Stag Industrial, Inc.

Greetings and welcome to Stagg Industrial's third quarter 2022 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, Steve Zarros, Associate Capital Markets and Industrial Relations. Thank you, sir. You may begin.

Thank you. Welcome to Stagg Industrial's conference call covering the third quarter 2022 results. In addition to the press release distributed yesterday, we have posted an unaudited quarterly supplemental information presentation on the company's website at www.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 FCC and the definitions and reconciliations of non-GAAP measures contained in the supplemental information package available on the company's website. As a reminder, forward-looking statements represent management's estimates as of today. Stagg Industrial assumes no obligation to update any forward-looking statements. On today's call, you will hear from Bill Crooker, our Chief Executive Officer, and Matt Spenard, our Chief Financial Officer. Also here with us today is Steve Mackey, our Chief Operating Officer, and Mike Chase, our Chief Investment Officer, who are available to answer questions specific to their area of focus. I'll now turn the call over to Bill.

Thank you, Steve. 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 this quarter's results. SAG continues to have an extremely strong year operationally. These results are flowing to our bottom line core FFO and cash available for distribution. Recent headlines have pointed to declining industrial fundamentals. Robust construction pipelines and building deliveries are applying upward pressure to availability rates. Despite these trends, the industrial sector continues to benefit from extremely low vacancy relative to history. As a result, we are still forecasting strong market rent growth for both our portfolio and for the market generally. The ongoing capital market volatility continues to weigh on the asset transaction market as sellers continue to seek price stability. Those sellers who are not forced to transact have taken a wait-and-see approach. Potential acquirers have reset return expectations to reflect current market conditions. A fairly wide bid-ask spread has been the result. We expect attractive opportunities to develop as sellers become motivated by capital needs and upcoming debt maturities. These market dynamics have resulted in a more tempered acquisition and disposition guidance range for the remainder of the year. We now expect to acquire between $460 and $525 million this year, with acquisition cash cap rates ranging between 5.2 and 5.4%. We expect disposition volume to range between $135 and $150 million this year. The reduction in disposition guidance was also impacted by the ongoing price discovery. For the year, we expect an aggregate disposition cash cap rate range of approximately 5.4%. SAG was successful in closing attractive opportunities in the third quarter. These opportunities were sourced earlier in the year. We acquired these assets at a 5.4% cash cap rate and expect to stabilize them at a 6.6% cash cap rate within the next few years. Over the past several years, we have purposely transitioned the platform to generate greater and more sustainable cash flow from our in-place portfolio. Same-store growth has meaningfully accelerated, including increasing our 2022 guidance each quarter this year. We also generate a material amount of retained earnings, which further supplements our cash flow growth profile. We are in position to take advantage of investment opportunities with less reliance on the debt and equity capital markets. We are also seeing great opportunities to grow our cash flows next year. We have addressed 45% of next year's expected leasing, approximately 6 million square feet, achieving 27% cash releasing spreads. This is a material acceleration of our leasing spreads achieved this year. There's also upward pressure on our weighted average annual contractual rental escalators, as we are signing leases with 3% to 4% annual escalators today. With that, I will turn it over to Matt, who will cover our remaining results for the quarter and provide an update to our 2022 guidance.