Executive Summary

Q4 2024 revenue was $57.9M, down 8% YoY on asset sales, while GAAP EPS swung to $0.35 vs $(0.55) in Q4’23, aided by disposition gains and a $11.0M debt extinguishment gain . AFFO per share was $0.65 (vs $0.80 LY), and Cash NOI was $47.7M (vs $50.5M LY) .
Strategic pivot accelerated: acquired a $490.0M IOS portfolio (45 operating, 6 redevelopment sites), lifting Industrial to 39.1% of ABR and eliminating the “Other” segment via $317.4M of 2024 dispositions .
Balance sheet/liquidity: Total debt $1.36B; net debt to Normalized EBITDAre 7.5x; liquidity $228.5M; 82% fixed including swaps; forward swaps add 3.58% fixed on $550M from July 2025–July 2029 .
Management reiterated long-term leverage target ~6x; near term will balance deleveraging with targeted IOS growth; dividend set at $0.225/share (Q1’25 declared; Q4 paid) .
Potential stock catalysts: (i) execution on IOS mark-to-market (management cites ~70% MTM opportunity), (ii) continued office dispositions (tenant purchases a key channel), and (iii) deleveraging toward ~6x .

What Went Well and What Went Wrong

What Went Well
- Industrial pivot and IOS entry: closed $490.0M IOS portfolio; Industrial now 39.1% of ABR; IOS operating ~100% leased with 47% IG tenancy and ~70% mark-to-market opportunity .
- Leasing execution: Q4 leasing of 144.1K sf at 26% GAAP / 11% cash releasing spreads; Same Store Cash NOI up 0.4% YoY; management indicated underlying SS Cash NOI growth would have been ~2.8% absent a rent abatement and a one-time reversal .
- Capital structure progress: added a $175M term loan to fund IOS; 82% fixed-rate exposure; forward-starting swaps fix $550M at 3.58% (Jul’25–Jul’29) .
What Went Wrong
- Topline/AFFO pressure from asset sales: revenue down to $57.9M (vs $63.1M LY); AFFO/share $0.65 (vs $0.80 LY) as dispositions reduced income base .
- Elevated leverage post-IOS acquisition: net debt/Normalized EBITDAre rose to 7.5x vs 6.2x at Q3, with management planning balanced deleveraging vs IOS growth in 2025 .
- SS Cash NOI headwind in Industrial from legacy rent abatement and non-tenant reimbursement reversal; though abatement ended in Nov’24, Q4 growth understated underlying trend per management .

Financial Results

Quarterly progression (oldest → newest):

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$55.952	$54.960	$57.934
Net income to common ($M)	$(3.768)	$(24.395)	$12.712
GAAP EPS (basic & diluted)	$(0.11)	$(0.67)	$0.35
FFO per share/unit	$0.65	$0.58	$0.74
AFFO per share/unit	$0.70	$0.65	$0.65
Cash NOI Total ($M)	$44.002	$42.193	$47.698
Same Store Cash NOI ($M)	$44.204	$41.972	$39.005
Operating Margin (%)	81.2%	79.8%	81.9%

YoY comparison (Q4 2024 vs Q4 2023):

Metric	Q4 2023	Q4 2024
Revenue ($M)	$63.058	$57.934
Net income to common ($M)	$(19.889)	$12.712
GAAP EPS (basic & diluted)	$(0.55)	$0.35
FFO per share/unit	$0.29	$0.74
AFFO per share/unit	$0.80	$0.65
Cash NOI Total ($M)	$50.522	$47.698
Same Store Cash NOI ($M)	$38.844	$39.005

Segment revenue mix by quarter:

Segment Revenue ($M)	Q2 2024	Q3 2024	Q4 2024
IOS	$0.000	$0.000	$5.464
Traditional Industrial	$14.554	$14.918	$14.981
Office	$32.991	$33.234	$33.318
Other	$8.407	$6.808	$4.171
Total	$55.952	$54.960	$57.934

KPIs and balance sheet:

KPI	Q4 2024
Properties (Operating / Redev)	97 / 6
ABR mix (Industrial / Office)	39.1% / 60.9%
WALT (weighted)	6.4 years
Occupancy (RSF / Acres)	99.5% / 99.6%
Net Debt ($M)	$1,213.8
Net Debt / Normalized EBITDAre	7.5x
Total Liquidity ($M)	$228.5
Dividend per share	$0.225 (Q4 paid Jan 17, 2025; Q1’25 declared)
Q4 Leasing & Releasing Spreads	144.1K sf; 26% GAAP / 11% cash

Why the quarter looked this way:

Revenue/AFFO down YoY due to strategic dispositions of non-core and Other assets; Q4 revenue $57.9M vs $63.1M LY; AFFO/share $0.65 vs $0.80 LY .
Positive EPS swing reflects net gains on asset sales ($13.1M) and a $11.0M debt extinguishment gain, partially offset by $5.7M goodwill impairment .
SS Cash NOI increased modestly (0.4%); management noted an Industrial rent abatement and a one-time reversal masked underlying ~2.8% SS growth potential (abatement ended Nov’24) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Update	Change
Dividend per common share	Q1 2025	N/A (regular quarterly)	Declared $0.225 payable Apr 17, 2025	Maintained
Capital structure (rate hedging)	2025–2029	Existing $750M swaps to 7/1/2025	Added $550M forward swaps at 3.58% (7/1/2025–7/1/2029)	Improved visibility
Leverage target (Net Debt/EBITDAre)	Long-term	~6x target	Reiterated; Q4 actual 7.5x; plan to balance deleveraging with IOS growth	Maintained

Note: Company did not issue quantitative revenue/EPS/AFFO guidance ranges in the Q4 materials; dividend policy and balance sheet parameters were updated/affirmed .

Earnings Call Themes & Trends

Topic	Q-2 (Q2 2024)	Q-1 (Q3 2024)	Current (Q4 2024)	Trend
Shift to Industrial/IOS	Amended facility to enable industrial investments	Exploring industrial expansion, foundation in place	Closed $490M IOS portfolio; Industrial now 39.1% ABR; IOS ~100% leased	Accelerating
Dispositions/“Other” segment	Continued sales; $58.2M 1H’24	“Other” ~10% ABR; aim to exit by YE	Eliminated “Other” segment; $317.4M 2024 sales	Completed/positive
Credit facility & hedging	Facility amended/extended; 100% fixed via swaps	Amended/extended to 2028; 100% fixed	$175M term loan added; 82% fixed; forward swaps at 3.58% (2025–2029)	Strengthened
Leasing spreads/mark-to-market	Samsonite 28% GAAP/7% cash; 3.75% escalators	Auburn Hills 41% GAAP/20% cash; escalators up to 3%	Q4 total 26% GAAP/11% cash; IOS ~70% MTM opportunity	Strong/ongoing
Office sale demand	—	Bid lists improving vs prior years	Local specialists + tenant purchases (44% of 2024 proceeds) driving sales	Improving liquidity
Leverage & deleveraging	Target ~6x; pro forma 6.4x after extension	6.2x at Q3; focus on office sales	7.5x after IOS; target ~6x reiterated; balanced plan	Near-term higher; plan to reduce

Management Commentary

CEO on strategic pivot: “Our strategic plan to shift our portfolio more towards industrial is well underway… We acquired a substantial [IOS] portfolio… divested $317 million of non-core assets… amended and extended our credit facility… We will continue to divest non-core assets while focusing our investments on IOS… confident that refining our portfolio will drive long-term growth” .
CEO on IOS fundamentals: “IOS… characterized by fragmented ownership, significant supply constraints, compelling operating fundamentals and minimal CapEx… Premier infill IOS portfolio… has a 70% mark-to-market opportunity… We plan to concentrate our investment strategy on these types of assets” .
CFO on balance sheet and swaps: “Total liquidity was approximately $229 million… 82% of our debt was fixed… new forward swaps… $550 million… effective July 1, 2025… converting SOFR to a weighted average fixed rate of 3.58%” .
CEO on acquisition focus: “Mix… most compelling is… IOS… cap rates… still a gap [vs traditional industrial]… embedded growth in IOS portfolios… better dynamic” .

Q&A Highlights

Capital allocation: Proceeds from Other segment sales used primarily to retire AIG debt; remainder boosted cash; leverage rose with IOS acquisition; management will balance deleveraging and IOS investments .
Acquisition mix: Management leaning toward IOS over traditional industrial due to embedded growth, cap rate dynamics .
Office dispositions: Buyer interest improving—local specialists and tenants as buyers; in 2024, ~44% of gross disposition proceeds came from tenant purchases .
Leverage target: Long-term ~6x reiterated (ended 2024 at 7.5x given IOS acquisition); management cites track record of asset sales to reduce leverage .
Industrial lease rollover: ~10% of Industrial ABR expires in 2026; early discussions positive but still early .

Estimates Context

Wall Street consensus for Q4 2024 (Primary EPS, Revenue) via S&P Global was unavailable at time of query due to provider rate limits; as a result, we cannot assess beat/miss vs consensus. Values would normally be retrieved from S&P Global.*

Key Takeaways for Investors

The strategic re-rating case hinges on executing the IOS mark-to-market (~70% cited) and stabilizing the six redevelopment sites at targeted 7.5–8% yields, which could support internal growth and deleveraging .
Asset mix quality improved (Other segment eliminated; Industrial 39.1% ABR), but near-term AFFO dilution from dispositions and higher leverage are trade-offs to monitor .
Balance sheet risk is mitigated by high fixed-rate exposure (82%) and forward swaps fixing $550M at 3.58% from mid-2025, partially insulating from rate volatility .
Office sale liquidity appears to be improving with tenants as buyers; continued progress on office dispositions is a key medium-term catalyst for deleveraging .
Underlying same-store growth is stronger than headline (management points to ~2.8% underlying growth absent one-offs), and rent abatement headwind ended Nov’24, favoring 2025 comps .
Dividend continuity at $0.225/share underscores cash flow stability; payout sustainability ties to execution on IOS growth and leverage reduction .

Footnote: *Consensus estimates unavailable due to S&P Global request limits at time of retrieval.

Peakstone Realty Trust (PKST)·Q4 2024 Earnings Summary