Gladstone Commercial Corp (GOOD) 2023 Q4 法說會逐字稿

Greetings. Welcome to the Gladstone Commercial year end and fourth quarter earnings call. (Operator Instructions) I'll now turn the conference over to Mr. David Gladstone, Chief Executive Officer. Mr. Gladstone, you may now begin your presentation.

問候。歡迎參加格拉斯頓商業年終和第四季財報電話會議。（操作員指示）我現在將會議交給執行長 David Gladstone 先生。格萊斯頓先生，您現在可以開始您的演講了。

Okay, thank you, Rob. That's a nice introduction. And thank all of you for calling in this morning, it's nice of you. We enjoy the time that you take away from your day to come listen to our phone presentation. Wish I had more time to talk to you. We only get this once a quarter. Now we’ll hear from Michael LiCalsi, our General Counsel and Secretary, to give us legal and regulatory matters concerning the call today. Michael?

好的，謝謝你，羅布。這是一個很好的介紹。感謝大家今天早上打電話，你們太好了。我們很高興您從一天中抽出時間來聽我們的電話演示。希望我有更多時間與你交談。我們每季只收到一次。現在我們將聽取我們的總法律顧問兼秘書 Michael LiCalsi 的發言，他將向我們介紹有關今天電話會議的法律和監管事宜。麥可？

Thanks, David. Good morning, everybody. Today's report may include forward-looking statements under the Securities Act of 1933 and the Securities Exchange Act of 1934, including those regarding our future performance. These forward-looking statements involve certain risks and uncertainties that are based on our current plans, which we believe to be reasonable. Many factors may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements, including all the risk factors in our Forms 10-Q,10-K, and other documents we file with the SEC. You can find them on our website, gladstonecommercial.com, specifically the Investor page, or on the SEC's website, which is www.sec.gov. And we undertake no obligation to publicly update or revise any of these forward-looking statements whether as a result of new information, future events, or otherwise, except as required by law.

謝謝，大衛。大家早安。今天的報告可能包含根據 1933 年證券法和 1934 年證券交易法做出的前瞻性陳述，包括有關我們未來績效的陳述。這些前瞻性陳述涉及基於我們目前計劃的某些風險和不確定性，我們認為這些計劃是合理的。許多因素可能導致我們的實際結果與這些前瞻性陳述明示或暗示的任何未來結果存在重大差異，包括我們的 10-Q、10-K 表格以及我們向 SEC 提交的其他文件中的所有風險因素。您可以在我們的網站gladstonecommercial.com（特別是投資者頁面）或SEC 的網站（www.sec.gov）上找到它們。我們沒有義務公開更新或修改任何這些前瞻性陳述，無論是由於新資訊、未來事件或其他原因，除非法律要求。

Now, today we'll discuss FFO, which is funds from operations. Now, FFO is a non-GAAP accounting term, defined as net income, excluding the gains or losses from the sale of real estate and the impairment losses on property, plus depreciation and amortization of real estate assets. We'll also discuss core FFO, which is generally FFO adjusted for certain other non-recurring revenues and expenses. And we believe these metrics are a better indication of our operating results and allow better comparability of our period-over-period performance.

現在，今天我們將討論FFO，即來自營運的資金。現在，FFO是一個非公認會計準則會計術語，定義為淨利潤，不包括房地產銷售損益和財產減損損失，加上房地產資產的折舊和攤提。我們還將討論核心 FFO，通常根據某些其他非經常性收入和支出對 FFO 進行調整。我們相信這些指標可以更好地反映我們的經營業績，並且可以更好地比較我們的同期業績。

Now, please visit our website, once again, gladstonecommercial.com, to sign up for our email notification service. You can also find us on Facebook, key word there is The Gladstone Companies, and on Twitter, @gladstonecomps. Today's call is an overview of our results, so we ask that you review our press release and Form 10-K, again, both issued yesterday, for more detailed information.

現在，請再次造訪我們的網站gladstonecommercial.com，註冊我們的電子郵件通知服務。您也可以在 Facebook 上找到我們，關鍵字是 The Gladstone Companies，在 Twitter 上找到我們，關鍵字是@gladstonecomps。今天的電話會議是我們結果的概述，因此我們請您再次查看我們昨天發布的新聞稿和 10-K 表格，以了解更多詳細資訊。

And with that, I'll hand the baton over to Gladstone Commercial’s President, Buzz Cooper. Buzz?

至此，我將把接力棒交給 Gladstone Commercial 總裁 Buzz Cooper。嗡嗡聲？

Thank you, Michael, and thank you all for calling in. Today, we will discuss our operations and topics that are top of mind.

謝謝你，邁克爾，也謝謝大家的來電。今天，我們將討論我們的營運和最重要的主題。

Interest rates continue to have outsized impacts on capital markets and real estate. In October 2023, the benchmark 10-year treasury yield peaked above 5% for the first time since 2007. Rates remained volatile through the end of the year, with the 10-year yield finishing below 4% and increasing to 4.32% as of yesterday. This volatility translated directly to capital markets and investment volumes, as sellers' pricing expectations lagged real-time changes in rates. According to CBRE, the net lease investment volume fell 55% year over year through Q3 of 2023.

利率繼續對資本市場和房地產產生巨大影響。2023年10月，基準10年期公債殖利率自2007年以來首次升至5%以上的高峰。截至年底，利率仍波動，10 年期公債殖利率最終跌破 4%，截至昨天升至 4.32%。這種波動直接影響資本市場和投資量，因為賣方的定價預期落後於利率的即時變動。根據世邦魏理仕的數據，截至 2023 年第三季度，淨租賃投資金額較去年同期下降 55%。

Despite volatile capital markets, industrial real estate, which now accounts for more than 60% of our annualized straight-line rent, continues to perform. According to CBRE, average industrial asking rents in Q4 of 2023 rose 6% year over year, and the industrial vacancy rates at the end of the year were just 4.8%, despite record annual completions of 612 million square feet.

儘管資本市場波動較大，但目前占我們年化直線租金 60% 以上的工業房地產仍持續表現出色。根據世邦魏理仕的數據，儘管年度竣工面積達到創紀錄的 6.12 億平方英尺，但 2023 年第四季工業平均租金要價年增 6%，年底工業空置率僅為 4.8%。

Moving on to office, the broader market continued to struggle in 2023. According to Cushman Wakefield, office net absorption in Q4 of 2023 was negative for the eighth consecutive quarter. We made tremendous progress throughout the year of delivering on our current core strategies, divesting non-core office assets, acquiring mission-critical industrial assets in the path of growth markets, and diligently underwriting our tenants' credits.

進入2023年，大盤繼續陷入困境。Cushman Wakefield 的數據顯示，2023 年第四季辦公室淨吸收量連續第八個季度為負值。我們全年在實現當前核心策略、剝離非核心辦公資產、在成長市場的道路上收購關鍵任務工業資產以及努力承保租戶信貸方面取得了巨大進展。

We exited seven non-core markets and properties, completed nearly $30 million in new acquisitions, and increased portfolio industrial concentration from 56% of annualized straight-line rent as of December 2022 to 60% as of December 2023. All of our acquisitions throughout the year were completed in established growing markets including Chicago, Dallas-Fort Worth, Indianapolis, and the Lehigh Valley in Pennsylvania. Furthermore, the acquisitions improved portfolio WALT with a weighted average lease term at closing of 19.3 years.

我們退出了七個非核心市場和物業，完成了近3000 萬美元的新收購，並將投資組合的行業集中度從截至2022 年12 月的年化直線租金的56% 提高到截至2023 年12 月的60%。我們全年的所有收購都是在成熟的成長市場完成的，包括芝加哥、達拉斯沃斯堡、印第安納波利斯和賓夕法尼亞州的利哈伊谷。此外，這些收購還改善了 WALT 的投資組合，截止收盤時的加權平均租賃期限為 19.3 年。

In addition to new acquisitions during the year, our asset management team led more than 1.4 million square feet of leases, resulting in more than $1.2 million or 13% net increase in same-store GAAP rent. The annualized straight-line rent of these transactions totaled $10.7 million. While we cannot control the Fed or predict exactly where interest rates will go, we remain confident that all of these developments have better positioned our portfolio for 2024.

除了年內的新收購外，我們的資產管理團隊還主導了超過 140 萬平方英尺的租賃，導致同店 GAAP 租金淨增長超過 120 萬美元，即 13%。這些交易的年化直線租金總計1070萬美元。雖然我們無法控制聯準會或準確預測利率走勢，但我們仍然相信所有這些發展都將更好地定位我們的 2024 年投資組合。

Portfolio occupancy was at 96.8% as of December 31, 2023, and we collected 100% of cash-based rents during the year. This is a testament to the mission-critical nature of our assets and quality credits of our tenant, both of which position us well to weather any economic storms we may face.

截至2023年12月31日，投資組合入住率為96.8%，年內我們收取了100%的現金租金。這證明了我們資產的關鍵任務性質和租戶的品質信用，這兩者都使我們能夠很好地應對我們可能面臨的任何經濟風暴。

In addition, we believe there are levers which we have yet to fully realize. Most of our industrial assets have fixed annual escalations of 1.5% to 3.5%. Industrial rent growth over the last few years has exceeded these escalation rates, resulting in rents that are below market and valuable upon lease renewal.

此外，我們認為還有一些我們尚未完全實現的槓桿。我們大多數工業資產的年增長率固定為 1.5% 至 3.5%。過去幾年的工業租金增長超過了這些上漲率，導致租金低於市場水平，並且在續租時很有價值。

Our balance sheet is healthy and flexible, positioning us to continue deploying capital into industrial deals at accretive cap rates, as seller expectations normalize. Since January 1, 2022, we have repaid more than $194 million of mortgage debt and grown our unencumbered asset base by 61% from $510 million to $822 million. Following the completion of the four office building sales currently under contract, we'll have only five office mortgages remaining, and the first maturity of those five is in 2026. We have $56.5 million in available liquidity via our revolving credit facility and cash on hand and remain below 50% levered as of December 2023.

我們的資產負債表健康且靈活，隨著賣方預期的正常化，我們能夠繼續以增值的資本化率將資本部署到工業交易中。自 2022 年 1 月 1 日以來，我們已償還了超過 1.94 億美元的抵押貸款債務，我們的未支配資產基礎增長了 61%，從 5.1 億美元增至 8.22 億美元。目前合約下的四棟辦公大樓銷售完成後，我們將只剩下五棟辦公大樓抵押貸款，這五項貸款的第一個到期日為 2026 年。透過循環信貸安排和手頭現金，我們擁有 5,650 萬美元的可用流動資金，截至 2023 年 12 月，槓桿率仍低於 50%。

In short, 2023 was a successful year for selling legacy non-core office assets and redeploying proceeds into mission-critical industrial assets. Seller expectations have yet to fully normalize to the new standards set by the Federal Reserve, but as we do, we will be well-positioned to capitalize on accretive new opportunities. We expect sale lease backs in particular to be the primary source of new deals for us. And sale lease backs provide additional credit diligence and term, which are both hallmarks of our value proposition.

簡而言之，2023 年是出售遺留非核心辦公資產並將收益重新部署到關鍵任務工業資產的成功一年。賣家的期望尚未完全正常化到聯準會制定的新標準，但正如我們所做的那樣，我們將處於有利地位，可以利用不斷增加的新機會。我們預計售後回租將成為我們新交易的主要來源。售後回租提供額外的信用調查和期限，這都是我們價值主張的標誌。

Our balance sheet is flexible, driven by more than $154 million of net mortgage debt reduction since January 2022. And again, we have more than $56 million of liquidity on hand to continue growing our industrial base. Since 2019, our industrial concentration as a percentage of annualized straight-line rents has increased from 32% to 60%, and we expect to further increase this concentration in the next 6 to 12 months.

自 2022 年 1 月以來，我們的資產負債表非常靈活，抵押貸款債務淨減少超過 1.54 億美元。同樣，我們手頭上有超過 5600 萬美元的流動資金來繼續發展我們的工業基礎。自2019年以來，我們的產業集中度佔年化直線租金的百分比已從32%上升至60%，我們預計在未來6至12個月內將進一步提高這一集中度。

I will now turn the call over to Gary Gerson, our CFO, to review our financial results for the quarter and our liquidity position. Gary?

我現在將把電話轉給我們的財務長加里·格森（Gary Gerson），以審查我們本季度的財務業績和流動性狀況。加里？

Thank you, Buzz. I'll start my remarks regarding our financial results this morning by reviewing our operating results for the fourth quarter of 2023. All per-share numbers referenced are based on fully diluted weighted average common shares.

謝謝你，巴茲。今天上午，我將首先回顧我們 2023 年第四季的經營業績，就我們的財務業績發表評論。所有引用的每股數據均基於完全稀釋的加權平均普通股。

FFO and core FFO per share available to common stockholders were both $0.36 per share for the quarter. FFO and core FFO available to common stockholders during the fourth quarter of 2022 were both $0.34 per share. FFO and core FFO for the 12 months ended December 31 were $1.46 and $1.47 respectively. FFO and core FFO for the same period in 2022 were $1.54 and $1.56 per share respectively.

本季度普通股股東可獲得的每股 FFO 和核心 FFO 均為每股 0.36 美元。2022 年第四季普通股股東可獲得的 FFO 和核心 FFO 均為每股 0.34 美元。截至 12 月 31 日的 12 個月，FFO 和核心 FFO 分別為 1.46 美元和 1.47 美元。2022年同期的FFO和核心FFO分別為每股1.54美元和1.56美元。

Our same-store cash rent in the fourth quarter of 2023 increased by 6.5% over the same period in 2022. This was due to a one-time accelerated rent and increased recovery.

我們2023年第四季的同店現金租金較2022年同期成長6.5%。這是由於一次性加速租金和回收率增加所致。

Fourth-quarter results reflected total operating revenues of $35.9 million, with operating expenses of $28.1 million, as compared to operating revenues of $37.2 million and operating expenses of $25.7 million for the same period in 2022. Expenses were higher in this period mainly due to impairment charges, offset by the waiver of the incentive fee in 2023.

第四季業績反映總營業收入為 3,590 萬美元，營業費用為 2,810 萬美元，而 2022 年同期營業收入為 3,720 萬美元，營業費用為 2,570 萬美元。這段期間的費用較高，主要是由於減損費用，但被 2023 年激勵費的豁免所抵銷。

Looking at our debt profile, 40.1% is fixed rate, 49.7% is hedge floating rate, and 10.2% is floating rate, which is the amount drawn on our revolving credit facility. As of December 31, our effective average SOFR was 5.38%. Our outstanding bank term loans are hedged with $310 million of interest rate swaps, and the remainder, with interest rate caps. We continue to monitor interest rates closely and update our hedging strategy as needed.

從我們的債務狀況來看，40.1%是固定利率，49.7%是對沖浮動利率，10.2%是浮動利率，這是我們循環信用額度的提取金額。截至 12 月 31 日，我們的有效平均 SOFR 為 5.38%。我們未償還的銀行定期貸款透過 3.1 億美元的利率掉期進行對沖，其餘的則設有利率上限。我們繼續密切監控利率並根據需要更新我們的對沖策略。

As of today, our 2024 loan maturities are manageable, with $15.6 million due, which encumbered two properties held for sale. As of the end of the quarter, we had $75.8 million dollars of revolver borrowings outstanding.

截至今天，我們的 2024 年貸款到期情況可控，到期貸款為 1,560 萬美元，這阻礙了兩處待售房產的償還。截至本季末，我們的未償還循環借款為 7,580 萬美元。

We sold 1,776 shares of common stock this quarter, resulting in net proceeds of $24,000 through our at-the-market program or ATM. We received net proceeds of $400,000 from sales of our Series F Preferred Stock. We continue to manage our equity activity to ensure that we have sufficient liquidity for upcoming capital requirements and new acquisitions. Presently, we have four properties held for sale.

本季我們出售了 1,776 股普通股，透過我們的市場計劃或 ATM 獲得淨收益 24,000 美元。我們從 F 系列優先股的銷售中獲得了 40 萬美元的淨收益。我們繼續管理我們的股權活動，以確保我們有足夠的流動性來滿足即將到來的資本要求和新的收購。目前，我們有四處待售房產。

As of today, we have approximately $3.4 million in cash and $51.5 million of availability under our line of credit. We encourage you to also review our quarterly financial supplement posted on our website, which provides more detailed financial and portfolio information for the quarter.

截至今天，我們的信用額度下擁有約 340 萬美元的現金和 5,150 萬美元的可用資金。我們鼓勵您也查看我們網站上發布的季度財務補充資料，其中提供了本季更詳細的財務和投資組合資訊。

Our common stock dividend is $0.30 per share per quarter, or $1.20 per year. Our common stock closed yesterday at $12.51. The distribution yield is about 9.59%.

我們的普通股股息為每季每股 0.30 美元，或每年 1.20 美元。我們的普通股昨天收在 12.51 美元。分配收益率約9.59%。

And now I'll turn the program back to David.

現在我將把程式轉回給大衛。

Well, thank you, Gary. That was a good report. And Buzz and Michael did good reports as well. This team has performed very well and reacted admirably to the various changes presented by the lasting impact of the pandemic and changes in the economy. Overall, I just have to tell you, it's a very nice quarter.

嗯，謝謝你，加里。這是一個很好的報告。巴茲和麥可也做了很好的報道。這個團隊表現非常出色，對疫情持久影響和經濟變化帶來的各種變化做出了令人欽佩的反應。總的來說，我只想告訴你，這是一個非常好的季度。

So you heard today of some of the things that they've been doing. In summary, during the fourth quarter, they acquired two new industrial facilities, again, manufacturing oriented. They sold two non-core properties. These were both office properties. And we're talking about the end of December 31, 2023. We, of course, are off to a good start. We also, during the last quarter, leased six of our properties. Subsequent to the end of the quarter, we sold an additional non-core (technical difficulty).

所以你今天聽說了他們一直在做的一些事情。總之，在第四季度，他們收購了兩個新的工業設施，同樣以製造業為導向。他們出售了兩處非核心財產。這些都是辦公室物業。我們正在談論 2023 年 12 月 31 日結束。當然，我們有了一個好的開始。在上個季度，我們也租了六處房產。在本季末之後，我們又出售了一個非核心（技術難度）。

The commercial team is growing the real estate that we own at a good pace, and the team is doing a great job of managing the existing properties. We have a quite a good team of people that are working those deals that come up, and very proud of them. Our team of strong professionals continue to pursue the potential quality projects on the list of acquisitions that they are reviewing. They've got quite a list to go through now. Our acquisition team is seeking only strong credit tenants, not going after the marginal ones.

商業團隊正在以良好的速度發展我們擁有的房地產，並且該團隊在管理現有房產方面做得很好。我們有一支非常優秀的團隊，他們正在處理這些達成的交易，並為這些交易感到非常自豪。我們強大的專業團隊將繼續在他們正在審查的收購清單上尋找潛在的優質項目。他們現在有很多清單需要檢查。我們的收購團隊只尋找信用良好的租戶，而不是追求邊緣租戶。

Well, that's really enough from me. Let's stop here and, Rob, if you'll come on and ask and show them how to ask questions, we'll take some questions from those who are listening.

好吧，這對我來說真的足夠了。我們就到此為止吧，羅布，如果你願意過來提問並向他們展示如何提問，我們將從正在傾聽的人那裡回答一些問題。

Thank you, Mr. Gladstone. (Operator Instructions) John Massocca, B. Riley Securities.

謝謝你，格萊斯頓先生。（操作員指示）John Massocca，B. Riley Securities。

So maybe a quick question -- sorry if you touched on it somewhere in the call and I missed it, but have you made any decision yet on the incentive fee going forward into 2024? Is that something you are still considering spending? Or is that going to be essentially back in operating expense this year?

所以也許是一個簡單的問題 - 抱歉，如果您在電話會議中的某個地方提到了這一點而我錯過了，但是您是否已就 2024 年的激勵費做出任何決定？您還在考慮花錢嗎？或者說今年的營運費用會基本恢復嗎？

Hey, John, good morning. It's Buzz. We are having internal discussions. We have not met with the Board and had any formal recommendations at this point, so I cannot give you a definitive answer. But we are obviously looking at all our alternatives, as we did waive it last year. As we look going into '24, we obviously want to be cognizant of doing the right thing.

嘿，約翰，早安。是巴茲。我們正在進行內部討論。目前我們尚未與董事會會面並提出任何正式建議，因此我無法給您明確的答案。但我們顯然正在考慮所有的替代方案，就像我們去年放棄的那樣。當我們展望 24 世紀時，我們顯然希望認識到做正確的事情。

Okay. That's understood. And then in terms of the existing vacancy, can you provide some updates on either the disposition potential or lease up? Just given the number stayed flat quarter over quarter in terms of both partially vacant assets and fully vacant assets.

好的。就這麼理解了。然後就現有空缺而言，您能否提供一些有關處置潛力或租賃的最新資訊？鑑於部分空置資產和完全空置資產的數量環比持平。

Sure. And I'll hit first, obviously, an asset we have discussed previously, our asset in Austin on Parmer. We have had some interest there. We continue to work with the tenancy, trying to attract new tenancy or expansion. There are some requirements in the market that are of good size. Can't disclose who they are, but we are certainly running down and trying to work with.

當然。顯然，我將首先討論我們之前討論過的資產，即我們在帕爾默奧斯汀的資產。我們對此有一些興趣。我們將繼續與租戶合作，努力吸引新的租戶或擴張。市場上有一些規模較大的需求。不能透露他們是誰，但我們肯定正在努力合作。

Our hope there is to get tenancy, and then within that building, look to see what is best for us, for the stockholders as it relates to hold or sell. But at this point in time, I don't have anything from the standpoint of being able to actually report from leasing activity there.

我們希望獲得租約，然後在該大樓內，看看什麼對我們、對股東來說是最好的，因為它涉及持有或出售。但目前，從能夠實際報告那裡的租賃活動的角度來看，我沒有任何資訊。

Other than that, and I have my CIO here, EJ Wislar, I can have him comment on some positive activity that we have on our leasing front within the portfolio. I do want to state that it's all very positive. And I think, as you know, we stay in front of our tenants on a quarterly and certainly annual basis. So we're ahead of the curve as it relates to our vacancy. EJ?

除此之外，我的資訊長 EJ Wislar 也在這裡，我可以讓他對我們在投資組合租賃方面的一些積極活動發表評論。我確實想說，這一切都是非常正面的。我認為，如您所知，我們每季甚至每年都在租戶面前。因此，我們在空缺職位方面處於領先地位。埃傑？

Thanks, Buzz. Yeah, John, as we look at where things stand today and our current held for sale as of 12/31, obviously, it was mentioned that there's additional assets held for sale currently. A few of those are vacant office assets, so as we look at our capital allocation strategy, making sure we're being the most efficient, whether we want to break those buildings or sell them and redeploy those proceeds, I would expect we'd see that vacancy rate improve over the next few quarters as we dispose of a few vacant office assets.

謝謝，巴茲。是的，約翰，當我們看看今天的情況以及截至 12 月 31 日我們目前持有待售的資產時，顯然，有人提到目前還有其他待售資產。其中一些是空置的辦公資產，因此，當我們審視我們的資本配置策略時，確保我們是最高效的，無論我們是想拆除這些建築物還是出售它們並重新部署這些收益，我希望我們會隨著我們處置一些空置的辦公資產，空置率將在未來幾季有所改善。

Okay, understood. And then maybe just on a line-item basis, property operating expense was down in the quarter, and you called out some successful real estate tax appeals. Can you maybe just provide some more color on that? Is that something that's sustainable on a go-forward basis? Or is that a one-time true-up in 4Q?

好的，明白了。然後，也許僅從專案的角度來看，本季的房地產營運費用有所下降，並且您提出了一些成功的房地產稅務上訴。你能提供更多的顏色嗎？這是可持續的嗎？還是這是第四季的一次性調整？

I'll let Gary handle that. If I may, I will tell you that we are aggressive where we can be as it relates to appeals, and we've had successes there. Gary?

我會讓加里來處理這件事。如果可以的話，我會告訴你，我們在上訴方面盡我們所能，積極進取，並且我們已經在這方面取得了成功。加里？

John, as I mentioned, it's a one-time. I think these were appeals, so they lowered the taxes on some of these buildings. I believe one of them was in Texas, which was significant -- or two in Texas were significant. And I think that's it going forward, so these are basically reappraisals from a tax perspective.

約翰，正如我所提到的，這是一次性的。我認為這些都是呼籲，所以他們降低了其中一些建築物的稅收。我相信其中一個在德克薩斯州，這很重要——或者兩個在德克薩斯州很重要。我認為這就是未來的趨勢，所以這些基本上是從稅收角度的重新評估。

Okay, so it's not just a true up for what was budgeted in ‘23? It's a lower base tax rate, essentially?

好的，那麼這不僅僅是 23 年預算的真實結果？從本質上講，這是一個較低的基本稅率？

Yeah.

是的。

Okay. I will cede the floor. Thank you very much. That's it for me.

好的。我將讓出發言權。非常感謝。對我來說就是這樣。

Thank you.

謝謝。

Is there a next question?

還有下一個問題嗎？

Yes. The next question is from the line of Dave Storms, with Stonegate.

是的。下一個問題是來自 Stonegate 的 Dave Storms 的。

I just want to start, occupancy had a really nice jump subsequent to the end of the quarter. Is that a product of a couple real good wins, one giant win? What's the story there?

我只想開始，在本季末後，入住率出現了非常好的跳躍。這是幾次真正的好勝利、一次巨大勝利的產物嗎？那裡有什麼故事？

As mentioned, we do stay in front of the tenants and obviously work with them. We’re well ahead of our lease expirations and discussions. So we have had some successes there, as I referenced in my notes, of several -- exactly on 1.4 million square feet and $1.2 million in net operating increase on the same-store GAAP rent. So we are, again, actively engaged there and had good success. We will continue that as we go into 2024. And I’ll also ask EJ to give a comment here on a couple that he’s been working as well, specific, because our concentration, for lack of a better word, is light, relative to one asset that we are in good stead with.

如前所述，我們確實站在租戶面前，並且顯然與他們合作。我們在租約到期和討論之前就已經準備好了。因此，正如我在筆記中提到的，我們在那裡取得了一些成功，其中一些成功是在 140 萬平方英尺的面積和同店 GAAP 租金的淨營運增長上 120 萬美元。因此，我們再次積極參與並取得了良好的成功。進入 2024 年，我們將繼續這樣做。我也會請 EJ 對他一直在工作的一對夫婦做出具體評論，因為相對於我們所處的一項資產，我們的注意力（由於缺乏更好的詞）很輕很好的替代品。

Yeah, thanks. The occupancy increase was also related to the sale of one vacant office asset in South Carolina, so that was an improvement there. And as I mentioned before, we've got a few more vacant office assets that will be sold here in the next quarter or so.

是的，謝謝。入住率的增加也與南卡羅來納州一處空置辦公資產的出售有關，因此那裡的情況有所改善。正如我之前提到的，我們還有一些空置的辦公資產，將在下個季度左右出售。

Very helpful. Thank you. And then you mentioned in the comments that you're focusing more on higher quality credit tenants. Is that a comment on just demand being strong enough that you can focus on those higher-quality tenants? Or is that more of a comment on spread shrinking between high-grade and low-grade tenants? What's driving that increased focus?

很有幫助。謝謝。然後您在評論中提到您更加關注更高品質的信用租戶。這是對正義需求足夠強大以至於您可以專注於那些更高品質的租戶的評論嗎？或者這更多的是對高檔和低檔租戶之間價差縮小的評論？是什麼推動了人們更加關注？

Obviously, with the market and with our company history, we've always been focused on credit of our tenancy. I'll let EJ take that, specific to market from the standpoint of what the market is also providing to us in the way of tenancies. EJ?

顯然，根據市場和我們公司的歷史，我們一直在關注租賃的信用。我會讓 EJ 從市場以租賃方式提供給我們的角度來看具體市場的情況。埃傑？

Yeah. And, Dave, when we say high-quality tenants, it doesn’t necessarily mean a rated investment grade tenant. What we mean is when we look to acquire mission-critical industrial assets where the underlying tenancy has strong fixed coverage ratios, moderate to low leverage, strong EBITDA margins, and operates in a counter-cyclical or defensible industry with a strong moat. And so what we like to do is acquire those mission-critical assets that are generating an outsized portion of corporate revenue and EBITDA and free cash flow at the asset level

是的。而且，戴夫，當我們說高品質租戶時，它並不一定意味著投資級租戶。我們的意思是，當我們尋求收購關鍵任務工業資產時，這些資產的基礎租賃具有強大的固定覆蓋率、中等到低的槓桿率、強勁的EBITDA 利潤率，並且在具有強大護城河的反週期或防禦性產業中運作。因此，我們喜歡做的是收購那些在資產層面產生大量企業收入、EBITDA 和自由現金流的關鍵任務資產

And so we certainly do like to acquire assets leased to rated investment-grade tenants, but there's also something to be said for acquiring an asset that is very important to the underlying tenants. So when we say credit tenants, it's not just investment grade, but also those upper-middle market tenants that we get additional granular information into their operations that helps us underwrite them.

因此，我們當然喜歡收購租賃給投資等級租戶的資產，但對於收購對基礎租戶非常重要的資產也有話要說。因此，當我們說信用租戶時，不僅是投資級租戶，還包括那些中上市場租戶，我們可以在他們的運營中獲得更多詳細信息，從而幫助我們承保他們。

Understood. That's very helpful. And then just one more for me. Do you have a sense of what your geographic focus is going to be in 2024, one way or another?

明白了。這非常有幫助。然後再給我一個。您是否了解 2024 年您的地理重點將是什麼？

We have obviously seen, as it relates to the health of the country, from the standpoint of growth, it has been Southeast, South Central in nature. So we have had good success there, and certainly at the concentration, the more we do, the more that also comes our way. I'll let EJ get more specific on those markets, but that's where we are, as well as the Midwest, seeing a focus. It's not on the West, and it's not certainly in the Northeast at this point in time. And we've had good success.

我們顯然已經看到，因為它關係到國家的健康，從成長的角度來看，它本質上是東南部、中南部。所以我們在那裡取得了很好的成功，當然，在專注方面，我們做得越多，我們的收穫就越多。我會讓 EJ 更具體地介紹這些市場，但這就是我們以及中西部地區所關注的焦點。它不在西部，現在也肯定不在東北。我們取得了巨大的成功。

Yeah, obviously, Dave, when we look at our markets, what we like to see is business-friendly environments with strong demographic inflows, as well as business formation. And so that leads us to be focusing on places like the Sunbelt, as well as some select Midwest markets. We like those markets as well. They've got a strong manufacturing base, and we like the light manufacturing space, and that the tenants are very sticky, meaning they've got significant capital invested into the assets, which increases the renewal probability. So I would expect you'll see us continue to focus on those markets over the next few years.

是的，顯然，戴夫，當我們審視我們的市場時，我們希望看到的是有利於商業的環境，人口流入強勁，以及企業形成。因此，這導致我們將重點放在陽光地帶等地方以及一些精選的中西部市場。我們也喜歡這些市場。他們擁有強大的製造基礎，我們喜歡輕工業製造領域，而且租戶的黏性非常大，這意味著他們在資產上投入了大量資金，這增加了更新的可能性。因此，我希望您會看到我們在未來幾年內繼續關注這些市場。

That's all very helpful. Thank you for taking my questions.

這一切都非常有幫助。感謝您回答我的問題。

Thanks, Dave.

謝謝，戴夫。

Okay. Rob, any more questions?

好的。羅布，還有什麼問題嗎？

There are no additional questions at this time, Mr. Gladstone.

格萊斯頓先生，目前沒有其他問題。

Oh, that's terrible. We need more questions. We like it when you ask questions. So now, you're going to have to hold your question until next quarter. So we'll see you next quarter. That's the end of this conference call.

哦，那太可怕了。我們需要更多問題。我們喜歡您提出問題。所以現在，你必須把問題留到下個季度。那我們下個季度再見。本次電話會議到此結束。

Thank you. This will conclude today's call. You may disconnect your lines at this time. We thank you for your participation.

謝謝。今天的電話會議到此結束。此時您可以斷開線路。我們感謝您的參與。