Stag Industrial, Inc.

Greetings and welcome to the Stagg Industrial Inc. Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Steve Zarros, Senior Associate, Investor Relations and Capital Markets. Thank you. You may begin.

Thank you. Welcome to Stagg Industrial's conference call covering the third quarter 2024 results. In addition to the press release distributed yesterday, we 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, GNA, acquisition and disposition volumes, retention rates and other guidance, leasing prospects, rent collections, industry and economic trends, and other matters. We encourage all listeners to review the more detailed discussion related to these forward-looking statements contained in the company's filings with the SEC. 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 Mike Chase, our Chief Investment Officer, and Steve Kimball, EVP of Real Estate Operations. We're available to answer questions specific to their areas of focus. I'll now turn the call over to Bill.

Thank you, Steve. Good morning, everybody. 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 the third quarter 2024 results. We are happy to report another strong quarter of operating results. The industrial supply pipeline continues to contract, and absorption remains stable in many of our markets. Availability and vacancy appear to be approaching a trough, although our expectation remains that we won't see an inflection point until the back half of next year. Market rent growth for our portfolio stands at 3.2% through September 30th, keeping us on track for full-year market rent growth of approximately 4%. The leasing market is active with tenants committing to space. I'm happy to report that we have already leased 38% of the square feet we currently expect to lease in 2025, achieving cash leasing spreads of 24.1%. This level of leasing is on a similar pace to last year. On October 22nd, American Tire Distributors voluntarily filed for Chapter 11 bankruptcy. In conjunction with this filing, the tenant entered into a restructuring support agreement with participation from the current holders of its term loans. American Tire Distributors is the nation's largest independent tire distributor with over 80,000 customers. American Tire Distributors operates within seven of our facilities across 841,000 square feet. They represent 1% of our annualized base rent or approximately $6.1 million. In the aggregate, these seven leases have rents at market and all seven buildings are actively utilized. All leases are current with zero missed rental payments. We are monitoring the situation closely. This event is reflected in our updated guidance provided in yesterday's earnings release, including core FFO per share for the year. The acquisition market regained momentum in the third quarter with activity noticeably accelerating post-Labor Day. Acquisition volume for the third quarter totaled $113 million. This consisted of six buildings with cash and straight-line cap rates of 6.7% and 7.2% respectively. During the quarter, we acquired a five-property portfolio totaling 290,000 square feet. The total acquisition cost was $78.1 million with a cash cap rate of 6.9%. The portfolio is located in the supply-constrained Route 128, Route 3 sub-markets of Boston, Massachusetts. All of the buildings are located within close proximity to I-93, I-95, and I-495. The portfolio is 100% leased to five tenants with a wall to 4.9 years and weighted average lease escalations of 3.75%. Subsequent to quarter end, we acquired two buildings for $66.6 million at a 6.3 cash cap rate. On the development front, as of September 30th, We have over 2.1 million square feet of activity across nine buildings in the US. In July, we closed on a five acre land site. The planned 76,000 square foot building will be developed with an estimated delivery date of Q3 2025. In August, we closed on our first single asset joint venture with a national developer. The project will consist of a single 284,000 square feet distribution facility capable of accommodating up to two tenants with an estimated delivery date of Q4 2025. Both projects sit in the North Valley Submarket of Reno, which has experienced robust tenant demand and rent growth over the past several years and continues to be a premier location in the market for distribution tenants. With that, I will turn it over to Matt, who will cover our remaining results and updates to guidance.