Greetings, and welcome to STAG Industrial Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Steve Xiarhos, Associate Capital Markets and Investor Relations. Please go ahead. Thank you. Welcome to STAG Industrial's conference call covering the Second Quarter 2022 Results. In addition to the press release distributed yesterday, we have posted an unaudited quarterly supplemental information presentation on the company's website at www.stagindustrial.com under the Investor Relations section. On today's call, the company's prepared remarks in answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements include forecasts of Core FFO, Same-Store NOI, G&A, acquisition and disposition volumes, retention rates and other guidance, leasing prospects, rent collections, industry and economic trends, and other matters. We encourage all our listeners to review the more detailed discussion related to these forward-looking statements contained in the company's filings with the SEC and the definitions and reconciliations of non-GAAP measures contained in the supplemental information package available on the company's website. As a reminder, forward-looking statements represent management's estimates as of today. STAG Industrial assumes no obligation to update any forward-looking statements. On today's call, you will hear from Bill Crooker, our Chief Executive Officer, and Matts Pinard, our Chief Financial Officer. Also here with us today is Steve Mecke, our Chief Operating Officer, and Mike Chase, our Chief Investment Officer, who are available to answer questions specific to their area of focus. I will now turn the call over to Bill. Thank you, Steve. Good morning, everybody, and welcome to the Second Quarter Earnings Call for STAG Industrial. We are pleased to have you join us and look forward to telling you about this quarter's results. As we noted on our last earnings call, the industrial fundamental story is very much intact. We continue to see strong demand across our markets. We believe the short and medium term secular demand drivers, including e-commerce, supply chain reconfiguration, and increases in inventory levels will continue to be a tailwind for some time. Additionally, near-shoring and onshoring should provide incremental demand in the medium term. Supply is coming online at a moderate pace, constrained by increased construction costs and supply chain backlogs. Vacancy rates remain low in our markets, and market rents continue to grow at a strong rate. This positive industrial backdrop, coupled with our team's operational excellence, result in another strong quarter. Core FFO per share was $0.56 this quarter, a 7.7% increase over the prior year. Our Same-Store NOI continues to be a big contributor of this growth. The Capital Markets remain quite volatile. The rapid rise in interest rates has caused the market to enter a period of price discovery that is ongoing. This has caused a general slowdown across the Industrial Capital Markets and for STAG specifically. Even with this slowdown, our acquisition volume for the second quarter totaled $165.4 million. This consisted of nine buildings with stabilized cash and straight line cap rates of 5.2% and 5.7% respectively. The acquisitions this quarter are consistent with our investment thesis. Our underwriting model allows us to adjust price to reflect current market conditions, and that is evidenced this quarter. Given the uncertainty in the Capital Markets, we have widened our acquisition volume range and reduced the midpoint for the back half of the year. We have also increased our cash cap rate guidance by 25 basis points this year. In addition to the acquisition this quarter, we closed on 92 acres of permitted land on two parcels in the Greenville-Spartanburg market of South Carolina for $5.6 million. This speculative development project is strategically located near the Inland Port in Greer, Greenville-Spartanburg Airport, and the BMW plant. The project is expected to be completed next year and will consist of two buildings totaling over 700,000 sq ft. We remain focused on capital recycling. We had 1 non-core asset sale during the quarter and closed the sale of a two property portfolio totaling 1 million sq ft subsequent to quarter end. This sale generated $82 million of gross proceeds at a 5.2% cash cap rate. We acquired these assets approximately five years ago at a 6.2% cash cap rate and produced an 11.4% unlevered IRR during our hold period. We are maintaining our disposition guidance range of $200 million-$300 million this year and expect our disposition cap rate for the year to be between 4.5% and 5.0%. With that, I will turn it over to Matts, who will cover our remaining results for the quarter and provide an update to our 2022 guidance. Thank you, Bill, and good morning, everyone. Core FFO was $0.56 for the quarter, an increase of 7.7% as compared to the second quarter of last year. Cash available for distribution totaled $87.2 million for the quarter, an increase of 16.6% as compared to the prior period. Leverage remains near the low end of our range, with net debt to run rate Adjusted EBITDA equal to 5.1x. We have not issued equity since the beginning of January. During the quarter, we commenced 22 leases totaling 3.2 million sq ft, which generated cash and straight line leasing spreads of 14.1% and 21.9%, respectively. Retention was 89.6% for the quarter. Cash Same-Store NOI grew 4% for the quarter and 4.7% year to date. Moving to capital market activity, on June 28th, we funded our previously announced private placement notes. The 10 year notes totaled $400 million and bear a weighted average interest rate of 4.12%. The proceeds were used to repay balances on the revolving credit facility. Subsequent to quarter end, on July 26, we refinanced term loan D, which was scheduled to mature in January 2023, and term loan E, which was scheduled to mature in January 2024, with new term loans totaling $375 million. These new term loans mature in January 2028 and bear a fixed interest rate inclusive of interest rate swaps of 3.31% at close. In addition to the term loan refinance, we upsized our revolving credit facility to a notional of $1 billion, improving our liquidity profile. This represents an increase in revolver capacity of $250 million with no change to pricing or maturity date. In terms of guidance, we've made the following updates. We've widened the range of expected acquisition volume from a range of $1 billion-$1.2 billion to a range of $700 million-$1.1 billion, resulting in a decrease in the midpoint to $900 million. Acquisition cap rates for the year are now expected to range between 5.25%-5.5% as compared to the previous range of 5%-5.25%. These revisions reflect the uncertain macro environment as we head into the second half of the year. We have increased our same-store guidance from a range of 4%-4.5% to a range of 4.25%-4.75%, an increase to the midpoint of 25 basis points. This increase is driven by the robust demand we are experiencing for our buildings and leasing results that have exceeded our initial expectations. Finally, we've adjusted guidance for net debt to run-rate Adjusted EBITDA from a range of 4.75x-5.5x to a range of 5x-5.5x for 2022. I will now turn it back over to Bill. Thank you, Matts. A great quarter with a strong outlook for the remainder of the year. I want to thank our team for their continued hard work. Without them, none of this would be possible. Lastly, I want to thank Ben for everything he has done for STAG. Ben has created an amazing organization with a sound investment thesis that has resulted in extraordinary shareholder returns through the years. I'm excited to work with Ben in his new role as Executive Chairman and look forward to executing on the many opportunities that lie ahead. We will now turn it back over to the operator for questions. At this time, we'll be conducting a question answer session. If you would like to ask a question, please star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from Sheila McGrath with Evercore ISI. Please proceed with your question. Yes, good morning. Bill, I was wondering if you could comment on your underwriting for acquisitions. With your stock price lower and debt costs higher, have you increased your hurdle rate given the change in cost to capital? Is the market cooperating with cap rates moving higher? Hey, Sheila. Thanks. As part of our underwriting, cost of capital is an input that's in our underwriting model, inclusive of debt costs, forward interest rates, our stock price. Because of that, our hurdle rates naturally increase. As I mentioned in the prepared remarks, price discovery in this market is real. There are less assets coming to market now, given the uncertainty in the market, which is one of the reasons why we widened our acquisition guidance. We expect, you know, once this price discovery period to normalize, we expect to return to our more normalized acquisition pace. Okay, great. As a follow-up, I guess this is for Matt. Does your acquisition require more common equity at the higher end of the range? Just if you can comment on funding debt versus equity. Yeah, absolutely. Good morning, Sheila. Good morning. It's a great question. You know, we have not issued equity since the beginning of January. We don't need to issue equity this year, which is implied in our guidance. You know, we increased the leverage range this quarter. We have strong internal growth. You know, we have material retained cash from earnings now, and we have the opportunity to accretively recycle capital. You know, we're gonna continue to evaluate all options, but our guidance can be achieved without common equity this year. Okay, great. Thank you. Thanks, Sheila. Our next question comes from Craig Mailman with Citi. Please proceed with your question. Thank you. You know, you guys have, from a geographic standpoint, maybe a little bit different portfolio than some of your peers here. I'm just kind of curious, if you're seeing any kind of varying levels of demand as you go from, you know, some of the primary markets down to some of the tertiary markets, you know, and just whether some of this economic weakness or inflation, is having an impact on demand or, you know, if the broad national trends are kind of holding tight. Yeah. Thanks, Craig. I mean, the broad national trends are holding tight. Certainly we have some markets that are stronger than others and some markets that are weaker than others. Generally this last quarter, our market rent growth about 8%, so strong market rent growth. Some of the stronger markets we're seeing is, you know, Philadelphia, Central PA, El Paso, Sacramento. Overall, the trends are very strong, and you're seeing that flow through our operations. Our leasing spreads mid-teens. One thing that you saw in this quarter's results is occupancy pickup in our same-store pool. That's a result of reduced downtime. Historical downtimes are probably coming in six months from long-term averages to what we're seeing today. Gestation periods on leasing decisions, have you seen any shift in that from beginning of the year to now? That's a good question, something we look at. No material changes in the leases we've signed for gestation periods. Okay. Shifting to acquisitions, you know, clearly, I know you guys have kind of signaled tighter underwriting standards and that, so the change in acquisition guidance shouldn't have come as a surprise. I'm just curious, as I looked at the pipeline, you guys were down from $3.7 billion-$3 billion this quarter. Right. You know, was that a function of, you know, just less transactions being pulled from the market or, you know, everything in the pipeline just didn't meet your criteria, so you kind of self-selected and removed some stuff? I'm just kind of curious what. Because that's a pretty. It's like a 20% reduction. It's a pretty big reduction. I would say the pipeline's down more so for less assets coming to markets. Unless sellers need to sell, a lot of brokers are advising sellers just to wait and not put assets on the market during this volatile time and price discovery time, which, and we've obviously talked about and all of our peers have talked about. I think that's part of it. I would say a smaller component of the reduction is just stricter underwriting thresholds and inputs. Okay. Just last one from me. On the $82 million portfolio you just sold, I know, you know, relative to initial pricing, you're probably off 70 basis points and, you know, that was a function of a longer WALT on those assets. I guess if you kind of bucketed your portfolio, I know your WALT has come down over time, but how much of your portfolio do you think is seeing, kind of some outsized cap rate movements just based on, kind of lease duration versus, you know, less cap rate movement because it's just got better mark-to-market and, you know, the ability to get to it quicker? Yeah. It's an interesting question. It's a tough one to answer. I would say that portfolio in particular had lower escalators. The rents were at market. Really, it was a low-growth two-property portfolio. You know, our portfolio varies from some vacancy short-term leases to long-term leases, and even some of those longer-term leases are well below market. When you start to do the math, those assets would not move from a cap rate perspective as much as this two-property portfolio. You know, it's just a very difficult question to answer. Net-net, our portfolio is around 15% below market today. We continue to see strong market rent growth. Great. Thank you. Thanks, Craig. Our next question comes from Blaine Heck with Wells Fargo. Please proceed with your question. Great. Thanks. Good morning. You guys adjusted your expected cap rate on acquisitions with your guidance update, but I didn't see any mention of expected pricing on dispositions, which you guys had previously indicated would be around 4.5%. Can you talk about? Yeah. whether there's any change in expectation there? Yeah. Thanks, Blaine. We, in the prepared remarks at the end of it, I did mention that we expect cap rates for dispositions to be 4.5%-5%. It wasn't in our supplemental, something that we may add going forward. That implies a 25 basis point increase in acquisition cap rates, similar to what we're seeing. I mean, disposition cap rate, excuse me, similar to what we're seeing on the acquisition side. Got it. Is there any kind of change in the composition of the bucket of assets for sale this year as pricing has changed in order to kind of hit that cap rate target? I know it's up a little bit, it's 25 basis points, but are you changing kind of the bucket of assets that you're looking to sell? I would say not materially changing the bucket. I would say what we're looking at are assets that we view are valued higher externally than we value internally. As we go through that analysis, that really drives what assets we're willing to sell. Okay, that's helpful. And then, Bill, in response to Sheila's question, you talked about price discovery not really having seen pricing normalize relative to the move we've seen in the cost of capital. I know this is probably a tough question to answer, but just wanna get your thoughts on how long you think it'll take for that appropriate pricing adjustment relative to what we've seen on the cost of capital side, and maybe how far has pricing moved with respect to, you know, what you think would be justified relative to the movement and cost of capital. Well, I agree with you. It is a tough question. I wish I knew the answer. I would say generally what we're seeing is anywhere from 25 basis points- 75 basis points in cap rates. In some of our stronger markets with lower WALTs, and you've got market rent increasing at a faster pace, those cap rates are not moving as much. When you have assets like the portfolio we sold where low escalators at market, long-term leases, those are moving a little bit more. In that portfolio, for example, as Craig mentioned, that moved about 70 basis points. Okay. That's helpful. Thanks, guys. Thank you. Our next question comes from Michael Carroll with RBC Capital Markets. Please proceed with your question. Yeah, thanks. Bill, earlier you highlighted that the drop in the acquisition pipeline is in part due to stricter underwriting standards. Can you expand on that? Is that driven by just the cost of capital changes, or is there lease up and rent adjustments that you're making there too? It's cost of capital primarily. That's the minority reason why the pipeline decreased. I would say the primary reason is due to less assets coming to market because of the price discovery phase we're in. Okay, great. Then the 25 basis point cap rate increase, I believe that's your estimate of how much that they moved. I mean, how much does that vary by market, I guess within your portfolio? I guess what's some of the high and low ends of those cap rate moves by market? Yeah, I think. I mean, right now, again, we're in this price discovery phase. I think you might get a different answer from us than others. I think everybody's provided a different answer so far. I think the 25-75 range is a good range. Part of it is how soon can you acquire the real estate, you know, what market it is, how long the lease term. There's a number of reasons that drive the change in cap rates. I think generally 25 basis points-75 basis points is what we're seeing. Okay. Just last one from me. Can you talk a little bit about the, I guess, the 2023 lease expirations? I mean, I'm assuming you're in discussions with some of those tenants right now. How are those progressing compared to what you kind of put in the supplemental the past few quarters? Yeah. I mean, those are progressing pretty well. We've taken care of 25% of our 2023 lease expirations. Rollover rents this year for 2022 is mid-teens, as you know. Next year we're high teens. I think it's 18.5%-19% so far on rollover rents, and that's on a cash basis for the 2023 lease expirations that we've already taken care of. Great. Thanks. Thanks, Mike. Our next question comes from Jon Petersen with Jefferies. Please proceed with your question. Great. Thanks. I think you guys said the mark to market on your portfolio was 15%. I was just curious, is that on a cash or a GAAP basis? That's cash. I should have clarified this too, Jon. When I speak mark-to-market, it's really focusing on the next few years. We're not trying to predict what market rents are gonna be for leases that are rolling seven, eight, nine, 10 years out. Really in the next few years, we expect in that mid-teens, as I mentioned, with Mike on the last question. Next year right now is trending higher than that. 25% of our leases have been taken care of at high teens. Got it. All right. That's helpful. You know, you guys have talked about capital recycling. Do you guys have any, you know, I guess, different or evolving thoughts on doing joint ventures or maybe setting up investment funds or something like that, so you can kinda keep some of these portfolios in your managed business but extract some capital? I mean, I would say no different than what we've discussed before. Right now, the business plan does not contemplate any type of joint venture structure. We're very comfortable operating our business plan, operating within our guidance ranges, as Matt said, this year. Right now, no change to that thought. Okay. Just last question from me. Anything different in the past few months on, like, the lease escalators you guys are negotiating, whether there's any sort of, you know, inflation link to it or just looking at where inflation's at and demand overall, you know, how much higher are you able to push escalators now versus, I guess, even just a few quarters ago? Yeah. Well, I would say our leasing team starts every lease negotiation with trying to get CPI. That doesn't really go that well. We're signing 3%+ escalators in our portfolio. In some markets, we're seeing 4%+. It really depends on the supply-demand dynamics in the markets. The escalators certainly are increasing with the leases we're signing. Do you know what the average escalator is on your in-place leases today? We do have some component of our leases that are CPI. So the escalators range anywhere from 2.3%-2.5%. It's been increasing pretty significantly over the past couple years just due to the new leases signing at 3.3%+, and some leases 4%+. Okay. All right. That's helpful. Thank you. Thanks, Jon. Our next question is from Bill Crow with Raymond James. Please proceed with your question. Hey, maybe beating a dead horse here, but on the acquisition disposition guidance, does this imply because you just increased it, expectations 25 basis points, that you're going to focus on acquisitions with typically lower WALT than you have? I assume if you redid that, the nine-year, 5.2% cap rate deal that you did in the second quarter, I assume that would be significantly higher at this point? Yeah, we're gonna focus on deals that meet our investment thresholds, Bill, and then sometimes that's longer-term leases and sometimes it's shorter. I mean, any given quarter, we could have one year leases and 10-year leases in there. It really is a mix. A lot of the acquisitions in the second quarter, as you can see, were closed at the beginning of the quarter. The three that were closed at the end of the quarter, the cap rates were 25 basis points-30 basis points higher. That's just based on, you know, the market moving a little bit. Okay. You did say the range could be, what? 75 basis points. I assume those are longer- Yeah. We saw 70 basis points on the Midwest portfolio. Again, that's a portfolio that had long-term leases right around 2% escalators at market. The acquisitions we signed in the second quarter were well below market, even, you know, long-term leases in nature, but still well below market. Yeah. Okay. All right. Thanks. Thanks, Bill. Our next question is with Jamie Feldman with Bank of America. Please proceed with your question. Great. Thanks, and good morning. I wanted to dig a little bit into tenant credit risk. Can you talk about your credit watch list and maybe bigger picture, you know, how you're feeling about, you know, any occupancy risk whether we're in a recession or heading into a recession, you know, whatever the next six to nine months might bring? Sure. Hey, good morning, Jamie Feldman. This is Matts Pinard. First, let's start off with our tenant profile. You know, we have call it larger average building sizes and, you know, I think about 80% of our portfolio is single tenant. That kind of lends itself to larger, more sophisticated tenants. North of 80% of our tenants have revenues greater than $100 million, north of 60% of our tenants have revenues greater than $1 billion. Now, I'm not representing that as a credit stat, but those are large, sophisticated tenants who are more likely to reorganize than to Chapter 11 and leave. In terms of our watch list, let's start with credit loss that we've received that has impacted us to date. We've had zero credit loss through the first six months of the year. We do have some credit loss baked into our pro forma for same store, but we think that's prudent. As we sit here today, our tenant watch list is shorter, not longer, and we're broadly diversified across industries. Yeah. Just on rent collections, the last couple years, I think we're 99.6, 99.8% rent collection over the last couple years. We have a pretty very strong credit profile in our portfolio. Thanks for that. Are there any regions or industry groups that you're seeing a change in leasing cadence? Not particularly. I, you know, expected maybe a little bit more pushback from some of the 3PLs in terms of pricing, just given how low their margins are. We inquire about that on our weekly leasing call, but we really haven't seen any trends that are occurring yet. Okay. All right. Thank you. Thanks, Jamie. Our next question is with Vince Tibone with Green Street. Please proceed with your question. Hi. Good morning. I wanted to continue the conversation on cost of capital a little bit, and specifically just how do you assess the attractiveness of issuing equity, and really what metrics or framework do you use, whether, you know, when analyzing whether to issue debt or equity to fund external growth? Yeah. I mean, there's a number of factors we look at, Vince. A couple, you know, is the opportunity accretive both on a per share metric and an NAV basis? You know, is it a good long-term add to the portfolio? I would say I'm very proud of what we've done over the past five, six, seven years with respect to being prudent allocators of capital when, you know, the stock price is at a level that we're not comfortable issuing equity, and I think we're doing that again now, where our guidance is we've reduced our acquisition guidance a bit, widened the range. Coming into the year, we had elevated disposition guidance as compared to prior years. I think this is a time where we're gonna be prudent. We're gonna watch the market, not overpay for assets, and evaluate both opportunities on the acquisition and disposition side of things. That's helpful. I just wanna maybe follow up. Just like specifically, are you looking at maybe implied cap rates, like maybe when your implied cap rate comes back in, let's say to the mid-fives, which is where your, you know, acquisition cap rate assumption is. Is that a level where you'd be comfortable issuing equity? Do you want your implied cap rates to be inside? Are you looking more on earnings metrics? Like, I'm just trying to get a sense of, you know, as the both private and public markets move, at what level expects you to start issuing equity again? Yeah. I mean, there's a number of factors we look at, Vince. I would say just going back to, you know, the guidance this year, our guidance does not imply issuing equity this year, just given where our balance sheet is, the liquidity we have, the internal growth we have. So as our EBITDA increases, our leverage decreases, as well as, you know, the same store. I mean, there's just a lot going our way this year in terms of the operation. So our guidance does not imply issuing equity this year. There are a lot of factors that we consider, you know, when we do issue equity. Okay. Thank you. Maybe just one more from me, switching to operations a bit. Could you talk a little bit about what drove the big occupancy, you know, increase quarter-over-quarter, and if that was, you know, a big positive surprise to you or just a little bit of color on kind of the leasing or what drove that? Yeah. It was a positive surprise on the leasing side. You saw our occupancy tick up both on the portfolio and the same-store portfolio. It goes back to the earlier comment that just downtimes are shorter than what we were projecting. Really, it was occupancy pick up earlier in the year, and that was a big driver for the increase in the same-store guidance for the year. Great. Thank you. Thank you, Vince. Our next question comes from Nick Thillman with Baird. Please proceed with your question. Hey, good morning, guys. Just from high level, what's the early read on 2023 investment game plan? If your funding costs don't improve from here, like, what happens next year? Hey, good morning. Basically, it's the same sources of capital available to us next year that are available now. You know, we have a good view into internal growth over the next 24 months. We're comfortable with same-store growth in the mid-4% area that you're seeing this year. You know, as Bill mentioned earlier in the call, we have material retained earnings, you know, approximately $70 million-$80 million per annum, and we continue to have the ability to recycle capital. You know, we're constantly evaluating sources of capital, but, you know, as shown this year, we do not have to issue equity. Regarding your guidance, you had a pretty good quarter on the core side, especially, and you upped the guidance that way. What made you decide not to raise the earnings guidance for the year, you know, despite the strong core growth? Is it really just the lower disposition, also the lower acquisition volume, or is there something else to it? No, I think really you can see the reason right in our guidance. You know, we've widened and decreased the midpoint of our net acquisition expectations for the year. And that's partially offset by an increase in the same-store guidance as well. Net-net, that kind of keeps us in the range. You know, we did fund $400 million of private placement notes at the end of June, also factoring into our Core FFO range. Maybe just two quick ones on the spreads. I mean, you had pretty good spreads in the second quarter. Anything to read into why they were a little bit lower than first quarter? I mean, is there anything else, any color or comment that you could give us on that? No color or comment. It's broad-based. The leases we signed this quarter commenced this quarter. It's across 20+ leases. Spreads are strong. You know, you look over last year, the four-quarter average continued to increase. Our early outlook for 2023 is a continued increase in spreads. Got it. Maybe last quick modeling question. You just issued debt at about low 4s interest rate. If we were to look out a quarter, two quarters from now, what should we generally be modeling for your debt issuance later this year? I mean, we're talking like mid 4s, high 4s, your kind of expectation? The 4.12% notes, those were originated in April. We funded those in June. We recently refinanced our term loans. We were able to all-in swap those at 3.31%. As we sit here today, it's a mix between private placement notes and term loans. I do wanna note Mm-hmm. We're effectively done in the debt capital markets this year, so this really is kind of a 2023 modeling. If you were to look at where we can issue in the private placement market today, it's in the mid- to high 4% range. You know, as we sit here today, I don't expect that to change. If you're gonna model 2023, because again, we've kinda accomplished everything we want to do on the debt capital side for this year, using a mid- to high 4s for long-term debt makes sense. That comment is ba- And as- Go ahead. I was just gonna say, as Matt said in his prepared remarks, I mean, the debt we just closed had a weighted average interest rate of about 3.31%, inclusive of interest rate swaps. Right. Tha t mid- to high 4s comment, that was still reflective of the recent Fed hike, right? That's right. Yes. We have a current market where we would likely issue. Yep. in a private placement market. As you know Yep. You know, debt capital markets are fluid and, you know, the answer. Sure. may change quarterly. As we sit here today, that's our response. That's as of today number. Okay. Got it. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from John Massocca of Ladenburg Thalmann. Please proceed with your question. Good morning. What is the outlook and appetite for maybe kind of a larger portfolio disposition or portfolio dispositions? I know we're going through kind of price discovery on all kind of asset transactions, but is there still kind of an aggregator spread for selling larger portfolios versus granular assets? Hey, John. I mean, the spread for portfolios has persisted since we've been in this business. I'd say right now it's a hard question to answer because of the price discovery. I know a lot of the big private guys are on the sidelines now, just waiting to see where interest rates shake out. That probably continues through the end of the summer. Right now I can't give a good answer of where that portfolio premium would be. Historically, that's been, you know, anywhere from, you know, 75, 100, 150 basis points, depending on You know, what time frame we look at. It's hard to think that there's not a portfolio premium when the market settles down. I guess maybe your outlook for that type of a transaction, you know, near term, intermediate term? Yeah. I mean, it's something that we've done over the years. It's something that we're open to doing going forward, right? We evaluate all of our sources of capital, portfolio disposition, individual dispositions, as well as our other sources of capital, including debt capital and equity capital. As we move through the year, as we move through the next couple of years, it's something we'll evaluate, and if the opportunity is attractive, we'll execute on it. Okay. On the investment side, you know, in light of the Spartanburg development transaction that started, you know, what is the outlook for more development deals, especially in weighing kind of the pushes and pulls of underwriting returns in the current environment? Yeah, I mean, the development deals we've done so far, albeit a few, has proved to be extremely successful. We certainly have the capabilities to execute on this. You know, we're performing pretty strong returns for this development, which should be completed in about a year or so. It's in markets that we're comfortable in. It's markets that we really like. This opportunity, as we see more of these, we'll execute on them. Over the years, it's been hard to find these opportunities, but it's one of these, once you start doing a couple, those opportunities, there's more of those opportunities. We'll evaluate them. If they're attractive, we'll execute on them. Okay. Maybe just big picture, any changes to the supply outlook, or pockets of meaningful new product in some of your key markets? No material changes. As I said, I mean, supply is coming online. It's moderated a little bit. There is a fair amount of supply in the pipeline. That supply, just due to supply chain backlogs, is coming online in a slower pace. But the supply-demand dynamics in our portfolio is extremely strong right now, and you're seeing that through our operating trends. You're seeing that through leasing spreads, our same store. As Matts's noted, same store is tracking to at least be, you know, similar next year as it is this year. Leasing spreads right now for the 25% of leases we signed for next year are higher than they are this year. Supply-demand dynamics in our markets are very strong. Maybe just kind of like broadly speaking, is there any divergence in supply between some larger coastal markets and some of the kind of secondary markets where you have exposure? I would say there's a couple of our markets that have a little bit more supply, but again, nothing that we're overly concerned about. Overall, you know, we feel really good about where the portfolio sits today. Okay. That's it for me. Thank you very much. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to now turn the call back over to Bill Crooker, President and CEO, for closing comments. I just wanna thank everybody for joining the call today. Appreciate all the thoughtful questions. I hope everybody enjoys the rest of the summer, and we will talk to you all soon. Take care. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.