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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
Ki Bin Kim Truist
Greg McGinniss Scotiabank
Rob Stevenson Janney
Todd Thomas KeyBanc Capital Markets
Michael Carroll RBC Capital Markets
Caitlin Burrows Goldman Sachs
Dave Rogers Baird
Mike Mueller JP Morgan
Anthony Powell Barclays
Rich Anderson SMBC
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the First Industrial First Quarter Earnings Results Call. At this time, all participants are in a listen-only mode. After these speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference call is being recorded. now today, turn Mr. will to call I speaker your Instructions] like the to over [Operator Art and Marketing. Vice Harmon, President of Investor Relations

may You sir. begin,

Art Harmon

call. Sarah. welcome you, everyone, our Thank Hello, to and

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

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

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

call over to Now Baccile. let Peter the me turn

Peter Baccile

off XXXX for all Thank to thank joining you, you and an start. excellent today. is us Art,

within strong portfolio achieve in-service and key to continues value-add and our leasing team results, development operating both rents. Our

rental for new important drive strong sector yesterday, shortly. million CBRE to our and we the $XXX rate quarter, with Overall, quarter discuss occupancy million EA, form a in a vacancy capital term feet. quarter Net first fundamentals a finished of press high an X% industrial continue XX row. in new read the second remained you we execution an line level rate to of which roughly portfolio, with of growth. loan, will XX occupancy of in According our XX%. completions the at square As in Scott million in was the markets in rates In national completed also the square feet, record low release the absorption

I-XX, XX% We backfilled also largest cash I-XX of successfully square downtime. XXXX there, achieved of rental Chicago, with the no footer move-out nearly of our increase XXX,XXX we a in submarket rate

strong Through of rental new rate capture rental cash taken XXXX renewal rollovers our a rate on to increases and had at leasing. XX%. care change continue XX% We yesterday, of we of

increase For of in now our to all range XXXX, rates, leasing, rental XX%. of the that on renewal be we will and new on anticipate XX%

and new XX% square of to Since to activities. at First to last leases we XX value-add bring on earnings feet Miami X Moving and our call, buildings development inked leased. XXX,XXX Park

stabilize a Northern lease also in We a California. to value-add square signed XX,XXX foot project

of XX,XXX expect the rate square demand Empire to market. in tenant capture in buildings in projects call, Inland to addition discussed of an Empire for the our the the located First $XXX Southern Denver, The square pipeline building start These in As approximately Miami we Fontana our and the another the this sought we where project in Chicago estimated project. Park California, last X.X city of with second currently investment stands new latest yield Logistics five at a Valley, starting first the square our Center expanded quarter investment Inland years. an earnings overall Elm Miami, an land million. on quarter. feet X.X%. million is vacancy These are by are rates of well Lehigh totaled team are market the estimated after estimated In at we quarter, The approximately in supply-constrained for over to footer, yield this process, the of XXX%. which in the XX% of reflective the in great our assembling margin First development work in investments outsized rental cash low an is be known as projected California our start, which Including with expected projected of X.X to last and by $XX this market with totaled feet leased million The Southern development X.X%. developments, basis yesterday. as second couple these This is $XXX of X.X% as investment million as represents million growth yield

have prior we strategic and positioned highlighted growth land holdings. demand additional capture to in our well As calls, are we with

based that, added XQ, sites quarter, potential these in over site in This acquisitions total on million costs. Phoenix land Scott. investment joint on feet can it our share three sites and represents development potential in of and new the start a California Northern million. feet. additional support XX.X During the an based These of figures Inland investment These our more exclude in $XX Including turn in to the construction approximately our representing estimated $XXX of construction our the today's new support sheet I'll venture. new of basis. Empire land our Empire and Inland total, $X million entitled, we today the book costs With today's square adjusting balance land at new first than billion square for of will XXX,XXX when for

Scott Musil

Thanks Peter.

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

the quarter, same-store rates and rental in leases on cash higher for rental bumps embedded rate rent. by in free NOI our increases new excluding and average driven XX.X%, occupancy, was leasing, renewal lower Our termination fees, growth

basis new, during Summarizing lease-up. we were square and approximately X in-service of activity XQ points were XXX,XXX finished retention leasing As Tenant renewals footage acquisitions Peter million XXX of and noted, for with quarter, compared by XX.X%. the feet were with commenced. to leases Of million developments occupancy these, XXXX. square was XX%, our the up X.X quarter XXX,XXX

to capital side. the on Moving

the expiring a As $XXX was Peter new new this to mentioned, of closed compared million loan years. scheduled adjustment our term interest plus mature which partners our like tenure with X.X on basis million loan has of This term refinances basis we will a be have credit XX a The many line a credit. a plan XX SOFR down points, loan loan credit of the $XXX points. loan. of million plus which to to $XXX spread rate remaining X.XX% pay mortgage pay strong their used of million to support loan, new off in Industrial. remaining would will XX The term to an SOFR we a of used $XX second basis of years proceeds, And retire be million $XX Of to point our improvement banking September. First We the spread for the is quarter. thank of

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

XX, XXXX our Moving earnings more share, share Key portfolio. expect on fourth of foot range end now first to $X.XX to call, growth guidance is is call. our for assumes X.XX% the quarter Please in our includes our occur on guidance updated XX.X% square compared than our increased prior midpoint, occupancy of last related per before at increase offset occupancy leasing assumptions the space reflecting fees incremental quarter for occupancy NOI groundbreaking $X.XX at remainder interest. with basis Same-store to Peter per average the increase guidance. in share, Road increase midpoint and the the which a now plus that the second quarter which discussed FFO under for evening, guidance expected in Post our a the XX guidance XXXX basis compared XXX,XXX of Old to NAREIT to release with per to $X.XX XX.X%, our an termination construction performance of earnings our we a note our increase Baltimore follows: basis reflecting to of cash earnings for that in-service the prior an XX point impact anticipated in and at will of earlier. are lease-up capitalized as points X.XX%, the developments quarter our $X.XX completed costs midpoint to Guidance March

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

over Peter. me Let it back to turn

Peter Baccile

Thanks, Scott.

serve to significant We're off to while is As about we're we needs, a said, supply the excited shareholder start. readying developments, great creating chain value. 'XX tenants'

the open it Operator, opportunities land forward to ahead on our up questions. with look also We for well-positioned and to ready that, capitalizing we're holdings.

Operator

Instructions] comes [Operator line of from from Ki Truist. First Kim question Bin the

Your open. line is

Ki Bin Kim

$XXX FFO the this to on per impact are share would you thoughts million what On it? And the be swapping your loan, did, what year? if

Scott Musil

this of it's do had that or to of existing of swapped plan loan. outstanding. to we swaps something million are we a $XXX Bin, We that Ki do. swap million Scott. to portion rate all the loan already plan to the $XXX from the fixed either That's September

range. look swap have at that built As impact could far our if the guidance we rate guidance, as you into on FFO where today, you

impact. So that's the

Ki Bin Kim

And number into development you like can that. Okay. can leasing Got visits you're your pipeline so that'd leasing a But of I give realize or I some jump just the be activity around proposals, it. fully development metrics for seeing on that? whether get pipeline, quarter-to-quarter, insights

Peter Baccile

can Sure. and Peter I'll color. then well this, some crack as a and to in more take add Jojo at jump

in the we're XX% in-service. know, you As leased

pre-leasing are With that activity underway, in significant. except I and just Park would on we of to next our is completed also Miami say, We're that of that respect are having small to the spaces the First year. have are discussions, for already, the leased. going project, ones every All with significant space activity exception deliver the around about developments two projects

dialogue. some year projects going So the pretty are that deliver we're to this having active

robust. is We're So Jojo with to excited market want do else? about are. happy you very Peter, very add it. where we or the We're anything

Jojo Yap

Yes.

have of the multiple second is and And we a quarter, One the but until inquiries end completed, earlier multiple already to in not project that we there. responded showings have of the projects be Seattle. will

but getting good no announced yet. lease there, we're activity So,

Peter Schultz

Bin, Ki Schultz. it's Peter

only would prospects thing interest months. the couple an acceleration add last in of I the seen is of from we've So

point, most in we're for Peter's we're Jojo's more the in the to really fact is there is that reflective building markets supply demand the multiple that and is prospects on than part. So there now point seeing which most of spaces,

Peter Baccile

relative pretty where start buildings those the conversations to completed. And traditionally early the past wouldn't typically until these were are conversations

Operator

from McGinniss Greg Your of Scotiabank. next from question comes the line

open. is line Your

Greg McGinniss

and I Just leasing favorable given guess year were seems full FFO to per swapped. somewhat you guidance It reflect had thought due surprised potentially. the that's strength higher same-store of maybe limited largely growth, but increase expected the like just capitalized We sounds to increase. interest share increases, it the in debt originally that by

on other this So per your share any increases? just limiting are is Or FFO some items conservatism there end? guide

Scott Musil

No occupancy the Scott. Basically, remarks. mentioned is increase not, No, by we a guidance. driven our to the -- as there's is increase, our this in interest which increase midpoint in due $X.XX in is same-store capitalized increase in slight -- in

Peter Baccile

all don't And -- forget, leased we're we're pretty up. again,

when they quickly So lot the quarter next through second of and they developments on on going a this depends how year. up improve to completed opportunity that new completed, are we to number the be of quarter between end are can lease the

the So, we're that's -- upside. really

Greg McGinniss

billion Okay. any you $X that sense just rent terms about of at potential or then of kind might us of can And today? give profit achievable if development, margin what you expected in be yield think looking

Peter Baccile

have This we best Well, is now. look, we I indicator, the in-house. are where suppose, is land

So relative is market our strong. to basis

yields expect over rates years. going forward. margin, to strong on be We out four to that three not move, will be on or cap built going and speculate I'm land this

value significant that we're can't comment on. we that that something pipeline. we that's confident going -- to So But to add really feel

able handful years. been continue. of to any have margins the reason been very will last think very, not we've of don't to the what achieve that, seen You've way in robust. They've that We

Jojo Yap

in or develop And can coastal future the composition and seen, add thing rent what will we said assuming the and them -- is position the if lot you of as you are growth project A at to and we higher Peter in I look of this. only coastal the in markets. markets land that have predominant,

we about So allocation. feel capital good that

Operator

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

open. is line Your

Rob Stevenson

question just side. Scott, the a on debt

like X- do to pricing guys or at had relative for last where to guys instead rates fixed and went you guys five it interest years, spread been the you of were over the you for seems XX-year Because rate group would notes to pop? compress. up, the time where rate started If wanted REIT year-end before debt every the the you unsecured rest have

actual didn't the go time? very really Are you so rate seeing anything this different And much. up

Scott Musil

Yes. can XX points year you what you're gapped tell the to basis Rob, since have frame I end spread XX into. depending looking between the of time the out upon

into that So the in deal point an We was we out why of at gapped spread, was that picked locked the loan. which not all. term spreads July. last locked five-year we market reasons one had XX the into The that basis same

quite market, the the since out a placement So year. the been very, end of has has gapped steady very bit public bank The the definitely private market spreads. market on

Rob Stevenson

helpful. Or the rate still some for that terms construction. this stability what there? seeing problems deceleration you Are you seeing increase are terms accelerating? then issues? about labor That's there? at okay having is Or material Are guys you Okay. And there? are the for in in and availability of of what you in rate Is you of point? of And guys cost that seeing growth any

Peter Schultz

to Sure, availability really and costs One continue this. where But seeing delivery component that in continue I Peter two the materials is the of is Rob. say up, it and dates country. Schultz. expand. dimensions go is it to leg the we're on other depends and It's would

example, steel a is proofing order than an probably months that. out, is XX today longer As

construction gear levelers, or months or continues dock an our components probably, materials impacting definitely and so example. be or a roofing it's by schedule So whether overall, three getting as to it's switch challenge,

have ordering derisk by and continue remains and a our to to you So that, work and in a advance partners Jojo, challenge. But be general it we add? pretty that want to good to we continue contractor with challenged there. have anything materials and success

Jojo Yap

And add just our I'd which in increase in and terms No, terms in in we're of embedded as contingency costs. all underwriting. construction adding our that's well, labor, continues terms of we're forecasting of there, underwriting,

Rob Stevenson

charges there back ask one And or to the guys Scott, Is debt need drags earnings be $X.XX quarter, or get whatever last definition side? Okay. a the you to penalties the refinance and the we FFO on per is me. of range to other similar then aspects NAREIT share for The the GAAP, nonoperational that of aware end question, reason one-time guidance the incremental like I $X.XX just any from prepayment is question. $X.XX. or why in first guidance to which bottom of annualizes

it's sort for we down not leasing, that didn't not know potentials I of of sort nonrecurring cetera, or whether or need some whether be there. whole to thing hodgepodge there's So to adjust of just aware the potential et of

Scott Musil

as would in say, the guidance. months Yes, increased that It tightens XX the any of third there's Rob. a the probably upside a and in give We delivering developments progresses. second item. year though, type range. We forma There pro guidance decent quarter. assume of for some isn't We're lease-up. just lot one-time I

So that earlier of can than have XXXX. we might to bit extent we leases the be a that, little able pickup sign in to

Operator

Markets. of Todd Next the line question Thomas Capital from comes KeyBanc from

Your line open. is

Todd Thomas

I just change there seeing and you changed the asset mark-to-market. if I of the the Old all question demand at about to approximately Post timeline. on in for think the in wondering that leasing talked XXX an you can provide current you're that's was And Road, First on light an previously, market? update just XX% what

Peter Schultz

Peter It's Schultz. Todd. Sure,

full prospects for the now building. seeing we're interest multiple So from

all about occupancy. timing range Those a we're of of terms requirements So outcomes have for lease in execution pleased and that.

So back based on occupancy it's the push that, date we thought four to prudent months.

to increase we In terms our building plus over to now of XX%. or opportunity increase, occupancy rental And the be of certainly, that will XX%. expect another to minus be lease-up the this

Todd Thomas

in then out helpful. about That's one the in 'XX expected the of in of downtime the Any Chicago. terms to at else balance anything expiration size update Lehigh we of And the as square expirations? 'XX really you 'XX was guess, Valley backfill? feet then or similarly, discussed is Okay. of terms there or And look XXX,XXX on that I timeline in

Peter Baccile

Chris and first the Take will...

Peter Schultz

it's Todd, Sure. Peter again.

very Valley the vacated that very, XXX to in be second Activity submarket Lehigh in So to it good. in the fourth be have at the quarter. tenant correct, end the in of quarter, continues our we guidance released the

rents in We to that the expect increase the on XX% Chris? to be XX% asset. range

Chris Schneider

rollover that, for just Peter XXXX. after left the the no Todd, of rollovers And balance really significant there is largest mentioned

Operator

of next Markets. line question RBC Michael the Your Capital comes Carroll from from

is line open. Your

Michael Carroll

wanted in FR to how quarter, but due obviously, driven the get Company development is first can be pipeline? the in active lumpiness material mean, issues to slowed aggressive projects. quarter, trends timing? a second I the leasing and sense this and/or I development Or it the very is new of by in-process was trends pursuing the mean in just

Peter Baccile

few One you It has to when when with said are to with entitlements. things. do fact, do projects to going have going to we're has in be a what it is, ready,

with other do The speculative has to cap. our

today, ready $XXX which various of million we've under availability stages utilize. in intend got We to we being projects to come. And fully have of that

year And so, come goes on, we'll back on the you to as that.

Michael Carroll

to is let's kind at some how the And tenants start or -- deals? you Peter, when then, earlier like, I how historically? looking earlier new the building earlier development that what Can starting of is today Great. mean, versus, leasing highlighted looking pre-COVID provide in a are for project do say, construction. early call, occurring you under they color start much

Peter Baccile

and are long, those alternatives, beginning in not process. construction to early pretty they're too are on are wait opportunistic to and those they realize conversations there happen going that have Well, any the that

can going development, it's and track you course, interest take months we prospects we're closer that to it's a get to XX in get potential completion. not to at But when to ink the imagine, of paper hurry to the that big put and of and those good As in activity we project. touch to that if beginning the deliver see back with

building having was it and much, have conversations of much now. earlier the kind conversation, a the historically, we're So then and

Michael Carroll

it you're to aggressive time rental a to three completed? it's there just side? wants do you depending before how it? it willing I of on frame when on lease months the prospective tenant to Is be mean, lease Or is rate want the

Peter Baccile

coastal That's the that a new obviously, Particularly record continue leases deal seems in every we want rate. of that rental good of in is to maximize signing. question. markets, to deal trend and look it And all value these like the terms a of we're

completion, it how we'll to certainly the depends or aggressively very three tenant on we're that ask push lease. So -- months really meet sign going before to four very, the if wants

Operator

Instructions] [Operator Burrows line question Sachs. Your of from next the from Caitlin comes Goldman

Your is line open.

Caitlin Burrows

to Maybe previous of just construction a quick follow-up costs. questions one the on

you're wondering there point? if could was that Is what in it underwriting. to happens? Or just that clarify you cost -- contingencies just related adding if are I could mentioned clarify is. that you something You increases else

Peter Baccile

Jojo?

Jojo Yap

that Contingencies Sure. X% addition cost is That anywhere hard X% costs. in our will straight on increase. projection from to construction increase percentage total construction the to

to And because factor budget first increase applying an to in forecast it's project, been is contingency. do really all, that on that our and that all on will add we but -- the have So for construction look unknowns. it what that's just segment doesn't of estimated almost with the by the every cost, we've at control be do further we

we times a So, of lot -- that's contingency. the think

Peter Baccile

had the of have cost. increased contingency. budgets anticipated we estimated on additional significantly offset our to an in that, our And top So growth

Caitlin Burrows

kind acquisition was that rate levels. and Southern follow up be in markets? again. Maybe side, in go you quarter. you other in to so to below The California versus the the low maybe I guys Okay. Xs, properties of might came 'XX on how through acquire acquired two and your choice those with XXXX deals Could cap

Jojo Yap

-- never lease in lot would -- are probably those hit Sure. were the cash. Sure. time it trying very XXX% to a the market who where private it's off And acquisitions. If in long-term some there paid range costs replacement financing market. and they We're of and to they're with threes. market. size Both buyers they get we all and today, competed be pleased mid- takes were we're those all all I mean, And we a sub

So we're pleased projects. about very those

Caitlin Burrows

funding the going it. maybe -- come equity But of you contributes. think over Got development maybe cash one prioritize And you dispositions to itself play? flow versus forward, expect about how how the then or acquisitions do obviously, And or think as other? you choose strong into year, course growth could and do the

Scott Musil

Sure. Scott. Caitlin, it's

the million. the with projected total For the plus of we could care property $XXX we costs about year developments under process take sales. start new for We is mentioned, that the

the and to we market guidance time. credit. stock $XXX money price. million at we'll Just in market put to as be could plan of in $XXX is indebtedness, well equity million a capital It more capacity we also investments, our to strategy be our it our line reminder, determine And new excess as out as some be could We have flow. and what the cash like obviously that look would

Operator

of line the from comes question next Dave Baird. Rodgers from The

open. is line Your

Dave Rodgers

the XX%. ask spreads to about guiding, And then XX% Wanted to obviously, XX%. you're were quarter, XX%, leasing in you the

XX%. So the big half XX%, the you've us acceleration leases some given color some some big in year, maybe of and the of back on

couple first outliers a well, kind that Two, any One So, in a as quarterly -- one questions. is, looks basis the about on quarter go can you you talk of what sizing of the lease that by like lease seeing And maybe, types? that portfolio general you're across commentary lower and spreads kind the or size of third, that a property made much number? more then about forward?

Peter Baccile

Chris?

Chris Schneider

Chris. is this Dave,

in to range. the the the XX% really little of quarter, concentration a in full bit quarter. to we the just As non-coastal numbers expecting higher rollovers for you've the And XX% year. far our had be as in We're seen

or in works rental quarters, cash for XX% three final plus we're out rate increases. that averaging So minus the

a It's So, this certainly -- a not is of quarterly really of a just kind we more fluctuation. trend.

size about As spread but and it's Jojo rates what we're as Peter pretty size it, maybe far ranges, in all rate across the as far as seeing can talk increases.

Peter Baccile

sizes across to confirm to I that correct. footers up Right, and X.X feet. all over million XX,XXX

Dave Rodgers

you follow-up, That's one about of have mean thought the for you talk can put I helpful. the And the more then guys maybe just mark-to-market around idea portfolio. total

here little are sit rents of as seeing certainly you bit, spreads a they be bounce a As today, with well. will around growing as kind fast and helpful thought process as

Peter Baccile

Yes.

that, as you don't we So know, track Dave.

We robust the continue to doing is in for. continue of indication through we're significant what we're just XX%, the think certainly how increases be shouldn't of the the we're best that feels coastal especially going went markets rent in It signing where to this end through leases Chris that very seeing the increase is to and year, like math. range. number XX%

Operator

next comes Your with question line Mike from of Mueller JPMorgan. the

open. line is Your

Mike Mueller

expecting $XXX dispositions land low? to comments pretty bank Peter, through the need time are development to guess, the kind enable to it seems you're maybe year. your go to ramp disposed up you're still about it, the a keep Do higher to margins going starts of and million based think to you or like going on of I you million $XXX-plus

Peter Baccile

Mike. So those are different decisions,

be funding and term over additional continually for source growth We long opportunities. the portfolio. look disposing issuance really As new looking new far managing portfolio of development will the the time. assets as funded development over at primarily as our go, in lower we're the opportunities don't equity The that from and debt the at dispositions really

volumes of been it the us, that out, continues especially increase significant rapidly going And will over as has. forward much equity more you point overall combination to as of historically our fund and for as be, a So, as they the are debt going through have we size to time. than again, company growth

Mike Mueller

spreads. one then And on it. Got lease

So, effective that cash this pencil or higher that be? XX% above, the expectation basis, would out? much for spread say, or much how a year, GAAP XX% XX% number net to where How does on

Peter Baccile

GAAP look if a signed to Yes, you XX%. we've renewals date effective XXXX net the increase rent signed at XX% that increase, or cash that's is

Operator

of Our next comes Barclays. Powell the with question line from Anthony

is line Your open.

Anthony Powell

than lease non-coastal the but know your about expectation, lower relative to non-coastal lease your how question performed last I bit And relative guess, they what's A spreads a coastal, year? spreads. they over outlook how they're performed to I for, time?

Peter Baccile

to take that? want you Peter,

Peter Schultz

Sure. is even a consistent expectations, where to we're we're better It's Schultz. better thought. at I rents better which we're the we with the high doing across seeing Jojo? country in the as pace. say doing fast Peter grow than But we and markets. non-coastal would what in continue said, than coastal And

Jojo Yap

east. we Absolutely, and we're the non-coastal XX-plus in range, And the markets are in percent. then the for -- expect then coastal XX% markets,

well. -- difference. maybe to all everything X% doing So, the markets XX% are just It's

Anthony Powell

community opposition more whatnot development maybe And $X And I on becomes more Got thoughts it. as or that entitled? it issue how little guess, already is are you for current or navigate your about do industrial development, future seeing, how billion the I guess, you developments impacting and pipeline your or potential, your much of development that prevalent? a

Peter Baccile

part. take I'll that part of will first question. take the Jojo second the

phenomena a our something long that's period over developed to that municipalities. great great say job In with had of -- patience a with been have They for years. time. deal are they terms that that's would working I a doing the they a pushback, have local and we've relationships lot of of teams

So, more et and are are we're municipalities really improving in more working their cetera. with interested tax base, those that that

time, It doing getting great finding them job team but patience, it So, the takes is our pushback. we're approved. with a dealing takes opportunities and the

Jojo Yap

overview development California take entitled land the terms footage, early of and And XX% just And mentioned, Northern unentitled unentitled. on the the on like square roughly California. land. of we add in is terms with to part developable of Peter Southern our diligence kudos on we even In primarily to had Peter of turning and site XXX% we banning land what First about lot an with in taking of inventory, started, is Industrial terms if since partner on at look in cities entitled we're XX% but is that cities is mentioned, the you unentitled And a and before property. pre-due team, do the

So, and on development. we what we for why know and work what view our been to we've know and banning right XXX% the their is entitlement. that's We take temperature the risk, That's to want before the now a need lot is of result. upfront do

Anthony Powell

hearing of it. them or development. about its Maybe one replacing We're development you of generating seeing some terms in And if demand? incremental this back real pulling more so, Are your is Got that? for who's me. in estate markets Amazon

Jojo Yap

And the are been in answer XXXX, But time, outsourcing. definitely matter, at are does same firms of activity a Yes. -- using a record. activity back. They in more XPL, Amazon XXXX which third-party quite also was pulling the logistics There is and has bit not yes. some their

of has and number number estate general Now terms major XXXX the being the major top in retail And Manufacturer XX% about the kind industrial the a In of What's composition market -- e-commerce is -- still in biggest significantly. food-related QX of QX QX XXXX, the changed XPLs this terms 'XX, user the talking market versus of e-commerce in bit. increased to five. three. wholesale. now have was real of comparison 'XX the QX and little We're in XX%. and is users

gives of little kind that So bit. you a

little down QX it's which a XXXX. e-commerce, little a direct but So bit broad-based of a has a in taken Amazon -- bit market, slowed includes

Operator

line Rich of SMBC. next Anderson question with from [Operator comes Instructions] the Your

open. Your line is

Rich Anderson

of of give of big you pandemic first I answer, driver pulling observation, e-commerce. today. a up Last that any and I big early activity the a was is the to road answer my the to the losing stock answer general, Does any a sinister is something developer. Are Netflix terms going can any it these mentioned sort in being growth XXXX. And subscribers, big and coming beneficiary question, pause? of indicators relates the about the which as more speculative business, down speaking, broadly of the predict another of pandemic. you then in pause but as to were bring declining And they beneficiaries XX% e-commerce, just the in Amazon down concept, back, the of was partially

Peter Baccile

Yes.

let out earlier join very free. their like, faster who of their a new line and So tell the has on take is you at their their needs than crack sales and guys what are growing beginning space hands now, that much and Amazon on. business And are years, me looks A been world table feel that. for they any gets rationalizing to the rationalize typically atypical. They to space space.

For for lease themselves. they're space that to less begin to and now, going buy means

we providers. out, through more As other them -- logistics Jojo through pointed seeing become active third-party are

years. distribute is. But Now your we three typically was want through to commitments where their are what contracts use you you product decided strategy and sign don't capital a to might put if begin didn't long-term very overall your have that better being elsewhere those know you to to XPL

thing. So grow is it We percentage pause doesn't their -- of sales. overall to continue terms That's e-commerce strategy shifting. because wouldn't to give at first in is the all us going retail of

broad. extremely is is. The demand base thing second The

in active Jojo out, space fifth first most XXXX. is As user pointed of now of e-commerce quarter industrial the the

So, the different so it's we're the for demand at comes not sectors, many that Amazon. very business news the from concerned and broadly-based all on good about

Jojo Yap

So XXXX, XXXX, lower that, a at exceeded you in I just vacancy if of just XXXX -- but QX just to add terms terms to to QX there numbers in growth of activity, rate. compare our actually and XXXX QX just slightly QX

know, As of going market the markets got better the you the supply of tighter in terms of that targeting. lack all actually to because we're

XXXX. actually than better is a XXXX QX QX essence, in market So

Rich Anderson

I that. could appreciate

Next question, thinking. again, more big picture

drivers. the was there -- the lack During truck was of pandemic, talk

obviously important there's in inflationary this those you as hearing anything changing have to to inventories that is to observations your with two business side. get but I perhaps I'm it and at relates And the model didn't direction good is that want or or you the a myself sort recent Are for consumer in trucking pinched consumer repeating demand of whatever trucking demand. on the of that perhaps could into question, Now better? the been all environment, get world. Again, decline

Peter Schultz

good pricing watching trucking but that is business. Sure. What there's our When if up basis. look not you market. pricing. the the you daily the clients, put us we that. therefore, we a as you obviously, more the entrants is on at trucking is trucks actually a that more that's sales ratio we're volumes record down to pricing for basis, spot new for thing up, happens down. at number been question actually all a profitable inventory, of bit. because -- the prices Sure. -- spot that that look needs What push. X.XX. had year, came lowering a your experienced taking Federal in can on more rather demand. coming actually And that they of rent demand a spot think Thanks have on in than transportations contracts question. actually we've that hearing to And with And And Reserve spot is is the actually We pricing to it's your secondly, from more is competition reason that -- just other Last sales -- we down come or of inventory In went such part the landlords, because sign contract is sales monthly down have trucks movement pricing, us a the quite just for out

very, does it FR, very well. in here view Our

pre-pandemic, If you doesn't even pandemic were if that running X.XX will because don't look the shows at X.XX lose sales. work you at you even supply, and the have we

low in just X.XX. just be model that We to changed extraordinarily just to from case. in we the So, going think time ramp-up from because a -- there's just

inventory. feel the good the go about is We we inventory rate So, going to think up. sales

Operator

the I to further back now would at Peter no turn Mr. like There this Baccile. conference questions to time. are

Peter Baccile

look today. everyone participating with Thank Be the and to well. you, you, We operator, thanks many our forward coming on of in-person, connecting to call months. in for

Operator

Thank for you This conference call. concludes today's participating.

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