Stag Industrial, Inc.

Greetings, and welcome to the STAG Industrial Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matt Spenard, Senior Vice President of Investor Relations. Thank you, sir. You may begin.

Thank you. Welcome to Stagg Industrial's conference call covering the third quarter 2021 results. In addition to the press release distributed yesterday, we have posted an unaudited quarterly supplemental information presentation on the company's website at staggindustrial.com under the investor relations section. On today's call, the company's prepared remarks and answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements include forecasts of core FFO, same-store NOI, G&A, acquisition and disposition volumes, retention rates, and other guidance, leasing prospects, rent collections, industry and economic trends, and other matters. We encourage all our listeners to review the more detailed discussion related to these forward-looking statements contained in the company's filings with the SEC and and the definitions and reconciliations and non-GAAP measures contained in the supplemental informational package available on the company's website. As a reminder, forward-looking statements represent management's estimates as of today. DAG Industrial assumes no obligation to update any forward-looking statements. On today's call, you will hear from Ben Butcher, our Chief Executive Officer, and Bill Crooker, our President and Chief Financial Officer. Also here with us today is Steve Meche, our Chief Operating Officer, who is available to answer questions specific to operations. I will now turn the call over to Ben. Thank you, Matt.

Good morning, everybody, and welcome to the third quarter earnings call for Stagg Industrial. We are pleased to have you join us and look forward to telling you about our third quarter results. Industrial market fundamentals remain sound with historic net absorption levels supported by broad-based demand across the nation. We are having daily conversations across our tenancy to help address their real estate needs. Conversation topics range from building expansions to sourcing additional space across the 60-plus markets in which we operate, to sustainability-related upgrades such as efficient lighting conversion. These themes were highlighted in our recently completed fifth annual tenant survey. This survey provides us an opportunity to obtain real-time insight into how our tenants are thinking about their businesses and how their real estate needs are evolving in these unprecedented times. Not surprisingly, there was a dominant theme in their responses, the need for additional space. Tenants are looking to enhance the resilience and strength of their supply chains as well as to support new growth initiatives. Labor availability remains a widely held concern and limiting factor in these growth initiatives by our tenants. The majority of respondents indicated e-commerce activity has increased over the last 12 months, consistent with the belief that there has been a structural change in consumer behavior. Continuing the trend, approximately 40% of the buildings in our portfolio support some level of e-commerce activity. Our tenants, like our society in general, are also more focused on ESG matters. In particular, the survey revealed a noticeable increase in the importance of sustainable building operations as a measure of building fit. SAG continues to be a leader in ESG. We recently received our 2021 Gresby Public Disclosure Letter Grade Rating of B. Our score remains above the REIT average and ranks second out of the 10 industrial REIT real estate companies scored by Gresby. We look forward to releasing our inaugural Corporate Sustainability Report in the coming weeks, which will provide a comprehensive view into how we are addressing and accomplishing our ESG initiatives. The demand for industrial real estate seen through our portfolio operating metrics and heard through our tenant survey is also reflected in the asset transaction market. Yesterday, we closed on the sale of a building located in Taunton, Massachusetts, which is approximately 40 miles south of Boston. Acquired vacant in 2019, the investment strategy included repositioning the 350,000-square-foot building to optimize its appeal as a warehouse facility. A short-term lease was signed with a large private company as we initiated the permitting process. Shortly thereafter, we entered negotiations with a large e-commerce tenant to fully lease the facility on a long-term basis. This e-commerce tenant identified the facility as a primary location to service same-day delivery to Greater Boston. also known as last mile delivery, an example of the common misperception of the widely used term last mile. After executing a long-term lease to this tenant, we were approached by multiple interested buyers. We ultimately sold the building for gross proceeds of $78 million, representing a 48% unlevered IRR for our three-year hold period. Proceeds of this sale will be redeployed accretively into our opportunity set. 150% nominal gain over our all-in cost basis was a great result for Stagg. This sale was consistent with our practice of selling assets that are worth more to others than they are to us. With that, I'll turn it over to Bill to discuss our third quarter operational results.