive base and cash-based rental increases of approximately 27% and 23%, respectively, excluding fixed-rate renewals. We've also made good progress on our 2026 expirations. To date, we have addressed roughly 3 million square feet or 41 percent of our total 2026 rollover, achieving an average cash rental increase of approximately 28 percent, excluding two fixed rate renewals. On the sales front, we exited five non-target markets in 2025 and continued to prioritize investing in our 12 target markets, which currently account for 87 percent of our gross book value. Total disposition volume for the year was $389 million, including $116 million from non-target market sales in the fourth quarter, with an average cash capitalization rate of 5.7% on stabilized assets sold during 2025. This volume included the sale of our Indianapolis and Ocala development properties to a user buyer in September at an implied capitalization rate of approximately 5%, and a 20% premium to our cost basis. The capital generated from asset sales was primarily deployed to strengthen our balance sheet by reducing high coupon debt. Additionally, we acquired one property in Atlanta for a 1031 exchange requirement in September and repurchased approximately 277,000 shares at an average price of $49.47 in December 2025 and January 2026. At year end, we held approximately $170 million in cash on our balance sheet. While cash balances are currently weighing on earnings, we believe liquidity is valuable as we head into a period where we can create significant value in our land bank. Strengthening our balance sheet was one of our primary objectives in 2025. We successfully accomplished this goal and entered 2026 in a strong financial position. Our capital allocation priorities will now primarily focus on disciplined investment and external growth opportunities, mainly in our land bank, and executing opportunistic share repurchases provided they don't impact the balance sheet progress we made in 2025. Acquisition activity is expected to be limited to 1031 exchanges, which may happen from time to time as we exit non-target markets. Through our development program, we have developed 15 facilities since 2019 at a 7.1% weighted average stabilized yield on first generation leases and generated sale proceeds of $91 million in excess of our cost basis. At year end, our development program was 98% leased or sold. We have continued to closely monitor market fundamentals where we own development land, evaluating both built-to-suit and speculative development opportunities. In the West Valley of Phoenix, where we own a 315-acre land site, we have observed an acceleration in leasing activity for facilities over 1 million square feet. Eighteen months ago, there were 10 1-million-square-foot buildings available in the West Valley. Since then, eight of these buildings have leased or sold to users, and the remaining two are in advanced stages of negotiations. Consequently, there will be no 1 million square foot facilities available in the West Valley, and nothing is currently under construction. In addition, construction costs are roughly $20 per square foot lower than they were at the market peak. With this favorable backdrop, we will be breaking ground on a 1 million square foot spec project on our Phoenix land site. Project completion is anticipated for the first half of 2027 with an estimated budget of $120 million and a stabilized cash yield within a range of seven to seven and a half percent. In summary, we successfully executed our core strategic initiatives in 2025, including enhancing our balance sheet, addressing vacancy at our three big box development properties, increasing portfolio occupancy, and achieving attractive leasing outcomes. In 2026, our priorities will center on strategic capital deployment, specifically pursuing disciplined growth opportunities and making opportunistic share repurchases, leasing our remaining vacancies, and generating robust mark-to-market outcomes. Our high-quality portfolio, consisting primarily of Class A assets in the Sunbelt and Lower Midwest, is well-positioned to benefit from improving market fundamentals and the positive momentum associated with advanced manufacturing investments. I'll now turn the call over to Nathan, who will provide a more detailed overview of our financials, leasing activities, and balance sheet.