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| Statement |
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| Overall, I just have to tell you, it's a very nice quarter |
| They've got a strong manufacturing base, and we like the light manufacturing space, and that the tenants are very sticky, meaning they've got significant capital invested into the assets, which increases the renewal probability |
| Seller expectations have yet to fully normalize to the new standards set by the Federal Reserve, but as we do, we will be well positioned to capitalize on accretive new opportunities |
| So we are again actively engaged there and had good success |
| And we've had good success |
| We have a quite a good team of people that are working those deals that come up and very proud of them |
| We made tremendous progress throughout the year of delivering on our current core strategies, divesting non-core office assets, acquiring mission-critical industrial assets in the path of growth markets, and diligently underwriting our tenants' credits |
| The commercial team is growing the real estate that we own at a good pace and the team is doing a great job of managing the existing properties |
| What we mean is when we look to acquire mission-critical industrial assets where the underlying tenancy has strong fixed coverage ratios, moderate to low leverage, strong EBITDA margins, and operates in a counter-cyclical or defensible industry with a strong moat |
| While we cannot control the Fed or predict exactly where interest rates will go, we remain confident that all of these developments have better positioned our portfolio for 2024 |
| This is a testament to the mission-critical nature of our assets and quality credits of our tenant, both of which position us well to weather any economic storms we may face |
| So we have had good success there and certainly at the concentration the more we do the more that also comes our way |
| Our balance sheet is healthy and flexible, positioning us to continue deploying capital into industrial deals at accretive cap rate as seller expectations normalize |
| That was a good report, and Buzz and Michael did good reports as well |
| In short, 2023 was a successful year for selling legacy non-core office assets and redeploying proceeds into mission-critical industrial assets |
| So we have had some successes there as I referenced in my notes of several exactly on 1.4 million square feet and [$1.2 million] (ph) in net operating increase on the same-store GAAP rent |
| This team has performed very well and reacted admirably to the various changes presented by the lasting impact of the pandemic changes in the economy |
| I will tell you that we are aggressive where we can be as it relates to appeals, and we've had successes there |
| Furthermore, the acquisitions improved portfolio WALT with a weighted average lease term at closing of 19.3 years |
| We're well ahead of our lease expirations and discussions |
| I do want to state that it's all very positive |
| EJ Wislar Yeah, obviously, Dave, when we look at our markets, what we like to see is business-friendly environments with strong demographic inflows as well as business formation |
| It's nice of you |
| So as we kind of look at our capital allocation strategy, making sure we're being the most efficient, whether we want to break those buildings or sell them and redeploy those proceeds, I would expect we'd see that vacancy rate improve over the next few quarters as we dispose of a few vacant office assets |
| So that was an improvement there |
| In addition to new acquisitions during the year, our asset management team led more than 1.4 million square feet of leases, resulting in a more than [$1.2 million] (ph) or 13% net increase in same-store GAAP rent |
| Since January 1st of 2022, we have repaid more than $194 million of mortgage debt and grown our unencumbered asset base by 61% from $51 million -- excuse me, $510 million to $822 million |
| And we believe these metrics are a better indication of our operating results and allow better comparability of our period-over-period performance |
| Despite volatile capital markets, industrial real estate, which now accounts for more than 60% of our annualized straight line rent, continues to perform |
| Our team of strong professional continue to pursue the potential quality projects on the list of acquisitions that they are reviewing |
| Statement |
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| According to Cushman Wakefield, office net absorption in Q4 of 2023 was negative for the eighth consecutive quarter |
| According to CBRE, the net lease investment volume fell 55% year-over-year through Q3 of 2023 |
| Moving on to office, the broader market continued to struggle in 2023 |
| David Gladstone That's terrible |
| Interest rates continue to have outsized impacts on capital markets and real estate |
| Industrial rent growth over the last few years has exceeded these escalation rates, resulting in rents that are below market and valuable upon lease renewal |
| According to CBRE, average industrial asking rents in Q4 of 2023 rose 6% year-over-year, and the industrial vacancy rates at the end of the year were just 4.8% despite record annual completions of 612 million square feet |
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