First Industrial Realty Trust (FR) 17 Oct 242024 Q3 Earnings call transcript

Good day, and welcome to the First Industrial Realty Trust, Inc.

Third Quarter Results Call. [Operator Instructions]

Please note this event is being recorded. I would now like to turn the conference over to Art Harmon, Senior Vice President of Investor Relations and Marketing. sir. ahead, go Please

you, everybody, Thank our welcome call. Dave. right. and Hello, to All

our and expectations, our quarter for we are by third Before discuss These laws. results estimates forward-looking as let statements of remind federal prospects. securities include on the me our and everyone may that management's call based statements defined plans year, guidance updated our

update time today's assume materially may and be results sensitive statements to date, no XX-K this cause XX, statements only Actual of which described and factors other Today's as from the in and We October XXXX. obligation provide. statements information our our or SEC accurate other could are our we forward-looking differ may filings.

non-GAAP in today's of under earnings at discussed You the and and earnings our available tab. a financial our The report SEC can call supplemental report, our firstindustrial.com Investors release. release reconciliation in supplemental are measures filings find

Our President Asset Officer; Baccile, us and call which it will begin questions. and Schneider, President; up Walter, Capital of Officer, for Executive Scott Also President we'll Officer; Chief and Jojo Operations; Chief Chief Management. after and of open Vice your Peter Financial President our Musil, with with remarks by Executive Schultz, Chris Executive Vice Executive Markets Yap, today Peter are Vice Bob Investment

me let over the turn Peter. Now to call

great solid all thank with leases you Industrial us another activity. capital new today. delivered joining some deployment and for Art, you, Thank metrics, quarter and along important First team operating with The

leasing, from capturing rollovers in portfolio our flow deliver position drive contractual to our embedded and all escalations operations. growth, funds us which leases, cash growth to continue rent We of strong on via continued development from in growth

feet. reflecting U.S. update you X.X%, Before the quarter This getting million is market third quarter online. basis most EA, development lowest broadly. increased the since on According of compared have market specifics, to points year's last XXXX. vacancy a to quarter the down Completions CBRE and third XX come that last to totaled XX% let modest industrial of for industrial number now into approximately square XX starts completion quarterly me

target our the XX% XX from markets, million For completions quarter. square down prior feet, were

disciplined, from million quarter peak third third quarter in remain in XXXX. starts square feet totaling down New XX the the of XX% the

quarter remained million On brought XX square the in the Renewal the XXX with which demand were million total markets. approximately of of side, strong. to active absorption third feet. net our This nationally square target in particular, year-to-date feet, XX leasing, million was

we XXXX of renewed call, our with of X more change XXX%. last last the the expirations than large a successfully rental Since Southern cash California rate

expirations the this through of XX% square of feet. XXXX our by date we're of As now call, lease

rate XXXX Our back-to-back XX% outstanding years to rental our cash rental Congratulations this rate XX% follow-up cash metric. strong we which to on of the performance leasing our commencements. delivered a increase is is growth teams for on

leasing, our last and which new rate our at XX% pace last XXXX XX%, half in renewal increase cash good fixed making for PA, is footage, than through We're rental the to by square of lease year. date Together progress discussed our of are progress leases Central is of Looking commencement we population now similar expirations. foot with rate million signed is on comprised with square X.X XXXX more our this call.

XXXX a our of incremental on budget on rate our view estimated rental fourth refined the our you cash We of signings. reviews quarter benefit with call increase will and give thoughts

to Pioneer plus Denver. at foot Inland last XX the square highlighted on we a our First lease Empire project the square a as inked in XPL XXX,XXX third quarter, for our leasing, East, development project call, full building Regarding First our a we in lease foot in XX,XXX

Turning now to capital deployment.

supply competing launched our development and incremental closely in XXX,XXX our our a We call, as Since at investment square wrap demand markets, Rockdale target last XXXX. starts first we up potential determine in continue Nashville. foot we to monitor Park

Our of X%. and dynamic is drivers of supply/demand Current unleased $XX we current yield expected like about the approximately investment represents with in stock. vacancy at Nashville total just cash The this an total is supply projected long-term new stands the X.X% of and market. attractive, million X%

long-term We port. Southeast Houston's park proximity The also the acquired buildings in on a X-building are to leased with XXX,XXX a close square basis. submarket XXX% foot

million Our and yield total the in-place $XX is approximately cash investment is X%.

to dispositions. now Moving

quarter buildings million. to our As for $XX date, $XX on Pennsylvania, we New total our X the a we $XXX million. XXX,XXX call, fourth to sold brings total last feet of totaling the million. In in sold Jersey year-to-date for discussed This portfolio in square

turn let results on guidance. me that, through over Scott details to With you further and to it walk our

Thanks, Peter.

the per Let $X.XX diluted $X.XX XXXX. were me results recap NAREIT fully our per for XQ compared from operations quarter. funds in share share to

the for bumps X.X I in cash quarter recognition square was lower fees, Central XX.X%. Pennsylvania. additional our X.X%. growth from comments the of occupancy. Excluded the increases amount, the rate some and same-store and excluding accelerated on The have XX%. this occupancy boohoo primarily embedded by improvement quarter, in results with in-service finished Our on is will driven quarter rental in NOI our leases, third was average by partially to rates reimbursement offset leasing tenant rent were cash tenant free NOI feet rental the and a quarter termination same-store growth our new calculation same-store boohoo, renewal leases Including shortly. We related million of which in higher

Of from million XXXX points XXXX. during the in leasing our square activity lease-up. acquisitions of approximately service commenced. Summarizing have and X.X million quarter, in-service renewals for approximately X.X feet these, with developments of developments leases the were Within we lease-up opportunity and basis were new, XXX,XXX and portfolio, in placed XXX,XXX XXX were

back boohoo. lease our with to Turning

rent their Due they and asset which of reimbursement per tenant to As lease. we on off have years building. Also which which a sublease about reported net at their deposit in their straight-line of result press, a FFO. the of XX cessation liabilities, letter have for reduction rent security of ceasing the a about on are credit, rent. a improvement worth in in keep the are is $X.XX in shorter-term the our operations, we for share and XXXX of have building form the mind XPL XX% covers operations that the our of written NAREIT have they current a remaining They year's to

for Let XXXX. review guidance our me quickly updated

have last Our FFO $X.XX share per which guidance for call. Key $X.XX midpoint the per of an at of our been only a in XXXX. average as End to NAREIT to tightened X range quarter $X.XX implies the we increase year XX% occupancy tightening which is remaining fourth to of for now and XX.X%. is the XX.X% quarter-end have of range XX% a share, quarter range earnings assumptions since of

in the improvements earnings since previously reimbursement and which the increase last the the recognition impact lease related leasing for NOI Our of tenant the square assumes previously This feet call. to of a will development fourth midpoint excludes onetime occupancy to X% Pennsylvania at growth the that disclosed. implies XXXX is XXXX. tenant fees range we in slated had of before X.XX% in X.XX% XXXX XX about Central XXX,XXX now point quarter cash year, guidance the the a that Note place accelerated quarter basis termination same-store XX%. same-store take our now guidance Fourth we for to

Guidance to and developments includes XX. the construction under costs at anticipated XXXX related completed September our

$XX.X For capitalize $XX.X million. the guidance expense to XXXX, million and is to year of full expect interest, per share we range $X.XX about G&A our

over back it turn to me Let Peter.

and Thanks again to team quarterly the created allocation that focused high-quality outperform we've is business cycle. for the strategy well through Industrial another solid First a capital our through positioned portfolio to actions performance

growth from we opportunities our can million we current have portfolio, highly over functional future square and growth feet embedded opportunities build which landholdings have our logistics We well-located of XX and within on facilities.

XXXX, have we of and the with exercise strong, our flexibility and assuming until is sheet balance loans. no option bank extension maturities Our

that, with for up to it ready Operator, we're questions. open

Blaine [Operator comes from first Fargo. with Instructions] Wells Heck Our question

of a from year-end. can specific I Are some talk but that implies outcomes biggest XX% give guidance just third guess, end between in occupancy maybe and you you push at some working that of on the So on? you of can portfolio us towards any you're wide color guidance? that could quarter leases range the kind of lease-up XX% there upside drivers large the has the relatively about upper

Yes. Chris. is This

If you we it that look half of about about, talked was the from occupancy at half development the portfolio. drop was portfolio other the core the from

to have activity back here some certainly talking it we're thought tenants, is or to X As the months push was we left but only some up in with prudent -- we do lease today, quarter. stand we

Scott. it's Blaine,

midpoint. the points. development we more into to development in quarter. we'll above frankly, hit foot going is occupancy our the And leasing We've square below about be guidance If think is I that, leasing it the got basis XX be than key could midpoint That's of high. guidance. our built fourth get XXX,XXX the

maybe very then of Great. helpful. That's just high-level a more a little And question. bit

which a than given a talk inflect good have think to portfolio you in as relatively diverse others. position which longer geographically. I guess, you're are that all think you markets poised a markets come rental demand and back you to best standpoint to supply talk growth? about seeing and can about you're take just guess feeling might from about I seems It sooner to though which you rate

Sure.

kind Let's East West. take of it to

we've growth was rent very in in largely, in Coast the other where markets, it very, the South change first. happened the Southern think West progress you've markets And that Florida. you've strong I our seen has East. was seen, are New stronger Those portfolio, as California, the Jersey, leasing in made dynamic

the we're That we're available now, to marketplace that happen begin that shift are get for additional seeing turn whole the traffic into dynamic to time absorbed, tenants potential and as going right more and activities. that over leasing in is seeing alternatives

Peter, do to comment? want you

thing we other as is The about I'd only growth. say rate rental think

Nashville today speaking. to and continue generally -- see Pennsylvania, traction Houston We in

West? Jojo, want the comment you on to

[ then in and supply And activity taking like -- has terms and of increased through, But general, in time cycling the cycle in Yes. through more digest to taking offers to there been has. proposals. terms has ], of IEE it time

Our Craig comes next question Citi. with from Mailman

Just lease. the Scott, boohoo on

it on to couple to game what's I the are cash we think kind you taking to about now. plan planning get impact next attack trying should that continue the subtenant of rent kind that you either And asset? cash of they to if over -- go this the security Or continue here deposit on guys the a back the guess direct So how with they're guys correct? or basis Is quarters? on of of flow pay the re-leased accounting the and

and question take care of Schultz accounting care Peter let the take I'll Right. of the booho. I'll of piece it about

script, deposit they're right the paying a on to you're FFO credit. that right, we on current, they we'll continue be -- cash if as their if again, Craig, rent have we in they current the obviously, a our in security letter we're of And So of do form stop and the basis. mentioned reflect rent, NOI now,

up worth rent. year's So we can that covers that use year X about to for about X

would that's paying in help the So that something that us stop case rent. they out

it in turn tenant detail. I'll talk to more the over And Peter to about

Scott. Thanks,

their retrenching building orders. are options of on So put is Pennsylvania. the They building be to the process then few to market fulfill the back should their be quality in for of to They the down the very plan operations U.K. a at Central the this building, will for end there the Boohoo by completed the in year. which Today, entire of winding sublet.

managing also subtenant square [ So through of a in their their the XPL, about DHL a building, they feel They or for have that. prospects XXX,XXX portion subletting. feet who's so pretty about ], good current

will, that. of We'll fully that's So success posted you their lease on have you obligation they honor to subletting some with keep payments, the if intend and subsidizing, but their some rental building.

Okay.

in And of the fourth that rent the kind so if what could to they be quarter, do upside guidance, Scott? pay

paying We Craig. have them rent,

because... Just

in the them Oh you have guidance? paying rent

absolutely they're credit, we've got their Yes, because paying that's security of deposit. two, for, the letter one;

mind, it's out credit the if got -- rent, not I can stop Keep I've they in with accruing with even because a bank that's that letter So keep there. tenant. of paying rent

paying. As me quarter probably of That recognize that result, accounting end now, of year. let fourth on if early me that a third security a stop rules go-forward to paying deposit takes the -- next quarter, basis the they stop to will takes they me if

then going question just And back the Blaine's to on Perfect. side. occupancy

on depending fourth impact here, just this October some feet kind could perspective? ending thinking about number. the and development through we to when you 'XX be of the versus we're in XXX,XXX So kind square XXX,XXX Is average of Where first square occupancy? be quarter the activity does more halfway from of How feet in an have that quarter from hit? of that of should leasing occupancy earnings look the stuff going a

it development would our of the I the to the say Well, end at leasing, quarter. guidance fourth baked we have in

So we it how that's have factored in.

that only far is properties I correct, could There the months left about be combinations decent leases work in have included with be but we time, in XXX,XXX, say what have As point for of prospects the that's have available. as macro this X we that at year. many pretty a to the development done. There's it different assumption. is we in would

with from Malhotra Mizuho. The comes next question Vikram

of all, the guess first I just on just tenants.

how sort through of You list walking evolved? watch the mind sort just is of us

Do first in next Federal-Mogul. re-leasing mind just about I quarter the guess, the one sort it specifically in of prospects And for I out, space? there's that was in -- of believe you year known talking move

it's at that square March. of already end Schultz. that's of Peter the foot expires Vikram, out Tenants lease Sure. XXX,XXX the Right, building. the building,

So work we've done our position marketing. to building for the make-ready

We of Pennsylvania options in that number seen for by space some today. already, the in and interest it we're limited have encouraged Central size

on... what again was Vikram, question your And

Just kind in just list just watch like watch the tenant giving the economy list segments, the the mind given -- on list? softening, in sublet bankruptcies the and volumes watch color just some certain of

nothing at of watch Other Sure. point this material Boohoo, than the on list time.

And just Great. one. then Okay. last

from down. acquisitions. standpoint, mentioned I'm some wondering a did you come -- You a have deployment starts capital few just

development. a did new You start

Some your wondering head we acquisition had, thinking have what I just back. who guess, development big I'm from standpoint, you a walked pipelines development peers of and it are into as 'XX?

it's the that development, there to the economy, opportunities. those we causing around big the end Pennsylvania, we are put to we the close for be involved to again, a hearing country, look respect most which of fundamentals South of stronger them eye of some with the what's submarkets impact of the their have around course, we we next Florida, of Obviously, new a that the the factors lot tenants year markets are the fundamentals think the markets wars on from that's happening election, off and starts going encouraging will decision-making in again continue the where whether one have to keep So the Texas, the to country. Nashville, year. When been world, that, submarkets at in be in development is

question next the Caitlin from And comes Burrows with Sachs. Goldman

leasing, you impacting on I if new a more development kind market talk wondering it vacancy. leasing was up? could do I how today. little new And bit that's your take utilization pick for what to other about think what's take of will guess, or whether the you and

that? take to want you do Peter,

of Sure, comments. Caitlin. It's A Peter couple Schultz.

In tenants, the terms other high of our material. with in our boohoo space than and not inspections sublet space utilization discussions one just with talked about generally we that pretty

of commented and operating or tenants But urgency. are reasons. on pace just most, more variety with for as cadence the discussions of decisions a of and Peter terms some not In --

activity. So in that lumpy market say continues of there is somewhat are And and demand I for prospects has deliberate. the the better most of year, probably been today there's be decision-making to level the it and but than the that pace would of

issues. geopolitical now The there people's There's macro with on mind. the weather out to a economy, uncertainty lot respect of is

little these going they're demand. they we who some to on investment things. for definitely to just growth we uncertainty. a dollars need But want the see tenants this there's waiting through bit to we clear of on, So are larger There and work fog pent-up get for have believe that

it. Got

versus to on this imagine for you're maybe acquisition. could acquisitions that? I is maybe mentioned the at and Okay. lower And how then looking guess, growth disposition properties I And lease like rate XXX% point the sell But strategy the you buy that ones. possible just higher-growth Houston

just So there? opportunity of wondering what's the kind

Yes.

what of kind and right we're we're be lot functionality us, has place to choosy other right It factors. about and have the the buy. in of for So to going a

deals, [ we so on are them there best ] do hair around And complications call when typically, deals.

we're we at so and better in where attended the there's don't as work broadly assets, And options, much and acquiring said, be done. to large, by I participate

So over that the focusing going we're again, that's growth the think the the on coming to submarkets there. term. are to strategy And most medium we show near

Are just And if sound I could, out? Was off it it's worked doesn't very other there one well not just on some so the obvious? it Houston and one, was hairy complication it maybe that is given leased. that market

basically right -- You on Caitlin head, market. nail hit was the off it the

have seller close with a to marketing. sure pretty few -- and they -- submarket wanted the that, And great portfolio cash with that submarket they going quickly, certainty. the southeast We the competitors. And make yield. very knew a addition good a X.X% and were work we were we're that product wanted to acquisition, pleased limited they the could and we In very won in in new buyer that product,

think dispositions. So Caitlin, I asked you also about

a as we assets capital higher that time. those some been forward that. on macro sales right, growth a lower growth lower now be we forward for You're see We'll than think much volume have those keep of going We're doing level, quite you have I redeploy opportunity. But the in focusing so at will the into past. trajectory it's that that can going done

from Anderson comes question Wedbush. next with the And Rich

the swing will that change is Harris what anything all don't minds on tenants? are I'm of on is Trump holding beyond the is November and until doing you understand like I'm the the What's in if I -- wins, with X like, question what -- election outcome. your it but risk, tenants tariff not see some factor Like the there if election, off First they mentioned there?

Yes.

gritty micro nitty into on we don't get So details. the

growth I the can't out. the generally speaking, in think, candidate of economy. that's it's to how going And to that in I either come about stability attribute and terms

new the it's is extremely strong. investment, not renewal growth the activity But renewals. The

you've very, As in seen been have cash very strong. our increases rent

is to regulation. wins mean and really to economic new investment. increased look regardless it's what decreased to regulation to activity landscape People going growth what anything for unrest from either going the or the who want So that's and see social like way, of

So there and the outcomes, a are macro kind pretty involved factors of it in some at big that's level.

state, going mind? blue your in Trump red are -- that like is any or oversimplifying there state, wins. do it too states Red better Is to

have on I view a don't that.

to on X% what you've NOI growth XXXX the political in done get XXXX? is second have on read guidance. for half based particularly next on The Not of you Do you guys. your question is is same-store for XXXX earn-in a your what

Are you in estimate asking going for think it's what what of XXXX? an we to be

guidance I XXXX. want Yes, for

Well, you. to not it give to we're going

year about in because is talking maybe into baked same-store I'm what baked or in? you of what X% X% next if So there's already did XXXX?

I couple on then for on increase of get pretty Well, key the a and But items. driver into run to renewal cash because industrial that. a going stable. I'm been of it's growth others Occupancy rate new real And achieve same-store, we're think the next same-store rate that's are cash leasing, to drivers peers. that's bumps been the different what the one core. rental of able is year not

that at Central in increase We XX% and for square rental of early you that what the a option X.X look 'XX we is rate fixed renewal in signed a into in XXXX expirations cash gave the XX% we includes Pennsylvania. footer million what think rates,

We've be do see final think to out pretty -- when be I we it's going good a a we what flesh to how going year. the rates number good rental is think to our guidance number. got So

recovery growth change? answer of what market if macro rent come to and mentioned and say, landscape All But Last X% it business me. God moving to Okay. you're just wondering into back political How Maybe areas by the geopolitical also seeing X% back don't that. can of marketplace? know you seen can everyone happen. in stabilizes. I your you -- country, where in market real how the the in for growth I'm kind is we that's willing, right from the you've environment with in now. speed bring how your can good history? get those rent you the some go health quickly quickly which happy perhaps and start Let's we things see

XX so frame some improve million math XX% Look, that, million of from we is net put XXX pipeline markets. bad. it, last It -- helps The went the this this to So and million our XXX feet down, on way from quarter absorption to in million XX construction okay? XXX year, a existing needs can't the pre-leased. quarter in million is pipe that time is frame completions but is and not second some. went Completions to

on So falloff some new when absorption front, we call for you at demand what the can in tenants. net the change. prospective we'll wind look If get the back things alternatives least, at side, our the

with think don't it's any to going great We happen speed.

it's difficult You're looking from But second that, probably aside next half of handicap. the to year. at

And that you growth seeing market a number have rent today? did you're for

Yes.

rents overall, up little flattish are So a bit. to

of you SoCal take X% they're or X%. If number, probably up that out

The from Janney. next question with Stevenson Rob comes

the the of months seeing and that fourth X rates ahead you out speculation about ago? Can the is both and are you've rate to strong volumes today transaction market demand you're are And quarter? sort and XX of leading recently buyers given that sellers given cut how up the or been first there where and cap that talk versus transaction

see At We're significant big rather opportunities a making We in recovery say some bets than on bets significant lot paid. pretty question of space. would we prices on that quicker being of longer. capital definitely the pretty people level, -- high prior a about the are speed some there's some chasing seeing

your any markets? you Jojo, on do and specifics Peter want comment to in

and year, monitor would some Rob, the we of over the now packages. marketed there bidders of widely just earlier on X in were bidders, maybe to XX these you're I some transactions as say X seeing

interest of in the lot space. a point, Peter's to So

half more then in transactions house -- have In second terms the half. our first that of will view

is feel lowering decline XX-year pricing. help kind leads when the said to comfort financing, Peter addition they're to definitive more in a now, rates the what In get what both of interest of fixed volatility, competing talking can more rate to -- bit short-term they buyers carry, like in or that those their they all help, more the

in cap basis the came XX Overall, say, rates also in. in I IRRs about expectation X the over points months, last for un-levered higher would came

the overall, a definitely, So is competitive. market more bit

And guys Okay. aggressively looking add to markets? to material land That's helpful. seen are you land your manner across you how pricing your pipeline in today? have any And down come core

Jojo?

mean, I now, looking you're good -- and company. platform grow to pipeline have to we Right at if our a very our continue

we'll Of favorable. submarkets. said, course, watch like make Baccile watch supply/demand I want are dynamics sure to we'll that the the And Peter

of for mention sites. a is that continue the to the pricing compare look We if rents. really thing it want have to decline you -- land land One will sites to decline, I significant is not

same a there of is between more still -- in bit bid little more quite being more a buyers token, buyers land a just more the with aggressive aggressive, yield lower expectations. sellers. ask buying little there bit sites are So and In bit now

to don't. Yes. market the definitely think is to go I pricing, which back XXXX landowners, seems going we it

that why the is wide. that's So pretty Jojo bid asset references

but front land, slow. the out are there for looking are of volume on kind that So transactions we

question And from next with the Baird. comes Thillman Nick

that talking that? broadly And related? weather a Florida? -- is how maybe we in the more Peter, becoming that of like Or Is south like you how Are kind factor decision-making. like just recent recently, mentioned comment? hurricane is more tenant of

they a damage. impact has on broad more frequency probably comment these economic the great about It's highly a weather of big cause of It consumption. patterns, disruptive

it. So you ignore can't

you but back. the they're minds new say, are big are people make back guess, looking growth. weighed of now dollars that investment who and still in they else they to the they Now coming something through they're confined, at before on to that's geographically just uncertainties have all would I It's

seemed still seemed there. you building pretty Logistics like that's it though on prospects And That's the in second helpful. Center, It then bullish lease-up. the on guys First as are

that With space, building, other submarket? space boohoo kind in listing think? different is that there that is competitive specific Or needs you sublease another as space of

Schultz. Nick, it's Peter

not its is So in the competitive. as be going entirety. Boohoo, subletting building I to mentioned,

sublease irrespective and that that entire now they'll be marking So the will there the be have of shorter-term to they come conclusion, building.

had the of the some second little at spaces. building activity pace disappointed there, of feet. making They're We've the of balance some there really decision but XXX,XXX a is two prospects, competitive. with The separate not are

The with comes Green Street. Vince from next question Tibone

on Could land bank in legislation, the what bill have this ability you this share particularly, legislation existing then land? years? your at that And impact and California build you your latest the views also California XX, development, impacting California AB does impact all industrial your supply could to industry-wide do on in think on over next few

upward on mean to it details over we're and tailwind. it positioned This over Jojo the pressure and assets. time, probably going Jojo pretty this. existing be put our in rents. will I more our will be how portfolio. be tailwind a But to for it then We're shape. good will It can talk is for it's speaking for And value increase going holding business. I'll mean to with generally -- about on hand I our a

Sure. Vince, thanks for your question.

those AB you state resi how example. upon it who California sensitive aims you and how law, -- the hospital, development really which not is the for depending limit industrial For new XX with to are are school, receptors, familiar, is and the far

building law -- upgrades increased is and setbacks means buffer requires and that the what state And zones. that

All XX/X/XX. have not their entitlement of from after our basically AB is under development started permitting land XX projects or exempt because that entitlement this affecting law is process

year, this September XX. you entitlement, to AB of anything XX are actually started -- you subject after So that haven't

So that's one clear. I make want thing to

said the to Just of that development going there to this constrains of supply effect land course, state we has be and very for to impossible the is across anything are be view of nearly be should or constraining anything what increase the would buildings. of developable basically, are value Peter the know difficult by is And all add our we of AB numerous due the developed the that again, that market, supply sites potential the of that there XX. as sites put existing and has And will to our constraints land decreases all growth. fundamentals that rent that existing that good believe i.e.,

hope I answers your with. question So that

think helpful much Empire, No, historical development the that's that. just how about color, much and legislation new of in we're trying pace can specifically, versus this to impact really -- Inland how

really all helpful is this So color.

JPMorgan. [Operator Instructions] Mueller Our next question from with Michael comes

sales go-forward think could XX to targets. like the disposition basis. And asset past, the you XXX on to be a you've pointed XXX or considerably mentioned go-forward I annual seems in of normally it lower

how I relative to to for pace? much implying Is lower development into read we So even guess, starts this start? And dispositions should just year? go-forward is it sensitive that how forward going implies what

you've Yes, into that it away know, opportunities. they're essentially say sales lower-growth higher-growth program dozen me disconnected is program way. from a as capital We're or they're not over reallocate assets connected, to point and now as seen that The the to years, let last us you was where for over.

do has that to really And so with -- developments. nothing

developments But numbers, through and right last those the retained going cash different yes, proportion them new fund lower as fund but of Now and proceeds equity. forward, we'll so way or the in fund over sales debt flow development. a have sales helped we'll decade well obviously, the much some as just

not connected. to going starts. really not impact it's They're So

question Scotiabank. Yulico next from Nicholas comes the And with

and in reimbursement, to -- that quarter? to just boohoo tenant that this go was accelerated income the was the I that already improvement unexpected that guidance? was Or wanted back

improvement accelerated the liability. That tenant was was unexpected recognition because that it reimbursement of

the tell I that So the the at we end is the you do third what was of you unamortized of balance, the or amortize $X.X about million. to quarter, life lease. accelerated over Well, million accounting have the to rules think which $X.X

So that of a $X.X straight-line but the against netted was that of the benefit was rent receivable million. write-off

the you how per that's share. So get $X.XX

quarter. issued all anticipated we in boohoo it's conjunction second it was again, in not guidance with when and So the

Okay. write-off, wasn't And is in guidance? which also then that the offset prior the

Both prior guidance, not in pieces was not. It correct. were

comes The with next Burrows Sachs. question Caitlin from Goldman

this ask it I way. follow-up quick figured one had to just easier I that was

when it up up then about rent to guys talking maybe little, market been was Southern about X% you you were growth might I growth, it the a excluding rent mentioned that California, X%. flattish, and Before have think

period, year-over-year time something Just else? for in the that third or the was quarter

year-over-year. That's

Lynch from next Barclays. Brendan And the comes question with

My sense maybe there's of follow-up gray in legislation additional the and area be might on is AB a lot bill coming. a that XX. Just some there's that

you actually adjusted talk has what future? be the of dynamics been might XX in you whether with the finalized think the Can AB is versus established about

point, Sure. size question. criteria, Very benefit criteria their specific AB read upon through in and setback depending the be investment At more they each for how clarification. certainly upgrades and you XX, the building building this receptor. good When could far would

up kind with kind changes out, of enough But has available. But be happen to building state is on -- might be forecast I right could end law is it what what so now, and because the of what is building where specific. might more there some that. certainly, building there it. ballpark a you additional can example, detail detail in it detail the And is But laid upgrades site land could can't and and how, hard it's even but for

fair to also municipalities don't like It's this. say the

So it litigated as well. be will

going some we'll to see. here. be There's definitely movement So

Great. topic. That's the other of flurry deadline of the you the one some entitlement avoid of to And Did maybe rate one before on of itself? helpful. this a submit consequences kind bill just request

were at also and already. some entitled sites All sites within Not into, all. some our clearly years have we

this reaction a quick done And as XX. so No, none AB was to

concludes for question-and-answer conference Baccile back like turn our remarks. the to to would any Peter This session. over closing I

thanks operator, you, to everyone on today. participating our call for Thank and

to great you have out or week. Have from me. Scott please a follow-ups Art, our reach any If call,

now for has attending concluded. conference today's presentation. you Thank The

You disconnect. now may