Plymouth Industrial REIT Inc (PLYM) 2023 Q3 法說會逐字稿

Hello, and welcome to the Plymouth Industrial REIT third-quarter 2023 earnings call. (Operator Instructions) Please note this event is being recorded.

您好，歡迎參加普利茅斯工業房地產投資信託基金 2023 年第三季財報電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to Tripp Sullivan of SCR. Please go ahead.

現在我想將會議交給 SCR 的 Tripp Sullivan。請繼續。

Thank you. Good morning. Welcome to the Plymouth Industrial REIT conference call to review the company's results for the third quarter of 2023. On the call today will be Jeff Witherell, Chairman and Chief Executive Officer; Anthony Saladino, Executive Vice President and Chief Financial Officer; Jim Connolly, Executive Vice President of Asset Management; and Anne Hayward, General Counsel.

謝謝。早安.歡迎參加普利茅斯工業房地產投資信託基金電話會議，回顧該公司 2023 年第三季的業績。今天的電話會議將由董事長兼執行長 Jeff Witherell 主持。安東尼·薩拉迪諾，執行副總裁兼財務長； Jim Connolly，資產管理執行副總裁；和總法律顧問安妮·海沃德。

Our results were released this morning in our earnings press release, which can be found on the Investor Relations section of our website, along with our Form 10-Q and supplemental filed with the SEC. A replay of this call will be available shortly after the conclusion of the call through November 9, 2023. The numbers to access the replay are provided in the earnings press release. For those who listen to the replay of this call, we remind you that the remarks made herein are as of today, November 2, 2023, and will not be updated subsequent to this call.

我們的業績今天早上在我們的收益新聞稿中發布，您可以在我們網站的投資者關係部分找到該新聞稿，以及我們向 SEC 提交的 10-Q 表格和補充資料。本次電話會議的重播將在電話會議結束後不久進行，直至 2023 年 11 月 9 日為止。收益新聞稿中提供了訪問重播的號碼。對於那些收聽本次電話會議重播的人，我們提醒您，本文中的言論截至今天，即 2023 年 11 月 2 日，並且不會在本次電話會議之後更新。

During this call, certain comments and statements we make may be deemed forward-looking statements within the meaning prescribed by the securities laws, including statements relating to the future performance of our portfolio, potential acquisitions, dispositions and other investments, future dividends, and financing activities. All forward-looking statements represent Plymouth's judgment as of the date of this conference call and are subject to risks and uncertainties that can cause actual results to differ materially from our current expectations. Investors are urged to carefully review various disclosures made by the company, including the risk and other information disclosed in the company's filings with the SEC.

在本次電話會議中，我們所做的某些評論和聲明可能被視為證券法規定含義內的前瞻性聲明，包括與我們投資組合的未來業績、潛在收購、處置和其他投資、未來股息和融資有關的聲明活動。所有前瞻性陳述均代表普利茅斯截至本次電話會議之日的判斷，並受到風險和不確定性的影響，這些風險和不確定性可能導致實際結果與我們當前的預期有重大差異。投資者應仔細審查公司披露的各種信息，包括公司向 SEC 提交的文件中披露的風險和其他信息。

We will also discuss certain non-GAAP measures, including, but not limited to, core FFO, AFFO, and adjusted EBITDA. Definitions of these non-GAAP measures and reconciliations to the most comparable GAAP measures are included in our filings with the SEC.

我們還將討論某些非 GAAP 指標，包括但不限於核心 FFO、AFFO 和調整後 EBITDA。這些非 GAAP 衡量標準的定義以及與最具可比性的 GAAP 衡量標準的調整均包含在我們向 SEC 提交的文件中。

And I'll turn the call over to Jeff Witherell. Please go ahead.

我會將電話轉給 Jeff Witherell。請繼續。

Thanks, Tripp. Good morning, everyone, and thank you for joining us today. Our third-quarter operating metrics reinforce my belief that our properties located within the Golden Triangle are well-positioned to capture the demand from a broad array of users. We experienced a 24.1% increase in rents on a cash basis for the quarter and expect to be higher than 20% for all leases commencing in 2023. That's at the high end of our 18% to 20% mark-to-market. We've also addressed our over 93% of our 2023 expirations and have made a lot of progress on 2024 expirations.

謝謝，特里普。大家早安，感謝您今天加入我們。我們第三季的營運指標強化了我的信念，即我們位於金三角的物業能夠很好地滿足廣大用戶的需求。本季我們的租金以現金計算成長了 24.1%，預計 2023 年開始的所有租賃的租金增幅將高於 20%。這是我們按市值計算的 18% 至 20% 的上限。我們也解決了 93% 以上的 2023 年到期問題，並在 2024 年到期問題上取得了巨大進展。

Organic growth remains on track as well with a 6.8% increase on a cash basis through the first three quarters of the year and same store occupancy of 98.6%. In the Golden Triangle markets, we're seeing positive space absorption, continued market rent growth, and favorable supply demand environment for our type and size of space. We expect to roll out a new white paper on the Golden Triangle ahead of NAREIT this month. But we have continued to see further investment in these markets that indicates there should be a substantial demand associated with the onshoring and nearshoring for many years to come. We believe we continue to be in the right markets at a low per square foot basis and able to provide attractive space to tenants that need greater access to these markets or might operate with more of a focus on margin.

有機成長也維持在正軌，今年前三個季度以現金計算成長 6.8%，同店入住率達 98.6%。在金三角市場，我們看到了積極的空間吸收、持續的市場租金成長以及對我們的空間類型和規模有利的供需環境。我們預計將在本月 NAREIT 之前推出一份關於金三角的新白皮書。但我們繼續看到對這些市場的進一步投資，這表明未來許多年應該存在與在岸和近岸外包相關的大量需求。我們相信，我們將繼續以每平方英尺較低的價格處於正確的市場，並能夠為需要更多進入這些市場或可能更注重利潤的租戶提供有吸引力的空間。

In our development program, we delivered two projects during the quarter. The first is our second building in Atlanta, which has a new lease for 72,000 square feet that commenced in September. We have proposals under consideration for the balance of the space. The other building is in Jacksonville, where we have a single tenant fully leased that also commenced in September.

在我們的開發計劃中，我們在本季度交付了兩個專案。第一棟是我們在亞特蘭大的第二棟大樓，該大樓已於 9 月開始新租約，面積為 72,000 平方英尺。我們正在考慮關於空間平衡的建議。另一棟建築位於傑克遜維爾，我們在那裡有一個租戶已完全出租，該租戶也已於 9 月開始出租。

Our final building in our Phase 1 development program is under construction in Jacksonville. It is fully leased and expected to deliver in mid-2024. As we've noted before, tenants are taking a little more time to make decisions on this new space, but we essentially have two spaces left to lease in the new developments, and we have active proposals under consideration for both.

我們第一階段開發計畫的最後一棟建築正在傑克遜維爾建造。該項目已全部出租，預計將於 2024 年中期交付。正如我們之前指出的，租戶需要更多的時間來對這個新空間做出決定，但我們在新開發項目中基本上還有兩個空間可供租賃，並且我們正在考慮對這兩個空間進行積極的提案。

Improving our capital structure through disciplined capital allocation has been a major initiative for us. We demonstrated our commitment to this improvement during the quarter with the elimination of the Series A preferred stock strategic execution of the ATM program at prices close to our NAV and the disposition of an industrial building in Chicago for a substantial gain. As a result of these decisions, we lowered our net debt plus preferred metric for the sixth straight quarter. At 6.7 times as of quarter end, we exceeded our year-end goal of 7 times ahead of schedule. We are on a path to further gradual de-levering in 2024.

透過嚴格的資本配置來改善我們的資本結構一直是我們的重大舉措。我們在本季以接近我們的資產淨值的價格取消了 A 系列優先股策略執行 ATM 計劃，並透過處置芝加哥的一座工業建築以獲得可觀的收益，展示了我們對這項改進的承諾。由於這些決定，我們連續第六個季度降低了淨債務加首選指標。截至季末為 6.7 倍，我們提前超出了年終目標 7 倍。我們將在 2024 年進一步逐步去槓桿化。

Yesterday, we also took care of our largest debt maturity with the payoff of the AIG loan. I'll let Anthony get into the details, but I do want to call out that our initiatives to swap our debt at the beginning of the year have put us in a good position. I want to focus on the September disposition for a moment. We had previously identified several properties that could be potential disposition candidates for real estate decisions. One of these factors was if it made more sense for an owner user, and that was the case with 6510 West 73rd Street, Chicago. We sold that property for $19.9 million, which was a price of $65 per square foot, yielding a 4.9% cap rate on in-place NOI and an IRR of 31.1% over a six-year hold. After paying off a mortgage on the property, we had nearly $14 million in net proceeds to combine with the ATM proceeds to eliminate the Series A preferred.

昨天，我們還清了 AIG 貸款，解決了最大的債務到期問題。我會讓安東尼詳細介紹，但我確實想指出，我們在年初交換債務的舉措使我們處於有利地位。我想暫時關註一下九月份的情況。我們之前已經確定了幾處可能成為房地產決策潛在處置候選者的房產。其中一個因素是它是否對業主用戶更有意義，芝加哥西 73 街 6510 號的情況就是如此。我們以 1,990 萬美元的價格出售了該房產，即每平方英尺 65 美元的價格，就地 NOI 的上限率為 4.9%，持有六年的 IRR 為 31.1%。還清該房產的抵押貸款後，我們有近 1400 萬美元的淨收益，可以與 ATM 收益相結合，消除 A 系列優先股。

We have another disposition that is under contract to sell by year end for $16.8 million. This property is our only asset in New Jersey and should result in another gain on sale. This expected sale provides additional proceeds for debt repayment and/or acquisitions and eliminating market where we did not have any scale, another factor we previously identified. We will continue to evaluate buildings that for real estate reasons, we no longer desire to hold.

我們還有另一項資產已簽訂合同，將於年底以 1,680 萬美元的價格出售。該房產是我們在新澤西州的唯一資產，應該會帶來另一個銷售收益。這次預期的出售為債務償還和/或收購提供了額外的收益，並消除了我們沒有任何規模的市場，這是我們先前確定的另一個因素。我們將繼續評估因房地產原因而不再希望持有的建築物。

What remains of 2023? You can expect us to be laser focused on getting our remaining spaces leased in the development program and taking advantage of the leasing opportunities ahead of us in the existing portfolio. We will also continue to take a hard look at how we might apply any proceeds from additional dispositions to reduce debt and/or fund acquisitions on an accretive basis and set us up for a successful 2024.

2023年還剩下什麼？您可以期待我們將專注於出租開發計劃中的剩餘空間，並利用現有投資組合中的租賃機會。我們也將繼續認真研究如何運用額外處置的任何收益來減少債務和/或在增值的基礎上進行資金收購，為我們在 2024 年取得成功做好準備。

Jim, why don't you provide some color on the leasing activity?

吉姆，你為什麼不提供有關租賃活動的一些資訊？

Thanks, Jeff. Good morning. I want to first touch on the leases we previously signed that commenced during the third quarter. We had a 24.1% rental rate increase on a cash basis on leases commencing in Q3 on an aggregate basis. You'll note from the release in the supplemental that the new leases experienced a 25.9% increase, while renewal leases experienced a 23.6% increase. We experienced a 68% renewal rate during the quarter of leases that were renewed, 9% were associated with contractual rent increases, which impact the overall renewal rate increase.

謝謝，傑夫。早安.我想先談談我們之前簽署的、在第三季開始的租約。從第三季開始的租賃，我們的現金租金率總計上漲了 24.1%。您將從補充中的發布中註意到，新租約增長了 25.9%，而續約租約增長了 23.6%。在續租的季度中，我們的續租率為 68%，其中 9% 與合約租金上漲相關，這影響了整體續約率的成長。

Related to the development program, in Georgia, we executed a five-year 72,000-square-foot lease and 180,000-square-foot facility with active tenants pursuing the balance. In Cincinnati, we executed a five-year lease for 47,000 square feet and our 155,000-square-foot facility and closing other deals to fill the balance of the space. Both executed leases commenced during Q3 and for all remaining 215,000 square feet of space yet to be leased in our development program, we have active proposals under consideration. Year to date, we have addressed over 93.5% of the total square footage scheduled to expire in 2023. When we add up all the leases commencing in 2023, we will experience an aggregate increase of 20.1% on a cash basis. The lease renewal rate so far for 2023, leasing is 67.5% through the first three quarters of the year of the leases that were renewed, 12.5% of the renewals were contractual increases.

與開發計劃相關，我們在喬治亞州執行了為期五年的 72,000 平方英尺租賃和 180,000 平方英尺設施，活躍租戶追求平衡。在辛辛那提，我們簽署了 47,000 平方英尺的五年租約和 155,000 平方英尺的設施，並完成了其他交易以填補剩餘空間。兩項已執行的租賃均於第三季開始，對於我們的開發計劃中尚未租賃的所有剩餘 215,000 平方英尺的空間，我們正在考慮積極的提案。今年迄今為止，我們已經解決了計劃於 2023 年到期的總面積的 93.5% 以上。當我們將 2023 年開始的所有租賃加起來時，我們將經歷現金基礎上的總計增長 20.1%。到目前為止，2023 年的租約續約率是，今年前三季續約的租賃率為 67.5%，其中 12.5% 的續約是合約成長。

With total portfolio occupancy at 97.6% and same-store occupancy at 98.6%, both of which are down slightly from Q2, but through October, occupancy is back up to 98% for the entire portfolio as remained at 98.6% for the same store. As you can see, we continue to benefit from strong leasing activity with rental rates still accelerating in occupancy, outperforming the national average of 95.6%.

組合總入住率為 97.6%，同店入住率為 98.6%，皆較第二季略有下降，但到 10 月份，整個組合的入住率回升至 98%，同店入住率仍維持在 98.6%。正如您所看到的，我們繼續受益於強勁的租賃活動，出租率仍在加速上升，超過了 95.6% 的全國平均水平。

Turning to 2024, we have already leased over 34% of the initial 2024 expirations. We will experience an aggregate 14.3% increase on a cash basis on these rents, 13.9% for renewals, and 31.8% for new tenants. This rental increase compares favorably to this time last year when our earliest batch of 2023 leases were up 10.3% on a blended basis. The renewal percentage for these transactions was 74%, with 43% of the renewal leases associated with contractual renewals. Rent spreads for 2024 are expected to be similar to 2023, with strong market rent growth projected for our markets. Consistent with nearly every quarter since the pandemic, we have collected over 99% of our rents billed during Q3, and there are currently no active rent deferral agreements.

到 2024 年，我們已經租了 2024 年最初到期的 34% 以上。這些租金以現金計算將總共上漲 14.3%，續租將上漲 13.9%，新租戶將上漲 31.8%。與去年同期相比，此次租金漲幅相當可觀，當時我們最早一批 2023 年的租金混合成長了 10.3%。這些交易的續約率為 74%，其中 43% 的續約租賃與合約續約相關。預計 2024 年的租金利差將與 2023 年相似，預計我們的市場市場租金將強勁成長。與大流行以來的幾乎每季一致，我們已收回了第三季所收取租金的 99% 以上，並且目前沒有有效的租金延期協議。

At this point, I'll turn it over to Anthony to discuss the financial results.

此時，我將把它交給安東尼討論財務結果。

Thanks, Jim. The third quarter saw core FFO at $0.46 per share, driven by sequential improvement in leasing spreads, contributions from our Phase 1 developments namely Jacksonville and Atlanta, slightly lower than anticipated interest expense, coupled with lower professional fees and corporate operating expenses. As Jeff mentioned, the path to sustaining sub 7 times net debt to annualized adjusted EBITDA has accelerated due to our strategic use of the ATM and in asset divesture to redeem the Series A and repay a portion of the outstanding line balance.

謝謝，吉姆。第三季核心FFO 為每股0.46 美元，主要得益於租賃利差連續改善、我們第一階段開發項目（即傑克遜維爾和亞特蘭大）的貢獻、略低於預期的利息支出，以及較低的專業費用和企業營運支出。正如傑夫所提到的，由於我們策略性地使用ATM 和資產剝離來贖回A 輪融資並償還部分未償貸款餘額，維持低於7 倍的淨債務與年化調整後EBITDA 的速度已經加快。

Our net debt and net debt plus preferred metrics have now converged as the Series A was the last of our preferred instruments to be addressed on our balance sheet. We ended the third quarter with net debt to adjusted EBITDA at 6.7 times, our sixth consecutive quarter of de-levering. As of the same period ended, 93% of our debt carried a fixed rate, or was fixed through interest rate swaps with a total weighted average cost of debt of 4.01% with 58% of the total debt on an unsecured basis. Subsequent to quarter end, we made another major improvement to the balance sheet with the payoff of the AIG loan. Our largest secured debt principal amount, representing approximately 12% of our total debt outstanding.

我們的淨債務和淨債務加上首選指標現在已經趨同，因為 A 系列是我們資產負債表上最後一個要解決的首選工具。第三季末，我們的淨負債與調整後 EBITDA 比率為 6.7 倍，這是我們連續第六個季度去槓桿化。截至同期，我們 93% 的債務採用固定利率，或透過利率掉期固定，總加權平均債務成本為 4.01%，其中 58% 的債務為無擔保債務。季度末後，我們還清了 AIG 貸款，對資產負債表進行了另一項重大改善。我們最大的擔保債務本金金額，約占我們未償債務總額的 12%。

On November 1, we repaid the AIG loan in full, which was $106.9 million after the release of lender escrows. After carefully reviewing numerous options for repaying this loan throughout the year and with an eye to how we can best position us for an investment-grade balance sheet, we decided to use our unsecured credit facility for the proceeds.

11 月 1 日，我們全額償還了 AIG 貸款，在貸款人託管解除後，貸款金額為 1.069 億美元。在仔細審查了全年償還這筆貸款的多種選擇，並著眼於如何為投資級資產負債表做好最佳定位後，我們決定使用我們的無擔保信貸額度來獲得收益。

We anticipate executing an interest rate swap in a very new feature on approximately $100 million of notional value across three counterparties that will have a tenor matching the remaining term on our facility maturing in August 2025. By going this route, we have preserved optionality while mitigating our exposure to variable rate improved our debt on an unsecured basis from 58% to 70% of total debt outstanding and eliminated all but $19 million of debt maturities until August 2025. Further, we will have the flexibility to pay off tranches of this facility with potential disposition proceeds instead of locking in higher interest rates over the next five to seven years.

我們預計將在三個交易對手之間以名義價值約1 億美元的全新功能執行利率掉期，其期限將與我們於2025 年8 月到期的貸款的剩餘期限相匹配。透過採取這種方式，我們在減少風險的同時保留了選擇性。我們的可變利率敞口將我們的無擔保債務從未償債務總額的58% 提高到70%，並消除了2025 年8 月之前除1900 萬美元以外的所有債務到期日。此外，我們將能夠靈活地償還該貸款的部分款項潛在的處置收益，而不是在未來五到七年鎖定更高的利率。

We achieved same-store cash NOI growth of 5.4% for the quarter and 6.8% year to date. During the third quarter, we did see operating expense pressure, primarily due to higher real estate taxes and annual maintenance expenses coming in higher than expected the majority of which we anticipate recovering a part of the end-of-year expense reconciliations. We once again affirmed core FFO guidance for the year and have held constant our same-store NOI range as we anticipate recoveries to adjust to the incremental operating expenses incurred aided by no notable dip in occupancy for the balance of the year. Our full-year range for interest expense remains unchanged. However, G&A expectations for the year have been decreased to a range of $14.2 million to $14.6 million.

本季我們的同店現金 NOI 成長了 5.4%，年初至今成長了 6.8%。在第三季度，我們確實看到了營運費用壓力，主要是由於房地產稅和年度維護費用高於預期，我們預計其中大部分將收回年末費用調節表的一部分。我們再次確認了今年的核心 FFO 指導，並保持了同店 NOI 範圍不變，因為我們預計，由於今年餘下的入住率沒有明顯下降，我們將根據增量運營費用進行調整。我們全年的利息支出範圍保持不變。然而，今年的一般行政費用預期已下調至 1,420 萬美元至 1,460 萬美元。

Operator, we're now ready to take questions.

接線員，我們現在準備好回答問題。

Todd Thomas, KeyBanc Capital Markets.

托馬斯 (Todd Thomas)，KeyBanc 資本市場。

Hi. Thanks. Good morning. I just wanted to touch on the development leasing and just see if you could provide a little bit more detail around tenant demand and the potential timeline to continue to get some leasing done, particularly at Fisher Park one and New Calhoun, too?

你好。謝謝。早安.我只是想談談開發租賃，看看您是否可以提供有關租戶需​​求的更多詳細資訊以及繼續完成一些租賃的潛在時間表，特別是在費雪公園一號和新卡爾霍恩？

Yes, this is Jim. The Cincinnati, we're close with two potential candidates and expect some movement in the next couple of weeks. Multitenanting, the building is opened up a wider range of opportunities there. In Georgia, we are very close on a lease with a food manufacturer of blended food products. We've been working with Georgia Power to address power supply issues, which are getting resolved, and we expect to have least shortly.

是的，這是吉姆。辛辛那提，我們已經接近兩名潛在候選人，預計未來幾週會有一些進展。該建築採用多租戶方式，為那裡開闢了更廣泛的機會。在喬治亞州，我們與一家混合食品食品製造商簽訂了非常接近的租約。我們一直在與喬治亞電力公司合作解決電力供應問題，這些問題正在解決，我們預計至少很快就會解決。

Okay. And then how should we think about new starts moving forward from here? Is there anything that you're contemplating, anything that might hit before year end or in early 2024?

好的。那我們該如何思考從這裡開始的新的開始呢？您有什麼正在考慮的事情嗎？有什麼事情可能會在年底或 2024 年初發生嗎？

So Todd, this is Jeff. So as in the prepared remarks, our Phase 1 development program is basically finished where we have one building under construction in Jacksonville that's leased that will be delivered early 2024. We're not going to take on anymore spec development. However, we do have in Cincinnati, 200,000 square feet. We are talking to potential build-to-suit. So those are the only things that we would ever start, probably in the next 12 to 14 months. We're going to be looking at build-to-suits. So we have four, five sites where we can build on so that's our focus.

托德，這是傑夫。正如準備好的發言中所述，我們的第一階段開發計劃已基本完成，我們在傑克遜維爾有一棟正在建設的建築已出租，將於 2024 年初交付。我們不會再進行規格開發。然而，我們在辛辛那提確實有 200,000 平方英尺。我們正在討論潛在的客製化方案。因此，這些是我們可能在未來 12 到 14 個月內開始的唯一事情。我們將考慮客製化套裝。因此，我們有四、五個可以進行開發的站點，這就是我們的重點。

Okay. And then Anthony, you commented on the balance sheet and overall leverage, which came in quite a bit, as you mentioned. So you're now below the 7 times threshold. What's the next target in terms of leverage, and where do you expect to be over the next few quarters after the disposition and the additional lease up in the development pipeline?

好的。然後安東尼，您對資產負債表和整體槓桿率發表了評論，正如您所提到的，這些槓桿率相當高。所以您現在低於 7 次閾值。就槓桿而言，下一個目標是什麼？在開發管道中進行處置和額外租賃後，您預計未來幾季的槓桿率會達到什麼水準？

Yeah. Thanks, Todd. We've said early on, our target is to be sustaining between 5 and 7 times. We have made significant inroads, and as you mentioned, came in under our 7 times target. There is certainly an opportunity as development stabilizes in 24 for another half turn down. So our next kind of target, if you will, would be sustaining around 6.5 times. And maybe just under that.

是的。謝謝，托德。我們很早就說過，我們的目標是維持 5 到 7 次。我們已經取得了重大進展，正如您所提到的，我們已經達到了 7 倍的目標。隨著 24 月發展穩定，再下降一半，肯定有機會。因此，如果您願意的話，我們的下一個目標將維持在 6.5 倍左右。也許就在那之下。

Nick Thillman, Baird.

尼克·希爾曼，貝爾德。

Hey, good morning, guys. Maybe a question for Jeff or Jim, just on 2024 leasing. You've gotten 2.2 million square feet done. Just some of the larger known expirations FedEx communication test design. Are any of those addressed in what you've done so far, or maybe get a color on those two individual leases?

嘿，早上好，夥計們。也許有個問題想問傑夫或吉姆，關於 2024 年的租賃。您已完成 220 萬平方英尺的面積。只是一些較大的已知到期聯邦快遞通信測試設計。您到目前為止所做的工作是否解決了其中任何一個問題，或者可能對這兩個單獨的租約進行了說明？

Yes. I mean, the larger space that coming up next year, of course, FedEx, which has a renewal notification date of 1/31 of next year. We've begun our engagement with them on potential renewal, and we expect to hear a definitive answer after the end of the year. We're working with feasible supply, which is Maersk. That building is quite full. The operations are strong there. We expect to have renewal, and that space has 330,000 square feet.

是的。我的意思是，明年的空間更大，當然是聯邦快遞，它的續約通知日期是明年的1/31。我們已經開始與他們就潛在的續約事宜進行接觸，我們希望在今年年底後聽到明確的答案。我們正在與可行的供應商合作，即馬士基。那棟大樓已經滿了。那裡的業務很強大。我們預計會進行更新，該空間將有 330,000 平方英尺。

Silver Line is a known move out, and we're working on marketing that space. We've got six to eight potential prospects of various sizes, and we're trying to see how we fit them in the space. Also, the neighboring tenant has approached us about extending their existing lease and potentially expanding in some of that space as well. And then one other -- no vacated the building a St. Louis, which was the 140,000 square feet where we expect to have a transaction on that early in Q1.

Silver Line 是一個已知的遷出地點，我們正在努力行銷這個空間。我們有六到八個不同規模的潛在客戶，我們正在努力了解如何將他們融入這個領域。此外，鄰近的租戶已與我們聯繫，希望延長其現有的租約，並可能在其中一些空間進行擴建。然後是另一個 - 沒有騰出聖路易斯的建築，該建築面積為 140,000 平方英尺，我們預計將在第一季初進行交易。

That's helpful. And maybe just like that extra some of these larger boxes, obviously, a lot in the news on just new supply being in bigger box, maybe what's in-place rents relative to what development rents would be?

這很有幫助。也許就像額外的一些更大的盒子一樣，顯然，很多關於新供應都在更大的盒子裡的新聞，也許相對於開發租金來說，就地租金是多少？

On the big box, we're still lower than this in the new product coming online. I think that it is an advantage for us, of course. Most of our portfolio is well-positioned against them. The new supply coming online being much -- probably up to like a 20% discount.

在大盒子上，我們在上線的新產品中仍然低於這個水平。我認為這對我們來說當然是一個優勢。我們的大部分投資組合都處於有利地位以對抗它們。上線的新供應量可能會有 20% 的折扣。

And then maybe for Anthony, you guys, in prior quarters, had mentioned maybe refinancing the AIG loan with more secured debt. Was that more a factor of just working towards this investment-grade balance sheet, or what's the pricing on maybe secured that is not as great as you initially had thought?

然後，也許對安東尼來說，你們在前幾個季度曾提到可能用更有擔保的債務來為 AIG 貸款再融資。這是否只是努力實現投資等級資產負債表的一個因素，或者可能確定的定價並不像您最初想像的那麼好？

Both factors played into the decision. So they're clearly heightened pricing with respect to secure debt. We also didn't like the lack of optionality with respect to secured. We think when we hedge the portion of line, that we should come in around 6.5. That equates to a hedge rate of, call it 4.8 plus our facility spread. So we do think that's well priced vis-�-vis today's alternatives. Yes, it's short term, but it serves as a bridge to get us to, hopefully, a less volatile interest rate environment two years from now.

這兩個因素都影響了這個決定。因此，他們顯然提高了擔保債務的定價。我們也不喜歡在安全方面缺乏選擇性。我們認為，當我們對沖該線的部分時，我們應該在 6.5 左右。這相當於對沖利率為 4.8 加上我們的設施利差。因此，我們確實認為與當今的替代品相比，其價格合理。是的，這是短期的，但它可以作為一座橋樑，讓我們有望在兩年後實現波動性較小的利率環境。

John Kim, BMO Capital Markets.

約翰金 (John Kim)，BMO 資本市場。

Thank you. Your '23 guidance implies a fourth-quarter increase FFO and same-store NOI to $0.48 and 9.5% on the NOI front. I know you had some developments that may help with earnings, but can you just walk us through some of the drivers to get to your fourth-quarter implied guidance?

謝謝。您的 23 年指引意味著第四季度 FFO 和同店 NOI 增加至 0.48 美元，NOI 增加 9.5%。我知道您取得了一些進展，可能有助於提高盈利，但您能否向我們介紹一些驅動因素，以得出您的第四季度隱含指導？

Yes, certainly, John. There is going to be a little lift in top line. We had some temporary vacancy that fills up in the fourth quarter. But the big story is really recoveries. As we mentioned, there was a dampening effect on same store, which is attributable to higher than anticipated real estate taxes and maintenance expenses, and to a lesser extent, insurance, all of which are largely recoverable. And as we've been rolling these legacy leases, Jim's team has been doing a really good job of converting those to more favorable lease types. And so we're going to see that pick up as we complete our final [CapEx] in the fourth quarter and then kind of prospectively, we're going to see improvement in recoveries in '24 and beyond.

是的，當然，約翰。頂線將會有一點提升。我們有一些臨時空缺，將在第四季度填補。但最重要的是康復。正如我們所提到的，同店受到了抑製作用，這是由於高於預期的房地產稅和維護費用，以及較小程度的保險費用，所有這些費用基本上都是可收回的。當我們滾動這些遺留租賃時，吉姆的團隊在將這些租賃類型轉換為更有利的租賃類型方面做得非常好。因此，當我們在第四季度完成最終的 [資本支出] 時，我們將看到這種回升，然後前瞻性地，我們將看到 24 年及以後的復甦有所改善。

On your discussion of '24 leasing activity so far and the lift that you've achieved, you guys mentioned that in '23, you started off at a more modest level and then there's cash leasing spreads accelerated during the year. I was wondering if you could just comment on that dynamic. Is that a function of the mix of renewals versus new leases a year ago, and you see a similar acceleration in '24 mark-to-markets?

在討論迄今為止的 24 年租賃活動以及所取得的提升時，你們提到，在 23 年，你們的起步水平較為溫和，然後現金租賃利差在這一年中加速。我想知道你是否可以對這一動態發表評論。這是一年前續租與新租混合的結果嗎？您在 24 年按市值計價也看到了類似的加速嗎？

Yes, that is exactly it. Most of the renewals kick in, and some of them have fixed rate renewals. I think the numbers around 40%-something of the existing renewals had fixed rate leases. So those kicked in early, and they start the rate off at a low level. And then as we get more market rates included that the overall rate goes up.

是的，就是這樣。大多數續訂都會開始，其中一些有固定費率續訂。我認為大約 40% 左右的數字——現有續約的大約有固定利率租賃。因此，這些措施很早就開始了，利率開始處於較低水平。然後，當我們獲得更多的市場利率時，整體利率就會上升。

If I could squeeze one more in. The 4.9% cap rate you got on your disposition. I know they went to a user, but what was the mark-to-market of that asset?

如果我能再擠進去的話。你的處置上限為 4.9%。我知道他們去了一個用戶，但該資產的市價是多少？

Our mark-to-market in Chicago is in the [mid-teens].

我們在芝加哥的市價處於[十幾歲左右]。

And then, John, just as a reminder, that was based on in-place NOI on a fully stabilized basis, it's probably around 6% yield.

然後，約翰，提醒一下，這是基於完全穩定的就地 NOI 計算的，收益率可能約為 6% 左右。

Anthony Hau, Truist.

安東尼·豪，真理主義者。

Hi, guys. Thanks for the question. I just noticed that occupancy is down in Memphis, like, I think, 2.3%. Recreating, providing color on that?

嗨，大家好。謝謝你的提問。我剛剛注意到孟菲斯的入住率下降了，我認為是 2.3%。重新創造，為其提供色彩？

Yeah. We had -- one tenant had a payment issue and they went into bankruptcy, and we restructured their lease. So we split the space in half. That extra spaces just came on the market recently. And we've got a longer-term deal with the new company that was formed after bankruptcy. And we also collected all the rents that they owe us as part of it, too.

是的。我們有一個租戶遇到付款問題，他們破產了，我們重組了他們的租約。所以我們把空間分成兩半。這些額外的空間最近才剛上市。我們與破產後成立的新公司達成了一項長期協議。我們也收取了他們欠我們的所有租金。

If you don't mind, what industry is that? Is it like they got 3PL or?

如果不介意的話，那是什麼行業？就像他們有 3PL 一樣嗎？

I think it was more printing.

我認為更多的是印刷。

Okay, thanks.

好的謝謝。

Thank you.

謝謝。

Bryan Maher, B. Riley Securities.

布萊恩·馬赫 (Bryan Maher)，B. 萊利證券。

Thanks, and good morning. Just one or two for me. Are you guys starting to see any slowdown in construction activity in your markets that you would chalk up to the higher interest rate environment?

謝謝，早安。對我來說只有一兩個。你們是否開始看到市場建築活動放緩，並將其歸因於較高的利率環境？

Hey, Brian. Yeah, certainly. I think that's part of it. And as you can see, there's some softening in the big box. You see 700,000, 800,000 million square foot buildings kind of sitting there, even in parts of Columbus. So I think it's a combination of both.

嘿，布萊恩。是的，當然。我認為這是其中的一部分。正如你所看到的，這個大盒子裡有一些軟化。你會看到 700,000、800,000 百萬平方英尺的建築物坐落在那裡，甚至在哥倫布的部分地區也是如此。所以我認為這是兩者的結合。

And then as it relates to getting leverage down successfully, and congratulations for that, is that increasing your appetite to start to look at new acquisitions? And if so, would that be funded with kind of a combination of cash and debt? Or would you skew towards some capital recycling activity?

然後，由於它與成功降低槓桿率有關，對此表示祝賀，這是否會增加您開始考慮新收購的興趣？如果是這樣，是否會透過現金和債務的組合來提供資金？或者你會傾向於一些資本回收活動嗎？

So I think as we indicated, we're not going to increase leverage so we're not going to go out and start buying properties on the line and move up leverage so that's not going to happen. We've also indicated that we're not going to be issuing dilutive equity at this time. So we're not interested in getting out there. So as we see deals that match up with the cost of our equity, we would certainly entertain that. We're still seeing some softening. There's still some negative leverage in certain parts of the country that seems to be waning, not so sure, that's a great strategy, but some people are employing that. So I don't think that we have a real appetite for that. We are in discussions with people with OP units. So we're having a lot of discussions, but we're certainly not going to move leverage up.

因此，我認為正如我們所指出的，我們不會增加槓桿，因此我們不會出去冒險購買房產並提高槓桿，這樣就不會發生這種情況。我們也表示，目前不會發行稀釋股權。所以我們沒有興趣出去。因此，當我們看到與我們的股權成本相符的交易時，我們當然會接受。我們仍然看到一些軟化。該國某些地區仍然存在一些負槓桿，似乎正在減弱，不太確定這是一個很好的策略，但有些人正在採用它。所以我認為我們對此並沒有真正的興趣。我們正在與 OP 單位的人員進行討論。因此，我們正在進行很多討論，但我們肯定不會提高槓桿。

And that is there a second part of that question that I missed?

我錯過了這個問題的第二部分嗎？

No. I know it's mainly just how would you find in capital recycling? You've pretty much addressed it. That's all I have and congratulations on getting out of New Jersey.

不，我知道這主要是你如何找到資本回收？你已經差不多解決了這個問題。這就是我所擁有的一切，恭喜你離開新澤西。

Yeah. Thank you.

是的。謝謝。

Barry Oxford, Colliers.

巴里牛津，高力國際。

Hey, Jeff. You touched on acquisitions, but are you saying, look, there are some one-off opportunities in the market. But look across the board, I just don't like what I see from a pricing standpoint.

嘿，傑夫。你談到了收購，但你是說，看，市場上有一些一次性的機會。但從整體來看，我只是不喜歡從定價的角度看到的情況。

Well, I think it's more nuanced than that, Barry. Yeah, we are seeing deals that -- the prices, the stock price is moving around a lot lately, but not in the too distant past. We have been at a point where we've seen accretive deals. Again, we're going to take a hard look at the real estate like we always do, the CapEx needs, and so on and so forth.

嗯，我認為事情比這更微妙，巴里。是的，我們看到的交易——價格、股價最近波動很大，但在遙遠的過去不會。我們已經看到了交易的增加。同樣，我們將像往常一樣認真審視房地產、資本支出需求等等。

So there are deals out there, again, very bifurcated market. In some markets, we're still seeing multiple bidders and negative leverage. In other markets, we're seeing sellers not getting the price they're looking for, and they're taking it off the market. We're also seeing desperate people out there. We have people that are stock to have to refinance. They're not going to put in more equity, and they're going to take pretty much whatever is out there. So for us, it's really just finding the right real estate as usual and making sure it's accretive.

因此，市場上也存在交易。在一些市場中，我們仍然看到多個競標者和負槓桿。在其他市場，我們看到賣家沒有得到他們想要的價格，他們正在將其從市場上撤下。我們也看到了絕望的人們。我們有庫存的人必須再融資。他們不會投入更多的股本，他們會拿走幾乎所有的東西。因此，對我們來說，實際上只是像往常一樣找到合適的房地產並確保其增值。

Right. But, okay --

正確的。但是，好吧——

The answer is there's not a lot of products out there. That's very clear.

答案是市場上的產品不多。這非常清楚。

Yeah, but it sounds like you're waiting for the market to come to you?

是的，但聽起來你在等待市場來找你？

That is correct.

那是對的。

Yeah. Jeff, on supply, are you seeing supply kind of sort of slashed deliveries seeping into your markets or maybe not as much as the national numbers would indicate?

是的。傑夫，關於供應，您是否看到供應量大幅削減的交付量滲透到您的市場中，或者可能沒有全國數據顯示的那麼多？

Well, I think it's -- I think you have to look at a submarket by submarket as opposed to just a market. And if you take a market like Chicago, there's 21 submarkets in Chicago, okay, Brian. And then really, I think, it's not so much the market. It's really the size of the building. As Jim said, we have 70,000 square feet for lease, and we have three or four proposals. You can talk to someone that has 800,000 square feet, and no one's been to the building in three months. So I think that's really what it is. And that's where all the building was Barry, right?

嗯，我認為——我認為你必須逐個子市場來看待，而不僅僅是一個市場。如果你以芝加哥這樣的市場為例，芝加哥有 21 個子市場，好吧，布萊恩。我認為，實際上，這並不是市場的問題。這確實是建築物的大小。正如吉姆所說，我們有 70,000 平方英尺可供出租，我們有三到四個提案。你可以和一個擁有 80 萬平方英尺的人交談，而三個月內沒有人去過這棟大樓。所以我認為這就是事實。那就是巴里所有建築物的所在地，對嗎？

So as you go out and build new construction, it's a lot cheaper, made a lot more sense a few years ago to go out and build a million square foot buildings because that was all the rage of people were buying them unleased at low cap rates. And I think that's dried up significantly.

因此，當你出去建造新建築時，幾年前出去建造一百萬平方英尺的建築要便宜得多，更有意義，因為當時人們很流行以低上限利率購買未出租的建築。 。我認為這已經明顯枯竭了。

Right. Is that what one of the reasons why you're not interested in to expect development at this particular juncture also?

正確的。這是否就是您對在這個特定時刻期待發展不感興趣的原因之一？

Yeah. I mean, I think, we've seen that tenants are taking longer to make decisions. They ultimately do make them, but they've been slow down. So we're not going to go ahead and put spec out in the marketplace. I don't think it's a smart move.

是的。我的意思是，我認為，我們已經看到租戶需要更長的時間才能做出決定。他們最終確實做到了，但速度卻很慢。因此，我們不會繼續將規格推向市場。我認為這不是一個明智之舉。

(Operator Instructions) Mitch Germain, JMP Securities.

（操作員指令）Mitch Germain，JMP 證券。

Thanks for taking my question. The contractual renewals that Jim you referenced, are those at market or are they at an agreed-upon level?

感謝您提出我的問題。您提到的吉姆的合約續約是在市場上還是在商定的水平上？

Agreed-upon level.

商定的水平。

So that's already baked into the leases at signing is kind of what you're suggesting?

那麼，這就是您所建議的那樣，在簽署時就已納入租約中了？

Correct. And that the leases that we inherited, we don't typically do that.

正確的。我們繼承的租約通常不會這樣做。

Okay. That's helpful. And then, Anthony, I think you kind of mentioned the AIG loan. Obviously, it's on the line now. You're going to swap a portion of that. I'm assuming the swaps have flexibility for you to pay down without penalty. Is that the way that you're structuring that?

好的。這很有幫助。然後，安東尼，我想你提到了 AIG 貸款。顯然，現在已經上線了。你要交換其中的一部分。我假設掉期具有靈活性，您可以在沒有罰款的情況下還款。這就是你建構的方式嗎？

Yes, we're going to have a multi-tranche structure across the notional amount so that we preserve flexibility to the extent that we continue to execute on select asset sales and look to further pay down outstanding debt.

是的，我們將在名目金額上採用多部分結構，以便我們在繼續執行選定資產銷售並尋求進一步償還未償債務的範圍內保持靈活性。

Okay. But as we think about 2024, obviously, we'll have a little bit of a push higher in rate because of the change from the composition of that debt from the AIG to the line. Is that the way to think about it?

好的。但當我們考慮 2024 年時，顯然，由於 AIG 的債務組成發生了變化，我們的利率將會略有上升。是這樣思考的嗎？

It is.

這是。

Okay, great. Thanks, guys. Good quarter.

好的，太好了。多謝你們。好季度。

Thank you, Mitch.

謝謝你，米奇。

Mike Mueller, JPMorgan.

麥克·穆勒，摩根大通。

Yeah, hi. I guess on the developments, the build-to-suits, I mean, can you talk a little bit about return requirements just given the capital markets backdrop, given what you would traditionally underwrite on spec, and just kind of put all that into context?

是的，嗨。我想關於開發，定制，我的意思是，你能談談考慮到資本市場背景、考慮到你傳統上按規格承保的回報要求嗎？ ？

Yeah. I think it's fairly simple. I mean, we've been building to high-single digits. And I think that's -- if we can build to a high-single digit, an eight or nine. It's accretive. So that would be how that would measure up. If you want more color, I don't know what it would be, but pretty simple.

是的。我認為這相當簡單。我的意思是，我們一直在努力實現高個位數。我認為，如果我們能夠達到一個高個位數，即八或九。這是有增值作用的。這就是衡量標準的方式。如果你想要更多的顏色，我不知道會是什麼，但很簡單。

Okay, got it. And then I guess with the acquisitions being pretty spotty at this point. I mean, how should we think about dispositions over the next few quarters? And I know you have something lined up in the fourth quarter. But even if you don't see anything on the acquisition side, do you think you'll still be somewhat active on the disposition front?

好，知道了。然後我想目前的收購情況相當不穩定。我的意思是，我們應該如何考慮未來幾季的部署？我知道你在第四季有一些安排。但即使您在收購方面沒有看到任何進展，您認為您在處置方面仍然會有些積極嗎？

To a certain extent. I mean, again, we've -- I think we've talked about this a lot, and we're happy to reemphasize that -- like Chicago was a perfect owner-user building, right? There's limited parking, limited docks. It made a lot of sense to sell it, and an owner user is not looking at the cap rate. They're looking at maybe the next 20 years so whether they pay $10 million or $14 million, I don't think really matters to some people if they want that building and they want the location.

在某種程度上。我的意思是，我們——我想我們已經討論過很多次了，我們很高興再次強調這一點——就像芝加哥是一座完美的業主-用戶建築，對吧？停車位有限，碼頭有限。出售它很有意義，而且業主用戶並不關注上限利率。他們考慮的是未來 20 年，所以無論他們支付 1000 萬美元還是 1400 萬美元，我認為對於某些人來說，如果他們想要那棟建築並且想要這個位置，那並不重要。

I think New Jersey is kind of a similar play for us. And we have just a handful of other properties that we've identified as part of the strategy was to sell out of New Jersey. We have one building there. We have one building in Milwaukee. We probably will sell as we indicated. So we are not going to gain scale. We're not going to be in a market. And our strategy is to try to manage, and we're managing 70% of our properties in-house. That will continue to tick up over time, and I think that has -- in the environment for the next couple of years, I think, real estate operators, I think you're going to see that we're going to deliver results of that strategy.

我認為新澤西對我們來說是一種類似的比賽。我們還確定了少數其他房產，作為出售新澤西州策略的一部分。我們在那裡有一棟大樓。我們在密爾瓦基有一棟大樓。我們可能會按照我們的指示出售。所以我們不會擴大規模。我們不會進入市場。我們的策略是嘗試管理，我們正在內部管理 70% 的資產。隨著時間的推移，這種情況將繼續增加，我認為，在未來幾年的環境中，房地產經營者，我認為你會看到我們將交付以下成果：該策略。

Okay. Thank you.

好的。謝謝。

Thank you.

謝謝。

Anthony Hau, Truist.

安東尼·豪，真理主義者。

Hey, Anthony. I have a follow-up question about the swap. What rate should we expect for those?

嘿，安東尼。我有一個關於交換的後續問題。我們應該期望這些的利率是多少？

I think we're going to come in at an all-in rate of about 6.5.

我認為我們的總賠率為 6.5 左右。

Okay. And for your watch list, has that change over the past six months? And do you expect like bad debt reserve to return back to a pre-COVID level?

好的。對於您的觀察名單，過去六個月有變化嗎？您預計壞帳準備金會恢復到新冠疫情爆發前的水平嗎？

Our watch list, and Jim can affirm this, has not materially changed. One in, one out. It is only a handful of tenants. And in terms of bad debt, we've had de minimus write-offs pre-, during, and post-COVID. We're not anticipating a material increase in the run rate as it relates to bad debt.

吉姆可以肯定，我們的觀察名單沒有重大變化。一進一出。只有少數幾個租戶。就壞帳而言，我們在新冠疫情之前、期間和之後都進行了微量沖銷。我們預計運行率不會大幅增加，因為它與壞帳有關。

Thank you.

謝謝。

Thank you.

謝謝。

There appear to be no further questions at this time. I would now like to hand the call back to Mr. Witherell for closing remarks.

目前似乎沒有其他問題了。現在我想將電話轉回威瑟雷爾先生以供結束發言。

Thank you all for joining us this morning. We are available for follow-up questions as usual, and we'll talk to you next quarter. Thanks so much.

感謝大家今天早上加入我們。我們可以像往常一樣回答後續問題，我們將在下個季度與您交談。非常感謝。

The conference has now concluded. Thank you for your participation. You may now disconnect your line.

會議現已結束。感謝您的參與。現在您可以斷開線路。