Hello, and welcome to the Plymouth Industrial REIT second quarter 2022 conference 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 your touchtone phone. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to your host today, Tripp Sullivan of SCR Partners. Mr. Sullivan, please go ahead. Thank you. Good morning. Welcome to the Plymouth Industrial REIT conference call to review the company's results for the second quarter of 2022. On the call today will be Jeff Witherell, Chairman and Chief Executive Officer, Pen White, President and Chief Investment Officer, Anthony Saladino, Executive Vice President and Chief Financial Officer, James Connolly, Executive Vice President of Asset Management, and Anne Hayward, General Counsel. Our results were released this morning in our earnings press release, which can be found on the investor relations section of our website, along with our Form 10-Q and supplement filed with the SEC. A replay of this call will be available shortly after the conclusion of the call through August 10, 2022. The numbers to access the replay are provided in the earnings press release. For those who listen to the replay of this call, we remind you that the remarks made herein are as of today, August 3, 2022, and will not be updated subsequent to this call. During this call, certain comments and statements we make may be deemed forward-looking statements within the meaning prescribed by the securities laws, including statements related to the future performance of our portfolio, our pipeline of potential acquisitions and other investments, future dividends and financing activities. All forward-looking statements represent Plymouth's judgment as of the date of this conference call and are subject to risks and uncertainties that can cause actual results to differ materially from our current expectations. Investors are urged to carefully review various disclosures made by the company, including the risk and other information disclosed in the company's filings with the SEC. We also will discuss certain non-GAAP measures, including but not limited to Core FFO, AFFO and adjusted EBITDA. Definitions of these non-GAAP measures and reconciliations to the most comparable GAAP measures are included in our filings with the SEC. I'll now turn the call over to Jeff Witherell. Please go ahead. Thanks, Tripp. Good morning, everyone, and thank you for joining us today. What you will hear from us this morning is very consistent with what you've heard from other industrial landlords so far this quarter. Industrial fundamentals are as strong as ever. Tenants are showing zero sign of economic distress. Rent growth is robust. Supply chains are shrinking and borrowing costs are ratcheting up significantly, while seller and buyer expectations appear to be mismatched. We will keep our commentary short on these well-trodden topics, but we can certainly devote more time to them in Q&A if necessary. Where Pen and I would like to focus most of our time this morning is on correcting some false premises and reaffirm our belief in our markets. When we look across our portfolio, you can see that our operating metrics reinforce our thesis that our markets have strong fundamentals, lower cost of living, higher labor force availability, lack of new supply competing with our property type, and tight availability for space that is in high demand for the majority of our tenants. In addition, recent large corporate and manufacturing relocations to these regions and the ongoing shift in supply chains certainly reinforce our long-held belief that a Tier One-only investment strategy is not only short-sighted and subject to higher volatility, but also inconsistent with a disciplined, diversified investment approach. There are a lot of facts about the non-coastal markets that are being overlooked. There are two major developments that I would like to highlight. First is the decision of the Ford Motor Company to locate the development of their BlueOval City just outside Memphis. This is their future electrification program and will consist of over 10 million sq ft and over 10,000 new jobs. The second is the Columbus, Ohio market, where Intel is building two semiconductor fabrication plants on 926 acres. This is a $20 billion capital investment that will create 3,000 high-tech jobs. There is a reason these global companies have chosen these markets to create the future of their companies. Based on numerous requests we've received of late to better educate the investment community on what's being missed about our markets, we have a few new slides in our investor presentation that supports this commentary. We will also have third party research posted on our website as well that provides a lot more empirical data. Now let's turn to the key operating stats for the quarter. They look a lot like what we've reported the last several quarters, but we're starting to see the cumulative impact of double digit rent increases and record leasing volumes show up in accelerating same store NOI growth. Occupancy was 97.3%. Cash re-leasing spreads were 22.2%. Same store NOI on a cash basis was up 15.8%. Rent collections were well over 99%. Core FFO per share was up 15% and AFFO per share was up 28%. Consistent with our announcements in June ahead of Nareit and our quarterly activity update in early July, we have elected to pull back from acquisition activity. Penn will get into the drivers for this decision later. Until we see some stability in the capital markets, we expect our primary source of growth for the near term will be organic growth complemented by our development program that can produce yields in the 7%-9% range. We have provided some new disclosures related to our development program in the quarterly supplemental on pages 5 and 12 that I want to highlight, such as more definitive completion dates, funding percentage, and percentage leased. As this program progresses, we will be able to give you a better idea of the status of each project. In Portland, Maine, we have completed construction at our 70,000 sq ft building, and we are now 50% leased with proposals out for the balance of the space. In Atlanta, we're under construction with a new 237,000 sq ft industrial building that should deliver in the third quarter, and a 180,000 sq ft building adjacent to it that should deliver in the fourth quarter. The total investment for these two is approximately $24 million. We currently have a lease out for signature on the second building for the entire 180,000 sq ft. In Cincinnati, at our Fisher Industrial Park, we have a new 155,000 sq ft building under construction for a total investment of $12.2 million. That should also deliver in the fourth quarter. We have five other buildings that are in various stages of development but have not yet begun construction. In Cincinnati, we have another 200,000 sq ft that we are considering in Fisher Park. In Jacksonville, we are preparing to begin construction on 176,000 sq ft over four buildings that are in our existing parks. Out of the 176,000 sq ft, we have a lease signed on 20,000 sq ft and a lease out for signature on 41,000 sq ft. As it relates to our balance sheet, we know where we need to be in terms of leverage. While our plan to gradually delever is extended a bit due to the current state of capital markets, we know 2023 will be a big opportunity for us. We have the Series A preferred that can be repaid beginning on January first. Absent the ability to accretively access equity capital in the markets, we expect to delever through EBIT growth. We also have several options we are actively considering in terms of UPREITs, additional asset dispositions on a limited basis, or JV such as the one we completed with Madison in Memphis. Our dividend payout ratio is among the lowest across our peer group and provides a solid return to our shareholders. Pen, why don't you take it from here on what's occurring in our markets and with our acquisition activity? Thanks, Jeff. Good morning, everyone. During the second quarter and through the first week of July, we closed on $65 million of acquisitions totaling 662,000 sq ft across 6 industrial buildings. The weighted average initial yield of the acquisitions was 5.9% at a weighted average cost of $103 per sq ft. These acquisitions expanded our footprints in Chicago, Cincinnati, Cleveland, and St. Louis. We also entered the Charlotte market for the first time and continue to look for new opportunities in the Carolinas. The $65 million in acquisitions was slightly below what we had projected for Q2, but we elected to pass on several opportunities that we had previously underwritten. Year to date, however, we've completed $254 million in acquisitions, which would still be one of the more active years in our history. While our investment pipeline remains very robust, we believe it's prudent to press the pause button on new acquisitions for the time being. Buyers and sellers are going through a period of price discovery, which is consistent with what we've seen in other periods of public market volatility and swift moves in interest rates. In the wake of rising interest rates, inflationary pressures, and recessionary type discussions permeating the economic landscape, going-in cap rates are being reevaluated, while retrades have become more ubiquitous as deals are still closing but at 10%-25% less than initial guidance. As we have said in prior calls, we will focus on what we do best at Plymouth. That means we'll look for opportunities that are accretive on a cash flow basis, allow us to secure above-market rental increases, leverage our regional property management and asset management teams, and focus on markets with low vacancy rates, strong rental growth, and high tenant demand for our preferred product type and size. So far, the results of this investment strategy speak for themselves. Where we think we need to elaborate a bit more and connect the dots for the investment community is why we've invested where we have and what we're seeing that others seem to be overlooking. As Jeff mentioned earlier, we've added a few new slides on our markets in our investor presentation, which help crystallize our investment strategy, specifically our history of investing in Tier Two markets and in older properties, i.e., Class B, that typically have smaller tenants. In conjunction with Avison Young and their industry research arm, Avant, we've pulled together an analysis of Tier One and Tier Two industrial markets. When comparing Tier One markets, such as Los Angeles, Inland Empire, Northern New Jersey, and Seattle, for instance, to our Tier Two markets, such as Cincinnati, Columbus, Indianapolis, Jacksonville, Memphis, and others. We find that Tier Two markets enjoy higher affordability and lower labor costs than Tier One markets. In fact, Tier Two markets boast an industrial work-to-business ratio four times that of Tier One markets. That's important because, as most of you know, workforce availability and labor costs are predominant factors for companies occupying industrial space, as well as population growth. Since 2005, population growth in our Tier Two markets was 13.4% compared to 5.7% in Tier One markets. The projected population growth for Tier Two markets for the next four years is 2.1% compared to a -0.3% in Tier One markets. Tier Two markets predominantly lie within the center of the country. What CCIM Institute Chief Economist K.C. Conway calls the Golden Triangle, an area that roughly triangulates Illinois, Texas, Florida, and back up to Illinois. The Golden Triangle contains over 70% of the U.S. population and half of the U.S. GDP, and more ports than any other region in the country, and 5 of the 7 Class One railroads. 90% of U.S. households live within a five-hour truck drive of primary intermodal facilities and inland rail ports. While the coasts certainly have a commanding presence for logistics, the Golden Triangle has recently become the epicenter for logistics infrastructure. The strongest e-commerce, parcel delivery, logistics, and retail firms have expanded significantly throughout the region. According to the CCIM Institute, in 2000, West Coast ports handled 65% of all shipping containers, with East Coast and Gulf Coast ports handling the other 35%. Yet in 2020, that ratio became balanced at 50%, 50%. That is another reason why we continue to invest in the Golden Triangle, where over 90% of our portfolio exists. Another interesting statistic is that the availability of industrial space throughout the country in 20,000-150,000 sq ft range has shrunk significantly as a percentage of total inventory over the last 20 years. The predominant development focus in both Tier One and Tier Two markets has been in buildings 500,000 sq ft and over, with nearly a third of all inventory in Tier Two markets over 500,000 sq ft. Since 2010, in Tier Two markets, there has been only 7% growth in the 20,000-150,000 sq ft range and over 75% growth for 500,000 sq ft and over. Yet the size range that has experienced the highest year-over-year rental growth, according to CBRE Industrial and Logistics Research, are lease signings for space between 100,000 sq ft and 300,000 sq ft. What does all this mean? First, it means that all new supply is not created equal. We hear comments about the large amount of new supply coming online in our markets. Yet anyone quoting those statistics need to acknowledge that little to none of that product competes with our product and our tenant base. Second, the highest demand and most liquid size of space being leased in our markets comes in the 20,000-150,000 sq ft range. Third, Plymouth's average size tenant is about 65,000 sq ft, with 70% of our ABR concentrated in leases under 250,000 sq ft. Lastly, the high demand for these smaller spaces, the sheer number of tenants executing leases in this size range, and the limited supply is pushing up rental rates. Market rents have been increasing, but we have been outpacing them. We see this on the ground every day. These dynamics are what originally attracted us to these markets, and we believe our thesis is being proven out. I would also note that we've looked at rent growth statistics in these same markets for every year since 2006, and they've shown that in past recessionary environments, they remain relatively stable compared with Tier One markets. The bottom line is that we believe continuing to invest in the Golden Triangle in assets between 100,000 sq ft and 300,000 sq ft will enable us to continue to push rents for the foreseeable future, as we have already demonstrated. Now, I'd like to turn it over to James Connolly to walk through the leasing activity and portfolio operations. Thanks, Pen. Good morning. Leases commenced during the second quarter of 2022 totaled an aggregate of 1.5 million sq ft for leases greater than six months. These leases included 500,000 sq ft associated with renewal leases and 1 million sq ft for leases with new tenants. The weighted average lease term for these leases was 5.7 years, and the rental rate associated with these leases increased 22.2% over prior lease rates on a cash basis. The renewal rate for Q2 was 33%. For the year through Q2, the weighted average lease term on commencing leases was 5.4 years with a 19.5% cash rental rate increase, and the first half renewal rate was 51%. Through the end of July, we have executed leases totaling 6.4 million sq ft related to space scheduled to expire during 2022, which represents 92% of the 7 million sq ft of total 2022 expirations. This amount includes adjustments for acquisitions and early terminations. The renewal rate for these transactions was 71%, with a weighted average lease term of 4.1 years. Furthermore, we leased 630,000 sq ft of space that had been vacant at the start of 2022, 55,000 sq ft of new development space, and have had just 106,000 sq ft go vacant without being re-leased. Rental rates associated with all executed leases commencing during 2022 is 17.1% over prior lease rates on a cash basis. These transactions include seven leases of at least 10 years on 518,000 sq ft. We have also leased the roof on the new Portland building for solar panels, which will be operational during 2023. There was 1,028,000 sq ft leased for space expiring during 2023 at rates 11.1% above expiring cash rents. While this amount is less than the 2022 total rental rate increase, it is actually greater than the renewal rate increase through Q2 2022 of 10.1%, which is what this space is comprised of. There are leasing prospects for our Atlanta, Florida, Cincinnati, and Maine development projects that we are actively working. Additional solar leasing is also in the works, with roof space totaling 4.2 million sq ft being awarded to two solar vendors to lease out. The solar panels should be operational during the first half of 2023, generating approximately 42 MW of power. Portfolio-wide occupancy at the end of Q2 2022 was 97.3%, up 30 basis points from the end of Q1 due to the commencement of the vacant space leasing previously mentioned. Of the 921,000 sq ft of vacancy within our portfolio at the end of Q2, 533,000 sq ft has been leased with tenancy starting later in 2022, with another 98,000 sq ft categorized as being repositioned at five locations. In total, there were 10 buildings with 1,266,000 sq ft classified as being repositioned during 2022 due to rollover and/or planned renovations. Most of this space, approximately 95% of it, is currently leased, but excluding all the repositioned square footage, our occupancy rate would be 97.5%. If you added back all of the future leases coming online, our occupancy would have been 98.8%. Finally, through 7/25, we had collected 99.3% of our rents billed during Q2 2022. There are currently no active rent deferrals. The asset and property management teams continue to deliver at a high performance level. Our buildings remain leased at a high occupancy level. Rental rates continue to increase. Tenant relations are high, and our buildings are well looked after. At this point, I'll turn it over to Anthony to discuss our financial results. Thank you, Jim. We were pleased to report double-digit increases in same-store NOI and core FFO and AFFO per share and unit. There are a few points that stand out in our Q2 results that I will discuss before providing commentary on our updated guidance assumptions for the year. Let's start with acquisitions. The $48.9 million completed in the second quarter was less than the $74 million mark we previously communicated. However, we completed another $16.5 million soon after the quarter, bringing us closer in line with what we had projected. Consistent with Jeff and Penn's earlier commentary, we are not expecting additional acquisitions for the balance of the year. G&A, excluding the write-off of dead deal costs associated with prospective acquisitions not consummated, was 8.8% of revenues as we held the line on expenses. Interest expense, however, was a headwind for us as rates moved approximately 100+ points from Q1, leading to a 24% sequential increase in interest expense on only $20 million in incremental debt. We did not deploy the ATM at any point after our last earnings call. Same-store NOI on a GAAP basis was up 9.4% and up 15.8% on a cash basis. That's an acceleration from Q1 that we attribute to sequential growth in revenue from our new and renewal leasing in the portfolio, supported by improved expense reimbursement as we convert expiring rollover to triple net lease structures. Triple net lease now account for approximately 72% of same-store ABR as of quarter end. More specifically, in the same-store pool, we saw strong leasing results in our Chicago and Ohio markets, and accelerated lease-up in our Cincinnati market. Looking at our balance sheet, our total debt to total market capitalization moved up to 52% at quarter end, primarily due to the decline in our stock price from Q1. While net debt plus preferred to EBITDA improved 50 basis points to 8.3x. As of June 30, 79% of our total debt carried a fixed rate or was fixed through interest rate swaps, with a total weighted average cost of debt of 3.61%. With 55% of total debt on an unsecured basis. As noted on our last call, we recast our unsecured credit facilities, adding 5 new banks to the facility and increasing it to $800 million in total from $500 million. The increase was comprised of an additional $150 million to our unsecured revolving line of credit, which brings it to $350 million and a new $150 million five-year term loan, which brings us to $450 million in term loans. We have implemented interest rate swaps on $300 million of the term loans, subsequently moving them to SOFR-based from LIBOR-based in mid-July. Our current leverage continues to reflect the fact that we are carrying approximately $24.8 million in investments on our balance sheet as of June thirtieth, related to construction and progress associated with the development activity for the projects Jeff outlined earlier. While these projects are currently a drag on net debt to EBITDA, they will be contributors to earnings as well as NAV creation when they come online over late this year and next. Our liquidity position remains strong as presently we have $15.9 million of cash on hand, plus an additional $7.2 million in operating expense escrows and $282.5 million of capacity on the revolving line of credit. Turning to our 2022 guidance, we have affirmed our Core FFO per share and unit range. With a contribution from previous acquisitions, the more than doubling of our annual same-store NOI range and lower G&A offset by higher interest expense, the effect of the previously disclosed conversion of half of the Series B shares to common shares on a one-for-one basis, the timing of lease up on our new development projects. With respect to same store, we have derived the low end of the new NOI growth range of 7.5%-8% to account for one potential move out of approximately 200,000 sq ft and additional real estate taxes, insurance and utility impacts, some of which may not be fully recoverable from tenants per the terms of their respective leases. As mentioned earlier, the impact from acquisitions is slightly below what we had originally anticipated, and G&A will be lower than expected as we carry forward the expense controls through the balance of the year, with guidance reflecting a $475,000 decrease to the midpoint. From this point, absent the one acquisition completed in early July, the only debt we expect to add to the balance sheet is related to our development program for the balance of the year. As Jeff noted earlier, we know where our leverage targets need to be, and we will consider all options to get there absent the use of the ATM at current price levels. We expect to be very judicious with the use of debt and are anticipating fixing the rate on our new $150 million term tranches. We have increased our full-year guidance on interest expense by $1.15 million from the midpoint. The incredible leasing and our ability to capture double-digit mark-to-market, coupled with our ongoing sourcing of value creation and development opportunities, will fuel organic growth and provide strong returns to shareholders. All of these levers continue to drive FFO growth and rightsize our leverage profile as incremental EBITDA comes online over the next 12+ months. Operator, we're now ready to take questions. Yes, thank you. At this time, we will begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up the handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. Our first question today comes from Todd Thomas with KeyBanc Capital Markets. Hi. Thanks. Good morning. First question, just around the guidance, you know, Core FFO of $0.47, again, second quarter, you know, implies a bit of a step down to get to the midpoint. You increased the cash same-store NOI growth forecast by 375 basis points, and it looks like the drag from G&A and interest expense, there's a net drag there of about $0.015 or $0.02. Can you just run through some of the moving pieces to help bridge the step down from the $0.47 in the quarter towards the midpoint of the guidance range? Thanks for the question. The drags in kind of order of priority, there's potentially some anticipated impacts with respect to OpEx that we're conservatizing a bit. There's the full impact, Todd, of the conversion of the Series B and then just a little more conservatism around the increase in debt costs. Okay. What's embedded in the guidance for the remaining conversion of the Series B in terms of timing? There's no subsequent conversion, so the guidance reflects the 50% conversion that took place in April of this year. Okay. Got it. As we think about the Series A preferreds, you know, roughly $50 million you mentioned in your prepared remarks that's callable January 1 of next year. You know, what's the current thinking there in terms of taking those out? Presently we have sufficient capacity on the line to take the The Series A out. We would be utilizing that capacity to redeem that Series A. Okay. That's helpful. If I could just one last one for Pen. You know, you mentioned in terms of you know, asset pricing, that deals have been retraded more recently and that you know, required returns have increased. Can you just provide a little bit more detail on the changes that you're seeing in initial cap rates in your markets? Yeah, sure, Todd. As a general comment, I think you're seeing some cap rate expansion across the board in our markets, you know, kind of anywhere from 25 basis points to 60 or 65 basis points, kind of depending on the tenants and the length of lease terms. We definitely have seen a lot of, I guess, reexamination from sellers, whether they wanna put deals on the market right now. I think their expectations may not be in sync with what's going on on the ground. I think a lot of folks are on the sidelines, and I think that's having an effect on valuations. We're still in a period of price discovery. I think we'll probably get more clarity on that, you know, after the summer, after around Labor Day or so. Okay. All right. Thank you. Thank you. Thank you. The next question comes from Bryan Maher with B. Riley Securities. Good morning. Staying with that line of questioning for a minute. I think in your prepared comments, you might have said that some deals were closing at 10%-25% below the initial contract price. I'm paraphrasing there, obviously. Who would the sellers be who would take such a haircut, you know, 20%-25% level? You know, kind of what's their motivation? Do you have any insights into that? Probably don't have a lot of insights, a little bit more conjecture. Oftentimes there may be funds, for instance, that are required to sell no matter what the market conditions are. There may be other reasons above and beyond that for other seller types. I think in my prepared remarks, that those haircuts were applied against initial guidance per se, not exactly applied against those under contract. We get a lot of Me and my team get a lot of calls from various brokers across the country on deals that we may have looked at in the fourth quarter, for instance, or early first quarter and passed on, and we get calls that say, "Hey, I know you looked at this 5, 6, 7 months ago, but we've realigned our expectations or the seller has. You know, would you consider, you know, X price instead of Y price?" Those kind of conversations have been occurring a lot more frequently in the last 30-60 days than they did 6 months ago, if that helps. Yeah, that's helpful. In your Golden Triangle comments, those were really helpful insights. Can you talk a little bit about, you know, rental rates, which, you know, clearly are well into the double digits? Are you finding, you know, any pushback from tenants or prospective tenants on, you know, those rates continuing to be, you know, sustainable at those levels, you know, at least for the next several quarters? Sure. This is Jim. The rental rates are continuing to go up. There's really been no pushback. I think it's the, you know, it's continued lack of space and tenants wanna make sure that they have warehousing into the future. Okay. Just last from me, you know, the comments on Memphis and Columbus were helpful as it relates to Ford and Intel. Can you give us any more details about kinda how you're thinking about the long-term increase in demand in those markets relative to kind of existing and proposed new supply? Yeah, Brian. You know, those comments were just, you know, just two out of many that are out there. I think the theme that we're trying to get across to people is that, you know, BlueOval City in Memphis, you know, Bill Ford said it. He said, "We're betting the future of the company on electrification, and we're doing it in Tennessee." There's a reason they're doing it there instead of Michigan. This overall theme that we have is this type of manufacturing, I would call the Intel facilities in Columbus, is somewhat of a reshoring. You know, they looked overseas to build those. There's a reason they're not building them in the Silicon Desert, but they're putting them in Columbus for a reason. We think that theme, based on lots of research, we think that theme of reshoring, onshoring, assembly, manufacturing, you know, high level distribution is going to take place over the next 10-15 years. I mean, this trend that is happening for reshoring and trying to enhance the supply chain is a trend that's gonna continue to go for a long period of time. If you talk about You know, our markets, you know, I think there's five markets in the country that represent almost 70% of what most of the new construction, Chicago, California, and so on and so forth. When you get into Memphis and you get into places like Columbus, where our buildings are, we don't really see an oversupply issue coming for us. There are certain parts of Columbus where there's a lot of new construction going on, Class A facilities, mostly bigger box. For our type property in general, we just don't see any overbuilding in most of our markets. Okay, thank you. Thank you. Thank you. The next question comes from David Rodgers with Baird. Yeah, good morning, everybody. Maybe Anthony and Jeff, these would be for you. On the same-store improvement, obviously guidance doubled, from last quarter to this quarter in terms of your cash same-store NOI guide. I guess talk a little bit more about maybe what surprised you guys in those numbers that allowed you to drive that up and the gains that you saw, is that primarily related to kind of the outperformance in 2Q? Or, again, do you think you can kinda get some of that back? It just seemed like some of the comments about the second half were, maybe not as strong as the first half. Yeah, there was a little surprise, a little acceleration. The surprise with respect to the spread, it was just outsized relative to our initial guidance. With respect to the acceleration, that took place primarily in Cincinnati. You know, I think we're gonna see a fairly similar impact in Q3. The caution around the same store is that we have about 1.1 million in available and expiring leases for the remainder of the year. While we are optimistic, there's you know, potentially a little downside to the extent that the one that we specifically identified vacates. In addition to that, Dave, as I mentioned, when speaking with Todd, that there are some potential impacts with respect to OpEx, specifically real estate taxes and specifically in our Chicago markets, where we have less triple net leases, and recovery becomes potentially a gating item to the extent that we have significant increases in real estate taxes. All right. That's helpful. Appreciate that, Anthony. Maybe with Pen, the deals that you guys said you backed out of, you obviously did close some acquisitions in the second quarter, but you chose not to pursue others. What was unique about those that you chose not to pursue? Was it timing? Was there something unique in the leasing prospects for those assets? Anything economically that you were worried about, or was it purely capital costs? I think against a backdrop of macroeconomic issues going on with respect to interest rates being hiked, of course, and inflationary pressures continuing, we just decided to press the pause button, as I mentioned. There were a couple of deals that when we drilled down through due diligence, we just found more potential CapEx as it related to particularly roofs. You kinda get into a discussion with brokers and sellers about what to allocate, and there's some difference of opinion along those lines. During those courses of discussions, the macroeconomic environment seemed to soften even more so. I think we're probably not unlike a lot of other of our peers that we decide, you know, let's just see what happens when the dust settles. We've always tried to be very prudent with how we allocate capital, and I think we demonstrated that we have been demonstrating that for the last two or three months. That's helpful. Maybe last for me, on the development side, you obviously gave some additional disclosures, so thanks for the added disclosures this quarter. You know, can you talk about your development cost protection that you have in place currently? As you look out to the pipeline that you kinda mentioned this quarter, can you talk about, you know, your comfort with being able to secure pricing on those transactions to move forward relatively quickly? Going back to your just, your recent comment, Pen, if costs are kinda moving on roofing materials and the like, do you end up kinda putting pause on future developments? Just wanted better clarity on that if I could. Thank you. Dave, this is Jeff. We have always done our own development, so we, you know, we're very involved in the entire process of getting these buildings built. However, when we bring on a contractor to actually start construction, we're doing a fixed price contract. There are no exclusions to that contract. Steel prices go up, concrete go up, we're not responsible for it. It's a full price, you know, truck pad, everything's included, dock levelers and so on and so forth. That all gets ordered in conjunction with signing a contract, and we don't sign those contracts with the contractor until we've checked back in with the brokers and seen where we've ended up. I think, you know, what gives us faith that these things are gonna get done is just, you know, we're in the market every day leasing. As you can see, we've signed a lot of leases, right, across our portfolio. We're in, you know, these are You know, we're signing 10, sometimes 10 leases a week, and so we know what's going on in the market. I'll give you an update that just came in in the last 10 minutes. In the prepared remarks, we have 176,000 sq ft in Jacksonville, over four buildings in our parks. I had stated that 41,000 sq ft was out for signature. It just actually just got signed. We have a 20,000 sq ft lease signed on half a building in Jacksonville, and 41,000 sq ft is a full building, and that just got signed this morning a few minutes ago. We've got, again, lease out for signature in Atlanta and, you know, that building will be in on time and on budget in the third and fourth quarter, both those buildings. There's a lot of activity in Cincinnati. Again, this is a Fisher Industrial Park is our 1.25 million sq ft existing park, and we have land in there to build another 300,000 or 400,000 sq ft. We've got walls are going up on 155,000 sq ft now in Cincinnati. A lot of interest in that. You know, going forward, we're gonna continue to build out if the demand is there. All right. Thanks, Jeff. Sure thing. Thank you, Dave. Thank you. The next question comes from Barry Oxford with Colliers. Great. Thanks, guys. Jeff, I think it's smart to pause on here on acquisitions if we're gonna be kind of going through a repricing. Let's say as we go into 2023, do you anticipate the acquisition volume to be where it has been previously? Or do you see yourself doing more development and then acquisitions won't be as big a component going forward? Yes. Yeah, thanks, Barry. Yep, yep. Again, on development, we wanna be clear. We believe that at these high single-digit yields, it goes with our theme where, hey, we'll build new buildings at high single-digit yields. We will buy Class B at attractive yields, and we'll buy Class A at attractive yields, right? We like to say we're buying Class A at Class B prices. I think we've proven that out, especially in St. Louis, which is we've done phenomenal job there over the last 12 months. We're not big developers. We're not out buying land. We're not, you know, we're not taking that risk of developing the land and then putting buildings on it, right? We're not going across the interstate, bringing in all the infrastructure, water, sewer, gas, whatever, electric, bringing it across, spending millions of dollars on infrastructure, then go build the building, right? Those are developers. It's a little higher risk game than we're interested in. We're building on land that we currently own. Would we buy an adjacent parcel? Yeah, if it all made sense. I just don't think that development going forward is gonna be a big piece of the pie. It's gonna be incremental. It's gonna add a lot of value. I think I'll answer this for Penn. I mean, if. We think the acquisitions are certainly gonna be available to us next year, and we will continue to buy below replacement cost at very attractive yields. Okay. You, short answer, Jeff, you see the acquisition pipeline returning to, you know, some sort of normal rate at some point? Yeah. You've got all these sellers that have backed away from the market until things settle down. Right. So- Right, that makes sense. Yeah. I mean, they're gonna have to sell eventually. I mean, that's. Right. That's the beauty of what we've always said is, you know, we get questions, well, why did somebody sell that building? There's probably 12 reasons why they sold that building or one of 12. One of our favorite buyers or sellers is the, you know, the guys that have to sell because of the fund or the public guys that have already kind of built it into their year-end. You know, we write it, we can write a check, and we know what we're doing. We get through due diligence as quick as anybody, but it's thorough due diligence. You don't see us passing on roof inspections like we see some people doing. We just don't do that. It's silly. We're geared up for it, as you know, Barry. We just think the next couple of years, there's gonna be a lot of product for sale. Great. Thanks for the color, Jeff. Thank you. The next question comes from John Kim with BMO Capital Markets. Thank you. I just wanted to clarify the assets being repriced in the market. I think, Penn, you mentioned valuations down 10%-20%, which would imply cap rate expansions of 60-120 basis points or more. In the Q&A, then you mentioned cap rates are up 25-50. I realize you said the valuations are down based on original guidance, but it seems like a very big discrepancy between the 60-120 versus 25-50. I just wanted to clarify which one was more accurate in terms of what you're seeing. Yeah. Hey, John. Sure. You know, the real answer to all this is that we are still in a period of price discovery. It's hard to pinpoint exactly. But yes, on average, we are seeing, you know, cap rates, you know, between 2.5%-5.0%, 2.5%-7.0%. Cap rates, as you know, don't tell the whole story, especially when it's applied to our types of properties. There's other factors that go into analyzing these deals, such as CapEx and length of lease term, how many tenants, so on and so forth. Cap rates are probably more applicable to what I call real estate bonds, the ten-year Amazon leases, or Walmart leases or some kind of investment-grade tenant, where they may have been trading at, you know, 3 caps on the coast. They have come up 100 basis points, maybe more. They're more interest rate sensitive, if you will. We've seen, as I mentioned earlier, all sorts of reasons why sellers are taking some properties off the market, or they have to agree to sell at a price that was different from their expectations 6-9 months ago. I think it's a little bit overboard. It's not an exact science. I don't have a specific pinpoint accurate cap rate compression factor to throw out, but I can share with you the ranges. I reiterate that we're still in a period of price discovery, and that will probably become more clarified as you know as we get closer to Labor Day. At what levels would you be more active on investments? Is it a certain initial cap rate threshold? Would it be just, you know, stabilization in the markets or to your cost of capital? Or are you more focused on replacement costs and the discount to that? Yeah. I mean, good question. We kind of take all those factors into consideration, and I think we always have. I think we've always taken, you know, cap rate, obviously, relates to our cash flow, which is very important to us. But we're also looking at, you know, the macro environment, economic environment. Yes, of course our cost of capital is a factor. All those things go into our bucket of factors, if you will, when we analyze whether to push the throttle further, faster on acquisitions. I think the good news is we do have and maintain a pretty solid, robust pipeline. We're certainly still, you know, looking at opportunities in all of our markets, but with a wary eye, I guess is probably the best way to say it. I think maybe we get a keener sense of how this is gonna shake out in the remainder of the third quarter and fourth quarter. Okay. Can you provide an update on the current mark-to-market you have in your portfolio? On average, we have a roughly little over 10% still to go. Is that on a GAAP or a cash basis? That's on a cash basis. Okay. Great. Thank you. Thanks, Sean. Thank you. The next question comes from Anthony Hau with Truist. Good morning, guys. Thanks for taking my question. Can you provide any update on the solar panel initiative and maybe quantify the economics? Yes. We have Illinois has a community solar program, so we've contracted with two solar vendors to try to take advantage of that. They're gonna lease space on top of our buildings, and they will get the incentives. We actually have no outlay on the solar panels. We're negotiating leases on roughly 4.2 million sq ft, which generates 42 MW of power. We expect those leases to be signed shortly, and then there's a discovery period where they implement everything with the utilities, get all the permits set. Installation occurs roughly 90 days after all that, the signing of the lease. We expect the installation to be done next year, roughly, yeah, roughly $1 million income from leasing the roof, the roofs with no outlay. Do you receive that $1 million in 2023 or in fourth quarter 2022? That would be a 23 number. The end of 2023. Gotcha. Just going back to the cap rate expansion comment, is that 25-60 basis points, 65 basis points across all the markets? Or is there some markets that's held up better than others or some that's weaker than others? Well, I think there's always. There are some markets that are weaker than others, no matter what type of macroeconomic environment we're working in. I think what's if anything, even though there's been some interest rate increases, obviously for the first half of this year, there still is a fair amount of a great amount of capital on the sidelines that might be keeping some of these cap rates low in fact. This is just because of the backdrop we're dealing with, because in the first half of this year, we've had record low vacancy across all markets, and solid demand has increased year-over-year rent growth demonstrably. I mean, the asking rents for the first half of the year increased 14%. As impressive as that was, the taking rent growth was even higher. I think it's at 18%. You know, we're still seeing, obviously, a huge demand from investors for industrial space across the board. But that being said, some of the buyers out there that typically leverage up a little bit more than others are spending more time on the sidelines. I think that has a mollifying effect on overall valuations. We're, you know, on it. We're keeping track of it. We see a lot of deals every single day. You know, not a lot has been getting done, if you will, in July and August. I think, again, after Labor Day, we're gonna see some kind of crystallization, if you will, of where cap rates are and overall returns. Okay. Thanks, guys. Thank you. Thank you. Our last question today comes from Connor Siversky with Berenberg. Morning, everyone. Thanks for having me on the call. Gotta dig a little deeper for some of these questions here. Maybe just to start on the development pipeline with the about $24 million remaining, for the projects in motion, is it reasonable to assume that the cost per square foot is essentially even across those projects for modeling purposes? You talking about the price per square foot to build, Connor? Right. Yeah. Well, Jacksonville will be a little higher than Georgia because we're building smaller buildings. Cincinnati is in line with Georgia, and Maine was a little bit higher than as well because it's a smaller building. Boston will probably see the highest hit in terms of price per square foot. Yeah. In terms of the NOI yields within the range of 7%-9%, does the same thing apply? I mean, is Boston getting the 9% versus Atlanta, Cincinnati down near the 7% or other way around? Correct. In general, those numbers are turnkey, so fit outs in the Boston space will be a little bit higher, but the rents are higher as well. It's a little bit higher yields. Okay. Just jumping back to early 2023 with the option to redeem those preferreds. I mean, in slowing down the acquisition pipeline and being somewhat conservative with development prospects, is there an element of this where you're freeing up capital such that you won't have to use the revolver to take down that preferred? It just gives you another option to get rid of that overhang. There potentially via cash flow will be some buy down of the preferred, if you will, but we will need to use the capacity under the revolver to take out the entire instrument. Okay. Is the goal to take out the entire instrument? Presently it is, yes. Okay. Okay. Understood. That's all from me. Thank you. Thank you. Okay. Thank you. This concludes the question- and- answer session. I would like to return the floor to Jeffrey Witherell for any closing comments. Thank you everyone for joining us today. As usual, we're available for follow-up questions, and we will talk to you next quarter. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.