Ladies and gentlemen, thank you for standing by, and welcome to the Duke Realty First Quarter Earnings Call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. If you should require assistance during the call, please press star then zero. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Ron Hubbard. Please go ahead, sir. Thank you. Good afternoon, everyone, and welcome to our first quarter earnings call. Joining me today are Jim Connor, Chairman and CEO, Mark Denien, Chief Financial Officer, Steve Schnur, Chief Operating Officer, and Nick Anthony, Chief Investment Officer. Before we make our prepared remarks, let me remind you that certain statements made during this conference call may be forward-looking statements subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. These risks and other factors could adversely affect our business in future results. For more information about those risk factors, we would refer you to our 10-K or 10-Q that we have on file with the SEC and the company's other SEC filings. All forward-looking statements speak only as of today, April 28, 2022, and we assume no obligation to update or revise any forward-looking statements. A reconciliation to GAAP of the non-GAAP financial measures that we provide in this call is included in our earnings release. Our earnings release and supplemental package were distributed last night after the market closed. If you did not receive a copy, these documents are available on the investor relations section of our website at dukerealty.com. You can also find our earnings release, supplemental package, SEC reports, and an audio webcast of this call in the investor relations sections of our website. Now for our prepared statement, I will turn it over to Jim Connor. Thanks, Ron. Good afternoon, everyone. The fundamentals of our business continue to be at all-time record levels. We achieved record high occupancy levels in both our stabilized in-service and total in-service portfolio. Record rent growth on a cash and GAAP basis. Our development platform had nearly $340 million of development starts. Our coastal Tier 1 exposure is approaching 50%. Our portfolio mark-to-market increased to 48%. All of these factors contributed to raising key components of our 2022 guidance, including over 10% growth in FFO, 11% growth in AFFO at the midpoints. Now let me turn it over to Steve to cover some of the market fundamentals and our operations. Thanks, Jim. On the fundamental side, first quarter demand was 95 million sq ft, making it five of the last six quarters of demand in the 100 million sq ft or greater range. First quarter deliveries were about 85 million sq ft, with the vacancy rate at quarter end remaining near record lows all time at 3.1%. Taking the record low vacancy rate of near 3%, coupled with an expected positive demand supply gap again this year, we have revised our 2022 rent growth forecast for our markets from the 10%-15% range to the high teens to low 20% range. On the long term demand side, CBRE recently affirmed its outlook for 1.4 billion sq ft of demand through 2026, with no periods of negative net absorption through 2032. Although we are paying close attention to headline data such as inflation, fuel and labor costs, and a resurgence of bottlenecks occurring in some Asian ports, we have yet to see an impact to demand in our portfolio. Based on recent dialogues with our customers, RFPs to lease space and the most recent Logistics Managers' Index at record levels, the near-term outlook is as strong as it has been in this cycle. Long-term, we believe the secular themes for greater inventory resiliency and e-commerce are still very much intact and should continue to drive short-term and long-term demand. Turning to our own portfolio, we continue to see these positive indicators evidenced by 62 leases executed during the quarter, totaling over 7.7 million sq ft. Demand was broad-based across categories with a number of leases between 250 and 850,000 sq ft. With customers such as FedEx, Samsung, Walgreens, Cardinal Health, International Paper, Sealy Mattress, some major 3PLs, and a global e-commerce customer. Of note, we had only two spaces greater than 100,000 sq ft in our in-service portfolio available at the end of the first quarter, and I'm happy and pleased to report that both are now leased. Our lease activity for the quarter, combined with the strong fundamentals I discussed, led to continued growth in rents on second-generation leases of 29% cash and 49% GAAP, both records. I'd also point out that only 18% of this lease activity was in coastal markets. Across our entire in-service portfolio, the portfolio lease mark-to-market is now 48% on a GAAP basis. We believe this presents strong visibility for significant rent growth for the foreseeable future. We finished the quarter with the total in-service portfolio 99.1% leased and the stabilized portfolio 99.4% leased. Again, both all-time records. On the development front, we had a tremendous first quarter of starts, breaking ground on eight speculative projects totaling $339 million in cost. All of these projects are in well-located submarkets. Our confidence in leasing speculative space continues to be very strong. As evidence of the 5.6 million sq ft of speculative developments placed in service over the past year, those projects were originally 3% leased at the start and are now 100% leased. Our development pipeline at quarter end totaled $1.64 billion, with 63% allocated to coastal Tier 1 markets, and 85% allocated to overall Tier 1 markets. This pipeline is 52% pre-leased, and we expect to generate value creation margins over 70%. Looking forward, our pipeline for future development starts is very strong. Our land bank at quarter end totaled $582 million, with an additional $235 million in covered land. 93% of this land bank is located in coastal Tier 1 markets. Coupled with the land options we have and other land in our operating portfolio, we can support our current level of annual starts for the next three years. It is also important to note for modeling NAV that the market value of the land we own is about two times our book basis. On average, we've only owned this land for about one year. With the fundamentals I outlined in our best-in-class local operating teams, our outlook for new development starts is strong. This is reflected by our revised guidance up about 20% for our original midpoint. I'll now turn it over to Nick Anthony to cover acquisitions and dispositions. Thanks, Steve. I'll start with dispositions. As noted on the last call, early this quarter, we contributed the third tranche of Amazon assets to our joint venture with CBRE Investment Management, for which our share of the proceeds was $269 million. Coupled with the outright sale of another Amazon facility in Tampa, dispositions totaled $325 million for the quarter. As a result, our Amazon exposure was 5.7% at the end of the quarter. Given the strong prices for logistics real estate, and particularly for a few of our strategically located assets, we are seeing an increase in reverse inquiries for some of our assets at prices we previously did not expect, did not have in our original plans to sell in 2022. As a result, we have increased our guidance for dispositions to a range of $900 million to $1.1 billion. This will provide attractively priced capital to fund our increased development expectations. On the acquisition side, we purchased one facility totaling 75,000 sq ft in the Southern California Mid-Counties submarket. The building was vacant, and given current leasing prospects, we expect it to stabilize at a 4.6% yield. I will now turn it over to Mark to discuss our financial results and guidance update. Thanks. Good afternoon, everyone. Core FFO for the quarter was $0.44 per share, which represents 12.8% growth over the first quarter of 2021. The increased core FFO per diluted share was primarily driven by rental rate growth, increased occupancy, and portfolio growth in its highly leased developments. AFFO totaled $166 million for the quarter. Our best-in-class low level of capital expenditures, along with strong NOI growth, continues to generate significant AFFO growth on a share adjusted basis, even in excess of our FFO growth. Same-property NOI growth on a cash basis for the first quarter of 2022 compared to the first quarter of 2021 was 7.3%. The growth in same-property NOI was due to increased occupancy and rent growth, as well as the burn off of some free rent compared to the first quarter of 2021. We do expect this growth to moderate a bit for the remainder of the year, based mainly on less free rent burn off. Same-property NOI growth on a net effective basis was 5.2% for the quarter. As a result of our strong start to 2022, we announced revised core FFO guidance for 2022 to a range of $1.88-$1.94 per share, compared to the previous range of $1.87-$1.93 per share. The $1.91 midpoint of our revised core FFO guidance represents an over 10.4% increase over the 2021 results. We also announced revised guidance for growth in AFFO on a share-adjusted basis to range between 9.1% and 13%, with a midpoint of 11%, compared to the previous range of 8.4%-12.3%. For same-property NOI growth on a cash basis, we've increased our guidance to a range of 5.8%-6.6% from the previous range of 5.4%-6.2%. This increase is mainly the result of expectations of continued strong rental rate growth and occupancy for the remainder of the year, similar to levels that we experienced in the first quarter. On the development guidance, the market fundamentals of our submarkets continue to be very supportive of speculative developments. Coupled with our lease-up track record, we are revising guidance for development starts to be between $1.45 billion and $1.65 billion, compared to the previous range of $1.2 billion to $1.4 billion. This increase in development starts will provide a key source of growth in 2023 and beyond. We've updated a couple other components for guidance based on our more optimistic outlook, as detailed in our range of estimates exhibit included in our supplemental information on our website. I'll now turn it back to Jim for a few closing remarks. Thanks, Mark. In closing, even with some rising macro headwinds on the inflation, interest rate, and geopolitical side of things, we believe the multiple secular tailwinds driving our business and overall positive GDP and consumer spending set up what will continue to provide opportunities for strong leasing and development. This, combined with the substantial amount of embedded rent growth in our existing portfolio, gives us great confidence in our ability to generate double-digit growth in FFO and AFFO for our shareholders. Not just in 2022, but in the foreseeable future, which should generate a commensurate level of growth in our annual dividend. I want to thank you all for your continued support of Duke Realty. We will now open it up for questions. I would ask that you limit your questions to one or perhaps two short questions, and of course, you are always welcome to get back in the queue. Also, please remember the prompt for Q&A is 10, it's not star zero anymore. With that, operator, we'll open the lines to take our first question. Thank you. Our first question comes from the line of Jamie Feldman. Please go ahead. I guess just thinking about the guidance, you know, there's a lot of the, you know, several areas where, clearly, you know, the outlook is better fundamentally, more development starts. Can you just talk about maybe some of the things that may have been a bigger drag than maybe people were thinking about, as you kind of weighed, you know, the positives and the negatives, if there was anything? Hey, Jamie, I'll start this, Mark. There were no really big drags. I guess maybe the only thing you could kind of point to that's changed negatively on this year's FFO number will be our increase in dispositions guidance. You know, most of that increase in dispositions guidance will go to fund the development pipeline. You know, that's modestly dilutive this year, but it'll be certainly accretive in the long run as we trade a low cap rate on disposition sales for higher yielding development assets. That was probably a little bit of a drag from where we were last quarter. You know what? I think we were pretty optimistic to start the year, and it's only better now. Then if you think about, you know, let's say we do end up heading into some sort of recession. Can you just talk about, you know, portfolio credit quality today and just how you think whether it's earnings growth or occupancy, or even leasing spreads would hold up, if we did see a pullback in the economy versus prior cycles? Yeah, sure. Jamie, it's Jim. I would make a couple of observations. I think we can all point back to roughly two years ago at the start of the pandemic, which was a great stress test for our portfolio and the quality of our credit tenants. You know, reminding everybody, you know, 18-24 months ago, we were collecting 99.99% of our rents. Not that anybody wants to see that kind of thing again, but that's the kind of stress test that gives us confidence that, you know, in any sort of a downturn out there in the future, our portfolio will continue to perform. As Steve pointed out earlier, even if the market softens to the point of where there's no rent growth in the markets, we still have 48% embedded rent growth in our portfolio. I would point to those two things as giving us a great deal of confidence in our ability to perform even if things were to soft somewhat. Okay. I guess just to be fair, though, I mean, there was a lot of government stimulus that kept tenants healthier, I guess thinking about even earlier downturns, if we look back at where occupancies really declined. You know, I don't. If you look at the number of tenants in our portfolio that got any sort of government assistance, it's less than 10%. You know, if you go back and look at some of the tenants that we did rent offset agreements, you know, half of them prepaid those early. I think that speaks to the quality and the resiliency of the portfolio and the tenants we've got. Okay, great. Thanks for the color. Thank you. Our next question comes from the line of Emmanuel Korchman. Please go ahead. Hey, everyone. Good morning. If we think about just the long-term drivers of the growth in this business, at this point in the cycle, how much of that should be coming from sort of the internal growth, especially with the mark-to-market as high as it is? I guess the deeper question is how much of that we get each year in the next few upcoming years here, and how much of that's gonna come from external growth? If we take your call around about 10% growth, you know, is that half from development and half from this rent mark-to-market, or is it a different proportion than that? You're pretty darn close, Jamie. Or Jamie. Sorry, Manny. We have a slide in our investor deck. He doesn't get that question. This question is mine, Mark. Yeah. You know. We have a slide in our investor deck that lays that out, and it really hasn't changed much. You're pretty much right on. If you look at our external growth, I think we quote a development return of, like, 10%-12% to FFO, the impact on FFO. Net of financing costs of 4%-6%, so net those together and you're five to six percent, give or take, of external growth. Our what I call our internal growth before GAAP, FFO, same property is about 5%. It's about 50/50. You're right on. I think the simple math way to think about it, our mark-to-market on our portfolio, like Jim said, is 48%. If you roll ±10% a year that we've been doing at 48%, there's 5% growth. That's simple math, but you're pretty close. Great. On the development starts, is there either a cost or a mixed component there? If we were looking at the number of starts that you're gonna have this year versus in the new guidance versus the old guidance, has that changed? Is it new projects, or is it more expensive projects or a couple of bigger projects versus some smaller ones before? Yeah, Manny, this is Steve. No, I mean, there's always some ins and outs. I would tell you it's a couple more projects. There's nothing significantly large that's skewing that one way or the other. Similar to what I mean. You know, we've got most of next year mapped out as well. Again, there's always a few that we find along the way, but we've been pretty diligent about building our land bank and having visibility for the next couple years in our development guidance. Steve, what would be the potential for that start guidance to go up again this year at all? Or is that kind of fixed for 2022 at this point? For development guidance to go up again on starts? Yeah. Yeah, if we found another project that we're able to start near term, but those are harder and harder to come by with entitlements. Could it go up modestly? Perhaps. Most of what we have is we're already in some level of process on. Yeah, I think the only significant mover in that would be some big build-to-suits. You know, they're out there, but they take a lot of time. We've got a number of those built into the pipeline, but you land one or two more of those, and I think you could see an appreciable increase. Thanks all. Thank you. Our next question comes from the line of John Kim. Please go ahead. Yeah, good afternoon. On your development land bank, you're saying now it can accommodate three years of development starts at your current run rate because the run rate has gone up. What's your ability to source more land in your Tier 1 markets and have development yields, kind of remain attractive to you? Yeah, I would say, I think that's the strength of our team. We've been able to do that the last, you know, last three years. Looking back to 2019, 2020, 2021, we've ran at a lower land bank number, and this development starts have been in the same range. So we've got, you know, as we said in our opening remarks, we've got a land bank that can support this level of starts for the next three years. You know, there's always a number of sites that are under contract, under option, some level of due diligence. This is where our teams shine, and I think we've done a really nice job with doing it. Yeah. For perspective, John, we got almost double the land now than we had a year ago. To Steve's point, we've been doing this level of development all along. Now, a lot of that land is covered land, it's generating income, which is even better. We've been buying about the same amount we've been monetizing every year. We've been doing it through this whole cycle. Right. Development starts are going up, so it's just the visibility on developments. It doesn't seem as strong as it did before. I was wondering on the second part of the question, multi-core development in Tier 1 markets or non-Tier 1 markets, doing developments there, when do these become more attractive? If at all. You're talking about the spread between the coastal Tier 1 and the Tier 1 of the other markets, John? Right. Just given the difference in land costs. Does it become more attractive to do developments outside of your coastal Tier 1 cities? Yeah. I would tell you, I think, you know, the land that we have either on the books or that we control, we believe is in the right submarkets in all of our various markets. The margins have been consistently, you know, let's just say north of 50% in our development pipeline. I would tell you the value creation opportunity in the whole portfolio is really good. It's not a situation of where we're differentiating between markets or shifting our strategy. I think we've got ample opportunity across the board. Great. Thank you. Thank you. Our next question comes from the line of Caitlin Burrows. Please go ahead. Hi, good afternoon. I had another follow-up question on developments. I guess initial 2022 development start guidance was low versus 2021, but you did revise it higher, and some of your peers have discussed issues with labor and materials impacting development potential. Just wondering if you could comment to what extent you've been impacted by current labor or material headwinds impacting your development potential. Yeah. Caitlin, I'd tell you know, we're closely monitoring what's going on with materials. I tell you, our processes have changed a bit in terms of when we're starting design, how quickly or how far out in front we're procuring materials. I would tell you all of our 2022 starts, you know, are locked in in terms of our start dates and design and our permitting, as well as our early long lead material items. Labor hasn't been as big of an issue, but materials have been. You know, again, I think this is where we're able to use our size and our balance sheet and our 50 years of experience to stay out in front of this. Yeah, Caitlin, I would add to Steve's comment. I think what's helping us drive our guidance on the development side isn't related to labor or material costs. It's you know, the land that we have in the portfolio when those sites are titled and ready to go. And it's the leasing of our you know spec portfolio. You know, we've come out in the first quarter and you know, most of the way through April, much stronger than I think even we anticipated. I think that's given us the confidence to go ahead and increase development guidance once again. Actually, my second question was gonna be on that speculative side. I was just wondering, it does seem like speculative development at this point definitely makes sense, but wondering what metrics you look at to gauge when speculative development is warranted and you're open to it versus something that might be considered more risky. Well, I don't know what we can do that's more risky than speculative development. But I'm open to ideas, I suppose. No, what we look at is you know a number of metrics. What's the percentage leased in the development pipeline? Even with the increase in the amount of speculative development we're doing versus build-to-suits, you know that number is still at roughly 50%, which is a number we're very comfortable with. You know, we look at leasing volume. You know, as Steve cited earlier, this is the, I think, eighth consecutive quarter that we're above 7 million sq ft. We look at the overall occupancy of the portfolio, the in-service and the total portfolio, both of which are above 99%. I think the combination of all three of those metrics would tell you that we need to be doing more speculative development and bring more space into the portfolio. Got it. Yeah, no, I was saying that in certain market conditions, speculative development might be considered more risky, but based on those metrics you were talking about, it seems that's not necessarily the case. Thank you. Got it. Thank you. Our next question comes from the line of Nick Yulico. Please go ahead. Oh, thanks. I was hoping to get, Mark, you know, in terms of the rent spreads that you're assuming, you know, in guidance for the rest of the year on a GAAP and cash basis? Yeah, Nick, I think they'll be very similar to what we posted in Q1. You know, the mark-to-market on our portfolio, sort of coincidentally, at 48% is really close to the 49% we posted in the first quarter. Steve mentioned only 18% of that roll was in coastal markets. That's pretty similar to what we expect for the last nine months of the year. We still don't have a lot of coastal roll coming at us the last nine months. I think you'll see, you know, it may vary quarter to quarter, maybe a little higher or lower, but by and large, for the rest of the year, I think you'll see rent growth that we post on deals very similar to the first quarter. As we look out to next year, we're not gonna give guidance yet, but I would tell you that the coastal roll we have next year is a little bit over 30% compared to the 18% this year. As we sit here today, I would expect it to get only better next year. Okay, great. That's helpful. Just second question is on development. If you could talk a little bit more about, you know, the yield for the deliveries in the first quarter, higher than it's been. You know, you had a 6-7% expected cash yield there. Kind of what's driving that. And then also, I guess going back to, you know, the yield that you quote on the development pipeline underway, 5.8%. You know, how we should think about ultimately, you know, that yield once you deliver since, you know, you did raise your market rent forecast. And so, you know, I don't think you're trending rents and your development yields. So maybe just give us a feel for how, you know, that could play out. Well, I'll start the first question and maybe try the second or turn it over to somebody else. You know, our yields have popped for really two reasons. We are leasing our spec projects literally as they go in service. You know, we've been talking about, as Steve mentioned, we started the spec projects we delivered over the last 12 months were started at 3%. They're now 100. They were virtually 100 when they went in service. We've been leasing these up at two months or less. We always underwrite one year. When you look at our initial yields, we've got a year of carry costs buried in the cost, so it brings our yield down a little bit. To the extent we can lease those up 10 or 12 months earlier, that helps yields. That's part of it. The second part was just rent growth. You mentioned it. We don't trend rents when we do our underwriting. We underwrite current rents when we start the deal, and then we only adjust that for signed deals. The deals we're signing based on the market rent growth we're experiencing are rents substantially in excess of what we underwrote. Those two factors is what's creating that big pop in yields from initial underwriting to delivery. I would tell you, as we look forward to the extent that dynamic continues, you'll see that result continue. Okay, thanks, Mark. Appreciate it. Thank you. Our next question comes from the line of Michael Goldsmith. Please go ahead. Good morning. Good afternoon. Thanks a lot for taking my question. You talked a bit about the drivers that are greater inventory resiliency and e-commerce growth. I want to dig into a little bit about reshoring. Do the shutdowns in China escalate this conversation again? This driver kind of takes a little bit maybe longer than some of the others to kind of materialize in demand. When can we really start to see this as a major contributor to demand going forward? Yeah, I think it's, you know, people are determined now, future-proofing their supply chains, whether you're talking about resiliency or future-proofing. I think it's a trend we're gonna see. I think near Mexico and Central America, relative to manufacturing, we're seeing some of it in spots and in certain industries in the U.S. The bigger impact near term to us is just more product on our shores. Yeah, I think it's definitely top of mind for all of our customers. Yeah, Michael, I would add, I think Steve's exactly right. The near-term impact is the safety stock that our customers are out trying to, you know, put in their logistics and supply chains. I think the impact of onshoring and nearshoring will be a little slower but steady or steadier over the course of the next likely 5-7 years. Because, you know, rebuilding or reengineering manufacturing, processing, assembly operations takes a little bit more time than just moving the logistics side of the business. I think that's a better long- to midterm and long-term driver for our space. Got it. As a follow-up, last year you had a number in more renewals than maybe expected as people look to renew early. You know, what are you seeing on that this year, and how do those lease negotiations differ from kind of traditional expirations? What sort of escalators are you currently getting in sort of your renewals? I would tell you, Steve Schnur, I would say that, you know, do we have customers trying to, given the environment out there, lock up space earlier? You know, certainly, I think that's what a good brokerage firm representing them would tell them to do if it's a critical piece to their supply chain. You know, we'll listen to customers, we'll talk with them. Obviously it's a landlord's market right now. We don't tend to negotiate rents too far in advance in today's market. In terms of escalators, it's been a big point of emphasis for us. You know, you saw us move our escalators up in the latter part of 2021, up north of 3%, in what we were signing then. In the first quarter of 2022, that number's moved to 3.6%. I would tell you, I would expect that trend to continue the rest of the year. You know, certainly there's inflation numbers out there that would suggest that they could go higher for us in our annual escalators within our leases. Thank you very much. Thank you. Our next question comes from the line of Ronald Kamdem. Please go ahead. Hey, just a quick one on inventory. I know it's been asked a lot of different ways, but when you're speaking to tenants, can you just give us a sense of what they're saying about their inventory levels and you know, are they happy? How much more do they need? Just any color commentary would be really helpful because we keep hearing about sort of inventory in common and wondering what you guys are seeing in your portfolio. Sure. I would tell you. You know, we do a space utilization exercise twice a year with our tenants. You know, tenants are utilizing space at sort of near record levels for as long as we've been doing it, just around 90%. The resiliency side of this or the build back of stock that they have, you know, we still think. You know, we pay a lot of attention to the inventory-to-sales ratio. You know, there's been a lot of debate by a number of people on this call as to breaking that down by category, and we've done that. I would tell you, we still think that there's a 5%-10% build back to get to pre-pandemic levels for inventories for our customers. That would tell you there's 300-400 million sq ft of incremental demand that needs to get absorbed back into warehouses. Got it. That makes sense. Just another one on a big picture, one on recession, which, you know, I know it's being debated in the market. You know, clearly you're not seeing it, you know, putting more capital to work here. Maybe can you give us a sense of what when would you see it, right? What are some of the signs that you would have to see in your businesses? It could be build-to-suit, it could be tenant commitment to capital. Like, how do you guys think about what the leading indicators in your businesses are for when things start to slow, if they start to slow? Well, Ron, I think it would first manifest itself with us in, I think, our leasing volumes, in our renewal discussions and things like that. Next, if you kind of peel back the onion, if we look at the deals that we're doing, and the capital that our customers are spending, if they start to pull back on capital investments inside the building, I think that's a pretty good leading economic indicator. You know, that's, I guess one of the reasons we follow that so closely in terms of, you know, our renewal percentage, our leasing volume, where the development pipeline is, so that we can keep a pretty good handle on that sense of, you know, the kind of demand we're seeing. Then the other thing which we've talked about before is the build-to-suits. The build-to-suits are the best leading economic indicator for us in our conversations with our clients for the next 18-24 months. Because you're talking about designing and entitling and building buildings that aren't gonna be delivered until 2024, in some cases, 2025. Customers aren't. If you know, if they're seeing problems out there in their logistics supply chain, they're not gonna be willing to make those commitments. Sitting here today, we've got lots of those opportunities. Thank you. Thank you. Our next question comes from the line of Vince Tibone. Please go ahead. Hi, good morning. Could you provide your lease mark-to-market on a cash basis and also share how that differs between some of your top markets? Yeah, Vince. It's Mark Denien. We're like, say, 48% on a GAAP basis and 35% on a cash. And then as far as the markets, you know, I would tell you it's pretty well spread. It's pretty even across all the markets, with the two main outliers being Southern California and New Jersey. You know, obviously our coastal markets are a bit better overall, but if you really peel back the onion on the coastal markets, Southern Cal and New Jersey are the biggest. You got to keep in mind, those are the two newest markets for us as well. And that's why, you know, we're only rolling 18% this year versus the 45% plus. exposure that we have on those coasts. That's why, you know, we're so bullish on our future outlook of this mark-to-market continuing to only get better. Pretty well spread out other than those two markets are clearly at the top of the class. No, that makes sense. Is there anything you can just quantify that a little bit? Just like how much higher is Southern California and New Jersey compared to the likes of, you know, Dallas, Chicago, Atlanta? Like, what order of magnitude, roughly? Double. Literally double. Yeah. Now, you know, like I say, keep in mind some of the Dallas and Chicago, places like that, we've got. Let's try to explain this the right way. We've got newer or fresh leases buried in that number. So just hypothetically, if Dallas is 45 and Southern Cal is double that at 90, I'm just throwing numbers out. Part of that is because Southern Cal, believe it or not, has some older leases in our portfolio because we haven't got to them to roll them yet. Dallas, we've been rolling all along, so we don't have as much churn left to go in Dallas, if that makes sense. You got to look at the maturity of it all, too. But yeah, it's. No, it's really helpful color. One more from me, switching gears. Like, has your asset mix in terms of what's targeted for disposition this year changed at all given the higher rates? You know, do you think pricing has moved for properties that are, you know, longer lease, lower growth profile? You know, we haven't seen it yet. What we have seen is that we've seen the buyer pool shrink a bit, on the assets. We've only had a few assets out in the market. One of them is under agreement at the pricing that we expected to transact at, sub-4% in a non-Tier 1 market. So we're keeping a very close eye on it. There's a lot of chatter out there about it, but I don't think anybody's really seen it yet. So, you know, we'll be opportunistic on the disposition side and, you know, evaluate each one as we go about it. If we think the price is right, we'll transact. If not, we won't. Great. Thank you. Thank you. Our next question comes from the line of Ki Bin Kim. Please go ahead. Thanks. Good morning. Just going back to your land bank commentary, you mentioned about three years of runway. I'm assuming you included the options that you have available. If you look at the land, I mean, half of that, if you include options, is actually in Columbus, Ohio, which I'm sure you could develop there, but I was just curious from a practical standpoint, is it really three years? Because I can't imagine you guys doing a bunch of Ohio developments all of a sudden. Should we expect you guys to continuously reload that land bank at a pretty strong pace? Kim, what are you picking on Columbus, Ohio for, man? No, to your point, just to clarify, and I think this is detailed in the supplemental. The only place we have a long-term land option agreement is at Rickenbacker Airport in Columbus, Ohio. Everything else supporting the numbers that Steve put out is land that we have either under contract, under agreement, covered land, or already owned and on the books. You know, the Columbus option land is a very small piece. Does not represent the lion's share of our development pipeline for the next three years. Okay, Tom. Thanks for that clarification. Just going back to the topic of demand. You know, I think one of your competitors talked about e-commerce not being at the tip of the spear anymore for demand and other segments stepping up. I know it doesn't work this way because the economy grows and population grows, so there's always kind of continuous demand. In a simplistic sense, you know, how far along are all these corporate users in terms of really just getting the space they need and have locked it up and, you know, maybe the next round of demand just looks a little bit weaker? Well, I'll make a couple of comments, and then I think Steve can add some color as well. You know, I think people have talked or speculated about Amazon pulling back, and we saw them pull back in terms of their deals signed last year, and yet we had record demand across the country. I think while we may see their demand moderate because of the you know how far along they are in terms of the build-out of their supply chain, I think the vast majority of our other clients are still playing catch up. I think we expect to see more continued demand on the e-commerce from you know everybody other than Amazon. I think a lot of companies are still playing catch up in terms of the capital investment in their e-commerce facilities. You know, the material handling systems and the robotics are still in their, you know, early stages of development. We just saw a headline where Amazon is investing $1 billion in robotics. You know, I think we got a long runway to go in terms of e-commerce and its adaptation in the U.S. and its supply chain, and I think that bodes really good for us. Yeah. Kim, I would just add, you know, for us, 3PLs continue to be the most active user in the market. We saw that in the first quarter. We saw that last year. Retail or e-commerce for us has probably fallen to about the third category in terms of overall demand. As Jim said, it's, I think most of our customers are early on in their venture towards, you know, building out their own e-commerce platforms. Okay. Thank you, guys. Thank you. Our next question comes from the line of Anthony Powell. Please go ahead. Hi. Good morning. You've talked about how some of your non-coastal markets are showing increasing strength here. Can you maybe go into more detail there, which markets do you wanna highlight, and how has the supply environment evolved in some of those non-coastal markets? Yeah. Look, it's hard to find a soft spot in today's world, right? I would tell you for us, you know, Houston is. We've talked about it before. Houston's probably been the one market that's been a little soft for us. You know, markets this past quarter, markets like Minneapolis, Raleigh, Chicago, Dallas, Atlanta were all great markets for us in terms of rent growth and overall activity. Nashville's been a good market for us as of late. It's hard to pick a market that's not doing well right now. Got it. Maybe one more. I guess, in terms of the lease mark-to-market, how should we think about that during a possible recession? How sticky do you think current rents are? Looking back at prior recessions, maybe not COVID, but other recessions, how did lease mark-to-market or overall rents trend, and how should we think about that risk over the next few years? Well, I'll start. I mean, I think forget the recession. On 48%, we expect it to get better because we don't expect rents to pull back anytime soon. I think the easiest way we think about it is if they go flat, which is a dramatic decrease from what we've experienced, you know, the last several years, we still have that 48% baked into our numbers. I think we're very comfortable that even if we have some period of dislocation here and rent growth stops, that it can, you know, stay in the range it's at right now, and we still have 48% upside. You know, how low can it go? I don't know. I mean, it could go lower. Anything can happen. I think we're very comfortable that the 48%'s only gonna get better. Sort of a downside scenario, maybe not a worst case, but a downside is it stays at 48. Yep. How did rents trend in 2008 and 2001? Just curious, as someone newer to the space. Well, I think you gotta factor in the different starting point, first of all. For 2008, we weren't at 3% vacancy heading into 2008. I mean, I just don't know that you can always look at history in the environment we're in now and draw logical conclusions from it. That would be my starting point. Jim, I don't know if you have anything to add to that. Yeah, I don't. Off the top of my head, I don't have that. I think to your point, you know, even if market rents fell and went truly negative, you know, even if they fell 15% or 20%, we've still got a 48% mark-to-market. I can't imagine a scenario, even in 2008 through 2010, rents didn't fall 50%. Yeah. The other thing I'd point out is in 2008, today we have 44% of our NOI coming from coastal Tier One markets that have 1% vacancy and don't have any land available. Back in 2008, that was less than 1%. There's a big difference there. Great. Thank you. Thank you. Our next question comes from the line of Rich Anderson. Please go ahead. Hey, thanks. Just a couple of quick follow-ups. A lot of my question has been answered. You mentioned just in an answer to a previous question just a little bit ago, e-commerce is the third largest, what was that? In terms of activity, leasing activity in the first quarter. Maybe you can give me the breakdown of the industries. I might have missed that. Yeah. Our top one was 3PLs. That made up for us a little under half of our overall activity. Consumer product goods would be, I guess, the next category I would throw out there is in terms of activity. Retail, e-commerce would be the third. Sort of what we call manufacturer assembled goods would be the fourth category. How has that changed over the past couple of years? I would say e-commerce and 3PLs have probably shifted. You know, consumer products goods have always been in that, usually in that top four for our portfolio. You know, Amazon's activity the past three, four, five years has always put e-commerce up near the top. Okay. Rich, I would say you gotta take that with a little bit of grain of salt. I'm not trying to make excuses, but, you know, the consumer products companies, how much of what they're doing is to support their e-commerce and how much is to support their more traditional supply chain? Right. That's kind of the gray area that moves back and forth. It's pretty easy to track Amazon and Wayfair.com 'cause that's purely an e-commerce platform. There's a, you know, there's a little gray area in there. I think to Steve's point, been pretty consistent all along. Same could be said for 3PLs too, obviously, right? You don't have the gray- Yes. There's very much a gray area, perhaps more. I had a sort of an idea about leading indicator and what's driving you to expand spec development, you know, at this point, you know, with a war going on and inflation and so on. You mentioned build-to-suits being the best leading indicator because those companies aren't gonna make those types of commitments if they don't really see what they think they're seeing. At the end of the day, they're ingrained in this business. You use the term catching up to Amazon. They might be willing to take on a little bit of a risk to play that catch-up trade, and not entirely an objective leading indicator if you were to ask me. The real objective leading indicators might be declining consumer sentiment in the face of inflation, GDP growth, you know, just released this morning, down 1.4% in the first quarter. Yet you're still hanging on to this aspect of the development process. I don't know if I have a question in here, but I'm just wondering, you know, beyond the build-to-suit observation as your guiding light to speculative development, what else is getting you there in the face of all these other, you know, what I would call risks to the system? Hi, Rich. Those are all valid points. Occupancy, demand, leasing volume, nationwide vacancy, all of those things. The roles were reversed. Do you need building more spec space? I mean, if you just think about it, at 99%+ in our in-service portfolio, we don't have enough space to handle just the organic growth of our existing customer base. Yeah, but 99 is a coincident indicator and could go down as much as it could go up, depending on demand of tenants and vacancies and all that sort of stuff. I don't mean to, you know, to litigate this on this call. I just feel like, you know, to expand speculative development at this point seems like, you know, a brave step, and you're not the only one doing it. I guess I'll just leave it at that. Thanks. Thank you. Our next question comes from the line of Mike Mueller. Please go ahead. Hi. Two quick ones here. First, who are you typically buying land from today? What portion of your spec activity is in existing parks? We typically buy, I would say, two different. Today, there's either private sellers, people that have owned land for a long time, whether that was a business or owned by a family or a private company. Two is, I would say, companies that we're redeveloping a site, something they've owned for a long time. In terms of your other question, was our development in existing business parks? There might be that in there. There's one of our projects, looking at the list here, I think one of our projects is in an existing business park. Everything else was a site that we've been working on and had it in some version of our land bank that was asked on this call a number of times over the past year. Got it. Okay. Thank you. Thank you. Our next question comes from the line of Blaine Heck. Please go ahead. Great. Thanks. You know, obviously, you guys put up some really sizable rent spreads this quarter, especially on a net effective basis at 49%, and especially given that, only 18% are in those Tier 1 markets. I was wondering to what extent the term of the leases rolling off is affecting those strong rent spreads. Are those leases kind of seven or more years old, and that's what's driving that high mark-to-market, or are they closer to, you know, 3-5 years old, and those rent spreads are really indicative of, you know, very strong rent growth that you've seen even in those lower tier markets over that short period of time? Yeah, Blaine, it's a little of both. They're not what I would call extremely long leases rolling. It's a little bit longer than the 3-4-year terms you mentioned. I think the average term that rolled was about five or six, which is about what our overall portfolio is as we sit here today. So it's just a combination. You know, we've seen great rent growth across all the markets. You know, whether you pick a market like Chicago or Indy or Atlanta, places we've been a long time, rent growth has been great. Not as good as Southern California, New Jersey, but certainly been a lot better than the built-in escalators within the lease. So it's not like it's a lot of 15-year deals rolling or anything like that. It was like 5-6-year deals rolling. Just pretty good solid growth across all the markets. All right, great. That's helpful, Mark. Noticed that about half of your starts during the quarter on a square footage basis were in Indianapolis. Obviously, it's your hometown, and we probably expect you guys to keep a footprint there. Can you talk about your longer term plans for that market and if we should continue to expect growth there? Maybe, you know, Steve can talk about the fundamentals you're seeing there relative to some of the trends in the Tier 1 markets. Sure. I wouldn't read a lot into the fact that we started three buildings this quarter. It's just a timing thing with some land we had. You know, we like the markets we're in. Obviously, we've got a long history in this market. We've got a very deep customer base. You know, we're in the right sub-market. Indy's probably gotten some headlines recently about some overbuilding. I will tell you that's occurring on, for those of you familiar with Indianapolis, on the east side or the far south side. It's not where these buildings are located. Again, we've got great history here. I think we know this market better than anyone, and I expect those projects to be successful. Longer term, you know, we haven't been super active on the development front in Indy. It's a good market for us, and when we see opportunities, we'll take advantage of them. Great. Thanks, guys. Thank you. There are no questions in the queue. Please continue. Yeah, I'd like to thank everyone for joining the call today. We look forward to engaging with many of you throughout the year. Operator, you may disconnect the line. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Conferencing Service. You may now disconnect.