Nick Thillman • Robert W. Baird & Co.

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President & CEO Greg Lehmkuhl noted that while most competitors are rational, a few smaller players are engaging in aggressive discounting in oversupplied markets. He believes this pressure will be absorbed over time by waning new supply, network consolidation efforts, and the eventual obsolescence of older facilities, some of which will be taken offline.

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President and CEO Colin Connolly noted a strategic bias toward acquiring 'new and small' lifestyle-oriented assets. EVP of Operations Richard Hickson expressed confidence in backfilling the Samsung space, potentially by signing direct leases with existing subtenants. EVP and CIO Kennedy Hicks clarified that while Houston is not a core market, Briar Lake is a quality asset and not a top disposition priority.

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CEO Ted Klinck stated that it is still 'early days' to assess AI's impact, comparing it to past industry challenges like densification that were successfully managed. CFO Brendan Maiorana projected a tenant retention rate of 45-50% for expirations through 2026, which is higher than the recent past and supportive of future occupancy growth.

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CEO William Crooker explained that vacancy is highly dependent on building size and market, with larger boxes in markets like Indianapolis and Columbus seeing higher vacancy rates. He noted that average lease-up time has normalized to around 9-12 months. Regarding renewals, Crooker confirmed that STAG is ahead of schedule on 2026 expirations, as sophisticated tenants are actively seeking to lock in rates before anticipated market rent growth accelerates.

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President, CEO & Director Brent Smith confirmed the long-term strategy to increase Sunbelt exposure towards 80% by pruning non-core assets, with a potential dividend return in 2027. EVP & COO George Wells and Brent Smith then provided detailed updates on the leasing pipeline for the specific vacancies mentioned, highlighting strong activity for the Epsilon building in Dallas and the Piper space in Minneapolis, and noting the New York City lease renewal is progressing as expected.

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President and CEO Marshall Loeb stated the Raleigh acquisitions had going-in cash yields in the low-to-mid 5% range. He explained the disposition strategy involves pruning older, slower-growth assets in markets like Jackson, New Orleans, and Fresno to redeploy capital into higher-growth markets like Raleigh and Austin. This is viewed as an attractive source of capital, especially when the equity market is less favorable, to fund accretive acquisitions and drive long-term NAV growth.

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CIO Johannson Yap stated the plan for the Camelback project is to maximize value, with options including a sale, acquisition, or holding the asset, and highlighted the remaining 71 acres of land. Regarding data centers, President and CEO Peter Baccile noted it is a long-term project that requires significant investigation into power availability, with no material updates at this time.

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CIO Johannson Yap explained that the goal for the Camelback JV is to maximize value, with options including selling, holding, or acquiring the partner's stake. CEO Peter Baccile stated there was no significant update on data centers, as such projects are long-term and contingent on securing power.

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CEO Peter Baccile explained that the weather comment referred broadly to the increasing frequency of disruptive events that add to economic uncertainty for tenants considering new investments. Executive Vice President Peter Schultz clarified that the boohoo space is not competitive with their other availability, as boohoo will be marketing its entire building, which serves a different tenant need than the smaller 350,000 square foot space First Industrial has available.

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COO Laura Clark noted that lease terms have remained steady in the four-to-five-year range. She highlighted a significant trend of accelerated early renewals, with year-to-date activity nearly doubling the volume from the second half of last year. She interpreted this as a positive sign of tenant business strength and their long-term commitment to their space.

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CFO Tim Arndt stated that bad debt was in line with Q1 at around 35-40 basis points, elevated from the historical average of ~20 bps but below GFC levels. He noted no single thesis, but some weakness was tied to Southern California and larger, home-oriented users. CEO Hamid Moghadam added that due to high mark-to-market rents, defaults have been NPV positive in aggregate.

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