Good day, and welcome to the First Industrial Realty Trust, Inc. Third Quarter Results Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on a touch-tone phone. To withdraw your question, please press Star, then two. 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. Please go ahead, sir. All right. Thank you, Dave. Hello, everybody, and welcome to our call. Before we discuss our Third Quarter Results and our updated guidance for the year, let me remind everyone that our call may include forward-looking statements as defined by federal securities laws. These statements are based on management's expectations, plans, and estimates of our prospects. Today's statements may be time-sensitive and accurate only as of today's date, October 17th, 2024. We assume no obligation to update our statements or the other information we provide. Actual results may differ materially from our forward-looking statements, and factors which could cause this are described in our 10-K and other SEC filings. You can find a reconciliation of non-GAAP financial measures discussed in today's call in our supplemental report and our earnings release. The supplemental report, earnings release, and our SEC filings are available at firstindustrial.com under the Investors tab. Our call will begin with remarks by Peter Baccile, our President and Chief Executive Officer, and Scott Musil, Chief Financial Officer, after which we'll open it up for your questions. Also with us today are Jojo Yap, Chief Investment Officer, Peter Schultz, Executive Vice President, Chris Schneider, Executive Vice President of Operations, and Bob Walter, Executive Vice President of Capital Markets and Asset Management. Now let me turn the call over to Peter. Thank you, Art, and thank you all for joining us today. The First Industrial team delivered another great quarter with solid operating metrics, along with some important new leases and capital deployment activity. We continue to drive cash flow growth from our portfolio via contractual escalations in our leases, capturing embedded rent growth on rollovers and continued development leasing, all of which position us to deliver strong growth in funds from operations. Before getting into specifics, let me update you on the industrial market broadly. According to CBRE EA, U.S. industrial market vacancy increased a modest 10 basis points to 5.8%, reflecting that most of last year's development starts have now come online. Completions for third quarter totaled 87 million sq ft. This is down approximately 30% compared to last quarter and the lowest quarterly completion number since the third quarter of 2021. For our target markets, completions were 45 million sq ft, down 40% from the prior quarter. New starts remained disciplined, totaling 36 million sq ft in the third quarter, down 68% from the peak in the third quarter of 2022. On the demand side, the third quarter was active with net absorption nationally of 54 million sq ft. This brought the year-to-date total to approximately 125 million sq ft, of which 75 million were in our target markets. Renewal leasing, in particular, remained strong. Since our last call, we successfully renewed the last of the three large 2024 Southern California expirations, with a cash rental rate change of more than 150%. As of the date of this call, we're now through 97% of our 2024 lease expirations by square feet. Our cash rental rate increase is 51%, which is a strong follow-up to the 58% cash rental rate growth we delivered on our 2023 commencement. Congratulations to our leasing teams for back-to-back years of outstanding performance on this metric. Looking at our 2025 lease expirations, we're making good progress and are now through 37% by square footage, which is similar to our pace of progress last year. Together with new leasing, our cash rental rate increase for leases signed with 2025 commencement date is 33%. More than half of this population is comprised of the 1.3 million sq ft fixed rate renewal in Central PA we discussed on our last call. We will give you a refined view of our thoughts on our estimated 2025 cash rental rate increase on our fourth quarter call, with the benefit of budget reviews and incremental signings. Regarding development leasing, as we highlighted on our last call, in the third quarter, we inked a full building lease for our 461,000 sq ft First Pioneer project in the Inland Empire East to a 3PL, plus a 61,000 sq ft lease at our First 76 project in Denver. Turning now to capital deployment. We continue to closely monitor demand and competing supply in our target investment markets to determine potential incremental starts as we wrap up 2024. Since our last call, we launched a 542,000 sq ft development at our First Rockdale park in Nashville.... Our total projected investment is $54 million, with an expected cash yield of approximately 7%. The current supply-demand dynamic in Nashville is attractive, and we like the long-term drivers of this market. Current vacancy stands at just 2.7%, and unleased new supply represents about 2% of the total stock. We also acquired a four-building, 211,000 sq ft park in Houston's Southeast submarket, with close proximity to the port. The buildings are 100% leased on a long-term basis. Our total investment is $29 million, and the in-place cash yield is approximately 6%. Moving now to dispositions. As discussed on our last call, we sold a portfolio in New Jersey for $82 million. In the fourth quarter to date, we've sold three buildings in Pennsylvania, totaling 163,000 sq ft for a total of $19 million. This brings our year-to-date total to $157 million. With that, let me turn it over to Scott to walk you through further details on our results and guidance. Thanks, Peter. Let me recap our results for the quarter. NAREIT funds from operations were $0.68 per fully diluted share, compared to $0.62 per share in 3Q 2023. Our cash same-store NOI growth for the quarter, excluding termination fees, was 7.6%. The results in the quarter were primarily driven by increases in rental rates on new and renewal leasing, and rental rate bumps embedded in our leases, partially offset by higher free rent and lower average occupancy. Excluded from the same-store calculation is the accelerated recognition of a tenant improvement reimbursement related to our tenant, Boohoo, which leases 1.1 million square feet in Central Pennsylvania. Including this amount, our third quarter cash same-store NOI growth was 11.9%. I will have some additional comments on Boohoo shortly. We finished the quarter with in-service occupancy of 95%. Within the in-service portfolio, we have approximately 200 basis points of lease-up opportunity from developments placed in service in 2023 and 2024. Summarizing our leasing activity during the quarter, approximately 3.5 million sq ft of leases commenced. Of these, 500,000 were new, 2.2 million were renewals, and 900,000 were for developments and acquisitions with lease-up. Turning back to our lease with Boohoo, as reported in the press, they are ceasing operations at our building, for which they have 10- years remaining on their lease. Due to the cessation of their operations, we have written off their straight-line rent asset and tenant improvement reimbursement liability, the net result of which is a $0.01 per share reduction in our 2024 NAREIT FFO. They are current on the rent and have a shorter term sublease to a 3PL for about 40% of the building. Also, keep in mind that we have a security deposit in the form of a letter of credit, which covers about a year's worth of rent. Let me quickly review our updated guidance for 2024. Our guidance range for NAREIT FFO is now $2.61-$2.65 per share, which is a tightening of the range and an increase at the midpoint of $0.02 per share since our last earnings call. Key assumptions have been tightened, as we only have one quarter remaining in 2024, and a fourth quarter occupancy range of 95%-97%, which implies a quarter end average for the year of 95.2%-95.7%. Our occupancy guidance now assumes about 800,000 sq ft of development leasing we had previously slated for the fourth quarter will now take place in 2025. Fourth quarter cash same-store NOI growth before termination fees of 8%-10%. This implies a 7.75%-8.25% range for the year, which is a 25 basis points increase at the midpoint since our last earnings call. Note that the same-store guidance excludes the impact of the accelerated recognition of tenant improvements related to the Central Pennsylvania lease in 2024, and the one-time tenant reimbursement in 2023 that we previously disclosed. Guidance includes the anticipated 2024 costs related to our completed and under construction developments at September 30th. For the full year 2024, we expect to capitalize about $0.06 per share of interest. Our G&A expense guidance range is $39.5 million-$40.5 million. Let me turn it back over to Peter. Thanks again to the First Industrial team for another solid quarterly performance. Through our focused strategy and capital allocation actions, we've created a high-quality portfolio that is well-positioned to outperform through the business cycle. We have embedded growth opportunities within our portfolio, and we have future growth opportunities from our current land holdings, on which we can build over fourteen million sq ft of highly functional and well-located logistics facilities. Our balance sheet is strong, and we have flexibility with no maturities until 2026, assuming the exercise of extension options in our bank loans. Operator, with that, we're ready to open it up for questions. ... We will now begin the question- and -answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star and then two. Also, please limit yourself to one question and one follow-up. Re-queue to ask additional questions. Our first question comes from Blaine Heck with Wells Fargo. Please go ahead. Great, thanks. Good morning. So occupancy guidance implies upside from the third quarter, but has a relatively wide range of outcomes between 95% and 97% at year-end. I guess, can you just talk about some of the biggest drivers in the lease-up portfolio that could kind of push you towards the upper end of that guidance? Are there any specific large leases you're working on that you can maybe give us some color on? Yeah, do you know? This is Chris. If you look at the occupancy drop, about half of it was from the development portfolio that we've talked about. You know, the other half was from the core portfolio. You know, as we stand here today, you know, we certainly do have some activity, or we're talking to some tenants, but we thought it was prudent to push back the lease up with only 2 months left in the quarter. Hey, Blaine, it's Scott. I think development leasing is the key to hit the high, and frankly, it could be, you know, going below the midpoint. We've got 400,000 sq ft of development leasing built into our guidance in the fourth quarter. That's about 60 basis points. If we get more than that, we'll be above our midpoint occupancy guidance. Great, that's very helpful. And then maybe just a little bit more of a high-level question. I guess, given that, you know, you all have a relatively diverse portfolio geographically, it seems as though you're in a good position to talk about which markets you think are poised to inflect sooner than others. I guess, can you just talk about which markets you're feeling best about from a supply and demand standpoint, and, you know, which you think might take longer to come back to seeing rental rate growth? Sure. Let's take it kind of east to west. I think, as you've seen, rent growth was very, very strong in Southern California, other West Coast markets, New Jersey, South Florida. Those are the markets where the change in dynamic has happened first. And the leasing progress that we've made in our portfolio, you've seen, largely it was stronger in the east. That whole dynamic is going to shift over time as the alternatives that are available in the marketplace for potential tenants begin to get absorbed, and we're seeing that happen right now, and we're seeing that additional traffic turn into more leasing activity. Peter, do you want to comment? The only other thing I'd say is, as we think about rental rate growth, we continue to see traction in Pennsylvania, Nashville, and Houston today, generally speaking. Jojo, you want to comment on the west? Yeah, and in terms of cycling through, taking more time to inflect, IE, in general, has to cycle through and digest the supply it has, but there's been increased activity in terms of offers and proposals. Very helpful. Thank you. Our next question comes from Craig Mailman with Citi. Please go ahead. Morning. Scott, on the Boohoo lease, so you guys, it's, I guess, they're on cash basis accounting now. Is that correct? And kind of how should we think about the impact of that if they continue to pay rent over the next couple quarters, or, you know, are you guys planning on taking back the security deposit and trying to go direct with the subtenant? Kind of what's the game plan here to attack this, to either get it re-leased or, you know, continue to cash flow in the asset? Right. Well, I'll take care of the accounting piece of it, and I'll let Peter Schultz take care of the, the question about Boohoo. So, Craig, you're right, we're on cash basis, and again, as we mentioned in the script, they're current on their rent right now. If they continue to be current, obviously, we'll, we'll reflect that NOI in our FFO. If they stop paying rent, we do have the security deposit in the form of a letter of credit, so we can use that for about up to a year. That covers about a year's worth of rent. So, so that's something that would, would help us out in the case that they stop paying rent. And I'll turn it over to Peter to talk about the tenant in more detail. Thanks, Scott. Good morning, Craig. So the Boohoo is in the process of winding down their operations at the building, which should be completed by the end of the year. They then plan to put the entire building on the market for sublet. They will be retrenching back to the U.K. to fulfill their orders. Today, there are very few options for this quality of a building in Central Pennsylvania, so they feel pretty good about their prospects for subletting. They also have a current subtenant in a portion of the building, about 400,000 sq ft or so, through their 3PL, DHL, who's managing that. So that's subsidizing, if you will, some of their rental payments. But they fully intend to honor their lease obligation and have some success with subletting the building. We'll keep you posted on that. Okay. And so if they do pay rent in the fourth quarter, kind of what could that be upside to the guidance, Scott? We have them paying rent, Craig, just because- Oh, you have them paying rent in the guidance. Okay. Oh, yeah, absolutely, because they're paying for one. Two, we've got the letter of credit. That's their security deposit. So even if they stop paying rent, I can keep accruing rent because I've got that letter of credit out there. And keep in mind, that's with a bank, it's not with the tenant. As a result, the accounting rules will let me recognize that security deposit on a go-forward basis if they stop paying. So that takes me to- Got you. That takes me to, if they stop paying now, that takes me to probably the end of third quarter, early fourth quarter of next year. Perfect. And then just going back to Blaine's question on the occupancy side. So we're, you know, halfway through October here. You have 400,000 sq ft of development leasing in the number. What - how does the activity on that 400,000 sq ft look? And from a kind of average occupancy in the fourth quarter versus ending occupancy, where should we be thinking about that depending on, you know, when some of this stuff could hit? Is this just going to be more kind of first quarter 2025 impact from an earnings perspective? I would say the development leasing we have it baked in to our guidance at the end of the fourth quarter. So that's how we have it factored in. As far as what is included in that 400,000, Craig, that's a macro assumption. There could be many different combinations of development leases with the properties that we have available. I would say the prospects we have for it is pretty decent at this point in time, but we have work to be done. There's only about 2 months left in the year. Great, thank you. And the next question comes from Vikram Malhotra with Mizuho. Please go ahead. Thanks for taking the questions. I guess, just first of all, just on the tenants, do you mind just sort of walking us through how has sort of the watchlist evolved? And specifically, there is one known move-out, I guess, in the first quarter of next year in Federal-Mogul. Do you mind just sort of talking about prospects for re-leasing that space? Thanks. Peter? Sure, Vikram, good morning, it's Peter Schultz. Right, that's the 708,000 sq ft building. That lease expires at the end of March. Tenants are already out of the building, so we've done our make-ready work to position the building for marketing. We have seen some interest in it already. And we're encouraged by the limited number of options for that size space in Central Pennsylvania today. Vikram, what was your question again on Boohoo? Just the watchlist, like the tenant watchlist, just given- Okay the kind of sublet volumes and bankruptcies in certain segments, just in the economy softening. Do you mind giving some color on the watchlist? Sure. Other than Boohoo, nothing material on the watchlist at this point of time. Okay, great. And then just last one, you know, you did a few acquisitions. I'm just wondering from a capital deployment standpoint, you mentioned starts have come down. You did start a new development. You know, some of your peers who had, I guess, big development pipelines, have walked it back. I'm just wondering, from a development and acquisition standpoint, you know, what are you thinking as we head into 2025? So, with respect to development, we continue to keep a close eye on the submarkets where we have development opportunities. Obviously, there are a lot of factors involved that impact the fundamentals of those submarkets, whether it's, you know, the wars around the world, what's happening in the economy, the election. We have been hearing from some big tenants that that's causing them to put their decision-making off to the end of the year. When we look at the fundamentals around the country, the markets that we think are going to be most encouraging for new starts next year will be in Pennsylvania, Texas, South Florida again, and of course, Nashville, which, again, is one of the stronger markets in the country. Thank you. The next question comes from Caitlin Burrows with Goldman Sachs. Please go ahead. Hi, good morning, everyone. I was wondering if you could talk a little bit more about new leasing, whether development or other vacancy. I guess, what do you think it will take for new leasing to pick up? And what's your take on utilization and how that's impacting kind of the market today? Peter, you want to take that? Sure, Caitlin, good morning, it's Peter Schultz. A couple of comments. In terms of space utilization, in our discussions and inspections with our tenants, generally pretty high. Sublet space, other than the one we just talked about with Boohoo, not that material. In terms of the cadence and pace of decisions and discussions, some tenants are operating with more urgency, but most, as Peter just commented on, are not for a variety of reasons. So there's demand, and there's activity, and I would say that the level of prospects in the market today are probably better than it has been for most of the year, but the pace of that decision-making continues to be lumpy and somewhat deliberate. Got it, and- Sorry. Now, there's a lot of uncertainty out there with respect to the macroeconomy, geopolitical issues. The weather is now on people's minds, so we need to work through these things, but we believe, we see there's pent-up demand. There are definitely larger tenants who have investment dollars for growth that they want to get going on, and they're just waiting for the fog to clear a little bit on some of this uncertainty. ... Got it. Okay. And then just maybe on the acquisitions versus disposition strategy at this point, I could maybe imagine that you're looking to sell lower growth properties and buy higher growth ones, but I guess, just like, how possible is that? And you mentioned the 100% lease rate for the Houston acquisition, so just wondering, kind of what's the opportunity there? Yeah. So for us, we're kind of choosy about what we're going to buy. It has to be in the right place and have the right functionality and a lot of other factors. And so typically, we do best when there are complications around deals. We call them hair on deals. And so we don't participate in the, you know, broadly attended auctions by and large, and we're much better at acquiring assets, as I said, where there's work to be done. So that's the strategy there. And again, we're focusing on the submarkets that we think are going to show the most growth over the coming near to medium term. If I could, just on the Houston one, it doesn't sound very hairy given it's well leased. Was that one maybe was just off market and it worked out, or there's some other complication that is not so obvious? Jojo? Jojo. You nailed it right on the head, Caitlin. Basically, it was off market. In addition to that, the seller wanted certainty, and we have a good portfolio in the Southeast submarket, and they wanted to make sure that they work with a buyer that knew the submarket, could close pretty quickly, and we won the limited marketing. There were very, you know, few competitors, and we're very pleased with that acquisition. Great product, new product, and a 5.9 go-in cash yield. So, Caitlin, I think you also asked about dispositions. You're right, as we have done for now quite some time, we're focusing on those assets that have a lower growth trajectory going forward so that we can redeploy that capital into a higher growth opportunity. We'll keep doing that. But I think at a macro level, you will see the volume of those sales going forward be much lower than it's been in the past. Mm-hmm. Thank you. The next question comes from Rich Anderson with Wedbush. Please go ahead. Hey, thanks, and good morning. First question is on the election, and you mentioned, you know, some tenants are holding off until they see what the outcome. What's the swing factor there? Like, is there, like, "I'm not doing anything if Harris wins, but I'm all in if Trump," like, I don't understand, beyond tariff risk, you know, what it is that will change on November 6th with the election in the minds of your tenants. Yeah, so we don't get into the micro on the nitty-gritty details. I think generally speaking, it's about growth and stability in the economy, and I can't attribute that to either candidate in terms of how that's going to come out. But it's the new growth investment, not the renewals. The renewal activity is extremely strong, as you've seen in our cash rent increases have been very, very strong. So it's really the new growth investment. People want to see what the landscape's going to look like either way, regardless of who wins, and what that's going to mean for anything from economic activity to social unrest, to you know, increased regulation or decreased regulation. So there are some pretty big factors involved in the outcome, and that's kind of it at a macro level. Is there any, like, red state, blue state, Trump wins, you know, red states are going to do better or worse? Is that, or is that too oversimplifying it in your mind? I don't have a view on that, Rich. Okay. So... Not to get political on you guys, sorry. The next question is 8% same-store NOI growth for 2024 is your guidance. Do you have a read on what your earnings is for 2025, based on particularly what you've done in the second half of 2024? Are you asking for what we think an estimate of what it's going to be in 2025, Rich? Yes, I want guidance for 2025. Okay. We're not going to give it to you, but... I'm talking about, you know, what is baked in. So if maybe there's 3% or 4% same-store already baked into next year because of what you did in 2024. I think you know, the key drivers of same store, a couple of different items. Occupancy is one on the core. I'm not going to get into that, but others are rental rate bumps. That's been pretty stable. And then it's the cash rental rate increase on new and renewal leasing, what we're able to achieve next year, because that's been a real driver of cash same store growth for the industrial peers. We gave you a look into what we think early, what 2025 is. We signed 37% of the expirations in 2025 at a 33% increase in cash rental rates, and that includes that fixed rate renewal option for the 1.3 million sq ft in Central Pennsylvania. So I think the number is going to be a pretty good number. We got to see how rental rates flesh out when we do our final guidance, but we think it's going to be a good year. Okay. Last for me, I don't know if you mentioned, you know, where you're seeing market rent growth in your areas of the country, where how that's moving right now. Maybe you can answer that. But also, you know, how quickly can it change? Let's say, you know, God willing, we get some recovery in the geopolitical landscape, and everyone's kind of happy with the political environment, macro stabilizes, all those good things happen. How quickly can you go from 0% to 5% market rent growth in your business and perhaps what you've seen in history? I'm just wondering the speed by which we start to see real health bring back come back into the marketplace. Look- Thanks. ... we can't put a time frame on that, but some math helps frame it, okay? So net absorption is not bad. It needs to improve some. Completions, so the existing pipeline is way down. Completions last quarter went from 72 million sq ft in the second quarter to 45 million sq ft this year, and this is in our markets. The construction pipe went from 170 million sq ft to 135 million sq ft, and 28% of that 135 million sq ft is pre-leased. So when you look at the falloff and what we'll call new alternatives for prospective tenants, if we get some wind at our backs on the net absorption front, the demand side, you know, things can change. We don't think it's gonna happen with any great speed. You're probably looking at the second half of next year. But aside from that, it's difficult to handicap. Did you have a number for market rent growth that you're seeing today? Yeah. So, overall, rents are flattish to up a little bit. Okay. If you take SoCal out of that number, they're probably up 2% or 3%. Okay, great. Thanks, everyone. The next question comes from Rob Stevenson with Janney. Please go ahead. Good morning, guys. Can you talk about the transaction market, given that you've been both buyers and sellers recently, given the first rate cut and the speculation leading up to that, and sort of where cap rates are today versus 6 or 12 months ago, and how strong demand is and transaction volumes are that you're seeing out there ahead of the fourth quarter? So at a high level, there is definitely significant capital chasing opportunities in the space. We're seeing some pretty significant prices paid. We would say some people are making some pretty big bets on the prior question about speed of recovery. We see a lot of bets on that being quicker rather than longer. Peter and Jojo, you want to comment on any specifics in your markets? Rob, I would just say, as we monitor some of the widely marketed transactions, earlier in the year, there were maybe six to eight bidders, and now you're seeing over twenty bidders, on some of these packages. So to Peter's point, a lot of interest in the space. In terms of, our house view that second half, we'll have more transactions in the first half. In addition to what both Peter said, is that, when talking to competing buyers, they feel like, the decline in volatility of the 10-year help, the lowering of short-term interest rates help their carry. They're more, a bit more definitive now, what kind of fixed-rate financing they can get. All of those leads to, more, you know, comfort in pricing. Overall, cap rates came in about 25 basis points over the last, you know, 3 months, I would say. And, the IRR expectation for unlevered IRRs also came in. So definitely overall, the market is a bit more competitive. Okay, that's helpful. And how aggressively are you guys looking to add to your land pipeline today? And have you seen land pricing come down in any material manner across your core markets? Jojo? Right now, I mean, if you're looking at... we have a very good pipeline to continue to grow our platform and our company. Of course, you know, we'll watch, like Peter Baccile said, we'll watch the submarkets, and we'll want to make sure that supply-demand dynamics are favorable. We continue to look for land sites. One thing that I want to mention is the land sites have pricing is not a really significant decline if you compare it to the decline of rents. So there is still quite a bit of bid- ask between buyers and sellers. In the same token, there are more buyers now being a little bit more aggressive in buying land sites with lower yield expectations. Yeah, landowners, it seems, think the market's going to go back to 2022 pricing, which we definitely don't. So that's why the bid- ask that Jojo references is pretty wide. So we are out there looking for land, but the transactions volume on that front are kind of slow. Okay, that's helpful. Thanks, guys. Appreciate the time. The next question comes from Nick Thillman with Baird. Please go ahead. Hey, good morning, guys. Peter, you kind of mentioned just more recently, the weather becoming more of a factor in when to tenant, in tenant decision making. Is that, is that hurricane related? Are we talking, like, South Florida and, like, how recent is that? Or, like, maybe how broadly is that comment? It's more of a broad comment about the frequency of these, I think, highly disruptive weather patterns. You know, they cause great economic damage. It probably has a big impact on consumption, so you can't ignore it. Now, they are, you know, geographically, you know, confined, I guess you would say, but they're still big, and they're now coming back-to-back. It's just something else that's on the mind of people who are looking at all the uncertainties that they have to wade through before they make investment dollars in new growth. That's helpful. And then on First Logistics Center, it seemed like the second building that's still in lease up, it seemed as though you guys are pretty bullish on the prospects there. With Boohoo kind of listing that other space as a sublease space, is that another competitive building, you think, or is it different space needs in that specific submarket? Nick, it's Peter Schultz, so not competitive. Boohoo, as I mentioned, is gonna be subletting the building in its entirety. ... so irrespective of the shorter-term sublease that they have there now, that will come to conclusion, and they'll be marketing the entire building. The balance of the second building is 350,000 sq ft. They're not competitive. We've had some activity there, a little disappointed at the pace of decision-making with some of the prospects, but they're really two separate spaces. That's it for me. Thanks. The next question comes from Vince Tibone with Green Street. Please go ahead. Hi, good morning. Could you share your views on the latest California legislation impacting industrial development, AB 98? Particularly, does this bill impact, you know, your existing land bank at all in California and your ability to build on that land? And then also, you know, what impact do you think this, you know, legislation could have on industry-wide supply in California over the next few years? I mean, generally speaking, and then I'll hand it over to Jojo for the details on our portfolio. You know, this is gonna be a tailwind. I mean, it'll be a tailwind for our business. It'll increase value for existing assets, and over time, it's probably gonna put upward pressure on rents. But Jojo can talk more about our holdings. Sure. -and how we're positioned with this. We're in pretty good shape. Sure, sure. Vince, thanks for your question. For those who are not familiar, you know, the AB 98 is a new California state law, and it aims to limit industrial development, depending upon how far you are with sensitive receptors, which is really the school, resi, and hospitals, for example. And what that means is that if the state law requires building upgrades and increased setbacks and buffer zones. All of our land under entitlement is exempt from AB 98 because this law is basically affecting development projects that have not started their permitting or entitlement process after October 1, 2024. So after actually, September 30 of this year, anything that you haven't started entitlement, you are subject to AB 98. So that's one thing I wanna make clear. Just to add to what Peter had said is that, you know, again, there are. Our view is that there are going to be numerous sites that would be very difficult or nearly impossible to develop due to the constraints put by AB 98. And basically, this has the effect of constraining developable land across the state. And, you know, we all believe that anything that constrains the supply of developable land will increase the value of our existing sites and existing buildings. And of course, as we all know, that, anything that decreases potential supply should be good for the fundamentals of the market, i.e., rent growth. So, I hope that answers your question, Vince. No, that's a really helpful color, and we're just trying to think about how much, you know, versus the historical pace of development in Inland Empire, specifically, you know, how much this, you know, new legislation could impact that. So this is all really helpful color. Thank you. Welcome. Again, if you have a question, please press star and then one. Our next question comes from Michael Mueller with J.P. Morgan. Please go ahead. Yeah, hi. I think you mentioned that go-forward asset sales could be considerably lower, yeah, on a go-forward basis. And it seems like in the past, you've normally pointed to 75-125 or 150 of annual disposition targets. So I guess, you know, how should we read into what that implies for development starts going forward, even relative to this year? Is it implying, you know, a much lower go-forward pace, and just how sensitive is dispositions to starts? Yeah, they're disconnected, or they're not connected, let me say it that way. The sales program over the last dozen years, as you've seen and as you know, for us, was to reallocate capital away from lower growth assets into higher growth opportunities. We're now to a point where, you know, that program is essentially over, and so, that really has nothing to do with developments. Now, yes, obviously, those sales proceeds over the last decade or so have helped fund new developments, but, we'll just fund those developments in a different way going forward. We'll fund them through some sales, but much lower numbers, as well as retained cash flow and, you know, the right proportions of debt and equity. So, it's not really gonna impact starts. They're not connected. Got it. Okay, thank you. The next question comes from Nicholas Yulico with Scotiabank. Please go ahead. Thanks. Hi, I just wanted to go back to Boohoo and the, you know, that accelerated tenant improvement reimbursement. Was that income already in the guidance, or was that, you know, unexpected this quarter? That was unexpected because it was the accelerated recognition of that tenant improvement reimbursement liability. So what the accounting rules tell you to do is you have to amortize that over the life of the lease. Well, at the end of the third quarter, we accelerated the unamortized balance, which I think was about $4.4 million or $4.5 million. So that was a benefit, but that was netted against the write-off of the straight-line rent receivable of $5.5 million. So that's how you get the $0.01 per share. So again, it's all in conjunction with Boohoo, and it was not anticipated when we issued guidance in the second quarter. ... Okay, and then the write-off, which is the offset, that also wasn't in prior guidance? It was not in prior guidance, correct. Both pieces were not. Okay, great. Thanks. Appreciate it. The next question comes from Caitlin Burrows with Goldman Sachs. Please go ahead. Hi. Sorry, I just had one quick follow-up that I figured was easier to ask this way. Before, when you guys were talking about the rent growth, I think you mentioned market rent growth, that it was about flattish, maybe up a little, and then excluding Southern California, might have been up 2%-3%. Just for the time period, was that year- over- year in the third quarter or something else? That's year- over- year. In 3Q. Okay, thanks. The next question comes from Brendan Lynch with Barclays. Please go ahead. Great, thanks for taking my question. Just to follow up on AB 98, my sense is that there's a lot of gray area in the bill, and maybe there's some additional legislation that might be coming. Can you talk about whether you think the dynamics of what has been established with the AB 98 is actually finalized versus might be adjusted in the future? Sure. Very good question. When you read through AB 98, there certainly could benefit for more clarification. At this point, they have investment criteria, setback criteria, and specific building upgrades, depending upon the size and how far each building would be on a receptor. And there is enough detail wherein you can kind of ballpark what might happen in a building and what land site is available. But certainly there could be additional detail, because even the building upgrades and how, for example, the building is laid out, could be more specific. But it's so hard to forecast what kind of changes might end up with that. But right now, it is a state law, and it has some detail in it. It's also fair to say the municipalities don't like this, so it'll be litigated as well, so we'll see. There's definitely gonna be some movement here. Great, that's helpful. Maybe just one other one on this topic. Did you submit kind of a flurry of entitlement requests right before the deadline to avoid some of the consequences of the bill itself? Not at all. All our sites were clearly within, you know, some are years into, and we also have some entitled sites already. And so, yeah, no, none was done as, you know, as a quick reaction to this AB 98. Great. Thanks for the call. This concludes our question and answer session. I would like to turn the conference back over to Peter Baccile for any closing remarks. Thank you, operator, and thanks to everyone for participating on our call today. If you have any follow-ups from our call, please reach out to Art, Scott, or me. Have a great week. The conference is now concluded. 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