Modiv Industrial - Earnings Call - Q3 2025
November 14, 2025
Executive Summary
- Q3 2025 AFFO was $4.5M ($0.36 per diluted share), up 22% YoY, and management said it beat Wall Street consensus by $0.02 ($0.36 vs $0.34) with all five covering analysts below the print.
- Company reported total revenue of $11.7M; S&P Global consensus was $11.7M*, and S&P’s standardized “actual” shows $11.94M*, highlighting a small data-definition discrepancy versus the 8‑K.
- Balance sheet remains resilient: 100% fixed-rate debt at 4.27%, no maturities until Jan 2027, $8.3M unrestricted cash, $30M revolver availability, leverage ratio ~48%.
- Portfolio quality: 43 properties, WALT 14.2 years, annualized base rent (ABR) $38.9M, ~28% of tenancy investment grade (BBB- or better).
- Near-term stock catalysts: demonstrated AFFO resilience and asset-recycling progress (Costco Issaquah sale timing and new held-for-sale asset), plus sustained $1.17 annualized dividend (8.1% yield on 10/16 close).
What Went Well and What Went Wrong
What Went Well
- AFFO beat and YoY growth: “AFFO…$4.5 million ($0.36 per diluted share), a 22% increase vs. year ago” with management stating it was $0.02 above consensus and above every individual estimate.
- Liability structure and hedging: 100% fixed debt at 4.27% WAI, no maturities until Jan 2027; new swaps fixed SOFR at 2.45% in 2025, reducing cash interest expense ~$0.7M in 2025.
- Portfolio durability: WALT 14.2 years, ABR $38.9M, and ~28% investment-grade tenancy, supporting cash flow stability through cycles.
What Went Wrong
- Rental revenue dipped sequentially (Costco lease expiration on 7/31/25) and property expenses still show some leakage; management noted ~$40K/month bleed at Issaquah pending closing.
- FFO/share slightly below S&P consensus in Q3 (actual $0.33 vs consensus $0.342*) despite AFFO strength, reflecting non-GAAP addbacks mix and derivative amortization effects.
- Macro uncertainty and small-cap REIT sentiment: management emphasized sector “morass/malaise” and capital-market volatility tempering acquisition quality and timing.
Transcript
Operator (participant)
Good day and welcome to Modiv Industrial Third Quarter 2025 Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. On today's call, management will provide prepared remarks, and then we will open up the call for your questions. To ask a question, analysts may press star then one on your touchstone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to John Raney, Chief Operating Officer and General Consultant. Please go ahead, sir.
John Raney (COO and General Counsel)
Thank you, Chloe, and thank you, everyone, for joining us for Modiv Industrial's Third Quarter 2025 Earnings Call. We issued our earnings release after market close today, and it is available on our website at modiv.com. I'm here today with Aaron Halfacre, Chief Executive Officer, and Ray Pacini, Chief Financial Officer. Before we begin, I would like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts, such as statements about our expected acquisitions or dispositions and business plans, are also forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements.
Discussion of the factors that could cause or result to differ materially from these forward-looking statements are contained in our SEC filings, including our reports on Form 10-K and 10-Q. With that, I would like to turn the call over to Aaron. Aaron?
Aaron Halfacre (CEO, President, and Director)
Thanks, John. Hello, everyone. Hope you're doing well. This time we're going to do it. We're doing everything a little bit differently. Certainly, I had the call on a Friday in the afternoon. I'm surprised to see as many of you dialed in as you did. Hopefully, you have a cocktail in your hand. We're not going to do prepared remarks. I put a little more context into the press release. We're going to free for all questions, but I think what I'll say is kind of an iteration. It's really grindy, and I really like that. We purposely waited toward the end of the earnings season because some of the early reporters, it was interesting to see them come out. It's like, wow, this is pretty solid. Then they just got shit on in the markets. I was like, okay, let's see what else comes out.
It was really, I really wanted to spend some time observing because I candidly does not really move the needle when we come out. Typically when we come out, you are stacked four deep, and you guys do not have a chance to breathe. I wanted to give you a chance to breathe. That is the only reason. There is nothing else into it other than that. We will not do this that often. I feel generally optimistic. I mean, look, no one knows where December will pal be in December. Are they done or not? I think we all probabilistically underwrite that there is going to be a new Fed regime come May. That regime has a high propensity to be easing. At some point in the future, we should see easing.
Modiv share price is very easy to predict in a five-minute pattern and probably on a five-year pattern, but not sort of in between. If you think you've got easing, you think you've got a long period of capitulation. We started to see sort of non-equity. When I say non-common equity, I guess we've seen preferred and debt deals being done, which I think are tea leaves of capital market activity. In July, we saw, at least I got a palpable sense that there was some interest. We saw the deals like we saw with the fundamental deal, and we saw the pre-version of the Plymouth deal announced, and we saw the sort of ElmTree, and we were starting to see pipeline.
It kind of went sideways in late August, September, early October, where it's just like people got spooked and their shadows were seen. For instance, we were in the process of bidding on a pipeline deal that we liked. It was a company that was doing a Propco sale along with an Opco transaction. They were like guns ablaze, and then they pulled it. We've seen some of that stuff over the course of the last quarter. It was a bit of sort of a ball to quarter where people thought they had a look, and then the market gave them a head fake, and then they're like, oh, pausing on the margin. I think we get this real palpable sense that there's still a lot of money on the sidelines. I think still right now, a lot of people just want bloodbath returns.
They really want to shiv people who they think that are desperate. And some of those people are being picked off, right? We're seeing more REIT stuff that I think either they waved the white flag or they just did not have the wherewithal or whatever. But I think that capital still really sort of let's just be patient and let's just only get the super, super sweetheart deals. If we start to see real easing and we start to see some consistent trends for REITs, I do not know if that means we need consolidation on the rest of the S&P and NASDAQ to get that or not. It's hard to say because you could argue that until tech and some of these names cool off, then no one's really going to ever consider boring REITs.
At the same time, if they force correct, is that just going to drag everyone back down? It remains to see. It's pretty cloudy. Even despite that cloudiness, I feel pretty optimistic about what I'm seeing. Again, it's because I'm gritty and grindy, and I like that. That doesn't mean we're off to the races, but it does feel like, I mean, for us, I mean, we're like a goddamn cockroach that could survive a nuclear war. There's no real fundamental reason why we should be as durable as we are, given how small we are now in the context. There's a reminder. I've said this before. We came out two weeks before Putin invaded Ukraine, and we came out like, what, three and a half weeks before the Fed started raising rates.
The entire publicly traded existence of us has been like dog shit. Yet I feel like our balance sheet is stronger. I feel like our AFFO is better. I have much more clarity now than I did even a year ago. I think that leads to optimism. Enough of me rambling. Let's open it up to questions, shall we?
Operator (participant)
Ladies and gentlemen, we will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then the number two. We'll pause for a moment as callers join the queue. Our first question comes from the line of Craig Kucera from Lucid Capital Markets. Your line is open.
Aaron Halfacre (CEO, President, and Director)
So Craig.
Craig Kucera (Managing Director of Equity Research)
Yeah, hey, guys. Good afternoon. Just a few for me. Were there any one-time revenue adjustments in your other property income, and how should we think about that going forward?
Aaron Halfacre (CEO, President, and Director)
Craig?
Craig Kucera (Managing Director of Equity Research)
Yes. Can you hear me?
Aaron Halfacre (CEO, President, and Director)
Yeah. Yeah, I'm trying to get Ray to respond.
Raymond Pacini (CFO)
Yeah, there was a $300,000 fee that we obtained for terminating some easement rights that are north of property. That's it.
Aaron Halfacre (CEO, President, and Director)
To add a little clarity to that, our north of property, which is in Melbourne, Space Coast, there was a large piece of sort of underutilized, near-vacant land, and it was a former, I do not know what to call it, like a kids' park or something, like amusement park. That is getting redeveloped into a housing project, a townhouse type of arrangement. The prospective buyer had come to us because there were certain easements, and they wanted certain rights. We negotiated. It took a while, candidly. I would say we probably negotiated for 9-12 months. They basically gave us a fee for us to sign a paper. That is what that was.
Craig Kucera (Managing Director of Equity Research)
Got it. Was that all recognized here in the third quarter, or will we expect any additional fees going forward?
Aaron Halfacre (CEO, President, and Director)
That's it. One time.
Craig Kucera (Managing Director of Equity Research)
Okay.
Aaron Halfacre (CEO, President, and Director)
Yeah, one time.
Craig Kucera (Managing Director of Equity Research)
Okay. Got it. It looks like you added another asset to the held-for-sale bucket. Can you give us some color on what you're looking to sell here, and are you actively marking that for sale as well?
Aaron Halfacre (CEO, President, and Director)
Yeah. Obviously, we've had Costco in the held-for-sale up until this point. I guess about six weeks ago, we formally engaged a broker to sell Clara. Clara is held-for-sale. We're in the process right now of, I think our anticipation is that we would try to get this sold either by the end of the year or probably early January. That's the other property that's in the held-for-sale.
Craig Kucera (Managing Director of Equity Research)
Got it. Speaking of the Costco property, I think KB Home was expected to extend a couple of times until maybe December. Are you getting any change in sort of their viewpoint on the asset if they still expect it to close?
Aaron Halfacre (CEO, President, and Director)
Yeah. So they did extend to December. We've had some conversations recently about they're wanting to time the closing for a demolition permit. They've got to go through their process. As it stands right now, per the agreement, we have not been heard if they're going to extend beyond December 15th. They have one more extension that would take us through to, I think, February 15th. Right now, it's through December 15th.
Craig Kucera (Managing Director of Equity Research)
Got it.
Aaron Halfacre (CEO, President, and Director)
My bet is they'll close by then.
Craig Kucera (Managing Director of Equity Research)
Okay. Fair enough. Just one more for me. I feel like last quarter, you were saying you were seeing an increasing number of acquisition opportunities. I'm just sort of curious, based on your opening commentary, it sounds like things are maybe more loosening up, but now sort of seized. Is that sort of your viewpoint currently, or do you think things are coming back?
Aaron Halfacre (CEO, President, and Director)
Yeah. It's interesting. I would say that we were seeing some stuff in that sort of July timeframe, and we started throwing out some bids. Then it kind of contracted because we got a little sideways. I would say we've seen more in the last week and a half than we had probably in the prior month and a half. I don't know what it was about it. I mean, the markets were this volatile. Maybe it was because the end of summer. Maybe it was because we knew we had the September decision. I'm not sure. It kind of we didn't see much. Now we're starting to see more. Now it actually feels like I'm measuring it by quantity, not quality. It's starting to feel healthier.
There's definitely, I mean, I think, John, Ray, I'm thinking we've probably looked at four or five deals in the last week, right?
Raymond Pacini (CFO)
Yeah, at least.
Aaron Halfacre (CEO, President, and Director)
Now, quantity is, yeah, quantity is challenge. I mean, quality is still challenging, right? I mean, I think the one thing that if you imagine us as a steel blade or a knife, we're constantly sort of sharpening and sharpening on a grindstone and getting better at what we want and knowing better what we want. Our buy box has probably gotten a lot tighter. There is stuff that I probably would have been willing to bid on two years ago. I'm like, fuck it. I'm out. I do not want to bother. We have gotten much more selective. That said, it feels right now, at least, and it is usually odd because, candidly, you do not tend to see a lot at year-end. You tend to see them waiting early January, right? That is where pipeline tends to pick up normally.
Now you would generally think it's going to slow down because these take anywhere from 30-60 days to close. Then you're smack in the holidays, and you're like, "I think that's an interesting sign." I think what we are seeing sort of tea leaf-wise is there's probably more PE activity going on, which I think is always an early indicator, right? PE and hedge funds sometimes tend to, you generally construe them as to be smarter capital or maybe not smart capital than sort of people who have just got long bias or are doing 1031s or something like that, where they're forced by mandate to do something. These guys are looking for something. We have seen a little bit of PE activity pick up.
Craig Kucera (Managing Director of Equity Research)
Okay. Great. Thank you.
Operator (participant)
Our next question is from Gaurav Mehta from Alliance Global Partners. Your line is open.
Gaurav Mehta (Managing Director and Senior Equity Research Analyst)
Yeah, thank you. Following up on your comments on acquisition, can you comment on where the cap rates are for the kind of properties you're looking at?
Aaron Halfacre (CEO, President, and Director)
Cap rates are mainly seven handles. That's first year, right? We've seen a thumb eight, but mainly seven handles. Not necessarily low seven handles, but seven handles. I think brokers are certainly asking for the moon, and that's their job, and they get it. On a weighted average basis, those are probably tens, right? Now, I guess, in fairness, we've seen some wider ones, but you're like, I don't want to own that. Have we seen any tighter ones? I don't know that I have right now, to be honest with you.
Gaurav Mehta (Managing Director and Senior Equity Research Analyst)
Okay. Thanks for that color. Second question on, I guess, asset recycling. As the acquisition market picks up for your target assets, should we expect that you may sell more assets to fund those acquisitions?
Aaron Halfacre (CEO, President, and Director)
You should expect that we will be deliberate and systematic about asset recycling. If you think back, right, we did the asset recycling, the GFPR, which was a large bulk. Just for everyone's education purposes, generally speaking, if you do seven individual transactions to seven individual buyers in a given year, that's sort of the limit from an IRS perspective. If you go over that, you tend to have to get what is called a private letter ruling to sort of get exempted relief because otherwise, it might be deemed a trader you're dealing. When we sold that big bunch of office and dollar stores to GFPR, that was one transaction. That sort of kicked it off in earnest. We sold the one in Nashville. We sold one out in California. It just kind of got really super volatile.
We have been sitting on the KB thing for the Costco purchase for a while, looking forward to that closing soon. As I said, OES has this purchase option, so we cannot do anything with that until we actually have conversations with them. Their process is they have time on their clock. That one just was not going to happen immediately. The solar property, we have been with it for four years of trying to get a lot split. San Diego is really difficult to work with in terms of doing anything. That has taken long. It has felt really long in the tooth. We have not really shown much recycling. I think at the same time, we have other assets we could say would fly off the shelf, right? They would just immediately go.
What I say to these other assets is, obviously, there's the Kia asset, which is a non-core, but we also have in our industrial bucket some legacy assets. There's a handful that are not absolute triplets that I don't like because there's leakage, and it's not scale efficient. Some of them are just not the very focused, sharpened knife blade of manufacturing that we want. Those would have flown off the shelf in this period of time. At the same time, we're saying they're not hurting us. They're very comfortable credits. Let's see if we get a little bit of more stability in the cap rate markets. If the cap rates start to tighten, then we can comfortably roll those off, and we're not leaving a lot of chips on the table.
I think what you'll see over the next period of time is we will continue to do that, start recycling those. I think it'll be systematic, and since those have a long legacy that we'll have to, in terms of a low basis, we've held them for a long time, they will be 1031 or they'll be tax sensitive. We will be sort of timing, rolling into new acquisitions with the advent of those being sold, if that makes sense.
Gaurav Mehta (Managing Director and Senior Equity Research Analyst)
Okay. Thanks for that color. That's all I had.
Aaron Halfacre (CEO, President, and Director)
Cool.
Operator (participant)
Our next question is from John Masocca from BYO Securities. Your line is open.
John Massocca (Senior Research Analyst)
Good afternoon.
Aaron Halfacre (CEO, President, and Director)
Hey.
John Massocca (Senior Research Analyst)
As we think about maybe how's it going? As we think about maybe over a longer time horizon, the outlook for true growth, what's kind of interesting maybe as the Fed dynamic changes a little bit in terms of a sources of capital perspective? I just maybe hope in on your preferred stocks had a little bit of a run. There's been some smaller REITs that have been out there in the preferred market, but that would, in some people's mind, be a leveraging transaction if you did raise in that market. Just kind of curious where we should be thinking about sources of kind of external growth capital in the future if and when the market gets a little more accommodative?
Aaron Halfacre (CEO, President, and Director)
I think when we know the market is accommodative, I think that'll be a better time to ask that question. I think for us, and I've kind of alluded to this, is that that question predates that we have to grow, and we have to find sources for it, right? I kind of rebel against that question in general right now. I know the answer is underwhelming. Like, "Oh, if you don't have external growth capital, you can't really grow." I don't. I have several assets that are going to can trade low sixes, and I'm going to rotate them into mid to high sevens. That's growth, right? That's something to do in the near term until it makes it clear that we're the trend.
John Raney (COO and General Counsel)
Because you think about we're in a downward trend in REITs, or we have been, generally speaking, and it's correlated to rates. Until we have clarity on where rates are, then I think we'll start to see where pricing is. Another way I think a couple of ways I think about it, right? I'll talk about the preferred stuff too in a second. Look at (O) or W. P. Carey. I mean, I think their dividend yields are like high fives, right? Mid fives, high fives. And we're what? Eight. So we're roughly 250 basis points off of them, 250 basis points. That doesn't seem terrible to me. I don't like it. I think we're certainly undervalued, right, from a standpoint, but arguably everyone is, right? I mean, O was forever. It was like sub four dividend yield. And they're trading fairly wide.
I mean, that's much wider than a money market. And do they have a lot of risk in them? I mean, they have risk that they may not grow. But I think we need to see the broader, more liquid, the more easily bought, the easily loved names, right, the big names, to start to see some love from the broader institutional community, which they haven't seen because flows into REITs have not been good. Once you start to see that, then the next sign would be, "Okay, are we, we're the tail? Do we start to see that?" Right? Obviously, the price of our share price, if it's at a realm that's accretive, then we would start to access that. We're not there yet. Until it is, I can't do anything with that, right? The strategic capital stuff, we're always looking.
I think we've seen three preferred deals really in the last week: GMRE, we saw PINE, and we saw FrontView. I thought the deal that Preston and Fitzgerald did was really, I liked that. It was clever, right? I'd love to have conversations with them and reach out to them and do it, but I think that was a clever deal, right? I think that one is a constructive deal that'll cause growth. If I look at GMRE's and PINE, look, I get it. It's cheaper. That 8% preferred is cheaper than your equity was. You got to step back. That answers the question, which source of capital do I want to use?
I want to step back to the primary question and say, "Should I be using either of those?" If I have a hammer and the hammer says hammer every nail that says growth on it, then you're going to use capital. Think about it. If you just pull back on a time horizon and you underwrite that we could be in an easy environment and that this time next year, our share prices could be better as a category, then will it not feel a little like a chump to have issued a bunch of perpetual preferred at 8% when you could have just waited and maybe your dividend yield and your equity could have been issued at 7.5% or 7%? I get that they will make that accretive. It is not like it is bad. It is not like they are going to destroy themselves by it.
By no means. I mean, they're probably finding paper that's, I mean, investments that are wider than that 8. So it's going to be accretive. They are also just burdening their franchise with this thing that they're going to have to deal with. To me, I just want to step back and say, "Hey, does it really make sense? Do I need to post stats for the quarter because that's what everyone else does?" That was kind of my framework about being a small REIT is the bigger guys, yeah, I get it. They've got super low cost of capital. They do need to show activity, right? Our smaller folks, I mean, is that the right blueprint? So many small-cap REITs just try to follow this bigger mantra of the normalized REIT, and they're just not. I know it's a circular thing.
You say, "If you don't grow, then you're never going to get capital, and therefore, you're always going to be small." I'm like, "Maybe. But maybe you could actually create a really valuable franchise that people will buy." That's it. That's an experiment that we're doing.
I fundamentally take the view that if I improve the durability and quality of the income coming in and I sort of right-size the balance sheet and make it stronger, not weaker, and that I continuously do the right things over time, that as I think Warren Buffett says, "When the tide goes out, you'll see who doesn't have their swim trunks on." Right now, I don't know where those buckets of I know the categories of where those buckets of capital are, but I don't have a line of sight to tell you, "Yeah, I've got someone who's going to give me equity at fucking $18 a share." If I did, I would just take it and I would go put it to work. I haven't seen it happen in the big REITs, so I don't expect it to happen for us necessarily right now.
John Massocca (Senior Research Analyst)
Okay. With the in-place portfolio, just kind of broadly, what's the feeling amongst tenants as you reach out, given maybe we have a little more certainty even versus the last earnings call around the tariff outlook? I know it's still some uncertainty, but just kind of curious how they're feeling and if there's anything maybe notable from a tenant credit perspective worth calling out?
Aaron Halfacre (CEO, President, and Director)
Now, look, most of these operators, quarters do not move that much, right? They look annually. They look at cycles. They are getting orders. I think the tariff news is, if anything, it is old, right? I mean, the volatility is certainly tempered. I mean, you tell me. I do not think we have heard of the verdict yet on the Supreme Court. Even if we do, there are two other tariffs that you can implement. No one fucking knows, right? What we do know is there is no blood in the streets, and our businesses are operating. Most of our businesses buy US and sell US, right? We own a lot of durable businesses. We have not seen anything new on the radar.
It says, "Oh, oh no, this is tariffs are going to squeeze us." I think, look, people would love to have clarity on tariffs. I think tariffs do economically impact you. The near-term noise is there's not really been anything. We kind of said, I think, two quarters ago that most of our, the vast majority of our tenants learned from COVID and then the first Trump administration—it's not the first time he's talked about tariffs—that they didn't want to have dependencies on places that could get squeezed, a.k.a. China, right? A lot of them over the ensuing years have mitigated that risk as this is good business practice. That happens to look like a good reaction to the near-term conversations about tariffs, but we haven't heard anything recently or at all.
Since our first conversations, I think everyone was alarmed because Liberation Day, people were charged, right? Now it's like, "Yeah, okay. Let's wait till we actually know something else, and then maybe we can then sort of reforecast." Nothing yet.
John Massocca (Senior Research Analyst)
Okay. On just kind of a line item by line item basis, probably more likely into 2026, what's the potential impact to property operating expense, maybe even particularly like a net property operating expense from completing the former Costco headquarters transaction and maybe even the Clara, if you're able to sell Clara's former property?
Aaron Halfacre (CEO, President, and Director)
I would give you characteristics that right now, as we roll, I'd say that Costco delta on operating expense vis-à-vis the fee, right, so the extension fees, we're probably running, we're probably bleeding about $40,000 a month on that property, right? You're not going to, so there's a fair amount of CapEx, but we have also gotten these extension fees that sort of offset that from an AFFO perspective. There's probably about $40,000 a month bleed on that, how we think about it in sort of third quarter. Clara, actually, it's been lumpy. You got security fences in there, things like that. If we get that flushed out, I don't think you're going to see, and Ray, you correct me if I'm wrong, I don't think we're going to see world-changing property expenses go down just because those clear out. We're fairly neutral on that.
I mean, there's a little bit of movement in 2026. I think as we get rid of some of—we have, like I said, a small handful of non-absolute triple nets, I think on the margin that could reduce property expense next year. Ray, what are your thoughts on property expense?
Raymond Pacini (CFO)
I think it'll go down a bit, maybe $100,000 or so. I think as we sell some of the other properties, as we do the recycling, there are some others where there's some leakage. Over time, it'll probably go down a little bit further. Does that help?
John Massocca (Senior Research Analyst)
Yeah, it's very helpful. I appreciate all that detail. That's it for me. Thank you very much.
Aaron Halfacre (CEO, President, and Director)
Great. Thanks.
Operator (participant)
Our next question is from Steve Chick from Sabi's Garden Capital. Your line is open.
Stephen Chick (CIO)
Hey, thanks. Guys, I'm wondering if you could or if you know of what the same store rental income would be. Now, rental income is down 2%, but I think there's an overhang, obviously, from Costco, and Solar is probably in there as well. Do you calculate what same store rental income would be or a figure like that?
Aaron Halfacre (CEO, President, and Director)
We don't. I think the general view reason why is because there's so much movement in our portfolio that we have, but I think it's fair that once we complete a recycling, that that would be, and we think we're largely baked, particularly if we don't have external growth capital. I think it's fair that we would start implementing same store. We may try to run that for you and publish that sometime before year-end or something like that, but I don't think we have a handy ready to you.
Raymond Pacini (CFO)
No, but I'd say that our overall average is 2.5% rent growth a year just based on escalations in the leases. That gives you some idea of what's happening there.
John Massocca (Senior Research Analyst)
Yeah. I would characterize it as we recycle those. A lot of the legacy ones have the lower bumps, right? They're twos or they're every five kind of thing, every five years. I think that if you look at—there's a pie chart on our website that shows kind of the weighting of those. A lot of the stuff that we put in the last two years or the last three years sort of averaged north of 2.5%. I think over time, that could—or same store could trend that way.
Stephen Chick (CIO)
Okay. That's helpful. Can you say—I didn't catch it—on Solar, did you say when you thought that property would be resolved or sold?
Aaron Halfacre (CEO, President, and Director)
We're a lot closer than we ever were. I mean, we literally started this process in 2021, where we engaged consultants and went through the process. We're four years into it. We're doing some last—so we had to get the split and negotiate certain easements and then have the city look at it. Ultimately, I don't have the details 100%, but at a high level, we had to do some modest construction work to the entrance of the driveway to meet the new ADA compliance standards of the city. It took us a while to get them to give us the green light to do the construction. The construction is now underway, which is not a very long job. It's probably a couple of weeks. We have to go back and then get approval of all that stuff.
My guess right now, it's been a constant debate internally. There are some people who think we can get it done by year-end, and I generally sort of hedge the downside. I think it's a first-quarter event. Ideally, it's an early first-quarter event, but who knows? Once we're locked and loaded, that property will be taken to market. That will be another held-for-sale. The tenant has just finished. They left in September, ended their lease end of September. They cleaned it all out. It's a beautiful box inside. It's good. We've had people—we've had brokers come and look at it. Our intent is not to lease it, but to sell it to an owner-user. We think that's the best end result for that property.
Stephen Chick (CIO)
Okay. All right. Thanks. That's helpful. Appreciate it.
Operator (participant)
There are no questions at this time. I would now like to turn the conference back to Mr. Halfacre. Please go ahead.
Aaron Halfacre (CEO, President, and Director)
Great. Thank you, everyone. Appreciate what you've—for your dialing in and listening. We look forward to giving you updates as time goes ahead. I hope you have a great weekend. I hope you can all rest up for the Thanksgiving holiday. For those who are curious, we will not be at NAREIT. I do not want to go to Dallas in December, and it is just not relevant for us, I think, at this point. Enjoy the conference, and I wish you guys all the best.
Operator (participant)
This concludes today's conference call. Thank you for participating. You may now disconnect.