Oct 28, 2026 earnings call — Third quarter results and guidance update
Core FFO per share was $0.66 for the quarter, an increase of 1.5% as compared to last year.
Revenue $0.2B (est $0.2B) · EPS $0.37 (est $0.27)
Key quotes
"We expect our market rent growth for next year to be in the range of 2-4%, an acceleration as compared to the 1.6% market rent growth expected for 2026."
"In terms of our development platform, we have 7 buildings, or 1.8 million square feet of development activity that is not in service as of the end of Q3."
"The good thing is the buyback, it is another, you know, tool in our in our toolkit here."
Analyst Q&A 10
2027 rent spread update
Q (Craig Mailman · Citi): Analyst asked where 2027 rent spreads are running and for an update on 2027 lease expirations. He also asked how to think about spreads for 2028 and 2029.
A: Management said they are about 40% through the 2027 leasing plan. Spreads on that 40% were 12% cash rollover, or 17 and a half when fixed renewal options are excluded, and they expect leasing spreads next year to be around 15%. They added that with moderate market rent growth, leasing spreads in 2028–2029 are likely in the low to mid double digits and should be fairly steady.
"We expect leasing spreads next year to be around 15%." — William R. Crooker (CEO)
Where to deploy capital today
Q (Nicholas Thillman · Baird): Analyst asked whether buybacks or acquisitions look like the better use of capital today and where management sees the best opportunities. He also asked for development leasing progress.
A: Management said the buyback is another tool and they will use whatever option is the best use of capital. Developments recently have been the best opportunity, yielding 7% plus, with build-to-suits a little inside of that, and they completed acquisitions this quarter at about a 6.9% cap rate. They also said they will only deploy capital when opportunities meet their standards.
"Right now, we are those developments are yielding 7% plus and build to suits a little bit inside of that." — William R. Crooker (CEO)
Development pipeline and leasing progress
Q (Steven T. Kimball · Baird): The analyst wanted details on the development program: scale, where projects are, leasing progress, tenant mix, and how far along executed deals are.
A: Management said development is a growing core part of the business with annual starts over $100 million. They are tracking over $500 million of investment in 16 buildings across 11 markets, with 20% plus in build-to-suit, and the under-construction bucket is 48% leased with 27 deliveries expected. For completed but not in service assets they highlighted specific markets: Resource Drive with 28 thousand square foot left, Reno as the riskiest leasing market, Charlotte progressing and Louisville a 500 thousand square foot opportunity in a healthy market.
Q3 to Q4 earnings jump and same-store drivers
Q (David Rodgers · Raymond James): Analyst asked why earnings step up from 3Q to 4Q was strong and requested quantification of same-store impact and the tenant timing issue from last year.
A: Management said one driver is that acquisitions closed in the last week of September, which gives a full quarter of economics on the 6.9% cap rate deals. They reported past same store is 3.9% year to date and, after adjusting for timing, it would be 3.6%. They explained a tenant tied to the First Brands bankruptcy paid nothing in Q3 and then paid both Q3 and current rent in Q4, creating a quarter-to-quarter timing effect but no calendar-year impact.
"So the simple answer is past same store is 3.9% year to date." — Matts S. Pinard (CFO)
Acquisition repricing and tenant demand drivers
Q (Michael Griffin · Evercore): Analyst asked if deal repricing or retrades have appeared with recent rate volatility and whether seller or buyer expectations have moved. He also asked what tenants say is driving increased demand and whether decision timelines have changed.
A: Management said there have been indications of higher retrades and some repricing, estimating retrades around 25 to 30 basis points so far, and that cap rate movement will take a few months to fully show. They expect stabilization with a lag and noted their guidance assumes very little acquisition activity for the rest of the year. On demand, they cited supply-chain diversification, onshoring, pent-up demand after low activity years, and shorter leasing timelines in markets where vacancy has dropped, such as Greenville Spartanburg.
"I would say so far, you know, I would say it is probably somewhere in the 25 to 30 basis points based on kind of the retrades we have we have heard about." — Michael Christopher Chase
Public bond pricing and tenant credit trends
Q (Jason Belcher · Wells Fargo): Analyst asked how the new S&P rating affects accessing the public bond market and what pricing they might expect on a 10-year. He also asked for an update on tenant credit profile and any industries of concern.
A: Management said the S&P rating was the gating item to enter the public bond market but they are not actively looking for long-term capital now. They said 5-year spreads are between 100 and 110 and add about 20 basis points for a 10-year, implying an all-in coupon a little below 6% for a 5 year and closer to 6.25%, 6.4% for the 10 year. On credit, they see most risk in smaller, higher-leverage, low-margin businesses (for example, furniture); they have incurred 12 basis points of credit loss through third quarter versus an initial 50 basis point expectation.
"So to kinda sum that up, the all in coupon rate on a 5 year public bond with our 3 ratings would be a little below 6% and closer to 6.25%, 6.4% in the 10 year." — Matts S. Pinard (CFO)
Cash same-store drivers and fixed renewal options
Q (Eric Borden · BMO): Analyst asked what the building blocks are for cash same store (escalators, leasing, free rent, timing) and how much exposure to fixed renewal options remains.
A: Management said free rent is not a meaningful factor. The building blocks are contractual escalators around 3%, leasing spreads targeted around 15%, occupancy (they assume flat), and they bake in 50 basis points of credit loss. On fixed renewal options, those are not in new form leases; they exist in acquired leases, represent about 3-5% of the portfolio, and their impact has been consistent year over year.
"As you noted, it is it is contractual escalators, which are around 3%." — William R. Crooker (CEO)
Acquisition pipeline and data-center demand
Q (Michael Carroll · RBC): Analyst asked what portion of the acquisition pipeline is in late-stage negotiation and whether acquisitions will increase in 4Q and 2027. He also asked about data center–adjacent demand trends and which markets.
A: Management said their pipeline includes deals at many stages that they have underwritten, and historically their hit rate on the pipeline is low, so their updated guidance does not assume many additional acquisitions this year. They said they will evaluate opportunities next year based on capital and free cash flow. On data-center demand, they are seeing it where data centers are active (Midwest, Southeast, Texas), have had good leasing success, and these tend to be long-term leases with a weighted average lease term between 6 and 7 years.
"The weighted average lease term is between 6 and 7 years." — William R. Crooker (CEO)
El Paso deal thesis and G&A increase
Q (Jessica Zheng · Green Street): Analyst asked for the thesis on the El Paso acquisition and what drove the increase in G&A guidance this quarter.
A: Management said they like El Paso for the long-term fundamentals; the acquisition had a little over 5 years of lease term and is right near the bridge that drives cross-border demand. On G&A, they said the midpoint increased $2 million due to a collection of items including internal employee adjustments, new hires, service provider fee increases, and a true-up of the short-term incentive program.
"We like El Paso. We like the long term fundamentals in that market." — William R. Crooker (CEO)
Market rent green shoots and buying opportunities
Q (JPMorgan): Analyst asked which markets show green shoots supporting the 2-4% rent growth view and whether rate volatility could create buying opportunities from smaller developers facing financing pressure.
A: Management pointed to Greenville Spartanburg as a top market where vacancy fell from double digits to mid single digits and large Class A buildings near 300 thousand square feet are close to 0% vacancy, and they noted Columbus seeing strong big-box leasing; they stressed market rent growth depends on product type and market. On acquisitions, they said volatility can create opportunities, they found good opportunities in Q3 and they were able to acquire assets at strong cap rates like 6.9% for some deals.
"Absolutely. I mean, this is this is, you know, part of our business, and we were able to find some great opportunities in Q3." — William R. Crooker (CEO)