Good morning, everybody. Welcome to day two of Nareit. I'm Jonathan Petersen. I'm the head of the real estate research team at Jefferies. Very happy to have the management team of LXP Industrial Trust with me on the stage. Immediately to my left is T. Wilson Eglin, CEO. Down from him is Brendan Mullinix, Chief Investment Officer. We have Nathan Brunner, Chief Financial Officer, and James Dudley, Director of Asset Management. Thanks, guys, for being with us. Maybe what we can do, maybe Will, I'll start with you. If you could just give us maybe a brief overview of LXP Industrial Trust, just to set the stage what the company does, what markets you're focused on, and how you think the business is positioned today. Sure. Thanks, Jon, thanks to all of you for coming to our presentation today. To think about our company in the context of the other public REITs, our focus is on large format warehouse and distribution facilities, 93% of the portfolio is Class A. That's the asset focus. In terms of our market footprint, we're focused on 12 markets in the Sun Belt and lower Midwest. About 80% of the portfolio is in the Sun Belt at the moment. The markets that we're focused on have very good demographic characteristics, great logistics infrastructure. They're in business-friendly states, as a result, they're attracting a lot of the investment in manufacturing facilities. Demand drivers are also benefiting from data center construction and support operations. That's putting us, I think, in a very good position with respect to our ability to continue to raise rents. We've had a very strong year from a leasing standpoint so far. Our portfolio is about 53 million sq ft. Coming into the conference, we gave a leasing update, we've completed 4.6 million sq ft year- to- date. Yesterday, we signed 186,000 sq ft lease in Phoenix and raised the rent 54%. Exactly. We love that, and that's very important from an organic growth standpoint. We have 2.9% fixed rental escalations. That's contractual growth, and our rents continue to be inexpensive relative to market. Right now, we have about 10 million sq ft in various stages of negotiation. We think there's a long runway of great leasing outcomes for us. What's new in the business this year compared to the last few years is that we have really good opportunity to create value in our land bank via development. We had a great success earlier this year, breaking ground on a 1.2-million square foot facility in Phoenix that leased very quickly on really advantageous terms that will create a lot of shareholder value. In our transaction update press release on Monday, we said that we would be commencing a couple of development starts in Columbus, which is also a market that's set up very well to produce great development outcomes. We also announced an acquisition that allowed us to raise our guidance also. Anyway, all the fundamentals in our business are very strong. We've got good capacity for organic growth, and we now have that external growth component that's been missing. We are self-funding all of our new growth initiatives via asset dispositions. We haven't sold anything yet this year, but we will be in the market with some disposition candidates where we think we're going to get outstanding value, and that's consistent with our longer-term strategy. Right now, 87% of our assets are in our target markets. That implies that the other 13% are going to be turned into liquidity- over- time and reinvested in our target markets, mainly in development, where we can earn that premium yield compared to market capitalization rates. From time to time, we will be acquisitive when we have big tax gains to manage, and that was one of the things that happened with the recent acquisition in Phoenix, that will be completed with a 1031 exchange transaction. All right. Great. That was super helpful. Maybe we stick in the Phoenix market because you guys have been very active this year. I want to start with the development. You started a project on spec back in February. We haven't seen a lot of spec development being started in the industrial space. Maybe talk about the decision making around that and just the level of demand that you guys saw that led to the lease early on in the project. Sure. Well, that project in Phoenix, that land site is one that we've been working on for a number of years. When the market was weak in that market, I'm calling the end of the down cycle, what we did was a lot of pre-development work to position ourselves to respond to where we saw the strongest demand and the best supply dynamics. Actually there, we planned a 1.2 million building, a 380, and a 615, and did the design work and the permitting work to be able to launch on any of those three. While we were doing that, we observed that what had been very oversupplied in the larger space, as in many markets, large bulk was sitting there, and tenants were not pulling the triggers on leasing those spaces. We saw that start to switch mid-year last year and really accelerate towards the end of the year, and that had us thinking that the million-footer might be the most compelling opportunity. As we got into the beginning of this year, we saw all of those million-foot existing spaces get taken up or be in very advanced negotiations. We felt as though the timing was right to launch because both from a supply standpoint, we would have virtually no competition on the ground, and then the demand looked just very healthy. We hoped for pre-leasing. It was very exciting that it leased as quickly as it did. Those dynamics on the demand side have continued. Million foot activity has been very active, and at this point, we're still looking at a variety of size ranges. We're responding to some build-to-suit inquiries as well. We're also doing pre-development work in consideration of a potential another large bulk start later this year. I guess on those future developments at that site, what would it take to get you guys to Would you build on spec again? Are you looking for a pre-lease? How do you expect to approach future developments at that land site? If the market conditions remain as they are today, which is very similar to what they were when we made the decision at the start of this year to start spec, we would do another spec project there. Okay. Great. Let's stay in Phoenix. I want to talk about this acquisition you guys announced on Monday. It was a little over $100 million, covered land play, looked like the yield was very impressive, 16%. Maybe just talk more through what the strategy is with that land site, in Phoenix, and what you guys might do with it long- term. Well, it's a fantastic piece of land for industrial development. It's 37 acres on I-10, right near the airport. It is improved with some office buildings right now, that have five years of lease term left. The total rent payments in that five years are $82 million, compared to a purchase price of $103 million. What that means is by collecting all that rent and waiting for the vacancy at the end of the term, we're going to end up with a very low land basis that we think is going to produce a fantastic development outcome, at the end of the lease- term. The plan there is probably to build four or five smaller box formats of 400,000-450,000 sq ft. Okay. I guess in terms of timing on that development there, do you wait until the office lease is expired? I think you said there's about five years left on it. In all likelihood, that's our base underwriting. If there is an opportunity after we've done site planning, if we wanted to have a discussion with the tenant about an early buyout of the lease or something like that, if that enhanced our return prospects. we'd do it. There's a lot of rent to collect and a lot of accretion to enjoy while we're waiting for that development opportunity. I guess how unique is this opportunity? Do you see a lot of office to warehouse type conversions in your markets that you guys underwrite, or was this a pretty unique opportunity? I think that I'd say it's pretty unique in certain respects, but in others not so much. In Phoenix specifically, there's been a very considerable increase in office to industrial conversions and office to multifamily as well. What I think is particularly unique about this project is the scale of the site. It's 37 acres, in a very infill, fully built part of the market. It's directly on I-10. It's right across from the airport. It's a really exceptional location, and the size of it is very unusual. There's been a number of these kind of conversions that have gotten started in the last year or so in the same sub-market, but they're typically smaller projects. This lease structure that we're stepping into just provides a nice income bridge to that ultimate redevelopment for us. Okay. Unusual in that respect. All right. Great. Maybe we'll move on to Columbus, Ohio. You guys announced that you plan to start two new spec projects at the Etna Industrial Park. I guess 750,000 sq ft project and 160,000 sq ft. Maybe talk a bit more about the Columbus market and why you guys are confident in that development. Yeah, sure. First, just to give a little bit of background. In that park, these buildings, we've already developed three buildings there, which I think will sort of speak a little bit to Columbus and the kind of users that we service there. So the first building that we developed there was built to own for a user, which was Kohl's Department Stores. That was a 1.2 million square foot building. The second building was a 1.1 million square foot building that we built on spec and leased to Stanley Black & Decker. And our third most recent project was a 250 that we built on spec that leased to a 3PL that services the data center industry. I mention all that to sort of give you an idea of the diversity of tenant demand that's in that Columbus market. It's very centrally located. Our park is located directly on I-70, has fantastic access because of that. We appeal to a really broad range of tenants, including e-commerce, major retailers, and consumer product companies. One of the more recent demand drivers that we're seeing in Columbus, as well as in a number of our other markets, is data center related logistics requirements. That has sucked up a lot of existing space in the Columbus market. At this point, the bulk, and in particular for the east side of Columbus where we're located, which is most proximate to the majority of data center development to the north in New Albany, and some additional projects a little further east of us. The existing bulk is almost entirely gone. What's remaining is in very active negotiations. From a supply standpoint, it looks very compelling. There's a lot of demand behind it, and specifically including from data center requirements. We think there's a real opportunity there we could pre-lease. It's pretty exciting. Yeah. Could you guys dive in a little more on the data center opportunity? You talked about it in Columbus. I guess, what other markets are you seeing that? Maybe talk a little more about the type of customers we're talking about here. Are these 3PLs working with hyperscalers? Is this suppliers? What does it look like? We've seen it across all markets. If you look at the advanced manufacturing and data center demand that we've seen, it's been a significant portion of the absorption that we've had across our markets. Taking a step back, just on the big box side, 10 of our 12 markets are in the top 15 for net absorption. We've had a lot of net absorption in our markets. It represents about 72% of the overall net absorption in the last 12 months in the U.S. There was a big box push between Amazon and Walmart. We've seen a lot of that going back over the last nine months. I think the read-through on Amazon is probably, they announced that they're coming out and doing some third-party logistics business, so I think there's a read-through that there was that piece of it and also just getting closer to consumer and competing with Walmart. You had that push. On the tail end of that, and I think specific to our markets, we had data center activity in Phoenix. We've had data center activity in Columbus, as Brendan mentioned, Richmond, but really across all of the Sun Belt markets and many of the lower Midwest markets, and also advanced manufacturing. These companies are going there because there's access to power, strong labor, strong infrastructure as well. It's been really great for the big box market and the demand coming out. Some of the specifics about the data center users, they could be the hyperscalers through 3PL, they could be the hyperscalers themselves, they could be data center components, and just maintenance and testing. We've also seen new demand from contractors for the actual development of the data centers. Typical lease duration right now is going to be in that five to seven-year range. I think there is a little bit of a question in the market as to what the duration is for some of those contractors that are coming in and developing the data centers. We think that there's definitely going to be a staying power for the data centers with replacement of equipment and things of that nature. That's been a really great push to really even tighten the big box market more. They're looking for power. If your site has power, and I guess looking back on the last cycle for the big box space, you would typically spec a big box 4,000 to 6,000 amps. We specced our Phoenix to 9,000 amps. They don't need the power of the actual data center, but they need increased power for automation. They're looking for clear height. Having a 40-foot clear on a large building is really important. The other thing that's become even more important, I think this is across the industry in general, is slab thickness, because there is more automation and there's more just weight that's going in with equipment. It's been a great windfall for our opportunities, and I do think it's very specific to the markets that we're in. I guess I'll just really quickly touch on advanced manufacturing. We haven't talked about TSMC, for example, or Hyundai, in all these markets that we're in, advanced manufacturing is continuing to grow. I think we're going to see suppliers for those advanced manufacturing plants as they come online also be another demand driver going forward. I guess, JD, to pull it all together, we've talked about big box demand from Walmart, Amazon, data center demand, advanced manufacturing. If you were to rank those three, what are the biggest to smallest drivers of demand? Well, I think it's definitely Amazon. Yeah. I think Amazon and Walmart will continue. Walmart probably is doing one building for every three that Amazon's doing. They were the ones who really pushed demand on big box and changed the market really overnight in the third quarter of last year. This data center phenomena is definitely on the come because there is a whole lot of new data center creation that's happening. I think we're going to continue to see that push and that demand. The advanced manufacturing, I think, has longevity. Some of the data center stuff seems to be very immediate and being pushed forward. There's longevity on the advanced manufacturing as that gets developed. I think it really paints a nice picture for the supply-demand dynamic for big box in particular. Okay, great. I wanted to ask about escalators. Your 2.9% in place today on your portfolio, I think in the leases you guys have signed this year, you've been ahead of that range. Where are you able to push escalators today on tenants as you continue to move higher? Well, it's been an interesting cycle. If you go back pre-COVID, it was pretty typical to have a 2% escalator on most industrial leases. We saw those escalators get pushed up on the big box, in some cases, close to 4%, but I would say they averaged at the height of the market around three and a half when you're talking about the very large boxes. On some of the smaller boxes, four, and in some markets, maybe a little higher than four. There was definitely some downward pressure over the last couple of years on those escalators as supply got full and demand diminished. We saw pressure on the big box, pushing back down to around 3%. In some cases, maybe even high twos. Amazon was really pushing an initiative on two and a half in many cases. We've seen with the tightening of that particular market, escalators start to increase again. I think you'll start to see, particularly on the big box side, average escalators push back into that mid-threes in our markets. There is some softness on the smaller stuff and some competition there. In select markets and sizes, you may also be able to push some of the smaller back towards four. I think as the market tightens, supply continues to be a little bit constrained at the moment, and demand continues, we ought to see some upward pressure. Got it. Okay. Nathan, I'm going to bring you in here. Bringing this all together, you guys increased guidance, with a lot of these developments we've already talked about. Can you walk us through the moving pieces there, on the guidance and maybe the building blocks of where you think you're set up moving forward? Yeah, sure. The guidance range at the midpoint increased $0.055, which is about $3 million. There are really three components to that. The first was the Phoenix covered land investment that we made. That has annual run- rate GAAP NOI of about $15 million. In 2026, it will contribute about $9 million. We also announced as part of guidance that we plan to sell around $200 million of assets in the second half. Those properties will be properties that we own outside our 12-market target footprint. The earnings impact of those dispositions in 2026 is approximately $6 million, and that's based on selling those assets at cash cap rates in the low sixes. The third component of the change is the announcement around the Columbus development start. That has a development budget of $90 million. Roughly half that will be spent in 2026. Its earnings impact is largely neutral, as we invest cash on balance sheet, or revolve draw into those projects and ultimately capitalize interest from an accounting perspective. That's also an important change to our business plan. Okay. That's helpful. I guess just generally on capital allocation, it seems like you have a lot of development opportunities. You guys have done share buybacks in the past. I guess, how do you weigh where you spend that incremental dollar, I guess, from those dispositions on share buybacks, developments? You did an acquisition recently. How are you thinking about that? Yeah, both buyback and development have been interesting uses of capital to us. The shares have traded at a discount to net asset value the last couple of years. It's narrowed a lot. Development's a better use of capital right now. I think if you look at, for example, the building that we just pre-leased in Phoenix, roughly $120 million budget, and we think our profit will be $40 million. That just screens as a better use of capital compared to buyback. If the shares got softer for any reason, we have liquidity available for buyback as well. We'll look at those two areas very closely. When we're acquisitive, it's because we expect to have such a big gain from selling something that we want to keep our tax basis intact. Got it. Okay. You've alluded to it a couple of times, but on dispositions, I think you said 87% of your properties are in your target market. When we think about the balance, I guess, how should we think about timing kind of triggers to what gets you to sell? Well, what we're trying to do is maximize the value of each of those assets, and often there's an asset management project, typically a lease extension or something that supports more disposition value. We're trying to match that outcome with a good use of capital where we can put it to work at a return that's attractive compared to acquisition. A lot of those dollars will get allocated to development, and we'll make substantial progress this year. I would think our gross asset value would be over 90% in our target markets at the end of the year. We'll just keep going till it's finished. It's a multi-year project to optimize value and find good uses of capital. Okay. Maybe Nathan, on the balance sheet, can you just talk about where your leverage is at today? I know it's definitely been trending downward, but can you just remind us where your targets are versus where you are today and how we should think about that trending? Sure. We made really good progress on the balance sheet in 2025. We took advantage of some of that demand that James described around Amazon's desire for big boxes, and we sold two of our development projects to Amazon, and we used those proceeds to reduce our leverage profile by about a turn. We ended 2025 at around 5x. Our target is to stay between five and five and a half. We're going to be very prudent around match funding development and investment with dispositions to maintain that leverage profile of five to five and a half. Okay. Maybe, James, to come back to you. On the markets that we talked a lot about Phoenix and Columbus being particularly strong markets. I guess, what are some other markets in your portfolio you'd call out with particular strength, and which ones are a bit weaker right now? Across our markets, we've seen a pretty dramatic change in vacancy rate. We saw pretty much every one of our top 12 markets have several hundred basis points of compression. I know we've talked about Phoenix and Columbus already. I have to call out Columbus because Columbus really didn't have the overbuilding that some of the other markets that we have in our portfolio have. It's at about a 5% vacancy rate right now. If you strip out some of the functionally obsolescent buildings that are in the market, it probably screens closer to four. As Brendan mentioned before, there just really isn't a whole lot of availability. You've got The Ohio State University. You've got proximity to a huge portion of the U.S. consumer base in the Northeast. You've got advanced manufacturing with Anduril going in. You have all the data center activity that's happening in New Albany and to the east, as Brendan mentioned. Of our 12 markets, I think I would call out Columbus as really a great opportunity, which is interesting because the Midwest really struggled through this last cycle with Columbus kind of being the shining star. That being said, you look at places like Indianapolis where vacancy got really, really high. It's gotten really tight as well. We love the Sun Belt for all the great things about the Sun Belt, the transportation attributes, and the population growth. It's been really interesting to see how a couple of the really strong logistics markets in Columbus and Indianapolis have performed recently. All right, great. We've got just a few minutes left. Any questions from the audience? Yeah, go ahead. The 3PL data center suppliers, is there a certain facility size they're mainly leasing at, or is it kind of across the spectrum? For the line, the question is for the 3PL guys, is there a certain size they're looking for on the, sorry, 3PL data center? Yeah data center specific. The component suppliers, mostly what we've seen have been very big box. We've seen some varying sizes on the contractors. For example, in Richmond, we have a contractor looking at a 250. We've got a contractor looking at a 400 in Columbus. We would expect to see activity, well, we did see activity in Columbus on the 250 that we already leased, we would expect to see it on both sides of our developments going. It does vary, but I think the majority of it has been in that really big box. Thank you. Sorry. My observation is since the market has lots of volatility, how do you base on your spec development decisions? I don't know if that's accurate or not, just wonder, if it's accurate, what you see on the spec development, and then the market doesn't agree with you. Why so much of the volatility? Are you talking about rent volatility or just demand volatility? Decision to go to the spec development. Yeah. Box even to do spec development right now with all the volatility in the market. Well, there is volatility in the market. If you think of a couple of the things that are driving demand, right? A lot of it is around the advanced manufacturing initiatives, and that's steady multi-year investment. The data center investment that's also creating a lot of demand that seems to be pretty insensitive to the economic cycle. I think those are really strong attributes. In the case of Phoenix, some people said, "Well, why did you go spec there instead of just wait for a build-to-suit?" The truth was, we saw every 1 million square foot building in the market disappear over 18 months. The company that we leased the building to was already a tenant in our portfolio. We knew they were coming to market for an RFP, and we knew if we broke ground, we'd essentially have close to a captive audience. You're looking for that certainty where you have that visibility and you're really highly confident that the outcome is going to be great. Are you getting better return with spec in what you're just doing? Yeah, I think so. In that case, I think the rule of thumb probably is 50 basis points of premium yield compared to build-to-suit. In that case it's probably 100. If we'd waited for build-to-suit, there's other people with big land sites, it would've made it much more competitive. As I said, by breaking ground, it really put us in the best position to have a great outcome. Great. Ned. Last one. On this new acquisition in Phoenix, this is the last five- years term. I am just trying to wrap my arms around the best case scenario for LXP. Is that where the five- years goes and you collect the full $82 million, or is it better for an early termination and you then accelerate the redevelopment effort? I think that depends on the supply-demand dynamic for that size facility in Phoenix. We're going to work a couple years of site planning, then we'll be ready if we love the market from a development standpoint to have that negotiation with the tenant. Some of it depends on how much they're willing to pay us to get out of the lease. There is the potential for that to be additive to the sort of expected return profile that we underwrote. We're aware of that, and if there's an opportunity, we would capitalize on that. I think it's remote, but it's also possible that someone would come along and say, "Gosh, we really would love to have a headquarters office facility." We could enter into a new 15-year lease with somebody and sell it for twice as much as we paid. I think that's remote, but it's in the realm of possibility, I suppose. All right. We're out of time. Thanks guys so much. Appreciate it.