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Duke Realty Limited PARTNERSHIP (DRE)

Participants
Ron Hubbard Investor Relations
Jim Connor Chairman and Chief Executive Officer
Steve Schnur Chief Operating Officer
Nick Anthony Chief Investment Officer
Mark Denien Chief Financial Officer
John Kim BMO Capital
Vince Tibone Green Street Advisors
Blaine Heck Wells Fargo Securities
Michael Carroll RBC Capital Markets
Dave Rodgers Robert W. Baird & Co.
Manny Korchman Citi
Mike Mueller J.P. Morgan
Brent Dilts UBS Securities
Jamie Feldman Bank of America
Nick Yulico Scotiabank
Caitlin Burrows Goldman Sachs
Rich Anderson SMBC Nikko Securities
Bill Crow Raymond James
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to Duke Realty Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we'll have an opportunity for your questions. [Operator Instructions] As a reminder, today's conference is being recorded. I'd now like to turn the conference over to Ron Hubbard. ahead. go Please

Ron Hubbard

Good quarter Amy. and to welcome Thank call. afternoon, second earnings our you, everyone

Joining Jim Operating today Financial Anthony, me are; Investment Officer; Denien, CEO; Chief Steve Chief Mark Schnur, Chief Officer. Officer; Nick Connor, and Chairman and

other differ me These uncertainties our made could certain future actual that factors conference maybe could let this risks to subject to you forward-looking that cause Before we statements, our remarks, materially certain affect remind expectations. business make call prepared results. and from statements the during risks adversely results and and

we'd For XXXX this obligation that more financial information as refer with the today, in is about any you on All GAAP have SEC and our or those the revise XX-Q only reconciliation risk no at forward-looking statements. or non-GAAP our other and of release. the speak we provided in update factors, call company's of assume XX-K file forward-looking we SEC to A to to we included filings. earnings that July statements measures XX,

were release last supplemental package close. distributed earnings Our market night after and the

If our in at section not Relations' the are of you documents available Investor receive a copy, did dukerealty.com. website these

earnings our can also SEC in an reports and webcast supplemental You find of Investor section release, of package, Relations' audio the call this our website.

Connor. prepared Now it Jim I'll for to statement, our over turn

Jim Connor

the risen the nationally best demand seen. from has all-time X% hello, Ron with high of and market and near level submarkets ever everybody. The to range fundamentals to we've to as thanks, X% records as rent be some business now Well, successive or XX%. range our had of We've the XX% at quarters three growth projected continue

year began just starts new $XXX guidance raised the once full our developments with quarter, of again. strong value creation During million we under

that compression rent to have margins. increases allowed Continued well outpaced cost cap rate growth us improved material and drive

outlook over portfolio $XXX improved raised generation of total during quarter over that, exposure. When is in venture joint These XX.X% Tier our our of management the components it quarterly growth of outraising Steve and share on our assets Mark core provide and remarks. balance prepared leased. and to in also With that the will achieved and of for an X Our XX.X% guidance, market the four leasing, year-over-year million his and AFFO We results XX.X%. with announced I over will expected in markets growth in-service high core capital turn coupled record X geographic rent including and million. the sold our year second color operations from portfolio activities the improved all-time resulted of non-Tier per disposition, our more Louis for to outlook. St. growth portfolio we've XXXX update you $XXX now details be cover recently FFO key in to

Steve Schnur

all-time the deliveries new feet. consistent first I'll square in on XX this fundamentals over during setup, by more offset year strong supply the the digits third of asking results. feet dipped a CBRE we the absorption is Jim. million average Completions the review XXX The projects rents we're ground to range rents as down the cover to absorption of were XXXX with XX% square are market for square seeing mid-single for projected for across reduced previous asking to full compared in record against second grow the feet. national to to on over X% June million with XXXX June surpass This the figures in the be quarter what XX% and the the our This million around record. sales feet Thanks, feet increased and X.X% million square were is month million highest fundamentals than break on mid-XXs two With XX% XXX XXXX best vacancy quarter enough recent an now XX to the year-over-year impressive retail expect submarkets. XX%. Industrial and X%. and up operational May pre-pandemic quarter period demand own is timeframe, and positive and year. to measured which registered XXX This markets. completions notably our up net square the when to May Growth sales and e-commerce in perhaps year. then more

of occupier at supply leading in way. general with remain level the remains The the strains compared by record times. a ago. the and sales low X.X over nearly Demand to active broad-based were ratio a type categories ago. to a Continued activity XX% feet chain XPL doubled retailer year caused to from year-to-date retail year square inventory up XPLs the wholesaler very also and absorbed

downside are Of points data that course, year with feet, good past from e-commerce players. is is leasing these still and exceptionally a broadening square ago, XX which strong, Amazon demand indicator is a million e-commerce out even pure very

XX% very The for own by resulted in quarter the and million these records than which run of rate, lease executed to square historical signing coastal higher growth were about both continued basis, our strong exposure reported still all-time current we XX% deals cash X.X is portfolio. XX markets solid our markets, our our - rents of these of as our than were feet activity a to we XX%. Turning portfolio, portfolio in and GAAP portfolio, a About quarter but on for XX% in of which leases. lower

our future markets for quarter certainly outsized and growth this rollover lower in rent been opportunities demonstrates in this concept. portfolio we've coastal As saying, to these compared results exposure our

to still in growth moderate markets that We the consisted for this rollover continue. historical of new but developments year overall to to million remainder quarter We the speculative of coastal rents in expect started strong we $XXX five recent of levels, expect projects.

adjust and us. for our strategically strength located a operate land, we believe quarter, across great to return submarkets given last we projects these As alluded to risk the at

within XXX,XXX an with construction, starting rent two underwritten already fact, A space XPL above Columbus for rated lease we've global XXX% feet, a months the a of square well signed after customer project, levels. our at at the In totaling

I land development pipeline XX% is XX%. Tier of forward. XX% these you almost Our billion completed XX% at June value development expected we was a support This to $X.X creation XX% include allocated when that markets, to new of up that with to the Columbus X lease in levels recently going pre-leased also moves pipeline have quarter end This mentioned, an as continue add I'd bank XXth. of just

materials. scheduled to continue positioned through also lead we're to risk teams well taken our Our We have believe to critical steps and to grow sector mitigate development. related new

reflected outlook by acquisition revised forward, as dispositions. from is our new guidance and cover midpoint. been Anthony and Looking for the ever to $XXX I'll it's million Nick turn the as our development now it to strong up over is

Nick Anthony

Steve. Thanks,

we fundamentals two The on this Newark, continuing quarter, And will assets also market. a exceptionally very trailer in generate market as was comprised in firm. By the partly the For Newark at million leased Turnpike in-place rents also from cap even Louis management possibility one the aggregate in transactions asset with we've X.X% the asking redevelopment $XXX years and X% asset. one of Raleigh, excellent strong across in other rate submarket portfolio facilities in unique XX% sold XXX,XXX near big parking been two about I'll in below quality rent square the of large West of Columbus. in St. difficulty] in on an X now pricing range. and logistics and income-producing is of with about extra The last a and and but IE years of strong expires an site. credit to an few local in with in investment expected X.X% lease the location in facility interim, in New asset for [technical investor long-term vacancy. an a our XX both current yield only talking in irreplaceable in IRS SM two markets. our expected a share foot acquired logistics quarters. Port projects Airport over Newark return approximately X There is The the the stabilized box Jersey non-Tier update New facilities the is contained mid and Jersey. The has these stores X% from

in acre X.X million and feet aggregate reduces from a about and including the Investors as release Global First, with on most Amazon. million Amazon previously approximately placed part announcing The which of two on you $XXX to Tuesday exposure saw the of X% that joint strategy of X.X%, CBRE financing venture new debt pool press generates in to initial encompasses our facilities stated exposure we lot, also a trailer capital to assets. to formed square totaling XX tranche our manage

two Baltimore, third tranche to later the second quarter. trailer expect The close lot one consists and of in in facilities

are third in three tranche which mass in facilities located The of expected XX% Florida, employed The consists the to to expected leverage South Seattle XX% and is close early JV range. in Pennsylvania, XXXX. and

mid market third Secondly, in quarter last and we close second blending range. St. year, announced Louis plan during the this exit to the sales the rate we the X% in and quarter, a on cap our quarter early with

now transaction, the our Louis X the the it over turn market NOI and is discuss include the from to is from to update. pipeline, - NY XX%. tranche JV coastal guidance X XX% two our contributions, Tier results you and If our I'll development and one exposure and market St. exposure of NOI Mark our Tier financial our

Mark Denien

$X.XX for of afternoon, million represents million quarter second everyone. over quarter, the compared nearly the $XXX the to the quarter the share, in per XX% of year. AFFO Thanks, per $X.XX XXXX. quarter FFO share from totaled growth Nick. $XXX which second Core for last Good was

the some in slight of cash in XXXX to to by the same X.X%, and to property property XXXX The to in of second and We on free rent six NOI months second for in occupancy was for reflected quarter X.X% the growth compared guidance. property the to the continue rent basis same due Same high XXXX offset and burn quarter respectively. ended mainly year. growth through compared was growth of this periods the 'XX level our portfolio off NOI of 'XX a of remainder expect as same our compared the a revised decrease performance three previous partially

ATM program. During $XXX the of of million quarter, under sale shares our proceeds X.X we the million from generated

Nick effective maturities unsecured line. use our the of just mentioned X.X% have $XXX April any year. XXXX. of also development July, the in not to interest do redemption, have on of in maturity debt we remaining our dry our with million unsecured fund the We set of of the October We mature XXXX $XX redemption, dispositions to called and scheduled of fund borrowings of that We'll the were rate proceeds powder a and for million in in significant $XXX outstanding which from redemption quarter redeemed our notes, this credit we Early next late finished notes million After repay leaving this of to growing pipeline. bear of us July line X.X%. until plenty also

announced results. result represents for $X.XX to to of increase operational compared of the $X.XX execution XXXX, previous core a our in per $X.XX a per our revised of $X.XX first half the share. of midpoint through FFO range As The of share, FFO XXXX core guidance a XXXX guidance we over to XX.X% $X.XX revised range

of announced share revised a range on to compared XX.X% XX.X% X% midpoint a of to range in basis AFFO between our with and also to XX.X% XX.X%. for previous We growth guidance adjusted

cash a on NOI a X.XX% increased of guidance range property same X.XX%. we've in basis, to our For

our continue of both lease we're developments, to underwriting timing rates rental assumptions for the achieving. in off the outperform speculative in and We

compared previous of sites [technical due a of stages $X.XX is starts have development and billion $XXX on range between prospects, solid of list million maintained revised Based various we these diligence the between $X.X land for and billion build-to-suite the well our $X.X prospects, as While guidance entitlements. and difficulty] as billion. to

between website. our We've other range remarks. pricing turn guidance range a I'll the Our a primarily Jim billion. revised based has of our billion on closing now $XXX estimates few of to asset attributable $X.X previous components guidance $X.X for to million favorable outlook disposition updated included increase of rather detailed for our dispositions in to in back exhibit compared optimistic than is in as and on it our sells. additional been the properties to few the guidance more This billion to $X.X supplemental

Jim Connor

our results expectations midyear. to recently If capturing through driving Thanks, of open and ask questions, to Mark. the and with Q&A the Responsibility it get up take that characteristics and out should X-X. we'll and you're, star-X, for you perhaps it published exceptionally questions. proud Market element culture of in our you I'm Annual Realty We Also, significant urge take on the execution is for in closing, our differentiator and initiatives a opportunities of rental support I limit to positive exceeded In interest are not, clearly new Thank back or our X-X, the your are which Report questions. have would strong queue. we'll from not the strategy. your and year-to-date growth to opportunity short teams' for one outlook really unique, new you also website. our like for have as in beginning existing would of development The important It's year I'd rates, lines most an up our our and ESG proposition. believe now Investment Corporate well fundamentals With welcome customers. Duke questions we're year. prompt open everyone review course, of operator, point the remember I two your this to received. as that for

Operator

you. ahead. our well will question Instructions] Thank first come from Please And Kim. John go [Operator

John Kim

the CBRE the premium? three wondering value Amazon the on joint tranches? And also was you sale? there an was I you. cap could on if disclose Thank the if of And venture total rate

Nick Anthony

assets three well lot rate is this yes, trade $XXX of is the tranches X And other a value Nick. of all deals total upper cap. mid cap to environment. just of Amazon agreed in this with north a million. relatively Yeah, do along The is And

Operator

here. Thank ahead. question come go you. Tibone. next our moment from Please will One And Vince

Vince Tibone

on a transaction little I portfolio given the high in thought, Hi, Can have that you a which disclosure, and other pricing know, than cap comps. good the your some is looks sold higher Based X% process deal? market current Louis afternoon. discuss on just marketing maybe the you rate, like and St. at would it trends

So portfolio would deal that is helpful. be there any on other additional color

Nick Anthony

of We again. transaction into rents different Nick you a One pieces. and two alluded part to. X is this traded a low One at is upper was good. turnout it at as cap on was about portfolio latter this market, Vince the Yeah, on all traded other asset bit broke assets to X, other that little X%. difference from the Yes, the a mid the the and above portfolio

might higher that So a I the probably have in than drove expected. think price bit little what you

Vince Tibone

That Got makes sense. it.

that these So why above? that build-to-suits better were Were the were above and had reason we're you they to are out know mark? build both above market? they Is

Nick Anthony

was there was IRR And a that there's still and the Well, were mid transaction tax that's I above abatement in the on will little you bit why was market. reason that they think market. the tell Xs. I - in of part

Vince Tibone

year, just spot. that sense helpful. really it That's detail high as where a me, on know for to you Got follow-up lot it, certain more on you could more XX% why submarkets strongest where of is, seeing little opening I as at that's provide rent know, landed fundamentals? the that makes a that comments Jim's have bit wanted up you could you're one growth Maybe on to this

Steve Schnur

Steve. is this Vince Sure,

You New know, think are secret, Northern Northern California, I performing Jersey, well. no Southern it's exceptionally California

I think report that I year-over-year. northern a was said north saw of Jersey New XX% CB recently

a national you the the for it our three the by own basis those on we up I class. outlined top in And put our you seeing broke in best tracks know, of portfolio, just you with out I if numbers So that certainly sector. think we're being to with submarket were it

Vince Tibone

Makes sense. Thank you.

Operator

Thank you.

Blaine to Please Next, go go we'll Heck. ahead.

open. is line Your

Blaine Heck

JV think you forming Jim, little the about you pointed of thought can instead assets towards Great, more behind from bit outright. sale? the Amazon the commentary a talk outright selling assets process an past thanks. afternoon. I for a Good more guys

kind So was of there that meaningful there? your changed mind anything

Jim Connor

of you are Nick you in markets we ones did are overall those at least that alluded know, in you you you Amazon many the think would pricing. also as know, we like at a from know, really ones and know, keep those Holdings we can we want if to, an the And, premium There were go you you properties. relationship long-term, No, want you know, a the Other we look to number getting, people unbelievable back that conversations, those to when our we're as guide you to, you are that, I own combination. interest know, towards outright. determined, to assets And know, to as maintain selling we know, of trying perspective. a

joint selling some all XXX% little some will some forward, see it's a will be of going of the us venture I you'll go keeping some a wholly-owned, balancing some above, some think And bit to be venture wholly-owned, and So, sold the you the in know, and into a then continue outright. act, do will outright.

Blaine Heck

quick sense. first beyond a of any aware you makes talked has sold of? then on Or, that other you of other lot JV know, refusal right CBRE the any as agreements Yeah, assets just follow-up, we you that there any of, And stipulations know, should that type or tranches is a be about? the within three being

Jim Connor

a give bit can property some Nick close you little and yeah, - color, know, by of, So, there's you

Nick Anthony

Yeah.

Jim Connor

like Things that.

Nick Anthony

is We this our control there. destiny Blaine, mean, Nick. I

sell it hold can if to know, outright. it. want to something something, we sell You want we If outright, can hold we we

refusal, do JV, something Now, have if another course. first then to they of do we in want rights some

Blaine Heck

Thanks guys. it. Got

Operator

Thank you.

Michael Our Carroll. go next come Please from will ahead. question

Your line open. is

Michael Carroll

I'm your reduce about exit how's Nick, company Are other St. to or exposure to? about we you're sales markets happy any how there with thinking that you going change a you geographic And has today? been forward? I I But concentration announced Jim that how thanks, the little something concentration Yeah, not know think the want if should today. or Louis guess should bit? about sure the talked Indianapolis with

Jim Connor

an it's evaluation. Mike, know, ongoing You

or of years, You on And know, that the height our case bottom whatever looking did agent, be allocation, look the we'll and asset assets at know, we be the we market-wide know, as like Tier know, an know, seen continue list, of based we before we've look and the the continue rent simply continue prune we Louis growth, remains St. marketplace. see escalations, we at you in I the in on to the whether do, performing, portfolios we be. annual X you to few portfolio, - said asset, good the of that have we for it's, the you But like rent have done decisions the to additional any are focus we stewards of be try opportunities clear smaller to at out portfolio. Nick, you whether don't if always assets, know, on may the do last market you basis to portfolio, below

Nick Anthony

right, some know, assets. think use. always we I the raising higher that's those assets, lower-performing then we, that higher be capital that's I of although there's think going levers always and bars And for to one the getting you

on continue ongoing to basis. at look an we'll So it

Michael Carroll

think mean, now, And then, goal Okay. I of is I there of want tenant how you're the to you should type joint mean comfortable reduce do Amazon with? about guess mean, that? down a it's to with around to concentration get or we it X% I I the X% venture what exposure

Jim Connor

trying to X% keep X% the an ongoing stated to a of on in goal basis. had it We've range

Nick fast in front truckload. Prime push as it dispositions by the back can it the the is as Amazon Steve's out challenge door the ventures, and bringing joint door are know, and guys You

know, last I we'll answer of manage Amazon to with and, accordingly. more and know, you manage done sheet So with fulfillment fluctuate of down partnership bit you hope to sortation know, continue having be And, do we and going we, a the great they've mile we centers keep been as know our clear act. look, kind And, numbers deals the Blaine. this in a of the and you more balancing and partners facilities want our and up to those you opportunities. to same It's it's know, and exposure and as balance you we as use other we've

Operator

Dave we'll Thank next you. And go to Rodgers.

Your line is open.

Dave Rodgers

probably of the then the afternoon, start Maybe again, But Jim, guess you. everybody. I dropped and half $XXX occupancy quarter, rate the and bit, pipeline down look about at talk back it think goes you'd Good so in Yeah. you a development wanted as development the third on first, Steve the I year. million in-service for to that, you little or after another half about of see

and pre-leased a low I Obviously, about that where If spec, more might how the that of second head you pipeline? guess same in just many of to you time, start might but trying bit could the at how think in have you half leasing build-to-suits you're kind go? year component the quite on that rate with I'm overall,

Jim Connor

Yeah, give little started a Steve and they've bit of color. can all you

NAREIT You know, starting June at meetings. the

started people projects reasons know, for the outlined. in third new know, guiding quarter exact starting. towards we're XX% the You coming in the range we in-service you pipeline and, that Buildings that the XX% to you

not So that you the, would know, point But, of know, confident alluded low. we're the going completing low XXs. leasing today you XX%. I advance the so you I'm don't at know, the we're - here spec effectively sitting given go buildings far to Steve of as pretty volume I in in to, I low be think, mean

ins know, other with even lose XX% So color? see of I don't have think pre-leased to any going Steve, our I and you're you the outs, don't us all percentage.

Steve Schnur

I'd the the The projects think spec half of strong. indicated question start year outlined Yeah, is, like Dave. is, only see in that we've to spec pipeline the us in your you'll as thing leasing add Jim I is more latter

as bit. I there. you'll off commentary little in fall get around you out push know, next, we're things do you So to XX some a But X tougher that build-to-suits I the shortages see do that the and materials' maybe don't a know, shortages I material think start months with, of think, us to see dealing

Dave Rodgers

for of And Steve, growth one maybe know range terms or size in or demand either spaces, tenants of in seen terms you have then size overall? one of helpful. the That's meaningful last the you a you difference you. Got rent

Steve Schnur

us XXX I'd XXX strongest was to say for the sector. Yeah,

was Next XXX. to XXX

So or call spaces also don't we growth XX% our rent that about to best of you a know, XXX have over our category overall of available XXX,XXX represented feet. Honestly, lot from XXX that was a XX% activity.

I think that we I that now the market and right hard. places we wish more very it. is have had of space

doing everything's second XXX you all know, that You it's to the I us was well, know, XXX for But think relative. the best performer quarter. in

Dave Rodgers

thank Great, you.

Operator

Thank you.

to go we'll go Next, ahead. Manny Korchman. Please

line open. Your is

Manny Korchman

on afternoon, gave Nick, you Good color Hey. a little everyone. of bit acquisitions.

You did.

raising given learn guidance, at can there look in where you gone. from that? markets, markets, that going confident that You're have acquisition acquisitions your about to same tenants know going special you're different we the different valuations anything anything forward Is

Nick Anthony

Yeah, focus and we're in our markets. the Manny, to our know, coastal continue development you lever ground this, teams to going X Tier in mainly

deals, may not are those pipeline deep. know, our We deals our billion likely at that about marketed, that is any we'd be now is did like you we'll the that that, be more get redevelopment creative probably dream of just like we more this deal know, $X You in yard, place. quarter, but on deals, container the the right looking

getting in lot get very very, marketed starting talked is sub still Obviously, caps we there. X you see very leases, stuff, we'll challenging they're a you But broadly this of know, about feel expensive. the there. know, that now. to past, Class A We're So we good out XX-year the it

Manny Korchman

the turning just to discussion a back JV And second. for then

through with and to think you so assets, sell, If a you structure out figure there's Or or you know, for a Is were to partner that do X go going different next to a CBRE? and you tranche something be if the market you've XX. assets new let's that? say go already discussed of JV

Nick Anthony

one-by-one. the No, got going And a identified, we going we're hold to got bucket that know we discussion to we're I asset that we've pool into. those have today. X strategy a needs deal for assets that sell we'll that go a outright. new we going got we've do, into internally they're then assets of each hold, another that we've know what we pool every got decisions to And of we make JV, we've now mean, that But

Manny Korchman

Thank you.

Operator

Thank you.

Mueller. to we'll Next, go Mike

Your open. line is

Mike Mueller

basically should hi. as this disposition to when jumpstart we bit the new about development starts? year's being, JV? you know, Yeah, a levels Or billion this was you're of of I it the running wondering billion think $X.XX norm $X of plus inflated is

Nick Anthony

Hi, Michael, know, that this cap bit I bit you happen know behind environment. we is we little catchup what's primary And it. No, going this exposure taking Amazon think Nick. were with the you doing know, to inflated, tax was is the a on a you reason of a that, we're know, didn't the

a well. cautious So perspective we're little as bit from that being

So go-forward this expect to remain I wouldn't them at level on a basis.

Mike Mueller

Got it. That was it. Thank you.

Operator

go go ahead. Please to Thank you. Brent we'll Instructions] And next Dilts. [Operator

line is open. Your

Brent Dilts

in the back in XQ be in to In prepared renewals how coastal maybe talked second and mix the of coastal half. jump half the this said in a of greater guys. upcoming the renewals but thanks. a proportion year in year? Steve lower about the remarks, quantify But is you that Great, led growth, mix of to Hey able would rent next

Mark Denien

start Mark. and Hey, can in. Steve I'll this add Brent, is

You about the to know, prior in we've XX% at rollover been XX% running markets has this coastal quarter. to our of been

not market we The half down plus coming plus know, That's be some pull always back exact year, back closer minus XX% you'll slight numbers think range. we XX%, This at coastal year is, the early like did half million-dollar the reason question, back or quoting we know it forward. how exactly that like we'll know I'm have, been XX% early has right. that it at I that's it XX% jump of But look don't the renewals in to if will And many quarter, mentioned. see us, renewals, think up what will at you probably prior. we we to, the rollover

it's things still more little XX%. So because driven a had record not our was that growth bit two portfolios exposure the is, the I would that quarter of out at bit But exposure we this take a little there. the of

So and half could moderate that in comfort good really the very year, beyond, be gives know, some you this think but into, little XXXX good. bit further. It a back going numbers I to that going us may those escalate think we still it's even

here mid-teens know, cash going on as gross or getting good give we still you to see GAAP. on take still plus rent and, today, basis sit know, everywhere. a you a you're minus think So, or We're XX% we

Steve Schnur

some numbers pretty our broad-based. is we've cash. of only were that north all add the Florida, XX% at reported I Yeah, to were here. as Nashville said, it's Mark XX% mean, that I markets Indianapolis, what mean, looking of Cincinnati, thing or just through Central I'd I'm

So for on and us the side. what very seeing we're broad-based gross

Brent Dilts

And the haven't you're types types not you what that of then renew? one immediately tenants backfilling electing then Thanks. on backfilling perfect. tenants since been And of are Okay, to know, renewing, what are space? the here, tenants so last quickly,

Steve Schnur

backfilling I requirements think you, expected space want fire safety levels, the to e-commerce They for they very very be mentioned pay Right fulfill need. of a XPL the been chain, needs strong than what know, On the has business supply top has majority XPLs, and to increased the however had. retails consumer more of you E-commerce majority lot to to need, it, my been the either segments then in our would relevant now different renewals been needed be tell what active, stock, quickly, we XPLs want have a that didn't on to seeing year. I products side, we started would right space the would you this on turning inventory we that portfolio, remarks has get. space we're to whose And or behind know, that you not I or right. tenants space renewed lost either say

were So again, very broad-based, you. for but hopefully those specifics some

Brent Dilts

that. guys. appreciate Yeah, Thanks,

Operator

Thank you.

Next, Feldman. to we'll Jamie ahead. go Please go

Your line is open.

Jamie Feldman

Great, to was dispositions, ask development thanks. on to I a one on but similar the hoping question starts.

year? this you into think able you to rate you starts? or this year mean, guidance stuff is as Or you you are So thinking know, this were next something And for didn't you think that are bumped there year, your how sustainable the run know forwards start last pull for I start the level? you about about, year is

Jim Connor

make my pretty Yeah, million for at optimistic historically several next about a ability General rate We're would been. I maintain higher our than to guidance run as sure hundred you, Jamie, Counsel looks don't we've I give tell that's year. me

when see as to months, we'll the we're look we about know, get about optimistic the at development. pipeline But we spec January. build-to-suit, for you So next XX pretty

ahead been of pipeline. in lot discussion a our about we all and destiny contract, terms for design, precast the spots. way out of been land steel own a We've that talk of material. on securing XX there's of control lot know, our development, of There's about land, gotten You

with So in you about know, all-in-all, we forward feel January. you guides optimistic that pretty And we look know it. sharing good to you

Jamie Feldman

then you think pre - you months Okay, thank and And can what buy about plan you. know, how said, can what's over like, - ahead as next far XX or the we you you XX the

Jim Connor

Well out the steel, virtually now. you're target about a right structural year prebuying

slots significant production the other gotten secure the lock newest But working one we in diligently in we And to demand. can almost one, materials those. also gotten lead-times there, talk months probably roofing precast and all out. prices and That's and we've of that steel, So have been there. XX material out has are up about you know

Jamie Feldman

what development that to does that of do costs add your ahead time? And to

Jim Connor

I to they deliver. until that pay have it Not don't for

Jamie Feldman

great. right, you. Thank All Okay.

Operator

Thank you.

will go Please Yulico. from Nick question next come ahead. Our

is line Your open.

Nick Yulico

everyone. Hi, Thanks.

development can know, had you past year-to-date rates year? rate, a your you how assumption terms margin did and of cap you in I down you much your Just in terms page you Maybe the perspective over of, creation rates have I you give moved, cap question that, the you on know, some think cap inch in know, there. guess know

Mark Denien

just I tenant pipeline Before an the to just gets like a clarify. Nick unless Amazon think thing adjust signed cap to in, add A one our there want to on chimes cap Nick, that a in credit development us lease projects, or that rate change. once don't an with rates We there's causes

is there population really rate to cap the due changes. in changes the So

cap populate new got rate it's started So a markets know, lower new that projects in that in-service. maybe it's market are placed that - coastal you getting

our So let rate then actual the want I just methodology on Nick first, changes. comment and cap to I'll clarify

Nick Anthony

cap increases we're these, as be compressed know, weeks their low in-place the be to the to last know, willing rent months XX moving rates fast ever you to published had The cap as can time rates you six comps rates. bps. two it are get is leases yet. probably I stopped growth rates Yeah, literally rents because That's in Newark of very their tell and I've seeing Group you cap revised how Castle are sub But people too, but would Prominent market, XX X, that to X hasn't cap level it now. Jersey this the Brokers too this last quickly New over of and A over growing now. seen, attributed lower and lot first County, south

Nick Yulico

Okay, burn same-store, rent very well, that of of back the to year said of some terms great. just but - slowdown But you the the helpful. the was occupancy nuances in in I you the I quarter, the of this of half I'm occupancy of talked And about. free year guess back back know, due the and in had be some year. know, did trying increase in That's off terms comps some the I some guidance, the tough last the half then understand guidance, you still about were we of on of as in thinking should you you your Thanks. to think

Mark Denien

moving And you of a I'll try. just there's Nick, you've laid out, here. as Sure, pieces know, lot

the less of the rent most But it And first uplift year. from So, back it the 'XX. of when half is in I'm year is to first from a a little I decrease about in talking free compared I'm occupancy. the our half, of bit the tougher 'XX back talk half talking occupancy, of occupancy the comp of about a occupancy in to about not half

perspective I numbers for some front of have me. in So

year, were half the half 'XX of you 'XX, from first occupancy 'XX, when to the point half this uplift at we basis a 'XX. XX If had or look we favorable from actually first XX.X% first in of XX.X% 'XX of in the

XX basis at was in So that's positive the point back of When comp the impact. or look XXXX XX.X%. occupancy you year a half

half from points in our back to to but the the we So we the first the of occupancy XX the positive XX.X%, basis comp, the even because of a will half back hard 'XX to the it negative flat half, of backup, half. with first maybe from in year flat pretty think call XX occupancy that be first half a go from

basis that look occupancy because point in have now. going it really portfolio at you of anything the comp change bad way, our So you'd because solely XXX not if period, of in

year. then us because main that's So year, like driver we have for XX.X% comp next that the here. that year this up next think I won't also sets had

of So a I follow all down if makes were write lot that know sense. But you there there. that and it, numbers hopefully

Nick Yulico

Appreciate. Yeah, thanks, Mark.

Jim Connor

Ron We'll afterwards call just -

Operator

you. Thank

Our go Burrows. next question will come Caitlin Please from ahead.

line Your open. is

Caitlin Burrows

there. Hi,

Just bank. a land question on the

up allow and before, what you think I touched some these able could the us that bank days, to process just buying rather I it being keep the to but difficult, on you're continue. on imagine land you give briefly detail on seeing it's development to land

Jim Connor

then can I start Steve some you can Caitlin, Yeah, color. give and

at you half having keep And up continuing tell guys second difficult to the is. our problem how of bank, over they're million, will in it actually go no $XXX anticipated know, yet, You year. know, land the to you my we

little the more, they're That's is right we the the can entitlement opportunities find challenging. So more you old finding, Tier not markets, I'm really process. value, not making to we opportunities, particularly worried, and X any finding create in of managing a where adage the you know, coastal gotten continue challenge bit you know, the know,

development. we his for And we through sites that more that's build-to-suits really as guys are the Steve of at. really that our that, of really, so could art deal work affects deliver the way and timing good And the when or spec

Steve Schnur

I'll coastal our just they bank in - and to rents. develop the is land tougher great markets want to know, entitlement as Caitlin, also with it's XX% Yeah, today from land the is of markets add, And indicated. which be in grow also bank our you markets, Jim happen we

to know, option all XX you feet of we're know, you agreement probably opportunities, a those XX million things forward, close of on plenty we've support us, got square know, finding that, diligence under contract sites. we're under lot we through due So land out and going you working won't can

about So feel we good it. very

monetize You a million our $XXX we've $XXX averaged our know, year. over $XXX bank, last and buy we a years, in back you we you land $XXX know, four between look million and year,

we as about good confident and certainly on very Jim got But the it. deal feel more one things with we've So day-to-day. it challenging of ground is indicated teams the

Jim Connor

would the we on is, close and make, I Caitlin that put our Tuesday Wednesday. acquisition perfect in is perspective the land It point production we and it that last from on

analysis end. the you could see a challenging, the know, never been the And at hit you close of processors. you And, at done bank, got know, because in own, of I'm efficient But coming we that it about land got land the in out the for little is of So not the pipeline successful we're doing the a know, number development market more have constraints foreseeable of pretty some we're I getting we inventory. there. too we've there's land we you the our we about, time quarter that of years bit know, that land you given know, of plenty control that you years. And production production future, worried of amount on, or plenty that lot

from think I that So be fine we'll perspective.

Caitlin Burrows

But like Thanks. guess point. reasons need earlier is just more out they that good call a people That's not you I move that the one maybe have that top that of it's in you top space then one probably don't And - that mentioned it. point aggressive the rate the wanting or being not pay how are aggressive guys the of about guys on seems at the you balance occupancy from I rate tenants and thinking guess, standpoint this that but and commanding, side? are the rents to not, between you

Jim Connor

enough, will and because you you a broke tell pushing answers. rent just had, not highest Jim great we growth. GAAP high job, tell two records our you you doing give we're Steve all know, the and will ever we're cash Will

to more it costs used act, know, re-tenant the expression, you I've but, space. to that a know, it's you So, balancing

market I'm pretty try is. people we at guys can, if are rent can the So, we you that satisfied to pretty our know, grow have as continue our on keep a as handle much we we good we what but and are, level pushing. rents And

Caitlin Burrows

Thanks.

Operator

Thank you.

Next, Please ahead. to go we'll go Rich Anderson.

open. Your line is

Rich Anderson

afternoon. good Thanks,

machine. true are paying Jim, tenant spread like life an I it back? Duke me you not efficiently lease the in lease, I that the isn't good time essentially, loan isn't now to interest really know, better before money of know mean have be it on feels you've value XX% it given seems of it'd to their expires. for for a money, your run and XX% cash that it's you the of but, where that they So topic, say releasing to interest you

of know, if escalation So is and have at much I there that. wonder course what opposed to you rent angle lease? customers, point not a know, percentage over of you more you think of is for a to pain an couple maybe a very XX% your least leases And, rent as escalation dialed into rent rents know market you the the points about

Jim Connor

not a new X% pretty an up know, at goes And if end looking question. loan, rent, you at of I rent think, know, as - that's it that releasing rent getting out, healthy your the interest know, theoretical at that's know, spreads, free from escalation. Well, cash you increase. in on I'll and lease, you the the add own to we're looking annual you start great lease know, you certainly your effectively your to I your starting you look own XX% place, a I'm X.X%

you that, you GAAP that's rent So numbers. get the growth how know,

to So, compared all you numbers of our at peers. I numbers pretty good historical mean know, our

- So

Rich Anderson

was the question. But market figured my run it. than your No but I very getting waiting for theoretical healthy, be rather more That that's the quickly, efficiently, you is it were It - rent market And would silly if get only I point. it. means

Jim Connor

peers don't think, portfolio, we into our the you challenges No, is, do. the frequently given talked mean, we've know, of we as lease of know, one valid no, that's our some I no, I one a the terms you point. is, get don't, spaces length of of you get things know, the as you know, to of about opportunity

XX% I the things lease as understand know, And that's these that's all we when acquisition, you as Nick with that bought you why term, rent that just have. with we're rolling. know But, know, think of You the to under you a know, market. quality are alluded particularly of credits pushing we value we in building

Somebody's in get hell a a of going to price increase years. two about

Mark Denien

is, one. actually pain, pushing Xs of Number Well to some into know, two, the a the that, not markets. know, say them feeling market the pain easily and this from X the what and you market once, market X.X% the was right. is couple first feeling number in has you now comments, well, Rich, touched They're moved just the I had X% you really, and of is it's not that tenants I'd on a to all, escalator painful say, are him for

there, last a And often well thing there's capital associated then would is you're I'd you more shorter-term know, putting market more the deals. you're the say a you those say is, So the market. I cost with know, in rolling we're deals, getting deals,

associated a too. associated and cost with a is with risk there So that, that

you savings look quick. everything and on to flow basis be bit basis, And you a at then on by stream. adjusted - the on to know, side cash this is, risk also associated not at capital So the I'm totality look got little there rolling sorry, had a some risk of the

balancing but a act, to all you factor those got it's So now.

Rich Anderson

words, in private you know, company, is your But company? that start you a you Amazon? be exposure - then you shareholders of that owned or of exposure - you ways responding a because sort actually good are would know are way it's increasing you're balance stuff. Okay. to, to and is, to you in Amazon sort a we doing such and question all and when cringing and you a In your other it that's reducing reducing doing were some second by you're the you're And in if

Jim Connor

doing And have in substantial input decisions, a pretty I'll you, tell thing. shareholder Rich, No, the you, I'll these I'm of we're all this tell I company. prudent

Rich Anderson

Okay.

Jim Connor

you the at to our risk looked And, than creative more and Amazon, know, ways still love of has you And, us know, we've XX% maintain more who profile, asset tenant, exposure as reduce would a that. taking Yeah. who having we manager to on the assets should tell Any opportunity even probably one to you exposure you know, your is partner, and relationship. great give limit you good have. any the control than a

company, bar get doing a were for exact we're So, it would together. be yeah, for, the But, sooner. we and might I of know, greedy We private all tell monetize the we'd next conversation a time more thing. I same you, you of a think that's you know, if

Rich Anderson

I'll on catch you Las Vegas that in one.

Jim Connor

I'll be there.

Rich Anderson

guys. Thanks very much,

Operator

to go Bill Please we'll go next And ahead. you. Crow. Thank

is line open. Your

Bill Crow

certainly get may the film they it over and And I'm Hey. but make on if Amazon And know, less you thanks. guess on and, revolve I'm low spreads to I'll the Good spreads the with sense and of it's you there healthy? don't ask apologize you're, metrics popular development if become wondered, merchant at which so I both And that going development still that seems questions, capital, despite focus are around a to because you last intertwined or one well. makes sense, it afternoon yields really don't than boxes have a cost I know couple know, of years, point it. the yields, philosophical centers fact is much flipping you be as which economics, just like stabilized more

Jim Connor

or or assets. number We Yeah, yield we're the is stabilized where of is. don't we not majority the value that the that mean, monetizing what look at look average our know you on ability though X vast is. creation our spread on I average yield in to theory there I the and to yields the the on even the spreads, at But of the XXX cost alternative XXX the know, lower. is bottom over acquisitions points XX grow the probably capital. And, year in basis line. line top are

economy growing money think development a run got into you've to markets, the the you you you as So, that we're company, best you much healthy, and want way do. I got strong put what the with side, which ship, if can to know, acquisitions supplement strategic strong to that's is really as trying strong and a really

Bill Crow

lot vis-a-vis it guess NAV it much I a maybe at at like or makes growth to trading, sense. acquisitions, more takes certainly time to right, sense. a you're as doesn't And And a you just know, make that discount question. But, there's philosophical which it's know, a something that a you Right, make just maybe strong happen.

Jim Connor

And, land if mean and No, yeah, in know, gets process you I costs of right. rise, softening market. challenging, in know, more we prices material lot theory, how then yields, get no. and rise to continue on would we you we absolutely get I the dramatically underwrite the the a some deals, you're overall know, development. to because back more entitlement you mean, thinner, to got pull

Nick Anthony

as do we at look that pipeline. But IRRs still our very And development are strong well. on

Bill Crow

You don't to it. let's we hope know Appreciate now guys. a Have Congratulations. get point. good that quarter,

Nick Anthony

Thank you.

Jim Connor

Thank you.

Operator

you. follow-up have next Thank a we Kim. from John And

is line Your open.

John Kim

difficulty] I that. to [technical think mean touched I do had I didn't

Operator

at that's Okay we in this no time. questions okay. And further queue - have

Ron Hubbard

And of to disconnect thank look year. half the with Amy. we may Operator, Thanks, to throughout for joining I'd the of everyone the call. you many line. forward the engaging like second you

Operator

conference for does today. that and conclude your you Thank

You disconnect. may now