Stag Industrial, Inc.

SAG Industrial Inc. Fourth Quarter 2024 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 Zoros, Vice President, Investor Relations. Thank you, sir. You may begin.

Thank you. Welcome to Stagg Industrial's conference call covering the fourth quarter 2024 results. In addition to the press release distributed yesterday, we have posted an unaudited quarterly supplemental information package 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 and 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 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. Bank Industrial assumes no obligation to update any forward-looking statements. On today's call, you will hear from Bill Crooker, 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, who are 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, and welcome to the fourth quarter earnings call for Stagg Industrial. We're pleased to have you join us and look forward to discussing the fourth quarter and full year 2024 results. We will also provide our initial 2025 guidance. 2024 ended with an improved industrial supply backdrop and another solid quarter of operating results produced by our team. Supply pipeline continues to contract with deliveries down over 30%, and this is expected to continue in 2025. In aggregate, 2024 national industrial leasing demand was muted compared to recent years. However, much of the weakness was specific to certain markets. Many of the markets we operate in remain healthy from both a supply and demand standpoint. We are seeing an increase in tenant demand since the election spanning a broad array of industries. The most active tenant industries have been commercial services, building products, and air freight and logistics. In 2024, within our portfolio, we witnessed the strongest market rent growth in our non-coastal and manufacturing markets. Air-shoring and on-shoring projects continue to progress. This, along with pent-up demand from delayed decision-making by tenants, should result in growing warehouse demand. Leasing activity has re-accelerated with tenants committing to space to serve their warehousing needs. This is demonstrated in the leasing progress we have achieved to date and our 2025 business plan. I'm happy to report that we've already leased 70% of our operating portfolio square feet. We currently expect to lease in 2025, achieving cash leasing spreads of 23.8%. This level of leasing is on a similar place to last year and consistent over the last few years. As an update to last quarter, American Tire Distributors is still working through the bankruptcy process. As of today, all leases are current with zero missed rental payments. The ATD credit exposure is reflected in our initial 2025 guidance provided in yesterday's earnings release, including same-store NOI and core FFO per share for the year. Moving to acquisitions, volume for the fourth quarter totaled $294 million. This consisted of 15 buildings with cash and straight-line cap rates of 6.2% and 6.9% respectively. In December, we closed on a portfolio of five single-tenant buildings totaling 726,000 square feet in three different sub-markets of Chicago. We acquired the portfolio for $73 million at a cash cap rate of 6.5%. The portfolio was 100% occupied with a weighted average lease term of 7.1 years and rents 12% below market. This transaction offered an attractive combination of current income and long-term NOI growth. Subsequent to quarter end, we acquired one building for $16.6 million at a 6.4% cash cap rate. The recent volatility with interest rates caused an initial slowdown in the transaction market to start the year. We anticipate the acquisition market will gain momentum as we move through the year. In terms of dispositions this quarter, we sold two buildings for aggregate proceeds of $29 million. One of those buildings was a non-core asset. The other building was in Pleasant Prairie, Wisconsin, resulting in proceeds of $26 million, reporting a cash cap rate of 5.7%. In January, the company sold one building in Nashua, New Hampshire, for gross proceeds of $67 million, representing a cash cap rate of 4.9%. On the development front, as of 12-31, we have approximately 2.5 million square feet of activity across 11 buildings in the U.S. I'd like to highlight two events in the development portfolio. First, on the leasing front, roughly 50% of the 2.5 million square feet is under construction and 16% is pre-leased. The remaining 50% has been delivered and is currently 43% leased. This includes a full building lease set to commence May 1, 2025, for our 474,000-square-foot cross-stock building in Greer, South Carolina. The existing customer expanded their footprint with Stagg and will use this space for the production and distribution of consumer products. Second, in December, Stagg entered a 90-10 joint venture development partnership to construct approximately 400,000 square feet across two railroad buildings in the Charlotte market. The project is in the Concord sub market northeast of the city. As a project cost of approximately $56 million and expected stabilized yield of 7%. The site has secured favorable zoning, which positions well in this high barrier to entry market. With that, I will turn it over to Matt who will cover remaining results and guidance for 2025.