Oct 22, 2026 earnings call — Leasing strength and guidance update
Company increased NAREIT FFO guidance midpoint by $0.01 to a range of $3.11 to $3.15 per share.
Revenue $0.2B (est $0.2B) · EPS $0.44 (est $0.47)
Key quotes
"Our 2026 rollovers are nearly complete as we've now taken care of 94% by square footage and our overall cash rental rate increase for new and renewal leasing is 38%."
"As Peter noted, we increased our NAREIT FFO midpoint guidance by $0.01 per share and narrowed the range to $3.11 to $3.15 per share."
"The purchase price was $120 million with an in-place cash yield of 5.1% and a yield of 5.8% using today's market rents."
Analyst Q&A 15
development leasing timing and mark-to-market
Q (Craig Mailman · Citi): He asked why development leasing expectation fell from about 900,000 to 650,000 square feet and for an update on big availabilities. He also asked whether 2027 could be a temporary dip or a directional reset for mark-to-market spreads.
A: They said the shortfall was about 150,000 square feet moved into 2027 because core in-service leasing performed better. They reiterated year-end occupancy guidance is unchanged at 95.5%. They also said they view this as a reset off the COVID peak and expect more modest numbers going forward.
"If you look at the exact math of what was remaining, it was a little over 850,000 square feet last call so it's about a little over 800,000 square feet now, so 150,000 square foot delta." — Scott Musil (CFO)
occupancy guidance and swaps rolling off
Q (Viktor Fediv · Scotiabank): He asked what portion of the occupancy gap is already signed or committed and how they plan to manage swaps that roll off in 2027.
A: They said the 150,000 square feet was shifted into 2027 and the core leasing offset that this quarter. On swaps, they have two that roll off next year, $150 million and $425 million, and the expected impact versus expiring rates is about $0.01 to $0.02 per share in 2027; they will watch the forward market.
"If you assume current swap rates now or current SOFR or what the forward curve implies next year, the impact compared to the expiring rates is between $0.01 and $0.02 per share, so that's the financial potential impact in 2027." — Scott Musil (CFO)
SoCal renewals and new project pipeline
Q (Blaine Heck · Wells Fargo): He asked what share of Southern California 2027 expirations they've already addressed and whether early renewals reduce their ability to push rents later. He also asked about starting new speculative development projects and where.
A: They said they are not 'buying' leases and remain focused on the NPV, not soft on rent. They said about half of the signed Southern California renewals are done so far. On starts, they listed several near-term markets (South Florida, Dallas, Northern California, Central PA, Chicago) and said they will announce starts when ready.
"Yes, the second part on our signed Southern California renewals, we signed about half of them so far." — Christopher Schneider
big expirations (Denver, Atlanta) and activity
Q (Nicholas Thillman · Baird): He asked whether the large expirations in Denver and Atlanta have been addressed and if activity on large development vacancies is picking up or just timing-related.
A: They said the large Denver deal is signed and Atlanta remains the largest remaining and is in final discussions. They added Denver has more active inquiries and activity is better than in the first half; Nashville is active with little competition for their large building; some large Inland Empire buildings face more competition.
"The large one in Denver, we talked about is signed." — Peter Schultz
rent sensitivity and fuel cost effects
Q (Todd Thomas · KeyBanc): He asked whether lowering rents would help lease-up and whether higher fuel costs are changing leasing discussions.
A: They said lowering rents will not generate demand and they are not sacrificing rent to get leases done. They noted higher fuel costs raise marginal operating costs for trucking (now about 35% to 45%) and increase the premium on proximity, which favors their availabilities; higher fuel also raises construction costs and new supply bar.
"Lowering your rents are not going to generate demand." — Peter Baccile (CEO)
2027 spreads comparability and development yields
Q (Caitlin Burrows · Goldman Sachs): She asked if 2027 spreads are likely about the same as the 16% achieved so far and whether that compares to the 40.5% commenced metric. She also asked if the mid-6% initial yield on a recent land acquisition is representative for new starts.
A: They said they don't think 2027 will be meaningfully different from where they are so far and that the commenced and signed numbers are comparable. They said the mid-6% initial yield on the recent land deal is a real-time, representative example but not a ceiling.
"At this time, Caitlin, we don't think '27 will be meaningfully different from where we are so far." — Peter Baccile (CEO)
pre-2022 vs post-2022 lease opportunities and starts
Q (Richard Anderson · Cantor Fitzgerald): He asked how much larger the cash releasing spread opportunity is for pre-2022 leases versus post-2022 leases. He also asked if they can start more development given current replacement rents and their land ownership.
A: They said the pre-2022 leases present a definitely higher opportunity than post-2022 leases but declined to give detailed math. They also said they have plenty of opportunity to earn strong development yields and that the lack of Q3 starts reflects process timing, not lack of opportunity.
"Without getting into the math, the pre '22 number, as you would expect, is definitely higher than the post '22 number." — Peter Baccile (CEO)
pre-leasing timing and land replenishment
Q (Vikram Malhotra · Mizuho): He asked why they pre-lease renewals far in advance instead of waiting for market recovery, and where they are in replenishing their land bank and target markets.
A: They said they are not sacrificing rent and are taking risk off the table because tenants want to stay and they can get strong rents; average renewals are eight months in advance. They said they recently acquired a Texas site and are focusing land replenishment more on the right half of the country, including Texas.
"These tenants are eager to stay in their spaces, and we're going to take advantage of that, and we do get pretty strong rents." — Peter Baccile (CEO)
same-store increase drivers and SOCal tenant types
Q (Jessica Zheng · Green Street): She asked what drove the same-store guidance increase and why FFO rose only $0.01 despite a 75 bps cash same-store raise. She also asked what tenant types are active in the Inland Empire.
A: They said the 75 bps raise was driven by slightly higher occupancy and less free rent, which boosts cash same-store but does not necessarily raise FFO. For Inland Empire activity, they listed active tenants including 3PLs, e-commerce, wholesalers, retailers, advanced manufacturing, manufacturing-related, and data center–related users.
"You have 3PL, you have e-commerce, you have wholesalers, retailers, you got some advanced manufacturing, you got some manufacturing related and data center related." — Johannson Yap
expected retention and 650k leasing detail
Q (David Rodgers · Raymond James): He asked what percent of leases next year they expect to retain versus re-tenant, and asked for detail on how much of the 650,000 square foot development leasing number is signed versus LOI versus hopeful.
A: They said they expect retention of 65% to 75%. They said the 650,000 square feet number is based on activity across the 1.7 million square feet available and multiple projects, and they would not break it down by phase.
"Dave, we're still working through the budgets process completely, but we expect retention to be 65% to 75%." — Peter Baccile (CEO)
development vs acquisition return targets
Q (Michael Lewis · Truist): He asked the risk-adjusted return hurdles for choosing development versus acquisitions and how the Central Pennsylvania deal fits. He also asked whether AFFO growth might outpace FFO next year.
A: They said acquisition spreads should be at least 50 basis points and development targets are 100 to 125 basis points. For the Pennsylvania deal, they expect a yield closer to 6.5% when taken to market. On AFFO versus FFO growth, they said it's too early to tell but noted AFFO's denominator dynamics could show different growth rates.
"So on an acquisition, we want that spread to be 50 basis points or more, and these are kind of, I'll say, minimums." — Peter Baccile (CEO)
selling land to data centers and buyback use
Q (Jonathan Petersen · Jefferies): He asked if they are pursuing land or power allocations to sell to data center developers and which geographies; and how they choose between buybacks, paying debt, or development.
A: They said they are pursuing a handful of opportunities, some land and some cash-flowing buildings, and they are pursuing power on a couple; it's slow because the other side moves slowly. They said buybacks will be opportunistic versus other investment opportunities and decided relative to liquidity, leverage, and valuation.
"We have a handful of opportunities we're pursuing." — Peter Baccile (CEO)
election risks federal or local
Q (Omotayo Okusanya · Deutsche Bank): He asked whether the midterm elections or local ballots pose any federal or local risks to their business.
A: They said they are not really concerned and are focused on the core business and their strategy. They maintain regular dialogue with policymakers and do not see anything coming that would cause concern; local moratoria can appear but typically relax over time.
"We're just focusing on the core business, sticking to our strategy." — Peter Baccile (CEO)
escalation levels and land price trends
Q (Michael Mueller · JPMorgan): He asked whether rent escalations have eroded versus peak years and for commentary on land price trends as they refill the land bank.
A: They said escalations have been holding steady; 2026 signings are at 3.5% and the entire portfolio is at 3.4%. They said land prices were stable in the first half and have shown an uptick recently as more warehouse development restarts.
"If you look at our 2026 signings, so far, we're at 3.5%." — Christopher Schneider
no starts in Q3 and reasons
Q (Caitlin Burrows · Goldman Sachs): She asked whether no development starts in Q3 were caused by macro volatility or other external factors, or if it was expected.
A: They said it was expected and not due to outside forces. They said the timing reflects the speed of corporate real estate decisions and municipal approvals, not exogenous macro issues.
"It's just -- we call -- we talk about -- a lot about the speed of corporate real estate." — Peter Baccile (CEO)