Peakstone Realty Trust

Good afternoon and welcome to Peakstown Realty Trust's third quarter 2024 earnings webcast. All participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press the star key and then zero on your telephone keypad. Please note that this event is being recorded. I would now like to turn the conference over to Senior Vice President of Corporate Finance and Strategy, Michaela Lynch. Please go ahead, ma'am.

Thank you. Good afternoon, and thank you for joining us for Peakstone Realty Trust Third Quarter 2024 Earnings Call and Webcast. Earlier today, we posted an earnings release, supplemental, and an updated investor presentation to the Investors page on our website at www.pksp.com. Please reach out to our investor relations team at irfpkst.com with any questions. Please note the use of forward-looking statements by the company on this webcast. Statements made on this call may include statements which are not historical facts and are considered forward-looking. The company intends for all forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended, and is making these statements for purposes of complying with those safe harbor provisions. Furthermore, the forward-looking statements reflect our current views about future events and are subject to numerous known and unknown risks uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly than those expressed in any forward-looking statement and could be affected by a variety of risks and factors that are beyond the company's control, including, without limitation, those contained in our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q filed with the SEC. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes after the date of this call, except as required by applicable law. Additionally, on this call, the company may refer to certain non-GAAP financial measures, such as funds from operations, adjusted funds from operations, EBITDA RE, and normalized EBITDA RE. You can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP numbers in the company's filings with the SEC. On the call today are Mike Escalante, CEO and President, and Javier Batar, CFO. With that, I'll hand the call over to Mike.

Good afternoon and thank you for joining our call today. The company had a very productive third quarter. We successfully amended and extended our credit facility, generated positive leasing outcomes, continued to sell office assets, and fully exited our office joint venture. These accomplishments are the direct results of our team's exceptional ability to navigate the complex market environment. With a firm foundation established, we are excited to explore areas for industrial expansion. As I announced last quarter, in July, we achieved a key milestone, successfully amending our unsecured credit facility. As a result of this amendment, we extended our debt maturities and lowered our borrowing costs. And most importantly, we have a sustainable capital structure that positions us well for future growth. At the end of the quarter, our high-quality, well-located industrial segment had a wealth of 6.3 years, 100% economic occupancy, 58% investment-grade tenancy, and a potential 24% mark-to-market opportunity. Our high-quality, newer vintage office segment had a wealth of 7.2 years, 99% economic occupancy, 60% investment-grade tenancy, minimal near-term rollover in the next two years with only 4% of AVR expiring through 2026 and newer buildings with minimal near-term capital requirements. We have nearly completed the disposition of our other segment assets. The other segment now accounts for approximately 10% of our portfolio AVR and only 8% of our portfolio NOI. All remaining other segments are in the market for sale And we are still aiming to close on the sales of these properties by year end. However, we do not fully control the timing. In the quarter, we sold four properties totaling 338,000 square feet for approximately $40 million. We sold three assets from our other segment for $32.2 million. And we sold one asset from our office segment for $7.6 million. With this sale, we have eliminated our 2024 lease expirations in this segment. In addition to these closed sales, at quarter end, we had four other segment assets classified as held for sale. Now turning to leasing. We continue to showcase our strategic expertise by achieving strong, positive leasing activity this quarter. The resulting favorable releasing spreads are a testament to the demand for our properties in the market. In the industrial segment, we addressed our sole 2025 lease expiration by executing a 10-year, 121,000-square-foot lease extension at our property in Auburn Hills, Michigan. This extension takes effect October 1, 2025. The terms result in a 41% gap and 20% cash releasing spread. As part of the extension, the rent escalations were increased to 3% annually from 1.75% previously. And in the other segment, we executed a two-year, 27,000 square foot new lease, which commenced in September 2024 at one of our properties in Las Vegas, Nevada, at a 75% gap and 71% cash releasing spread. With that, I'll turn over the call to Javier to review our financial results. Javier?