STAG Industrial, Inc. (STAG) Q2 2026 Earnings Report, Transcript and Summary

Greetings. Welcome to the STAG Industrial, Inc. Second Quarter 2026 Earnings Conference Call. Please note, this conference is being recorded. I will now turn the conference over to Steve Xiarhos, VP, Investor Relations. Thank you, Steve. You may begin.

Thank you. Welcome to STAG Industrial's Conference Call covering the Second Quarter 2026 results. In addition to the press release distributed yesterday, we posted an unaudited quarterly supplemental information presentation on the company's website at stagindustrial.com under the Investor Relations section. On today's call, the company's prepared remarks and 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 forecast 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 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'll hear from Bill Crooker, our Chief Executive Officer; and Matts Pinard, our Chief Financial Officer. Also here with us today are Mike Chase, our Chief Investment Officer; and Steve Kimball, our Chief Operating Officer, who are available to answer questions specific to their areas 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 discussing the second quarter 2026 results. Industrial fundamentals continue to stabilize in the second quarter, and we remain constructive on the trajectory heading into the back half of the year. In our view, vacancy has peaked both nationally and within STAG's portfolio. Net absorption was 69 million square feet this quarter, a meaningful acceleration from Q1 and was 111 million square feet in the first half, the best start to a year since 2022. Supply continues to work in the market's favor. The development pipeline has contracted roughly halfway from its 2022 peak and under construction product now represents just 2% of total stock, of which about 55% is pre-leased. Demand tailwinds remain intact and diversified. E-commerce as a percentage of retail sales hit a record high earlier this year. Nearshoring and onshoring trends remain a new and growing source of demand as supply chain diversification has become essential for companies both large and small. As we messaged earlier this year, we've seen significant warehouse demand from users contracted to support ongoing data center operations. While the future impact from this trend is hard to quantify, it continues to be a strong source of demand within our sector. Since the beginning of last year, we have leased 2.3 million square feet to data center-related tenants. Notably, inland markets have continued to outperform coastal markets on both demand and net absorption and STAG's portfolio is well positioned to benefit. Overall, we believe the improvement in both the supply and demand picture is real and durable, and it positions our portfolio for improved rent growth as we move into 2027. In the first half of this year, we saw an increase in acquisition opportunities in the market. Acquisition volume for the second quarter totaled $287.1 million. This consisted of seven buildings with cash and Straight-Line cap rates of 6.1% and 6.8%, respectively. In terms of our development platform, we have 9 buildings or 2.3 million square feet of development activity that is not in service as of the end of Q2. These buildings are in various stages of development and have expected stabilized yields of 7.1%. In April 2026, we closed on a 343,000 square foot build-to-suit project located northeast of Dallas in Rockwall, Texas. Construction commenced in the second quarter with an estimated delivery date of Q2 2027 and an expected yield of 7.5%. Also in April, we closed on a 184,000 square foot development project located Southeast Phoenix in Chandler, Arizona. The 12-acre site is well located within the Southeast Valley submarket with immediate access to I-10. We are currently working through the project design and anticipate breaking ground in late Q3 2026 with an estimated delivery date of Q3 2027. In May, we executed a lease for 35,000 square feet or 25% of our Tampa development. The lease is to a fueling solutions provider and commences on August 1. Subsequent to quarter end, we executed a lease for 47,000 square feet or 62% of one of our Reno developments. The lease is for an e-commerce company and commences on September 1. With that, I will turn it over to Matts, who will cover our remaining results and guidance for 2026.

Thank you, Bill, and good morning, everyone. Core FFO per share was $0.65 for the quarter, an increase of 3.2% as compared to last year. Leverage remains low, with net debt to annualized run rate adjusted EBITDA equal to 5.2x. When incorporating the currently unfunded $70 million of forward equity proceeds, leverage is 5.1x. Liquidity stood at $614 million at quarter end. During the quarter, we commenced 36 leases across 5.6 million square feet, generating cash and straight-line leasing spreads of 19.8% and 33.7%, respectively. This was another strong quarter in terms of new operating portfolio square feet leased. Retention for the quarter was 75.7%. As of today, 92% of our forecasted leasing for 2026 has been addressed at levels consistent with our initial guidance and at levels in line with previous years. Same-store cash NOI grew 3.4% for the quarter and 3.9% year-to-date. Moving to capital market activity. As of today, the company issued 3.4 million shares on a forward basis under our ATM program at a gross average share price of $39, resulting in gross proceeds of $131 million. In the second quarter, we settled $59.8 million of proceeds related to forward ATM sales that occurred in the first half of 2026. As previously mentioned, we have $70 million of forward equity proceeds available to fund at our discretion which will be used to pay down the revolver and match fund our net acquisition development pipeline. Subsequent to quarter end, we repaid the $50 million private placement Note B, which matured on July 1. Additionally, on July 16, we refinanced our $150 million Term Loan A and $200 million Term Loan F, which were scheduled to mature in March of 2027, combining them into a single $350 million term loan. The refinanced term loan matures January 16, 2032, and there's an aggregate fixed interest rate, inclusive of interest rate swaps, of 3.53% until March 2027 and will then bear an aggregate fixed interest rate, inclusive of interest rate swaps of 4.79% for March 2027 through maturity. As part of this refinancing exercise, we repriced our revolver and all outstanding term loans, achieving a 5 basis point savings across all bank debt, resulting in interest expense savings going forward. Moving to guidance, we made the following updates. Credit loss guidance has been reduced from 50 basis points to 30 basis points, driven by 6 basis points of credit loss incurred to date. Average same-store occupancy guidance increased 25 basis points to a range of 96.25% to 97.25%. Retention has been narrowed to 75%. Cash same-store growth guidance has been increased to a range of 3% to 3.5% for the year, an increase of 25 basis points at the midpoint. Acquisition volume guidance has been increased to a range of $400 million to $700 million, and we expect the stabilized capitalization rate to range from 6% to 6.5%. These guidance changes resulted in an increase in Core FFO guidance to a range of $2.61 to $2.65 per share, an increase of $0.01 at the midpoint. 2026 guidance can be found on Page 21 of our supplemental package, which is available in the Investor Relations section of our website.

Thank you, Matts. I want to thank our team for their continued hard work and execution in 2026. This team has done an excellent job executing our operating plan in the first half of the year. The strong first half sets us up well for the remainder of the year. We'll now turn it to the operator for questions.

Our first question is from Craig Mailman with Citi.

Just want to start off on the acquisition side. Clearly, 2Q was a much bigger quarter than Q1 and kind of puts you on pace to hit even the midpoint of your updated guidance. But could you just kind of give us a sense of maybe what's under contract or LOI or what we should expect from a cadence perspective for the balance of the year?

Yes. Craig, we don't have much under contract or LOI right now, which is why we only raised the guidance, I think, $50 million at the midpoint. We're seeing good activity. There's a lot of sellers out there. Bid-ask spreads have tightened. And so the cadence, typically, Q4 is our largest acquisition quarter. But just given the volatility in rates and the macro environment, we didn't feel that confident in the cadence in the third and fourth quarter, just given what's going on in the macro environment. That being said, if rates stay stable and there's not a lot of volatility in the macro environment, we feel pretty confident we can keep up this pace.

And can you just talk about kind of the mix of what you bought, maybe some back story. I know at NAREIT, you guys were talking about passing on a $300 million portfolio. It didn't seem like any of these were portfolios. But at the same time, it felt like one of the reasons you guys passed on that was cap rates were falling and you weren't as pleased with where your cost of equity was. But now you lowered cap rates on acquisitions by sort of 0.25 point. So I don't know maybe we could just talk in general around how you're viewing kind of the upside in some of the assets that you're buying from either an IRR perspective to kind of offset some of that cap rate compression that you're willing to accept? And maybe how much of this was single assets versus portfolios and what the spread in those may be as well in the markets that you're targeting?

Yes. A lot to unpack there. But with what we bought this quarter, a lot of -- all Class A assets, submarkets, we feel really confident in, and we feel like we'll be a key player in for the long term. The cash cap rates were a little bit lower. I think it was 6.1% going in, 6.8% on a straight-line basis. So decently accretive from where we could raise capital in the second quarter, bumps on those leases about 3.3%. And generally, these are at or slightly below market. So good clean buildings and say, call it, clean cash flow, so no really CapEx leakage for these properties because they're all Class A and somewhat newly built. With respect to your question on portfolios, generally, portfolios have garnered anywhere from 25, 50, even in the best of times, 100 basis points for portfolio premiums. I would say right now, those middle-sized portfolios, call it, $500 million to maybe $1 billion, probably garner some cap rate compression. Above that, maybe not as much just because it's hard to deploy that much capital. And when you're trying to deploy it, you may not be willing to pay the cap rate compression for that portfolio. And then when you get to smaller portfolios, at least what we're seeing now, those portfolios are pricing closer to individual asset pricing.

Our next question is from Dave Rodgers with Raymond James.

Bill and Matts, I wanted to talk a little bit about leasing in the second quarter. It looked like it was only 8 leases in the new pool, but it just looked like some of the metrics were a little bit softer than what you experienced in the first quarter. So maybe you can kind of talk about if there was anything unique in that or in the first quarter? And then also just as you look kind of through the rest of the year, how you expect volume of leasing and spreads to progress? If you can give any color on that would be great.

Yes. Thanks, Dave. So for the year, we still expect 18% to 20% leasing spreads, probably closer to the higher end of that range. So right on track to a little bit better than our original guidance. With respect to the first quarter, I think our leasing spreads for new leases was 35%, 36%. We did have 2 leases that rolled up close to 60% in the first quarter. And that was due to those leases coming off of long-term leases with low escalators. So market rent just greatly outpaced where those leases were. And so that was a great win. It was baked into our guidance. In this quarter, we had one new lease that rolled closer to market. It was a short-term lease that was -- had some decent escalators. And just with the lower market rent growth over the past few years, it just rolled closer to market. So it was kind of twofold. You had a little bit of some great wins in the first quarter and one lease that didn't roll as much in the second quarter. But it all kind of comes out in the wash, and we're still looking at close to 20% leasing spreads for the year, and we're well on track to meet our leasing plan for the year.

And then maybe a follow-up on Craig's question. I mean he was talking acquisitions. Clearly, acquisition pricing getting tighter, lots of buyers out there. You're trying to move more into development. Can you talk a little bit more about what you're finding kind of on the development front and the ability to perhaps accelerate starts even further there to create a little bit more value versus buying at market today in a competitive environment?

Yes. I mean we're having some great success on the development side, really happy with that part of the platform. We were able to bring in a couple more developments. I mean the Dallas one is great, build-to-suit in Dallas at 7.5%, source that internally. And we're hopeful we're able to announce some new developments soon, too, right? So that part of the platform is operating at a very high level. The yields are 7% plus, so a great return there for us and also meets that, call it, clean income as the new buildings. And that's an area where we think we can continue to ramp up. I mean, right now, we've got $290 million of developments under some sort of construction period, not in the stabilized bucket. We would love to get that another couple of hundred million higher, but it's going to take some time to do that. Our JV partners, we're active with them. They're bringing us opportunities. We continue to expand the number of relationships we have. And we're also sourcing a bunch of developments with our own team and being creative with some of the land we have in our portfolio. So it's a great use of our capital. It's probably the best use of our capital, but it's limited to the extent that we can do maybe what we're doing now and then a couple of hundred million more, but it's going to take some time to ramp up to that.

Our next question is from Michael Carroll with RBC.

Bill, I wanted to dig in your comments regarding the data center demand that you're seeing across your portfolio. I mean, is that demand more concentrated in specific markets? Or do you see it more broadly across your entire portfolio?

It's broad. It's not across the entire portfolio, but we're seeing it a lot in the Midwest. We're seeing it in the Southeast. We're seeing it in Texas. So Michigan, Wisconsin, South Carolina, Houston. And so -- and there are some areas in the U.S. that we're seeing it that we just don't have vacancy that we can't lease to data center-related tenants. But it's in really those regions of the country. And it's not demand that's just short term. I think our weighted average lease term on that 2.3 million square feet we leased from the beginning of last year, it's like 7 years. And we rolled those tenants up -- those leases up 33%. So it's good long-term demand. The credits are strong, and it's just an incremental demand driver. And we're seeing that as an incremental demand driver. We're seeing e-commerce continue to be an incremental demand driver. We're seeing onshoring advanced manufacturing to be an incremental demand driver. And then you have typical GDP industrial demand. So the sector is really in a really good spot and all that incremental demand and then you look at where the supply picture is and the supply picture is really in check. So we're -- the industry is in the best spot it's been in probably the last 4 years.

And then related to that data center demand, do you know what the breakout or the service those tenants are? Is it mostly to service existing data centers? Or how much of it is it to construct and build new data centers within the area?

It's almost all servicing existing data centers and the upkeep. So having generators nearby, having spare parts in case something breaks there, that's primarily what this demand is.

Our next question is from Jason Belcher with Wells Fargo.

Just wondering if you could talk a little bit about the cadence of dispositions we should expect in the back half of the year. Should we expect those to be largely matched with acquisitions from a timing perspective? And then also, I know you gave a cap rate range on the acquisition side. Just wondering if you could provide something similar on the dispositions.

Yes. It's -- as much as we'd love to match our dispositions and acquisitions, it's not that simple. The disposition process starts a long time before the actual disposition transaction occurs. So we -- I mean, ideally, we try to do it, but at the end of the day, we identify dispositions that either are noncore and we dispose of those and we go through the process. Sometimes we have opportunities that are reverse inquiries that have come in the last few years, that's been from users. So we've gotten some really good pricing on those user sales. And then others are just assets that we feel like we've realized the most value creation we can and we dispose of those on an opportunistic basis. So I think the assets we've had -- I think we only sold 3 assets this year, 2 of which were just noncore and one was opportunistic.

And then I guess on the regional -- just touching on regional trends, can you talk about any pockets of strength or weakness outside of the data centers that you just mentioned across your markets?

Yes. So those markets that have the data center demand, I mean there's other demand drivers in those markets as well. So when we look across our portfolio, Midwest has been really strong. Southeast has been strong, absent maybe some of the port markets. Those are a little bit slower. And then in Texas markets for us have been really strong. And when you look at some of the weaker markets, it's the port markets, Savannah being one, Charleston being one, they're a little bit slower. And then El Paso is a little bit slower just given the U.S. -Mexico relations and Reno has been a little bit slower. But overall, the portfolio is performing really well. We're in our range of market rent growth for the year, probably trending a little bit to the higher end of our market rent growth range this year, and we're optimistic as we move into 2027.

Our next question is from Nick Thillman with Baird.

Maybe along the lines of questioning around just competitive bids on the acquisition front, maybe viewing it more from the disposition side, Bill, you've talked about being a little bit more strategic and then looking to grow the longer-term growth trajectory of the portfolio overall and maybe pruning some of the tertiary markets. Is this an opportunity here where you're seeing pricing firming and we've heard from some of your peers that cap rates have been relatively tight to maybe exit some of these larger tertiary -- or some of these markets where you do have some assets that you can offload in this sort of environment here and then just redeploy and lean into the development side on -- what are your thoughts around that just overall?

Yes. It's -- we absolutely look to do that. We look to do that every year. This is a year where we feel like we can get some advantageous pricing on some of those assets, but it takes time. And it's easy to maybe say, hey, this is a market STAG has said they don't want to be in. Why don't they just sell those 3 assets there. But it also may be a situation where there's 2 years left on the lease term, we feel like it's -- the tenant has a very high probability of renewing. So we're not going to sell that asset with 2 years of lease term. We're going to renew that tenant for 5 or 10 years and then sell the asset. So we don't want to sell assets when we feel like we can realize a higher value by executing our operating plan for that asset. So certainly, we have been disposing of some of our noncore assets. I said 2 out of 3 assets disposed of so far have been noncore. Those have sold in the, I think, about an 8.8% cap rate. And the other opportunistic transaction we sold this year was a 5.7% cap rate. So we'll continue to look at them. We expect, obviously, based on our guidance, more dispositions in the second half of the year. Those take longer. As I mentioned, you have to put the book together, you have to market it, but expect some more dispositions in the back half of the year. And I would say, in past years, we've been about 50-50 weighting. Opportunistic noncore dispositions is probably going to be more skewed to noncore dispositions this year.

No, that's helpful. And then maybe more theoretical high-level question. As we look at -- look at your footprint maybe in the Midwest and some of the center part of the country, we've seen a big pickup in just middle market M&A from like PE-backed groups. Traditionally, they aren't really looking from like a growth perspective, more so from an expense side and consolidation footprint. So curious if you're seeing any trends when you look at nonrenewals as a percentage of your portfolio? Is it tenants retrenching and maybe consolidating footprints or if there's anything you can read through on other tenants that you aren't renewing?

No, there's no material change from past years. I mean what we're seeing for nonrenewals, which is right at our historic average, right? I think our retention rate is around 75% this year. So the nonrenewals, sometimes it's -- well, most of the time, it's consolidating operations into bigger buildings or growing out of our building. But sometimes it's moving to a different building. We saw a trend at the end of last year, a little bit at the beginning of this year. Some tenants were moving to Class A space from some of our Class B space. That trend has slowed significantly because those rents are starting to gap out a little bit, those Class A versus Class B rents, but nothing material versus prior years.

Our next question is from Michael Griffin with Evercore ISS (sic) [ ISI ]

I wanted to go back to leasing. Clearly, this year has been very successful with 92% executed on your '26 plan. And yes, I realize I'm not asking specifically for '27 guidance, but maybe, Bill, you can give us a sense of how that leasing trend is trending relative to maybe your forward leasing plans at this time last year. Just want to get a sense of how the cadence of leasing has been progressing as we look to -- as we kind of turn the corner to 2027.

Yes. It's been progressing really well. When this time, end of July, you're not signing a lot of new leases into the next year. It's primarily renewals at this point, early renewals. And so historically, around this time, we're at 26% to 28% of our leasing plan next year. This year, around 35%. So ahead of plan. I think it speaks to the demand that we're seeing in markets and our tenants' willingness to stay in our buildings. Obviously, we're a very good landlord. Tenants love working with us, and they're looking to lock up space a little earlier. So making great progress on our '27 plan at this point.

That's certainly some helpful context. And then maybe one for Matts, just on the balance sheet. Clearly, leverage is in a very favorable position in the low 5s on a net debt-to-EBITDA basis. You recently refied the term loans. I recall you talking in the past about potentially looking to tap the public bond markets. I realize you don't have any sizable maturities until 2028. But can you maybe give us a sense of the opportunity cost, the pros and the cons of maybe going for a public bond offering versus continuing to track in sort of the bank debt arena?

Yes, absolutely. Yes. So I think really the question is long-term debt because we've been active in the bank debt market for a while. Historically, we've been a private placement issuer, and we've had phenomenal success in that market. We're a seasoned issuer. We've been in there for more than a decade, and that market continues to expand and mature. 7 years ago, it was a bunch of life insurance companies. Now you're seeing some financial buyers in there, and there's a lot of flexibility in that market. You can really tailor your offering to your debt maturity ladder. Comparing that to the public bond market, public bond market, you need a certain size. It's a different audience. The one benefit of the public bond market is the ability to execute a transaction in a tighter time frame. But as we sit here today, based on economic conditions, we could go either way. Historically, we've really enjoyed the private placement market.

Our next question is from Eric Borden with BMO Capital Markets.

I just want to talk about the occupancy cadence for a little bit. Guidance implies that the second quarter is, in fact, a trough, but just curious if you can elaborate on the confidence in how occupancy improves from here, what that recovery trajectory could look like over the next several quarters? And where do you ultimately expect to end the year on an occupancy standpoint?

Yes. Our occupancy guide is an average occupancy, and it's based on our same-store. That's where our guide is just to make sure everybody is on the same page. So our midpoint of our revised guidance is 96.75%. So it's where we are right now in our same-store pool, I think we're at 96.8%. And so we expect that to -- it's an average occupancy number. So our spot occupancy at the end of Q2 in our same-store pool is 96%. And so we expect spot occupancy to increase slightly as we move through the end of the year, but average occupancy to stay relatively flat for the rest of the year. That's what's in our guide. And so that would imply that the occupancy pickup we're expecting happens closer to the end of the year.

Great. That's helpful. And then just more of a bigger picture question, Bill. You talked about portfolios above $500 million to $1 billion, not having that portfolio premium just given it's harder to write larger checks and there's less companies to do so. But you're in a good shape from the balance sheet standpoint. Your cost of equity has improved. So just curious, do those larger portfolios create an opportunity for STAG? And just how are you thinking about scale overall?

Yes, so just to clarify my previous comments. So what we're seeing is portfolios sub-$500 million not having a portfolio premium, $500 million to $1 billion having some portfolio premium and above $1 billion kind of losing that portfolio premium just given how much capital they need to deploy. So it's that middle portfolio level, that $500 million to $1 billion, where we're seeing that portfolio premium. So at this time, just because of what we've established here at STAG and the people, the processes, the systems we've set up, we don't pay portfolio premiums, which is why we really haven't acquired a lot of portfolios over the years. We underwrite the individual asset pricing. So I wouldn't expect us to acquire something in the $500 million to $1 billion range. Below that, above that, we'll certainly underwrite it. And maybe there's an opportunity if the math works. And if it does, then we'll execute on it. If it doesn't, we'll just continue to execute our strategy.

Our next question is from Jon Petersen with Jefferies.

I'm curious what you're seeing in terms of tenant demand at different box sizes. So it seems like over the past, I don't know, 6 to 12 months, there's been heavier demand for the large million square foot boxes in the market and maybe a little bit softer for the few hundred thousand square foot boxes. Does that match up with what you guys are seeing in the market? And any change in that demand over the past few months?

Jon, Steve Kimball. I appreciate the question. Yes, it's been very active in the bulk, and we've seen drops in the vacancy rate based on that activity in the bulk market. I think the new news is that it's broader the demand in size, and we are now seeing a pickup in the smaller tenant demand. So if you're 70,000 square feet or less, we're now seeing that. We're seeing it across our operating portfolio and our development portfolio that we're finding more demand in the smaller space. There's still a little low in the 150,000 to 300,000 square foot spaces, but that seems to be picking up in activity as well.

Okay. Great. And then I guess, looking over the next year or 2 and thinking about your lease expiration schedule, I mean, if rents stay flat from these levels, where do leasing spreads trend as we get into next year for your portfolio?

Yes. I mean that's a big if, Jon, just given the dynamics we're seeing in the sector. But if we assume they stay flat, I mean, if you just go look back the last couple of years, we chew into about 5% of leasing spreads every year. In the last few years, we've had 0% to 2% market rent growth. So assuming that type of market rent growth, you would assume spreads deteriorate about 5% every year.

Okay. That's helpful. And then if I could sneak in one more. So you have $70 million of forward equity that's unsettled. I think the leverage, while it's low, it did tick up a little bit in the quarter. So can you talk about the decision-making on settling the forward equity versus allowing that leverage to trend a bit higher?

Yes. I mean a big part of that was we typically try to operate our balance sheet 5 to 5.5x, and we've been at 5x almost at every quarter end. There was an acquisition that we closed right at the end of the quarter that we weren't sure if that was going to close. And that was a decision of, hey, let's not fund this forward equity, settle this forward equity unless we need to. And then fortunately, the deal closed. I think we closed at the end of June. Otherwise, we probably would have settled some of that forward equity.

Our next question is from Jessica Zheng with Green Street.

Just wondering, as you're seeing strong new demand from data center and manufacturing-related tenants, are there any tenant categories that are maybe leasing a bit less today than before? Just curious if you think there are any future growth opportunities from any other tenant groups?

There's nothing that jumps out on our stats and what we've seen about demand drop off. It's just really just been some incremental demand drivers and rest of the other sectors that are in our tenant base have been pretty steady.

Our next question is from Mike Mueller with JPMorgan.

I guess looking at your in-process and recently completed developments, how broad-based is the interest in the tour activity that you're seeing? Or -- and is it skewed toward any, I guess, certain asset sizes or geographies?

Yes, Steve Kimball, I'll take that one. If you look at the supplemental, and we will first go with what we have under construction, we have the 4 projects that Bill referenced earlier on. Two of those in the under construction are build-to-suit. So we're 65% leased in the under construction pool, which is a high percentage for us in that group because we're skewed to build-to-suit there. But the 2 other projects you see, one is in Kansas City, which was on some excess land that we had. That building is under construction. I can actually use the word excellent for the activity we have on that building. We've had a number of people looking at that building. It's in an established industrial park in Lenexa in the Southern submarket of Kansas City, and we've had a very, very good activity on that building. And then the second one under construction is in Phoenix, but we're not breaking ground on that asset in the Chandler submarket until the late in the third quarter. So that's really going to work and Phoenix is an improving market. So we should be delivering that product right into a healthy market, and it's in an infill location. Probably you're more focused a little bit on the substantially complete portfolio, and I'll walk you through that. And I would say the one market that Bill referenced that we have -- that we're watching a little more closely is the Reno market, right? So we're happy to report we had the 47,000 square foot lease done subsequent to quarter end. That's a 75,000 square foot building. So we get the majority of that leased up. We're left with the 284,000 square foot building in the North Valley submarket. Reno is a very active market, but that activity is really in the manufacturing and the data center business and a little less in the traditional logistics that is located in the North Valleys market. So I would say a little bit slow in Reno, Nevada for distribution tenants, and that's playing off a little of a lull in the California markets. So we'll watch that a little closely. We do have activity. We have worked with different groups, but I think that's one submarket that we're watching a little more closely. Charlotte, we built the 200,000 square foot buildings. We're very -- we have good activity on the remaining 20,000 in our first building, which would bring that to 100% leased. And we also have good activity on our second building there. So I would say that's a market hovering a little over 7% vacancy. But when you drill down to the smaller tenants in our submarket, it's below that. So feeling good about Charlotte. Last but not least on that list is the Louisville market. And you've seen what's happened to bulk product in the Midwest. I mean those markets were hovering 200, 300 basis points higher in vacancy and has quickly dropped to about 5% in all those Midwest markets. We have the 500,000 square foot cross-dock in an established park in Bullitt County, just south of Louisville. And we have very good activity. There's probably 4 or 5 large spaces that have been delivered, and there's 4 or 5 tenants that are out in the market looking at those buildings. So that one also fits the market well, and we expect to have good activity.

Got it. And maybe one other quick one. What were the blended escalators on the new leases that you've signed so far this year?

I don't know if we have the exact number.

Mike, I can take this. I don't have it to the decimal point. It's north of 3%. It's anywhere between 3% and 3.25%.

There are no further questions at this time. I would like to turn the floor back over to Bill Crooker for closing comments.

I just want to thank everybody for joining the call today. I appreciate the questions as always, and look forward to seeing everyone soon.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.