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Duke Realty Limited PARTNERSHIP (DRE)

Participants
Jim Connor Chairman, Chief Executive Officer
Mark Denien Chief Financial Officer
Nick Anthony Chief Investment Officer
Steve Schnur Chief Operating Officer
Ron Hubbard Vice President, Investor Relations
Nick Yulico Scotiabank
Jamie Feldman Bank of America
Ki Bin Kim Truist Financial
Caitlin Burrows Goldman Sachs
Ronald Kamdem Morgan Stanley
Emmanuel Korchman Citigroup
Vince Tibone Green Street Advisors
Rich Anderson SMBC
Mike Mueller JPMorgan Chase
Anthony Powell Barclays
John Kim BMO Capital Markets
Blaine Heck Wells Fargo
Michael Goldsmith UBS
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Duke Realty first quarter earnings call. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Ron Hubbard. Please go ahead, sir.

Ron Hubbard

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

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

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

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

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

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

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

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

Jim Connor

approaching increased Coastal $XXX Tier and XX%, our is nearly platform starts, in high basis, development our portfolio, GAAP levels business be in-service at of rent a exposure to occupancy mark-to-market continue our all-time and million afternoon, our to We Good of portfolio our cash Ron. growth levels. achieved fundamentals Thanks, on record XX%. The everyone. stabilized record had record X development total both in-service

FFO, components growth factors these raising to in AFFO including guidance, of All over in at XX% growth midpoint. of our the XX% key XXXX contributed

cover and our Steve the operations. it me some to to let Now turn of over market fundamentals

Steve Schnur

Thanks, Jim.

it range. X feet, of was in first million greater quarters the of demand XX XXX the quarter the side, million X demand or fundamental last making square On foot square

about at quarter end square supply First positive XXXX the have forecast with the low coupled X%, X.X%. gap XX% with deliveries lows million we XX% near range. Taking the were revised record our feet of quarter XX demand vacancy remaining record XX% at rate all-time near vacancy the to this our markets expected for rent high low again year, to growth range to an teens rate from

through side, X.X of demand long-term the CBRE periods feet outlook through square of negative On net its XXXX. billion absorption demand no affirmed for XXXX with recently

attention Although labor as occurring drive customers, short-term resurgence most our recent secular still cycle. headline we paying and in as manager strong at continue lease it bottlenecks see to demand portfolio. a levels, and such the has with on an for our in resiliency, Asian impact recent logistics to believe this are close dialogues and outlook yet Based very record to we to to as in space demand. should e-commerce data intact term, the inflation, costs ports, we index and is inventory Long much and are the been greater some long-term themes have RFPs in fuel and near-term

Turning to portfolio. own our

And a at and Demand and are leases executed that a with the Of in global e-commerce and I'm had leased. between XXX,XXX We quarter X.X both was these number customers by first feet. report of feet positive the continue in-service pleased Mattress, X happy greater Sealy customer. some note, major leases spaces quarter. indicators, FedEx, only to Walgreens, our we feet square available evidenced than Cardinal now over across XXX,XXX XXX,XXX Health, million Paper, XPLs of broad-based see square as portfolio to XX square end totaling such during International with Samsung, the categories

Our on out markets. leased now significant We leased I also GAAP XX% lease in activity was growth portfolio leases portfolio portfolio finished XX.X% discussed, the fundamentals the both Across XX% foreseeable in records. to quarter led portfolio, mark-to-market of with XX% cash total combined our of coastal the continued again, the for the that XX.X% in-service rents a strong only presents lease leased, stabilized the growth for I'd activity is both and second-generation point records. the this with and visibility strong this quarter, XX% on GAAP, We all-time believe for in-service basis. rent future. entire

breaking on had tremendous $XXX quarter totaling a million projects speculative On first in cost. ground the we X front, starts, development

submarkets. of All well-located these projects are in

in feet of Our and the projects originally square past continues service in be strong, million leased very year. space speculative of speculative at leased. to Those X.X were confidence start the evidence XXX% are leasing placed X% over the now developments as

quarter to overall at pipeline markets XX% Coastal is over pipeline markets. end totaled margins XX% we to XX% and allocated expect development preleased, X Our Tier generate with creation allocated X Tier and XX%. $X.XX value This billion to

is forward, pipeline for future development strong. Looking very our starts

balance to support land can $XXX land. land located only in own market for is next for this end markets. portfolio, million the an average, year. land starts about with bank the Tier current Coupled Coastal that with we've owned also is totaled we have, our in of additional X land Xx the at land X XX% and, modeling on of about It basis we Our is quarter book our important value options for our NAV X land level another of uncovered this note the $XXX operating years. million annual we

and teams, it XX% starts now by development guidance, revised acquisitions dispositions. This strong. best-in-class our our I as local from With up Anthony the is to and new operating midpoint. original Nick about for reflected over I'll our outlook cover to fundamentals our outlined turn

Nick Anthony

Steve. with start dispositions. I'll Thanks,

$XXX share CBRE Coupled venture with Management, earlier joint of another on noted the dispositions tranche sale call, access contributed Amazon facility $XXX quarter. this outright totaled which quarter, was the with As for million Investment our third last the to we proceeds in Tampa, the Amazon of the million. for our to of

was the Amazon X.X% the at quarter. exposure our a As of end result,

estate Given the an our our of prices seeing logistics prices strategically at in previously plan XXXX. few are not and expect, original for strong our located particularly of assets did reverse for not some to in we for assets, increase inquiries in a we sell have did real

million result, a fund capital This increased attractively $XXX As our $X.X we for to billion. increased provide a development of guidance priced have to dispositions our range will to expectations.

we stay the yield. at discuss update. side, was leasing to building to Mark now I submarket. turn Mid-County a it purchased acquisition X totaling it Southern guidance we vacant, the expect will XX,XXX to financial California results X.X% and feet given The current in prospects, square On facility our over and

Mark Denien

afternoon, primarily $XXX highly per increased Core XXXX. rental the growth, leased diluted everyone. Thanks. represents was core quarter for quarter. FFO the rate $X.XX the share, was share developments. occupancy which The per XX.X% growth million growth FFO Good driven for quarter of AFFO first totaled increased over by in portfolio and

compared same-property property for basis of as continues was first NOI class Same first with growth of compared rent on quarter to for the the share-adjusted X.X%. in burn-off effective a due best NOI this XXXX growth of a quarter for and free Our cash growth the XXXX rent expect The NOI to generate in growth low free on even Same-property the on along basis on a of do moderate XXXX. was level FFO to the less well of the first to as occupancy X.X% burn-off. growth. growth year of some our a excess rent remainder mainly was capital of quarter growth to net the strong bit increased in AFFO We significant based quarter. expenditures, basis NOI growth

start share guidance results. a we FFO strong result revised The guidance a $X.XX to for to to compared represents XX.X% per range $X.XX previous of announced XXXX of our to an to FFO over core As increase the core of $X.XX per $X.XX midpoint of our share. range $X.XX of revised XXXX XXXX,

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

our cash we occupancy X.X%. for X.X% increase previous have result year, of growth NOI This of on growth of range increased a to same-property X.X% of expectations and range the quarter. to a the mainly For X.X% the rate a from the is guidance first that to rental basis, levels of we remainder to experienced strong continued in similar

development in be of source On closing key remarks. the submerged guidance $X.X continue our very our supportive XXXX growth market fundamentals and to lease-up -- a website. our estimates coupled previous and turn other to supplemental in developments, range of to of This billion billion. are included We've in compared excluded optimistic billion revising a detailed more guidance and of track record, for $X.XX specular with guidance. $X.X $X.XX be on between a updated billion on to based we development few our and the now it increase starts in back our development provide components to range The of outlook Jim beyond. I'll information of are as couple starts

Jim Connor

combined headwinds overall closing, but should portfolio ability strong rising continue consumer growth secular in to set-up we in shareholders all things, provide for tailwinds generate embedded will with support XXXX, some a AFFO substantial which positive in Mark. in you want of to continued of rate for our I and double-digit generate opportunities in business inflation, annual the with Duke thank not in GDP commensurate and macro geopolitical your the our dividend. growth Thanks, believe This, our us rent development. and on Realty. for confidence side even foreseeable level driving interest multiple our leasing the future, In spending our of and existing and in gives great amount just growth FFO to

up [Operator the and that, open We first our operator, we'll with will it now lines Instructions] open for take question. And questions.

Operator

the of from Our comes first question Jamie Feldman. line

Jamie Feldman

I more bigger where thinking guess development that there starts. drag might Can weigh of and outlook just about, things the as thinking positives there's we’re maybe that than maybe guidance, some just was the kind about fundamentally, negatives, the lot anything? better a been several areas of if about the some -- is talk a have you clearly you the

Mark Denien

you guidance this could dispositions the drags. to be development Most to thing of in is I'll dispositions Jamie, really your negatively that kind will point guess start. FFO guidance. fund year's is increase number Mark. There pipeline. maybe on go increase change were This of will this big only no in I the

But will that's that from I probably was think So certainly a sales this in quarter. trade year. long start and run for the drag a on it's But optimistic a assets. bit better rate as pretty little only low accretive dilutive But year, we we to we're disposition be cap it development modestly the were higher-yielding where last of now.

Jamie Feldman

about then of would it's you into say, about head we sort -- up you let's think talk quality did you credit you do think cycles? whether or recession. -- today prior did see Can just economy in -- we and even just earnings And portfolio how if end -- occupancy hold the the versus up if or pullback leasing growth spreads a some

Jim Connor

would Jim. a Yes. I of make Sure, observations. Jamie. couple It's

and we credit can everybody, of our we of XX test roughly rents. all our to XX years were collecting start portfolio ago reminding to And think tenants. ago, of was at the a point which great pandemic, I X our stress XX.XX% months the back for quality

softens thing wants anybody kind there's then out out to in Steve rent to gives will of And of that's pointed in confidence downturn that the our XX% the embedded our continue portfolio. growth in again, us that not there future, the we where any the no as market even stress markets, see earlier, that point of have a but perform. to portfolio growth that rent kind if test still sort So the in

So those ability things as in point a confidence were would somewhat. deal I giving to things great to our soft X perform of us if even

Jamie Feldman

about was it's declined. be even just earlier that, fair, that really there we government downturns, mean, guess I a if guess, of back at healthier, stimulus thinking tenants look I to I kept lot though, Okay.

Jim Connor

less don't in of look them of portfolio our early. tenants and that it's you if those I half some XX%. agreements, No, assistance, we rent look of that -- did at the And got the you prepaid if offset any go number at sort tenants government than of back

and portfolio think got. quality I to that the the the So the and speaks of we’ve tenants resiliency

Operator

Emmanuel Our comes next of question line Korchman. from the

Emmanuel Korchman

few growth, coming that this should If it the the the growth? each we mark-to-market? as especially XX% be we there upcoming we cycle, development the next that drivers about is a here, call with of deeper this how from how from high think point going year growth than is that of much I and this questions different in is So rent just around external come about get long-term much if how the of the that much your, as business, of in Or half years internal it, from from sort it and that? the is? guess is at growth, proportion to of half mark-to-market take

Mark Denien

close, You're Jamie, sorry, or Jamie Manny. --

Emmanuel Korchman

This question mine, Mark. is

Mark Denien

Yes.

We have slide right in you're it and And pretty a that that much. much deck on. our hasn't lays investor changed out, really

If growth. on then return XX% X%, XX% or growth, X% growth of about GAAP FFO, for like X%. -- development you FFO, your of in to of FFO quoted our cost take, same internal X], external external a look I net And our call, financing our of together at goes we impact the property that to think to to is so I what give [X

about So it's XX-XX.

And right way math XX%. on. think mark-to-market our like the You're to I said, about is simple Jim our portfolio, think it,

XX%, we've you a been growth. doing at If year or plus there's minus will, X% XX% that

but So you're pretty close. simple that's math,

Emmanuel Korchman

of that old it -- development Great. to component projects? is that smaller a the a were some the versus year new guidance And in going on Is starts, bigger there guidance, is So we projects ones cost expensive versus you're before? it projects mix new a or starts this the versus if at has a of number couple either -- the more Or then changed? have to look or there?

Steve Schnur

into our a significantly there's Manny, is -- couple find -- pretty along about one in mean, I outs. that mapped a and Steve. always there's next large Again, diligent next some the that out somewhere development Yes, way. for ins having this mean, so something visibility skew most land you, we've that guidance. go I few in year or way years tell projects. of and the would of always it's got building we I There's more as been the we this along couple bank well. we've But our other,

Emmanuel Korchman

So at would this to be fixed the year to go again potential kind guidance start is that 'XX Or what point? at of for for up all? Steve, that this

Steve Schnur

For development guidance to go starts? up again, on

Emmanuel Korchman

Yes.

Steve Schnur

term, and project another that to come if we're near by harder to those Yes, are able we entitlements. found start but harder with

is, But go it we're of in could process modestly, So most we level already of have up some perhaps. what on.

Jim Connor

Yes.

take in only you they're X I but could build-to-suits. more those, think And the significant big built filter an you time. they number that would be there, and But the X pipeline. of We've or a add see some lot into those appreciable of or a got out increase. think I of

Operator

from the Our of next John comes Kim. question line

John Kim

in more remain the Tier starts your you're to bank, accommodate your run to because yields current could land of now of at years development rate attractive your and have land ability kind you? gone run source development rate What's markets up. On saying we development X has your X

Steve Schnur

say to been do last the years, bank starts a been that development of the would our I we’ve We've looking -- same number, XXXX, development -- this have XXXX, X the able range. strength XXXX think lower and at XXXX, that's ran to team. back Yes. in land our I

job that And a level under our contract, we've done where There's team of got can a are years. starts diligence. this I really sites teams opening number think we've we've option, our the doing are it. a level under in that of next due for X our nice with -- some is shine. But support remarks, bank we've -- got So of land as said this always

Jim Connor

Yes.

had a John, we point, almost now had perspective, year And the level we been we've ago. double doing this land Steve's along. that of to all For development

whole which Now doing through amount a is is cycle. this been But land land. better. about of We've that we've it the every covered income, same been been lot generating buying even monetizing we've It's year.

John Kim

Right. up. are But going development starts

visibility strong seem did it's doesn't as it So as before. it just the developments, on

X wondering, developments Tier doing the become when development or part was X more attractive? markets do non-Tier I there, in question, on markets So the of second multi-store these

Jim Connor

X X John? spread the the Tier between other Coastal the of The Tier and markets,

John Kim

Right.

to the difference Tier outside attractive X become it given more Just of Does in do, Coastal cost. cities? land your developments

Jim Connor

tell land we would the that the I or books various think we that control, have our I you, all believe Yes. on the in is in submarkets either we right of markets.

north So of XX% consistently the are margins say, development our just consistently, pipeline. been have let's in --

strategy. the our differentiating we're or you, in opportunity not would I it's is tell creation markets situation the whole a good. shifting So between value really And where of portfolio

the across I think got ample opportunity board. we've

Operator

of Our line next Caitlin the question comes Burrows. from

Caitlin Burrows

I follow-up guidance question on did low you versus 'XX I higher. guess revise it initial development development. had was but another start 'XX,

And with of materials impacting some labor potential. developments and issues discussed peers your have

comment been labor headwinds wondering impacting to current just if So what your you you've extent could impacted by development or potential? material

Steve Schnur

we're think our front experience monitoring permitting of our bit with processes starting or big Yes, stay I'd as dates materials but tell quickly of items. in of of procuring terms hasn't and we're an Caitlin, XX size locked to as would But able changed and on to our design our of in far materials. material Labor you, we're and of sheet you, our issue, what's have as early this I been. materials. have in, been we're use our is long-lead are again, us. starts well out I start balance terms where out XXXX I'd our when you, our tell and years in in tell a front how design, how going all closely

Jim Connor

add Caitlin, Yes, would comment. I Steve's to

side And than material and our portfolio. it's first in labor out through the anticipated. leasing those ready much come development of the we've stronger think on the land quarter that isn't of most guidance when or our are drive portfolio and it's the us I have even to helping sites way entitled we the of costs, and related spec what's we think the I April go to

So again. to and once I think guidance confidence us increase that's go ahead development given the

Caitlin Burrows

be going wondering you're risky. on sense. Yes. And you to and warranted that considered at be definitely metrics versus to does something I just more actually, might was speculative like it this was development gauge look what seem my question at But second it makes is point to speculative side. that wondering, development open what speculative

Jim Connor

I'm know to don't than I suppose. can Well, speculative development. risky I ideas, what this open more do, is we

look What's So a leased at pipeline. we increase number a of the that comfortable what And is roughly we're versus the at in build-to-suits, development with. percentage is of speculative the at we're doing We volume. metrics. the number look XX%, number which even still in amount with is leasing development very

As the this think, are which of above quarter at in-service that X look earlier, Steve eighth we the, of is portfolio, overall cited I XX%. both feet. above square the portfolio, total and the consecutive occupancy the And we're million

all So more doing portfolio. we I and think that more to be the would you metrics combination the speculative into need of X those tell space bring development of

Caitlin Burrows

saying it. seems in certain you're no, it those conditions, talking necessarily metrics considered I that on but the Yes, market case. Got that's more was based not might risky, speculative development be about,

Operator

from Nick the question line next Our Yulico. comes of

Nick Yulico

you're basis. in spreads and cash Mark, rest the the get, of to the guidance for that year hoping a assuming was GAAP on in terms I rent of

Mark Denien

we going a of out XX%, have similar QX. the at coastal we role think That's We last to coming months. of really was quarter. last be what posted months for don't mark-to-market sort Steve of very roll that is in year. in coastal what was lot X I to The posted of pretty XX% first the only close the of XX% expect the similar Nick, X to the our on mentioned markets. Yes. still in portfolio we they'll

may I rent quarter-to-quarter, year, on quarter. rest post you'll think for first deals see maybe to that or higher by So the you'll growth I large, vary see of and lower. we little the a -- very similar it think But the

is that we As I would have compared to coastal going year. give role little we're bit we out the to XX% But look a to tell this not over next XX% you yet. year, year next guidance

So here as it we to only sit expect next year. I would today, get better

Nick Yulico

That's Great. Okay. helpful.

development. on second question Just is

little the it's If the about you the yield more in talk a been. quarter deliveries could than first bit higher for

you You you XX% going I of guess And how underway, did on had X.X%, you yield that rent back think kind we driving a the your that raise also, to forecast. there, should about development since once cash deliver yield what's expected the market quote ultimately that. pipeline then yield

in I And think development rents so yields. don't trending your you're

a for how maybe that just could us can you play So out. feel give

Mark Denien

start the I'll kind and to try first it over Well, question else. to maybe turn of

for popped Our yields really X reasons. have

as delivered They virtually service. we about spec We in -- There started they our We months. projects been the Steve last now literally spec are We've at are over leasing started mentioned, go projects the XXX% X%. XXX%. went in are as talking XX service. they we when

So X We leasing or months underwrite at always these we've X less. been year. up

costs when at of year got So yields, carry a our you initial we've the cost. in buried look

So our bit. little a it yield down brings

So to months yields. those up XX XX can lease extent that or earlier, we helps the

So that's was the of just part And rent second growth. then part it.

we signed only when deals. adjust to don't our and we trend then underwrite that it, We current mentioned rents deal for we when we underwriting. start rents do You

deals we accessible the substantially experiencing market we're signing are So of what based are and on rent underwrote. the

the factors to continues, underwriting that is to X that from big yields that look in what's dynamic delivery. as those extent pop tell you'll continue. I And forward, So see we creating result initial you, would

Operator

comes Our next line the Goldsmith. Michael from question of

Michael Goldsmith

this escalate of talked bit But to in longer some the takes others again? and inventory drivers reshoring. of driver of little that have this dig the growth. demand. to e-commerce China wanted I kind maybe into little bit shutdowns a a realize Do the conversation a And bit kind greater in about about You than resiliency

this we to see forward? as can going contributor start when So a really major demand to

Steve Schnur

Yes.

I more proofing, to or we're you're New I a some of talking trend Mexico in to people -- future seeing their supply determining near resiliency are is Central the impact it's on America think, just future think manufacturing, see, shores. chains. going in U.S. relative and bigger think in about certain Whether industries now, product and the I us it's our to proofing it spots But we're term

of I yes, mind for all customers. it's of think So definitely our top

Jim Connor

The Steve Yes, supply think is trying the exactly our are their safety impact right. stock is Michael, logistics I to that would chain. near-term add, I in customers out and put

think course the steadier onshoring logistics just rebuilding of a I little slower be of or the X of time impact bit will manufacturing, than little steady over nearshoring next the likely takes and the a Because assembly or but the moving operations reengineering, to processing, X more side business. years.

So long-term that's our midterm think driver for better long -- space. I and a

Michael Goldsmith

what year, a your are seeing as of of those sort And expirations? number had renew more renewals to And a you on that this how lease traditional -- people in had as escalators from renewals? And it. currently year? What you of differ early. look than Got expected negotiations maybe sort kind you follow-up, are getting last you do

Steve Schnur

I would given would out I up earlier? trying Certainly. Yes. do we Steve. it's tell have trying that, there, say to space the -- environment to customers lock you --

them. We'll -- if do it's representing now. tell right a would them piece I to them We're obviously, landlords supply their to chain. good firm brokerage critical customers. we'll it's talk with market -- think listen to it's But a a

market. today's So too negotiate in we in don't tend advance to rents far

it's for escalators, emphasis of a us. been point big of terms In

of the in in part move quarter signing of what north You up latter first saw X% number X.X%. of we our 'XX up moved I us that 'XX, then. would has to that the Certainly, In I tell escalators expect for go rest that our numbers us leases. there within -- our inflation in escalators you, higher suggest they to would out of the year. that could the there's annual continue trend would were we've

Operator

Our from Ronald Kamdem. the of next line question comes

Ronald Kamdem

Just I'm a of inventory us their any you need? portfolio. about more or your be much it's sense can comment, you because How saying are tenants, inventory. different And hearing when would they're of but give seeing Just levels? just color you're guys happy? I they a are helpful commentary what about do know announced a ways, speaking in and to one we on they what inventory quick lot really keep And wondering

Steve Schnur

would exercise debate as get are as with absorbed of I feet into inventories they lot call do you, our tell space year levels it, down our to for utilizing demand category. resiliency there's a that we've we've sort needs back on of get sales that utilization this you, build back a pre-pandemic tenants. we of or There's tell Tenants customers. near a that to square levels to number that record people twice a been we XXX in of Sure. doing of warehouses. And we lot still to for long have, our still stock a by to ratio. space million would of think this for -- you at build there's million by that. of back incremental just XXX X% around we breaking been that And tell to would XX% done side I a the pay the attention XX%. think, The to inventory as

Ronald Kamdem

when of That debated being you one it. -- not in But on then Got maybe market. just another sense when to it, to Like, are the work are it, can slow, what seeing how know it's a recession, it on do some sense. about in for your I things to And give commitments businesses, big picture see would putting if a tenant build-to-suits, be would leading what see start you slow? capital. could What they signs the to be your of that to it could think right? have businesses guys start you the Clearly, here. -- one you're you us more indicators makes capital in which

Jim Connor

our and itself Ron, in, think discussions I renewal -- first I things think, leasing would our that. volumes, it would in So like with we manifest us

pretty back peel the that I investments if leading good pull start the of and on customers spending, the a if our deals think onion, kind they you we back at if look building, to Next, doing, that's we're indicator. are capital capital inside economic that the

So follow volume, in good keep of that's, sense our before we're reasons thing which pipeline of talked the where handle that in our that we've one is is, pretty closely guess, I terms seeing. on a And leasing so renewal the about percentage, we can kind then development we other the build-to-suits. demand of the a that the so of

our are until that build-to-suits And the cases, about to -- to leading you're make we've supply the entitling for in today, in best their customers and not clients they're economic got building opportunities. indicator delivered XXXX. And aren't months. are problems in Because willing if our us out going buildings of XX be for those commitments. going talking they're the and XXXX, there with some So next here designing and lots be chain, XX to sitting to logistics seeing those conversations

Operator

next comes from Tibone. of the Our question Vince line

Vince Tibone

mark-to-market your provide also you cash differs Could of your top how share lease between markets? on some a that and basis

Mark Denien

well markets, at clearly better. back future we're bit our of New with outliers in of But the the that's I Yes. that's pretty XX% got it's top year the have on pretty bullish as other And a Vince, those rolling markets this at you, continuing mark-to-market only markets, We're well, to get even as on across leasing the you plus newest we far it's pretty GAAP XX% are for all are outlook spread. being and this markets, coastal then our markets tell It's Mark. basis mind, XX% main would those on coasts. the and Jersey. Jersey Cal little on X the X if coastal a X Southern us Southern and and why on overall. we're But markets the New out you the And better pull Obviously, versus are California than those well exposure as spread biggest. why that still class. And are XX% keep in the only cash.

Vince Tibone

compared No, Jersey Just Atlanta? Chicago, Is that anything Dallas, the what you there sense. order higher much bit? how New of little is can and of quantify to like California that roughly? Southern magnitude Like just makes likes a

Mark Denien

yes. double, Literally Double.

explain, to -- number. leases that, to got like we've in mind, of buried and trying that fresher Now the like newer keep Chicago, got I some say, Dallas we've places I'm in

you've and is Southern Cal, haven't or So Cal roll has XX%, because our hold leases and Southern our along. doubled has all out, yet, Dallas that of got them been just part Dallas it in hypothetically numbers we to because that, is is rolled to not, got believe portfolio if XX%

much we Dallas, go don't in churn have So as that makes left sense. to if

all, You yes. but at look the maturity too, got to at

Vince Tibone

do targeted had that's lower you No, color. One in higher of pricing for all mix changed longer think for at are really helpful switching Like, rates? gears. your has terms disposition that growth this me, what's more year lease, properties And moved given the for asset profile?

Nick Anthony

bit We yet. we the only a we've in haven't seen it We've What buyer seen that assets. is assets out a pool on market. the shrink seen the have few had

is that them agreement transact a we of a under One pricing in at market. expected sub-X non-Tier at, to X

it close has yet. anybody But we're lot a eye out really about a it. seen of think on very I it. don't There's keeping So chatter there

right, each the we'll So evaluate is disposition If as about we'll back think transact. won't. price opportunistic not, be on we -- we'll And side it. go we we and if the one be

Operator

Our Kim. next of question Ki line Bin comes the from

Ki Bin Kim

Just going back to commentary. bank your land

You it is of include which curious, bunch Columbus, sure of we in just that a bank of at Or I'm land really to pretty the standpoint, I was developments options, you mentioned can't options that continuously reload assuming land, sudden. all you doing a actually a I should But from pace? strong years? can of if X guys X Ohio you imagine you Because I'm at guys Ohio, included practical is expect a runway. if about look there. I the mean, you you that develop available. have But years half you

Mark Denien

for, Ki Colombus, supplemental. on agreement you do long-term we place man? The to is just land to Columbus, take Bin, Airport No, think Ohio I why it a in the point, in have this detailed Ohio. at is Rickenbacker option clarify, your only

contract, So covered on land under or already everything else land plays out supporting agreement, either the the put under is numbers have that books. owned it that Steve we

does So X pipeline not very for lion's our piece. the of small is Columbus land represent option share the the It years. a development next

Ki Bin Kim

that just topic going to Okay. back the of Thanks for And clarification. demand.

But if looks far a corporate just doesn't your terms it demand users little a of spear these of being next bit in and it e-commerce way the weaker? the kind but able how and of of growth, And or space work growth have -- demand. there's round continuous all sort in anymore maybe to and demand into locked talked population because competitors have not simplistic sense, are along about I just stepping the of getting always really one need know think they up economy for with up. and segments other I its of

Jim Connor

then of and as make add a think Steve comments, can I'll color some well. couple Well, I

in we have deal about demand back, their talked year. back signed I had And Amazon terms of across saw yet we think people record country. and the or them pull pulling last speculated

think their our they of catch I their supply vast -- see the up. build-out are I may other think because clients in the of terms far are chain, while majority we along moderate of So playing the of demand how still

on capital we So of see other more continue just in I Material are billion where a the of playing lot up e-commerce still systems in a from handling development. facilities. I $X Amazon in saw are and to still demand Amazon. in their early terms And stages expect investment headline robotics. of robotics We companies is e-commerce their think continued catch the think than -- the everybody investing

And e-commerce good us. runway and terms adaptation of long really think we its I I that the So a chain. its for and think go bodes supply in U.S. in to got

Steve Schnur

We market. active Yes, Ki category first just last probably year. us quarter. the Bin, XPLs be to demand. fallen e-commerce overall user I has in saw that add, We most the in us, to for third the in saw terms the would Retail of about continue for that

it's I building towards their -- in Jim e-commerce out said, as are venture So early platforms. own on think our of most their customers

Operator

Our of question line Powell. comes from Anthony next the

Anthony Powell

Can do some markets more in strength go some markets? involved there? Which detail into noncoastal some those how supply You've of has markets And here. how maybe increasing you talked of about are your the showing you noncoastal want environment highlight? to

Steve Schnur

us, like markets market great for probably in little us. I Yes. markets world, one hard soft past soft Houston, Chicago, a rent the us Houston Dallas, has – Look, a about But you, as were that's to Minneapolis, markets Raleigh, today's talked we’ve before, in growth been spot all for Atlanta is for market find of this it's and for us tell of good would in a terms late. quarter, overall it as right? activity. Nashville been

doing a hard market right -- not So it's it's pick well again, that's now. to

Anthony Powell

rents back that one guess of during we think lease we how you it. should did the but over current overall And I recessions? rents trend? prior Got lease COVID, few not Maybe How mark-to-market at more. how recession? that years? in how other terms do Maybe a think should risk are, looking possible next mark-to-market, about think recessions, sticky or about

Mark Denien

into decrease numbers. a experienced flat, we still have I to Well, mean, is think we the several I'll the expect way forget about because years, I to we expect which start. we've XX% soon. XX%, get anytime pull easiest we what think don't But think it they dramatic -- the baked our from go recession, is, that I better if it rents back last

we growth the rent think and I have even still at comfortable stops, we're here right range XX% that dislocation that of it's can in we'll So and some period have stay very now if it upside.

we're go comfortable happen. go? mean, it lower, But better. can it XX% I can low don't know. that the can how I So will I very anything think get

downside worst a stays at scenario, XX%. but is it a the of not downside sort case, maybe And

Anthony Powell

did rents newer space. someone the in and curious XXXX? trend XXXX to How Just as

Mark Denien

draw mean, in Well, environment just know all. that I in now in starting That point, of XXXX, you We're look if I were always starting think vacancy at the in to we be can got at from to different and don't XXXX. it. factor logical X% Jim, don't would know, the you into add conclusions anything heading I my you I have that. to we're first a a history -- point.

Jim Connor

went Yes. fell XX% a to think -- I or head, rents of my don't know, truly even top market. we've market XX%, mark XX% got and negative, to point, I even your if if off fell they I still have the that

imagine a scenario So XXXX I in through XXXX, can't didn't even fall rents XX%.

Nick Anthony

is out Coastal XX% -- XXXX, have Back have point I'd X% any that land don't X we have thing in NOI X%. XXXX vacancy our other that was Tier and in markets available. coming The than from today, of less

big difference a So there. there's

Operator

next question Rich of comes from Our the line Anderson.

Rich Anderson

e-commerce just my But questions answered. mentioned, question was couple of Just been -- bit of activity I in a to And in to lot the have a just of quarter? there a answer a ago, previous me quick maybe leasing you little follow-ups. was might is the terms that, missed what breakdown give first third the activity, that. of can the have largest, industries. you A

Steve Schnur

Yes.

of little would was be there I terms X category. -- then the e-commerce activity. goods under I throw product us fourth what XPLs. in Our category of be, next the activity. out made up for made would And Consumer top third. That sort would half that overall a be our Retail we would of guess, manufacturers up assembled the goods call

Rich Anderson

past And couple of the over years? how changed has that

Steve Schnur

say been up activity shifted. e-commerce always the Amazon's would goods for X past our products top. put in Consumer portfolio. have years X, X, near and usually probably XPLs always with has e-commerce -- in I top X have that the the

Jim Connor

e-commerce and of Amazon because that's track grain easy and of would area companies, they're platform. I got to to pretty that's of that Wayfair.com purely bit how e-conference products to Rich, support is the their salt. that is say more and I'm forth. their traditional how kind the It's little trying to to of much you much but take supply gray not an excuses, a doing with moves make what back chain, support consumer

in a So area I to think there. there's consistent point, But all along. pretty little gray Steve's been

Rich Anderson

more. It's obviously, for too, right? said very Same could be area, gray perhaps XPLs, a much

to in beyond and on an of face you if to speculative leading first the process. at that GDP aren't declining ingrained question wanted and of growth, so about -- of catch-up seeing. and sort end expand take be there I'm just guiding don't I because war The spec entirely you And else quarter. to might indicator this going I they a what's But might the at development being an going what point ask a they and you're development, to morning, see leading just to in this is if had would inflation. observation So you speculative they're what driving what the the commitments indicators call, system? on the you're a But if released types here. in in down the the bit -- the this so in wondering, the inflation the indicator, face you to think of other, real these idea catching I I business, X.X% have day, on in yet like trade all as leading build-to-suit up with and to development best really build-to-suits those on. objective the risks getting you little don't sentiment hanging I know used me. mentioned they light willing make not leading objective a term those indicator play be risk they're Amazon, of companies consumer were to to still of And

Jim Connor

demand, customer at valid the roles are our about the of reversed, vacancy, XX-plus those have enough organic it, of portfolio, handle space you in-service percent you those spec volume, points, all things. nationwide we If all more existing could our growth don't occupancy, think build just base. space. were in I to Rich, if leasing mean, just

Rich Anderson

it expand feel leave Yes. it, to just demand you're much the brave this point don't and But could go I'll go tenants all doing only vacancies step, stuff. up as XX% not one this just I is and on like seems of to as this depending a that a sort at guess it I like but call. coincident at development on and that. I speculative litigate mean indicator could and down of

Operator

line Mueller. Mike of Our comes the from next question

Mike Mueller

here. ones quick Two

activity are today? First, of who land what typically existing your spec you in portion from buying is parks? And

Steve Schnur

your or redeveloping or in the We parks, time. that might of who companies are have for that would typically be I existing business a -- for they've our either a a private a whether say, long X -- something And land today, that private we're time, would was other that a sellers, family business company. in is, people buy, a question there's terms owned owned I by say, owned long different development -- was Two site, --

Mike Mueller

-- what Yes,

Steve Schnur

land past of projects, park. in the existing times was it year. our list version One bank some number had one site over a at that Everything of here, working looking that in of call of is this think I business our an and our was else been the projects on a asked we've on

Operator

Our next from question comes line the of Blaine Heck.

Blaine Heck

quarter, up guys that XX% really especially rents a at put only especially this for you effective given sizable Obviously, some markets. on X are basis net those and XX% in Tier

spreads. rolling affecting what of the is rent the those So term wondering I leases to was strong extent off

driving those high to X So that and spreads are of those that old that X years closer you've that's are of very short what's in seen over lower-tier old, to more of rent period market? rent strong those and time? even growth indicative really years mark X Or or markets to leases they are kind

Mark Denien

would what not, mentioned. longer terms it's than a They're both. little I long extremely bit rolling. bit It's Blaine, call, X- leases Yes, little the X-year a you of that to

today. here or I is X, enrolled X is was what which think as the portfolio was term sit overall about about average our we

great a places market New good and Atlanta, but certainly across escalators time, seen just rent lease. than built-in been not has Indi better been the Chicago as pick the all it's like So we've a Southern a whether the California you Jersey long or markets, lot as a rent been combination. growth or great, We've growth within

solid like So rolling, just rolling X of lot a all markets. anything it to was not good like it's X-year that, X XX-year growth or deals deals the like – it's pretty across

Blaine Heck

Steve and Obviously, that were keep footprint of square there. Great. probably fundamentals the guys we Indianapolis. market it's expect the should a can helpful, some relative right. All about market. your Tier if Mark. a that we expect footage your basis noticed trends talk growth hometown you're you X to the starts there maybe year talk seeing And longer-term But about the on of during half can to plans I continue in to And you in quarter the for about That's there? and then that

Steve Schnur

headlines We've the history like that had. it's on that's we've are those South Sure. right market. East fact some long in I I great we Again, started And about just got a unfamiliar deep -- side with would on with some here. occurring we're or history base. got overbuilding. lots recently of located. of It's the customer we're in quarter. timing where these Indi's got read you lot buildings in. buildings the you this Indianapolis, the a we the this submarket. not we've X a side, very thing tell for Obviously, far got probably markets wouldn't a into land We

And super them. us. projects a for Indi. And when I think in we anyone. active expect Longer better than front take development haven't see know market of this advantage on we to I those It's we market be opportunities, successful. been good the term, we'll

Operator

There you. no Thank in queue. are the Please continue. questions

Jim Connor

you the everyone year. disconnect may today. would to for call Operator, joining look the to with like you forward engaging many We throughout line. thank of the I

Operator

and Ladies for does and gentlemen, today. that participation AT&T conferencing service. your conference for our for using you conclude Thank

You disconnect. may now