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First Industrial (FR)

Participants
Art Harmon Vice President, Investor Relations and Marketing
Peter Baccile President and Chief Executive Officer
Scott Musil Chief Financial Officer
Jojo Yap Chief Investment Officer
Peter Schultz Executive Vice President
Chris Schneider Senior Vice President, Operations
Bob Walter Senior Vice President, Capital Markets and Asset Management
Craig Mailman KeyBanc Capital Markets
Ki Bin Kim Truist
Robert Stevenson Janney
Caitlin Burrows Goldman Sachs
Michael Carroll RBC Capital Markets
Nick Yulico Scotiabank
David Rogers Baird
Anthony Powell Barclays
Vince Tibone Green Street
Michael Mueller JPMorgan
Jonathan Peterson Jefferies
Vikram Malhotra Mizuho
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the First Industrial Fourth Quarter Earnings Results Conference Call. [Operator Instructions] Please be advised that today’s conference call is being recorded. Thank you. At this time I will turn the call over to Art Harmon, Vice President of Investor Relations. Sir, you may begin.

Art Harmon

Valerie. much very you Thank Hello, everybody our welcome to call. and

February forward-looking quarter year the XX, update XXXX, time-sensitive information XXXX. maybe securities this XXXX assume we which may XX-K me discuss expectations, and today’s and laws. SEC our statements full and accurate-only results fourth our include to call based or as our for Before could These and in results statements by no from on Today’s statements and our estimates everyone of that as filings. Actual prospects. our are provide. date, statements materially our other of we statements defined obligation cause differ remind and management’s described other We may federal let are forward-looking plans guidance our factors

a today’s in firstindustrial.com earnings release find available filings measures can and call The are in reconciliation and supplemental of financial our tab. supplemental report, the earnings Investors report SEC release. non-GAAP discussed You our under our at

Investment Chief Walter, President; of Peter Operations; Markets Asset Management. questions. Our the remarks will Executive Chief Senior Capital on by Chief our and Musil, President and Scott for are Jojo and and Officer Vice Senior Vice call Officer. with today will Yap, Schultz, Vice Bob Schneider, Executive up Officer; your it Chris After which, President Financial begin open President Peter we Baccile, of call Also our

turn me let over Peter. Now call to the

Peter Baccile

Thank for us you joining today. and Art, all thank you

record our a future areas member and for First growth XX.X%. commitment another many I team businesses, their as I XX.X%. end positions excellent rate shown revenue year the our in CBRE completions. touch growth that your land demand contributions users XXXX XX outstanding they update enter million up Logistics And and focused of opportunities. value significant year Our the XXX U.S. on occupancy will these you growth. creation representing will every within Industrial quarter remain to and of to net But flow wide pipeline, advisors along results very our each of success range Thanks to the well capped absorption before of continued fourth and compared the of opportunities strong and estate XXXX. strong enjoy located highly positions in of our cash with feet, market. our competitive development with are for great on million portfolio, from embedded sizable quarter profitable for of fourth be Those and reported our supply feet as expanding enthusiasm momentum, the industrial strength source econometric cash that chains. real do, square let optimizing was on me shortly. square to We

well XXX was feet. absorption record square all new net demand year our progress square XXXX rollovers. the excess For feet, supply to This date in our contributing of totaled rental as across to million rate in completions, significant which shown growth with markets, our of is a million XXX dynamic

of Empire, of to Rider other investment the cash Southern more yield is at first Southern growth and foot estimated several bring development care this our project in investment tenant expirations due cash XX half increase a this the the XXX,XXX a we of rent basis yield our X.X% California vacancy our To Project, totaling rate million taken a we boasts which rental than announcing level markets, are XX% of at our we I-XXX As million. our XX are develop launching in of X%. including to with five South are be of serve one Miami this targeted outsized acres rapid demand additional of planned feet. the Total favorable of square on to had excited future yesterday, In approximately Center on an located portfolio of million to foot, XXX,XXX California. opportunities capitalize to we Inland to are more market with takedown first million X.X development quarter, feet, fifth square where XXXX many XX%. we our a $XXX tenant successful is approximate adding park starts just Florida will In a our logistics can our we building square the with activity, off experiencing we of X.X significant which square an

feet the centrepiece million will the South and Park over Florida growing our next First square X.X several Miami years of when out built fully as total serve portfolio.

cash adjacent the XX Total with Valley, And for for investment after I the projected we the of is XX yield XXX,XXX and our million. our is In the in location investment the of cash total building Logistics $XX FedEx target to our Denver, info XX new new logistics starting foot cash located footer sought projected a Lehigh X.X%. in is Center, this and investment just begin center $XX The will first square yield million In are is of projected Lehigh square the an million is first downtown. X.X%. airport estimated construction we XXX,XXX north yield X.X%. hub. Ground Our Corridor

are X.X%. feet. process X.X%, that moving our total these to million at and feet, development of with yield footer XXX yield a is new Kenosha, starts is square our a These cash development a yield we XX cash XXX%. announced starts, a development and estimated leased. is to are square XX%. At average our target expandable currently XX% investment an margin of forward development investment and overall of Lastly, Estimated million, to in million is X.X%, XX XXX,XXX XXX,XXX margin XX% and with total our X.X expected of Chicago, newly and first Park square Including XX% development

for our for of the our That support a potential positive today's capitalize real XXX billion fundamentals. and industrial are We to square development purchased more million We construction starts, on basis. today book acres quarter investment. Adjusting than our X.X also land announced an can using of X.X adding in sites sheet balance billion additional new estimated million. XXX newly is in new busy costs total the the estate feet. development land represents XX.X at This total

In addition, our our remaining joint venture feet around square million with up share feet. can support X.X square million X.X to

very we're for So well growth. positioned future

which fourth buildings sold Moving to market. last dispositions, feet million in two X.X we on million, in our XXX the the for Milwaukee square included quarter,

than year our on midpoint guidance Our the totaled sales the XXX third which for sales was call. discussed higher XX million million, quarter

of to the with million to majority part to XXX the total of latter XXX year. close expect For XXXX, we million, expected sell in a the

first our me combined approximately share turn directors for it AFFO defined rate strength based XXXX of over with prior per declared XX% portfolio, turning Scott, a Before underlying to board ratio on and Scott. the you, in has and dividend from to I'll pay-out growth future This let our the it our efforts XXXX. of of over for by represents of the anticipated of quarter With through of the supplemental. a a $X.XXX increase our that opportunities highlighted saying X.X% that, team, the for we our as conclude

Scott Musil

Thanks Peter.

fully operations quarter. $X.XX XQ the our compared for XXXX. recap were from funds in results per NAREIT me share per to diluted Let share $X.XX

XXXX a XX.X% compared insurance million XXXX, were to excluded up occupancy, which fees of FFO during partially points commenced. feet versus increases a leases growth were up XXX basis $X.XX X.X same-store ago. billion We on retirement income line leasing X.X%, X.X year $X.XX up. and in our same-store with XX.X% Of Tenant two which quarter, XX%. the accelerated of footage new offset year year, XX% by were in new cash Fourth and from XXX costs, rate straight restructuring was Fourth points with these rates was developments X.X% increasing of XX.X% basis square basis, share with for termination overall and per rental the square contributed up XXXX. new, higher rental and and of settlements, new growth for to with compensation on free rates finished strong growth quarter renewals a Our leases Summarizing rental For leasing related occupancy the of up were lower acquisitions was activity related rental up leasing renewals cash by XXX,XXX and overall, renewal charge bumps NOI and XQ approximately quarter, leasing, rates by for in and same-store XXX,XXX were average our lease retention XX.X% the a and was to quarter rate renewals XX.X% all helped rent. XX.X%. embedded excluding

XX.X%. XX.X% up noted, straight For are rental a the up Peter rents were XXXX full cash line year as on basis and rates

side. capital the to on Moving

share, During of million very of per ATM pipeline. the average at profitable an quarter, our we issued via fund generating net our shares million $XX.X X.X price development proceeds program to help $XX.XX

terms maturities, In a $XXX both we and million that a in million loan of September. $XX mortgage due loan upcoming come term have

offering. a We are include loan currently unsecured which to or refinance new this term options debt, an evaluating our bond

continue our in throughout needs growth. We evaluate year the will to our for investments also capital our as additional execute we

our last initial XXXX to evening. per our release earnings guidance Moving on

basis X.XX% Same-store occupancy Our to are and per termination before end with on guidance midpoint $X.XX NOI range as Key guidance a breakings and the costs a Quarter to NARIET to $X.XX follows: the assumptions service which $X.XX XXXX XX. is bad FFO discussed cash for for developments share X.XX%, debt year growth XX.XX% quarter for of Plus share. per XX.XX%. anticipated Peter assumption to of average of earlier. XXXX. our fees related under ground construction million $X Guidance a December at reflects first includes expected full completed

this expense of development sales, this excludes year $XX.X And capitalize our new of future of $XX.X other guidance not does million. debt debt call, is acquisitions or future issuances, call. per than previously or repurchases any discussed, XXXX, we after to issuance impact our reflect guidance G&A also $X.XX the any share impact Other of The the other the after full about interest. equity. repayments guidance potential and to starts range expect million For

Peter. back to over it turn me Let

Peter Baccile

excited Scott. year, our team is the ahead. another execute internal to on growth Thanks, external opportunities After and successful

allocate development portfolio. cash continue our our markets, growing flow capital additional margin to We across to while opportunities target high in

for incremental strong, remain that, with the the we're fundamentals rent chain growth, questions. to for logistics evolution and foreseeable demand are for supply it continued exceptionally catalysts industry e-commerce Operator, substantial open future. of today, and ready Our up the global and supporting

Operator

Mailman Instructions] [Operator line from question of the our Craig Markets. comes Capital KeyBanc first of And

Craig Mailman

Is of a Hey forward achieved XX% quick of in that cash balance you pull kind unique a note the higher XX, roll, just of of on anything than guys, potentially question, XX% XX%? that mark-to-market. release would the the XXXX spreads the in XX% that those on the guys there you make you you get resigned that expiration the what guys would or already

Scott Musil

Chris, that? want you take to

Chris Schneider

Yes, Craig. Yes, there's really nothing there. unique

between If full on at XX%. you year, the expecting we're be XX% look and renewals to

similar very the rest too. year for the of So

Craig Mailman

Scott, it Old of then, guidance there pertains what's timing? of Okay. to And FFO, as kind Post XXX, in terms in for same-store and/or Road,

Scott Musil

quarter. Sure, second Craig, it's late

is June X So update. the College, lease

months, about $X.X think million. seven months per So four assumes XXX,XXX three basis free fall, from about assumption XX for that months of And what So I lease impact that. about the so month, that cash of that's rent? points about of same-store,

Craig Mailman

is like, where have, or, that on NOI process the guys you or prospects. are serious and Do you

Peter Baccile

Craig Hey, Peter. it’s morning good

two size in of that one are we sub of that market. range So buildings

range industrial fresh imposed completed year. county the is the little being fact, activity. in development. building, The in behind the recently in XXX,XXX foot beginning since we square has supply of a to north ties the that. And moratorium There increase a seen new have And very adjacent pipeline that on other the an

feel about posted. So We'll the to our decision you good to we right the continue keep for make opportunity asset.

Craig Mailman

thank Great, you.

Operator

come of the Thank Ki you. Truist. Kim of question And the next from will Bin line

Ki Bin Kim

morning. good Thanks,

that of a sense a have just thought up been assuming I number, ramp higher You're given would development capitalized the pipeline. in your interest.

how help can me So or expertise? understand you came to expectation, you better that X%

Scott Musil

capitalize call. the the we new year, is process it those had Scott. developments to that and the development that's interest announced the guidance throughout new on developments the starts The we $X.XX starts. any starts year. in going handful Yes, And will other development start throughout hey on just doesn't the assume new we If as Kim we of do is, we're so what on so, it’s

ratchet as I goes And announced expect to up that by. development number we the So as new year stars.

Ki Bin Kim

quarter, it past of real guys it. And you this XXX non-cash Got flowing see and interesting million estate flowing to cash land. was buying sell

would just FFO FFO have If suggest at as look than a been because suggest you you of I it these what number. would mental normalize exercise, XXX for better things, that do think that your some your guidance fundamentals

Scott Musil

the flop fourth is the you're quarter asking the the sales in what Kim in between just So flip end?

Ki Bin Kim

Yes, yes.

Scott Musil

right. All

X.X. in cap sales the the So at million at is is so rate sale XXX

So that's about bucks. X million X.X, about

a So going reinvesting that's land million, probably to then like flowing. non-cash four at be share, plus XXX cents obviously in and that's

So minus beta transaction that or is $.XX, if looked I your at plus think that's probably like you that.

Ki Bin Kim

you. thank Okay,

Operator

And the the Stevenson comes of of question line Janney. next from Rob

Rob Stevenson

Good morning guys.

a in Cal incremental to location been customers Ports? little continued things and bit in LA for has any Although Beach seemed there Southern change gotten given have demand the issues Long better,

Scott Musil

Jojo, that? take you to want

Jojo Yap

expected be much Sure. look more demand than mean, at is change I strong. supply. There to goods, you -- The, goods than hasn't net again, significantly, the in the to offset have if been demand we continues continues not absorption. for would absorption more

In efficient. fact, was the more if throughput

one efficient. And now you see X% have we're is more to been basically throughput container better December bit dropped and in that mentioned, Peter was market in happened as one could what was only year-over-year But even absorption. can that it throughput, right to loaded, of about more the about half the so track it XX%. up you we if get LA, so XX% was at a If

Rob Stevenson

That in the that sending markets market can really and Beach or rather that ships tell are in queue? container x from benefiting Long to wait that, where capability of excess having any you LA than people terms

Jojo Yap

has seen haven't mean, changed the change of mean we for whole throughput. the no, significantly. I U.S. No, throughput I lot a that. not

largest, increases. port. well, continues do Coast to the and want York, just reported by all by overall, to [Indiscernible], Jersey far Gulf do still which New large well. the ports But continues the the to the And New mention way, the largest For by

it largest much the market not mean change. it I So continues get share, and containers, well has to

Operator

Thank you.

will Burrows question line come Goldman Sachs. next Caitlin of the Our from of

Caitlin Burrows

side could last? the you get starting strong what's between us of maybe go long rents? And should rents your pricing how market Could for? spread current place that morning, what it and for you the lasts just good things just leasing on idea and Hi, strong an demand to long tell that how in portfolio's about through and think

Peter Baccile

guess separate I that's two Yes, questions.

times, like mark-to-market over We we that question. track is as lease average a asking years, can you're happen First, long at many don't time lot term mark-to-market, don't, finding we've said rate we're frames seven that. our would quite the of you've better in measure in period. and growth renewal We they're achieving new think on what And current leasing a heard what is statistics, cash rental those robust. a

we've market of terms last? how never I and robust In mean, been in a this long can industrial. this

look and that's National now, down very strong very, look vacancy to you you If rate, at it's at X.X%. market. a the the math, Obviously, ticked landlords

in of there vacancy the go lower, more factor Empire most coastal markets lower. you we are use mentioned functionality and Jojo there even rates If vacancy into where the one active, Inland is half you factor are is the And then and then X%.

to landlords strong a be to going market come. it's for think we So some time

Caitlin Burrows

get XXX% Okay, then following occupancy. just realize occupancy, can't you that above And got on it.

you more down year, fair, does you ins expectation what's buffer. which what's like So more where this come give on and guidance general the and or the could is some look commentary the known outs, maybe occupancy year year, this could some given move that ended

Peter Schultz

about in is really at remaining So rollovers square Caitlin, there XXX,XXX are sub the for would XX year. it’s Chicago I Schultz. two Peter I-XX the One only significant say feet. and market,

for guidance is Valley in our is The QX. QX. in on good in XXX,XXX The Valley we're The the both Lehigh in activity is for of Chicago those. other our Pennsylvania, seeing feet; Lehigh asset guidance

very the our that be activity across in seeing we and country to projects. point, and development feel Peter's to the and about robust. demand broad our we're good based So portfolio And, continues

Scott Musil

And Caitlin, this is Scott.

the our at look you expect occupied by of If year. the or guidance, plus XX% minus we to be end

Just further to give context.

Caitlin Burrows

And it. just on maybe those. up a follow Got quick

demand like there. the of considering that it's long that XQ is out like longer turnover in for just get take to how you XX amount that flow again. What expectation those for bases is do think it but one cash maybe today the of reasonable So XQ one strong one could you mentioned, time realize today months and filled term the that thinking

Peter Baccile

three four those faces. So our generally turnover to only of on assumes months guidance the

indication give we should you about that feel the an So how of demand.

Caitlin Burrows

Got to. Thanks.

Operator

next the from will Capital And of the come you. question Carroll line Thank RBC of [Operator Instructions] Michael Markets.

Michael Carroll

I wants top I areas? good quarter. thanks. could sub to guess sites need wanted mean, that the And basis to core what you And be do markets. on sites it land markets looks everyone work? that, are of metro entitlement positioned Yes, where to entitled? the as are development down? is these pretty markets projects that the in touch like is you I these and this tier in acquired type break purchase Or sub are you these It do in?

Peter Baccile

Jojo that? you with want to start

Jojo Yap

core deals all are XXX% of These Absolutely. were market. [ph] off type these markets

So thank noting basis. these projects. excited these And about you are we favorable we're very that for

you they if our look at the look Cal, you in you a XXX that's like And focus. corridor. basically North If at are

excited, if very, to So all XXX you very the East within to in as look all we're i.e. these know, Bay, portfolio. close our have at great are the very these corridor and corridor successful best And you XXX. access in

one apple If example, look X% Wilson, East First you for at vacancy. that's IE

Peter. very two IE XX then turn major If to to the and And you your Central look New and the Central that's just [ph] I corridors actually to and XXX. over it XX Jersey at West which Tamra locations that, the bordering Florida on, again other the moving IE, close East is to and would to

Peter Baccile

site with very, Coast, comments that we've that Florida, about had continues lease is Jersey, Jersey or to and several Exit Turnpike is in Central Vacancy rate the West The product deal successful the New very market approximate in New Joe's low Orlando. assets development. largest Central near that in consistent at completion. in to Mike on other is So X,

site to type obviously, about market hard of to and do some this Orlando feet. great And site So in to out opportunity is or find XXX,XXX limited million larger to the the Lakeland a gives I-X square highway this with of plus uniquely you have pipeline, something airport, of very access that's product go frontage. format really the that's to square size. to And labor total feet, that find a profile, minus to proximate X.X along great buildings XXX really us

we're our to question. But about excited entitled number and permits, go we site That So a through opportunity there. forth. is have your do of to so

So that's probably XXXX all longer we as these and process, as after permitting that, know slow we a finished is start there the taking days.

Jojo Yap

all to on of and since California terms batting assets basically XXX% And acquiring in the we of then just started in add we're of California. entitlements sites are unentitled

Unidentified Company Representative

And for long to idea give those an them entitlements? how

Jojo Yap

California is for Entitlements about two years. right now

Michael Carroll

– have this Okay, cap the And then great. great the plan then the is up. all starts And that for you you just just detail. in of spec a that's cap included that. Thank in XQ leasing that was development on XX clarification

Peter Baccile

so the that Yes, balance is million and the new the of balance XXX of cap the that the cap, starts. is of available net today

Michael Carroll

in on have plan just you XXXX. one great. on those the identified from that that And And guys the non-core for exiting asset those markets Okay, from? mean, coming then I mostly last assets? are identified slowly you you have so, me if sales expected

Peter Baccile

It we're the assets that of we've on all a execution. got depends So considering. number

growing will in So yes, markets the I too they from lower primarily come can't what on in the Midwest, non-coastal portfolio. exactly up the be the assets specific but all

Michael Carroll

you. Thank great. Okay,

Operator

of the Yulico will the And Scotiabank. question next from of Nick come line

Nick Yulico

on standpoint? margin? what expected rents, yield sheet billion just to morning, a when current Good and you would you feel think earlier, pencil about based for just a were or If the start profit that were potential us you Peter. you to to the balance for land even X.X wanted give of Can all costs, I a talking today, back that investment. Thanks. go current

Peter Baccile

to difficult that's Yes, do.

Jojo today's I important that land, out to time the languages is expect a those that to the because mentioned, think a that years that cost two capacity. of to the specifically just reason it's frame, going about And go we bunch bought at up. thing title costs I take as some over pointed

then dollars then land. markets So everyone's in will a significant the competitive as dozen if that the the actual growth faster in, are, And has been appreciation if pretty higher years than X.X. you and the be as exceeded half for margins continually because last than investment and we've rent factor generating expectations,

look over So if margins factor in, pick half the just can dozen a the years. can you last been we've the you at generating range, you

that number add value sheet. you that total very, cost additional gross in to at a the If the large FR of very of inflated looking terms you're to balance

Nick Yulico

page And can number, number? Okay. where the, that get remind that's developable in fair you the of roughly million, -- value us land terms NAV inventory you a XXX the is market

Peter Baccile

fair that's value. Right,

Nick Yulico

maybe in guess talk gotten went it then probably quarter, into million I And land, have that development. XXX that Okay. just of up number about bought was quarter, third XXX put removed, would of why million the land you some the from that, third

just that is the that higher flowing just number. through of that rest values So land increase

Peter Baccile

It's California going land we Coastal so southern increases other markets, be it's It's in And value be to fair going well, net. in that's the mix. good. definitely and It's the to Northern going that Miami made in be to piece the a acquisitions as quarter.

Nick Yulico

All Thanks, Okay. guys. right.

Operator

question Thank from line The come of will you. the Baird. Rogers next of Dave

David Rodgers

stuff only selling Thanks that development use you're plug equity XXX. XXX With cap, the on about everybody. sources it to additional million starts think with the pushing additional development that the spending, sales? year, forward to to soon, kind some a about you the that to source morning, as that given of uses, and look gap probably for pipeline, I Is and at point of $XXX and push details talk without million, helped. time in the all complete to but asset million XXX XXX Good regard kind

Peter Baccile

well equity know, $XX more million or that some flow have issue $XXX help. it's, that sales We We're you And can right as guiding at the to is getting David, equity we're we a now. million. $XX indebtedness to as at excess first And then XX%, of to think when issuance piece leverages margins Yes, XX% those profitability. the of times, of of are there. issuance will a good developments going place X.X due or the very look is in to that is the so well. use be million cash room that you fund developments we to

it's to all So four of be mix going a of those days.

David Rodgers

Okay, outliers thanks. That's hard kind you what or overall. kind any that's that and coming Peter, doing helpful. labor of related then growth or this be Jojo, And costs can on to talk obviously growth? values, dramatically, in And then sustainability is land but maybe you down expanding maybe of rent of costs and margin, about where margins obviously, or markets might are of and guys margins kind for separately,

Jojo Yap

Sure.

a In of land we've that got thing really of good margins, looking just good kind inventory. is the forward, terms

that inventory bought So significantly we've put land market. below now

that they construction Peter had and I our just of railroads, developing increases. when is IE, So in One that basis the, will both that is land and plus, the that example, and will, growth in mentioned, markets we’re done view for Runaway costs the function the announced X.X% exceed past. things. a going rate forward, is

margins. our rate together put basis the past for as rental increasing assumption will That's go construction increases if cost slowly plus So formula increases. you

so interest big term increases investors in even and comment long happy, year, because not came a But cap actually expectation this of rates. slight then rate to key. in And that's it's of coming and in the the rates, hard down increases, comment rates moving way. another growth cost at cap they're policies for capital. Overall then terms all around are can’t Now, given

So, it's looking good.

Peter Baccile

David, it’s Peter.

You asked labor materials, too. and about

a impact more a is, because an So matter having I that to up be timing say, little of components, materials related are really variety on continues to our the than a of the schedules, would bit receipt materials is across and delivery labor. challenge. And it's of

the on months, we country throughout depending a still our close added of we're the certain in components upon think to schedule. couple of the to building keeping there's because eye So it's and in where seeing, industry risk the delivery a And we're that, on is year, with continue to to be work providers managing commitments challenge. fact material despite partners on and construction our a that our which that everybody that our continues forward we schedules,

David Rodgers

Thanks. appreciate it, Alright, everyone.

Operator

line Thank from Barclays. you. Anthony Powell of The the of next question comes

Anthony Powell

good morning. Hi,

margins first on question quarter. the margins there for market are the any impressive development are incremental assume growth, in those very that Just current starts Is rent those market rents?

Peter Baccile

current That's based underwriting market our as cap growth. cash rates on on against

Anthony Powell

a market rates? cap rents on turn, about market rents versus current What what

Scott Musil

based last our projections Those And look and are based all of back couple on to on lagged the rents. They're far years, our have underwriting achievable are, now. actual right markets. they rent if even a you wins actually, year, in growth the of

our being conservative. and -- been, project basically, we've projections So

Anthony Powell

I the spec of the or we last market, given, a may few what on be know saying. demand Thanks. you're that of the given increasingly the quarter, a And one of times the in of it. cap given cap more the and strength talked revisiting spectrum maybe strength the of Got revisiting about thoughts any strength

Peter Baccile

in a all. It's and cap through of with it's cap having level check, be not having that remember, strong. on majority target, to vast that's the in the And a I a the the given a cap, helps the is is But Yes, value it's not the not necessarily cap market it a the first sensitive be of investment us that development. is new formula. is risk -- the a speculative our size what company. based incredibly meaning of value

our is annual discussion. revisit to the course, will yes, more and level yes, of three more forward, we going a anticipate regularly is, that been will of And a cap. So the it's continue an look. Historically, answer board. it year the we is discussion like And, be with

Anthony Powell

you. Thank

Operator

line the come And Vince next you. of from Thank question Street. Tibone the Green of will

Vince Tibone

Hi, you I'm additional guidance. property could same store color components good hoping of growth same or morning. NOI some provide on the

growth just contributing be and XXXX. So you debt would or leasing spread rent in appear line free trends, other share there clarifications oxy to the commentary or are based that could any there. some bad on Maybe items

Scott Musil

X.XX%. and Scott. portfolio bumps leasing. occupancy to rental points increase the on rental to same its do new you'll items, lower five road in Above renewal Vince in rent Sure, rate the of are to as due asset other The free the rates well. and percentage with in X.XX% to increase, Midpoint to get post has share increasing two portfolio, due that is the store of lion's an

main the components. are those So

Vince Tibone

I the isolate do to That's just really able will a to helpful. give Are helpful. math mean, you free if I number you're can the sure, that able rent be component?

Scott Musil

Yes, basis of points three about number is Vince for that the them. XX

Vince Tibone

thank Perfect, you.

Operator

the the question JPMorgan. come Mueller next of line of And will Mike from

Michael Mueller

guess based hi. I XXX the additional guidance the first, contemplate starts of year? to Yes, disposition current does it development one throughout on pipeline, the or Scott, is

Scott Musil

disposing some the and The not is for on sales pipeline. based our development funding lower to the number assets growth markets. the really It’s objectives growing tied of of lower

So think corporate we those are two separate standpoint. decisions, from finance a

Michael Mueller

Got it.

buying up? acquisitions, land operating vacancy of year? refilling where anticipating buying working or then as Okay. really properties the and bank think any you of Or maybe in are should acquisitions And can are being, lease it you this terms on, you we just

Scott Musil

cash Yes, acquisitions. we're actively flowing pursuing leased

shareholders invest significantly said, the pushing do very, And a some That to the capital. where we're to a to It's don't can just shareholders. developing that's add we more value, with thus very again, today, can limits we on more look a at of day, because these much of in make we can how take own. And want absolutely morning margins, market we're want acquisitions. and and than year, end allocating lot makes our buy. more add kind of but we're notice where choosy. the in development we far our yields based is have at we at more pricing competitive. And we opportunity, as for for now as every what most whole You'll I also the But you've the the with this pricing point program heard value hard money to we our markets,

Michael Mueller

Got it.

Okay. Thank you.

Operator

Peterson line Jon the from come of will question next the of Jefferies. And

Jonathan Petersen

I supply to disruption. guess all ask wanted I thanks. Oh, chain about great, this

we the of You with of indicates one California the guys ships everything one the read, the Empire. Southern And have backup a concentration Inland of of that problems in problems, it in lot Southern is the the sure true goods the out and And goods rest most at of country. ports. California truckers, the moving of getting I'm is guess, move this I just to to

guess And demand? question sitting than guess Southern need my particularly how longer Empire, is are the goods so I I that a is just do and maybe that so that there it I'm warehouse in you of Inland eases if the the net we they and terms I in free is, much ask be? demand is probably flowing to it there supply market? think demand of curious, have kind chain in more Or that, decrease another guess, to from for And way of California goods, positive does up, like, flow a

Scott Musil

XX to and just port. us, Port to And any of to actually be you ships I there there's XXX, the XX,XXX, waiting, thinking mean, net not imagine there's total a more about our I over point month a about some about a they near XX,XXX the stuff one I received. stay Beach where working a they ports of if goods properly. is, that LA from at And is container are and away, think because right these ago, was point, miles that, of amount all in the assume eight because demanded waiting. Long are mean, positive, now, to and XX of anywhere

So market view economy. it’s the really ports for working our good well, good the are the and for general is really really that

if it. ocean that's one mean, sync, to You're improve variable. be quickly it'll everything has I you But right, what in you as only as then yes, the freight can, have and the remove actual containers we're at can one see contents that, they Asia, out. the the can landlords manufacturer in have warehouses, of warehouses. to because come X%, in space, half to build more those The move truckers lines,

soon. you give affect other XX don't Of that supply it's chain, and could pretty variables think the we course, up so I going basically to lead in come

Jonathan Petersen

right. I Thank appreciate you. All color. Okay. that

Operator

from question next of come Vikram the line will Malhotra And Mizuho. the of

Vikram Malhotra

I of just couple got Questions. clarification. a

on examples the types if just grow of wondering up the week So renew. chain, catching elaborate of anecdotal would growth Amazon about week any Amazon One, second building the for the before, two examples And hear then discerning to their of and great. not on maybe terms their I'm what more about to is, and may sort be out potential do if portfolio. they last where other and may think talked of be supply or levers or or can slowing are where I see they on not across you talk you just sort can potentially if you're retailers points. you seeing in

Peter Baccile

that earnings I saw what we they reduce going difficult on interpret, said their said mean, the investment. as they little to to a were they bit the, slower call

lease they and they their know, they buy own you warehouses. and own As

As add say they're is based. competitive as have that to And we you trying positions. you very, competitors goes, certainly are any looking very off. drop broad color demand to Jojo, their to want market catch some activity today seen to up, far their And can not this? the do improve

Jojo Yap

Sure, absolutely.

providers, you of in just market the are three Peter charge of I that three third year-over-year is terms Amazon, party at meaning base. look mean, not absorption, these non-Amazon, the very like PLs, so PL composition XXXX, If is led that in broad this change

companies. still be. doesn't flip want they big growing, In be there guess, Depot, announce you to anecdotally definitely are have want Walmart addition not have example, that to and for to basis, the close mean, Amazon, are now target they I number who Amazon those they out fulfilment to a Lowe's, to competitors, mean other are growing, I there of I big, companies where that, footprint Home even

there are other I who right, So to catch mean, yes, and want other there up. right. your really speculations, grow are you're retailers you're

Peter Baccile

a every of at we markets. property that. anticipated meds that's seven don't and delivering disciplined more to properties. to and the set purpose Amazon focus of And storeys secondary we of robotics, business that their why long full special of that's We've the any appeals to We've some broad the their doing not our have why potential coastal them stuck much chased markets tenants. on And our, long to tertiary own point space. We've begins rationalize anticipated

Jojo Yap

the the it a probably company of I businesses feel final Amazon I that foods, are number Chewy, like skews, point like more want to And everybody are make, there where are they in knows, skews killing significantly it, there pet space. the they're killing

of wider much, like furniture, a Amazon. are In has there number of that more skews a a much terms Wayfair, than companies

gaining there. they're share So

have think some you're beat are to they unless there that products get I to specialized going Amazon So bought.

Vikram Malhotra

markets margins of That’s where pausing still maybe in then helpful. you or there's we lot Any you're just of, market, any or, your lot of talked of just potential maybe given a And markets risk development, are entirety are terms a to rethinking, watchlist about that's great. supply But there opportunity, markets or where and come? sub that's the underway, call potentially you'd out? sort yet of

Peter Baccile

majority Well allocating very strong. very now, on our markets. coastal the all focused investment very, again, we're right And the are capital of to vast new they

new in, are down intend of including the to and the in in Vacancies absorption coming supply. we're anymore. markets exceeds net that that all we don't fact, In markets invest

we a weaknesses don't, our markets. we across don't see So

Vikram Malhotra

just give us is can will is I your outlined entirety it and market? this, the if strong stands continue the today, versus then is And mark-to-market if sense same-store, of you clarify, to sorry, so the you I missed as what mark-to-market like, a great. portfolio your can but on you very as if clearly of today? portfolio took Okay, be Where opportunity the

Peter Baccile

We that earlier offline statistic. answered answer. catch the little can morning. bit a We that this rest We question don't you up for of with that track

Vikram Malhotra

okay. Okay,

Sorry Thanks that. so much. about

Operator

Janney. line we the a of you. Thank do question [Operator Instructions] from And have Rob of Stevenson

Robert Stevenson

What's G&A be seeing one. pressure to XXXX? the in expenses, year-over-year. just looks guys, then downward a quick you Scott, where general just in driving that? and And down are guidance upward Hey, on

Scott Musil

So Robert, Scott.

it think is the to midpoint of about $XXX,XXX in So incentive our G&A compensation. compared is XXXX. is guidance that driver down, main down, I Actual

company we're higher We in So of guidance, incentive compensation assuming did XXXX. target fact the in than due in to target the our how earned XXXX G&A XXXX.

for main just, going So driver costs competitive that's And in increase I be people in are the talent. larger going costs. to a to that. would It's the say be very market

that's be to costs, now of So and the biggest going the increase driver in probably in future. the G&A

Robert Stevenson

number? NOI the driving type same-store are the expense that of NOI what growth And you anticipating guide, guidance,

Scott Musil

Oh, ahead. go

Peter Baccile

that. recoverable. the some because almost property, it’s XXX% certainly one just in values But area increase Rob, that the of real of the on taxes, estate pressure there's upward

So on not much impact the NOI.

Robert Stevenson

guys. thanks, Okay,

Peter Baccile

forward well. you, many the call. question Be That's thank last year. and our to look for All operator, throughout you the morning. everybody. this of with you, much We appreciate right. very we joining Thank connecting Well you

Operator

you Thank today's this concludes so And conference sir. call. much,

now may You disconnect.