Good day, and welcome to the First Industrial Second Quarter Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Art Harmon, VP of Investor Relations and Marketing. Please go ahead.

Thank you, Samara. Hello, everyone, and welcome to our call. Before we discuss our second quarter results and our updated guidance for the year, let me remind everyone that our call may include forward-looking statements as defined by federal securities laws. These statements are based on management's expectations, plans and estimates of our prospects. Today's statements may be time sensitive and accurate only as of today's date, July 21, 2022. We assume no obligation to update our statements or the other information we provide. Actual results may differ materially from our forward-looking statements, and factors which could cause this are described in our 10-K and other SEC filings. You can find a reconciliation of non-GAAP financial measures discussed in today's call in our supplemental report and our earnings release. The supplemental report, earnings release and our SEC filing are available at firstindustrial.com under the Investors tab. Our call will begin with remarks by Peter Baccile, our President and Chief Executive Officer; and Scott Musil, our Chief Financial Officer; after which we'll open it up for your questions. Also on the call today are Jojo Yap, Chief Investment Officer; Peter Schultz, Executive Vice President; Chris Schneider, Senior Vice President of Operations; and Bob Walter, Senior Vice President of Capital Markets and Asset Management. Now let me turn the call over to Peter.

Thank you, Art, and thank you all for joining us today. Our team delivered another great quarter, which included several significant leasing successes and the large land sale in our Phoenix Joint Venture, which have culminated in an increase in our FFO per share guidance, which Scott will discuss shortly. The U.S. industrial market continues to exhibit strong fundamentals. CBRE EA reported second quarter national vacancy at 2.8%, a new all-time low. Net absorption was 57 million square feet, in line with new completions of 61 million square feet. New construction has been increasing to meet tenant demand, but at levels that are generally measured especially in the coastal, supply-constrained submarkets, where we are focused. In our portfolio, we finished the quarter with an occupancy rate of 98.4%. And since our last earnings call, we signed a few key rollovers. We backfilled our largest remaining 2022 expiration, a 341,000 square footer in the Lehigh Valley, where we captured a 40% cash rental rate increase with only a few days of downtime. We also continued to achieve strong overall rental rate increases on our new and renewal leasing. Through yesterday, we had taken care of 89% of our 2022 rollovers. Currently, our overall cash rental rate change on new and renewal leasing is 23%. For the full year, we now expect cash rental rates to be up 22% to 25%, 2 percentage points higher at the midpoint than our expectations last quarter. I'll also note that the gap change for this population is 39%. Looking at 2023, we've already taken care of our 2 largest lease expirations. The first is a 627,000 square foot building in the Kenosha submarket of Chicago. We renewed this lease 7 months in advance of expiration at a cash run rate increase of 29%. The second is a 581,000 square foot tenant located in Minneapolis that we inked at a cash rental rate change of 15%. As of today, our largest expiration for 2023 is 366,000 square feet in the first quarter located in the Inland Empire, which is one of the strongest markets in the United States. The in-place rent on this property is well below market. Moving on to development. I would like to highlight a few major successes since our last call. We leased our 1.1 million square footer at First Park 283 in Central Pennsylvania to an e-commerce retailer. The building will be completed soon, and the tenant is taking occupancy in September. We also leased our 208,000 square footer in New Jersey with commencement upon completion in October. The rental rates achieved exceeded our initial underwriting by approximately 20%. We also signed another lease at First Park Miami, bringing the 592,000 square foot first phase of that project to 89% leased. Moving on to new development starts. In addition to the 83,000 square foot facility in the Inland Empire that we spoke about on our last call, we started 3 more buildings. Our largest is the 699,000 square foot sister building at First Park 283 in Central Pennsylvania. Our estimated investment is $96 million with a projected yield of 5.4%. At First Park Miami, we will expand our investment there with a new 56,000 square foot building with an estimated investment of $16 million and projected yield of 5.5%. Lastly, we started a 37,000 square foot project in the Infill 880 corridor of Northern California with an estimated investment of $20 million and a targeted yield of 4.7%. Including these second quarter development starts, our developments in process totaled 5.8 million square feet with an investment of $776 million, which are 24% leased as of yesterday. The projected cash yield for these investments is 6.8%, which represents an expected overall development margin of approximately 75%. This margin calculation reflects an upward adjustment of 50 basis points on average in the assumed market cap rate compared to last quarter. We were also busy on the acquisition front during the quarter, investing a total of $99 million in a handful of buildings and a few land sites, all were in coastal markets, including Southern and Northern California, Miami and Seattle. Thus far in the third quarter, we acquired 2 buildings comprised of 96,000 square feet in South Florida and Southern California, plus a small site in the Inland Empire for a total of $35 million. Overall, we continue to be well positioned to support future growth with balance sheet land today that can accommodate an additional 14 million square feet. This represents approximately $1.9 billion of potential new investment, based on today's estimated construction costs and the land at our book basis. Lastly, we've been active with our Camelback 303 Joint Venture in Phoenix. We successfully completed the sale of 391 acres to a data center user for proceeds of $255 million. Our share of the gain and promote before tax was approximately $104 million. Our share of JV contributions to date totaled just $33 million, and the venture still owns 219 acres of land, all of which features desirable highway frontage. I'll conclude with a hearty thank you to the entire First Industrial team for all of your hard work and many successes, as you continue to drive significant long-term shareholder value. And with that, I'll turn it over to Scott.

Thanks, Peter. Let me recap our results for the quarter. NAREIT funds from operations were $0.56 per fully diluted share compared to $0.48 per share in 2Q 2021. Our cash same-store NOI growth for the quarter, excluding termination fees, was 9.4%, primarily driven by higher average occupancy, increases in rental rates on new and renewal leasing, rental rate bumps embedded in our leases, and slightly lower free rent. As Peter noted, we finished the quarter with in-service occupancy of 98.4%, up 180 basis points compared to 2Q 2021. Summarizing our leasing activity during the quarter, approximately 4.3 million square feet of leases commenced. Of these, 800,000 were new, 1.5 million were renewals, and 1.9 million were for developments and acquisitions with lease-up. Tenant retention by square footage was 69.6%. Moving on to the capital side. As we announced on our last earnings call, we closed on a $425 million term loan in April with a tenure of 5.5 years. Proceeds were primarily used to refinance our $260 million term loan and pay off a $68 million, 4.03% mortgage loan. As of the end of the second quarter, our portfolio is 99.3% unencumbered. The new term loan has an interest rate of SOFR, plus a SOFR adjustment of 10 basis points, plus a credit spread of 85 basis points. In the second quarter, we entered into interest rate swaps to effectively fix the interest rate on the entire $425 million loan at 3.64%. The new fixed rate is effective in October of this year, once our existing swaps from the prior term loan expire. Moving on to our updated 2022 guidance per our earnings release last evening. Our guidance range for NAREIT FFO per share is now $2.15 to $2.23 with the midpoint of $2.19, which is an increase of $0.04 per share at the midpoint. The increase in our guidance is primarily due to earlier lease-up in our developments, and in-service portfolio, and an increase in capitalized interest due to our newly announced development starts. Key assumptions for guidance are as follows: quarter end in service occupancy of 98% to 98.75%; a 37.5 basis-point increase compared to our prior earnings call. This assumes the lease-up of the 644,000 square foot Old Post Road building in Baltimore will occur in the fourth quarter. Same-store NOI growth on a cash basis before termination fees of 8.25% to 9.25%, an increase of 50 basis points at the midpoint compared to our prior earnings call. Guidance includes the anticipated 2022 costs related to our completed and under construction developments at June 30. For the full year 2022, we expect to capitalize about $0.10 per share of interest, $0.01 higher than last quarter. And our G&A guidance range is now $34 million to $35 million, an increase of $500,000 at the midpoint. Other than previously discussed, our guidance does not reflect the impact of any other future sales, acquisitions or new development starts, the impact of any future debt issuances, debt repurchases or repayments, and guidance also excludes the potential issuance of equity. Let me turn it back over to Peter.

Thanks, Scott. We continue to focus on executing our development plan. The leasing markets are strong, and we're seeing good prospect activity at our properties under construction. In addition, as I mentioned earlier, we are well positioned to serve additional customer demand through our on-balance sheet land holdings. As we move forward in these unsettled capital markets, we will continue to emphasize proper risk management and remain prudent in allocating capital in the pursuit of profitable growth. Operator, with that, please open it up for questions.

. And we'll take our first question.

This is Greg McGinniss at Scotiabank. Just two quick questions for me. First one is on development margins falling to 75% from 100%. Is that just the 50 basis point increase in assumed cap rate?

Yes. That's the change in calculation. While there aren't a lot of data points, there are very few trades. We felt like to be intellectually honest and conservative in our estimations of our margins, it was prudent to bump the cap rate on average across the markets about 50 basis points.

And when is that 50 basis point factored into the calculation, is that upon completion of the development? Or is that like a 5-year timeline or something?

That's our estimate of cap rates for cash-flowing assets in each of the markets where we have these new developments.

Okay. And then on the disposition, the JV disposition, was that kind of always the plan with that land, was to look for another user for it? And then what is the expectation with the rest of the land you still have?

So our plan for Camelback was the same and is the same as our plans that we have executed now in PV-303, which has always been to identify sales to potential users, to do build-to-suits, to go ahead and do speculative development. So all of the above, and we're very, very pleased with the execution on the sale of that 391 acres.

So is this just too good of an opportunity to pass up instead of developing it yourself?

We never really intended to develop the entire site ourselves. We always intended to sell to some other users, at least a portion of the site.

And we'll take our next question.

This is Mike Carroll from RBC. Pete, can you describe, I guess, any other changes that you did to the development margin calculation? Was it just the exit cap? I mean, did you adjust the assumed rents that you're going to receive on any of these properties, I guess, higher or lower?

Jojo, do you want to cover that?

Sure, Mike. The main change was related to the exit capitalization rate based on projected performance for our developments. This was the key factor. There was minimal change in construction costs, staying below 1% compared to the previous quarter. There was a slight increase in net operating income due to rising rents, but this was balanced out in the overall margin. So, once again, the primary factor was the alteration in the exit cap rate.

Okay, great. In your prepared remarks, you mentioned that the leasing activity on the in-progress developments is quite strong. Can you provide more details about the upcoming completions? I understand there are about three buildings expected to be finished in the third quarter that are still unoccupied. What is the progress on those specific properties?

Mike, it's Peter Schultz. So 2 of the 3, the first is in Nashville, where we continue to see decent activity from full building users. The other one is in Denver. That market, we typically see an uptick in activity as the building is near completion, which is what we're seeing now, interest from both full buildings and partial building users. Both of those buildings will be done in the third quarter. So we continue to feel good about that as tenants continue to have very limited choices and the rents continue to go up. Jojo?

Yes. For the first deal, which is in Seattle, we have multiple inquiries for both full building and half building users, and we have proposals out, but no lease to report yet. And that building is scheduled to be completed in the third quarter of this year as well.

Okay. Great. And then just last for me. Can you give us an update on Old Post Road? I guess, what's the update there?

Sure, Mike. It's Peter Schultz again. So we're in discussions with several prospects. We're trading lease comments with 2, they're all full building users. The 2 that we're trading lease comments with the anticipated commencement date is in the fourth quarter, consistent with our guidance. Similar to my earlier comments, tenants continue to have limited choices and rents in that market continue to go up as well.

We'll take our next question.

This is Ki Bin Kim from Truist Securities. Just wanted to go back to some of those topics. Can you talk about any changes you may have noticed, if any, in terms of tenant interest or activity for leasing new space? What it looks like today versus maybe a couple of quarters ago?

Ki Bin. Yes, it's Peter Schultz, Ki Bin. So activity across the country, across space sizes continues to be solid, particularly on our new buildings. As you heard in our remarks, in New Jersey and Pennsylvania, we leased both of those developments ahead of completion, well ahead of pro forma. Our largest rollover in Lehigh Valley, we backfilled with downtime measured in days, and that's consistent with the level of activity that we're seeing across the country. It continues to be broad-based across industry types and there's been no slowdown over the last several months in terms of any demand. Jojo, anything you want to add?

Yes. That's reflective of our rent growth that we've achieved. So one of the reasons we continue to achieve good rent growth is that our properties are well located, but at the same time, we have multiple prospects on each of every space that actually we have. And so that just shows the strength of the market.

And just to stick with that, when you see multiple prospects, does that mean, for example, last year, if there were 5 or 6 prospects, is still 5 or 6 prospects on any given space? Or has that ticked down to maybe 2 to 3?

It's pretty much the same. In fact, if you look at the market reports on the activity, Q1 of last year is pretty much the same as Q1 and Q2 or the first half last year is pretty much the same as the first half of this year.

And we'll take our next question.

It's Dave Rodgers at Baird. I hope you're all well. I wanted to ask maybe on dispositions for the second half of the year, capital raising, fundraising activity. It seems like there's obviously a lot of price discovery going on and I understand the exit cap, and that's a good conservative call. But in terms of actually going out and executing in the market, do you have plans to do that? And on the flip side, are you ready to get more aggressive with both the balance sheet and new investments if the opportunity presents itself? And are you seeing those opportunities?

Our sales guidance remains between $100 million and $150 million, and we expect the revenue to be back-end loaded as we navigate this period of price discovery. As we begin to introduce a few offerings into the market, we will monitor how that unfolds. We anticipate receiving some strong offers, but it's important to note that we are still in this transitional phase. Regarding our approach to development and new opportunities, we haven't altered our stance significantly. There is a notable disconnect between capital market activity and our business operations, which remain stable. It’s still early, as we are just a month or two into the aftermath of Amazon's announcement, and so far, it hasn’t had a major impact. We will continue to be cautious in terms of risk-taking, but our perspective today is consistent with what it was at the start of the year.

Great. And then maybe, Jojo, a follow-up on the construction. I think you mentioned no real increase in construction costs sequentially. But can you talk about some of the components for construction? I mean, there's some big under construction and planned builds out there in terms of the numbers from the brokerage houses. Last year, there seemed to be some supply constraints in terms of steel and components. But how are those component shortages changing? And can we really start to see this big level of supply that's in the projection start to finally hit, given the current state of the environment?

We're closely monitoring the situation. As you know, we're also involved in development, and many factors influence delivery times. One positive factor is that steel prices have decreased slightly, going from a lead time of about 10 to 12 months down to around 2 to 3 months. However, this has been counterbalanced by increases in other material components such as switchgear, transformers, rooftop units, and HVAC systems, which in some markets have extended their lead times to nearly a year. This means that while we have gained some time with steel deliveries, we’ve lost it with other materials, which will impact the entire industry. At First Industrial, we maintain active communication with our contractors, make price commitments, and engage in forward purchasing when it's suitable, working closely with municipalities to manage our deliveries. However, construction delivery timelines have not changed. Overall, while there is a slight increase in projects under construction, many are facing significant delays. I anticipate that any new development announcements will be delayed as well.

All right. That's helpful. Last one for me, sorry. Peter Baccile, going back to you. You made some comments about 2 big leases you had inked already for '23. Do you have a kind of a macro number of what percentage you're done with '23 and where that takes you?

Yes. So we look at 2023, right now, we stand, we've taken care of about 24% of the leases, and that's at a cash rental increase of 20%.

. And we'll take our next question.

It's Todd Thomas, KeyBanc Capital Markets. First, I wanted to just follow up again on the 50 basis point increase in exit cap rates across the development pipeline. It sounded like that was a blended average. And I'm just curious if you can discuss whether there were any differences in markets or geographies, as you went through that exercise of raising cap rates across the pipeline?

Yes, it is a blended average. In the highest barrier coastal markets, it's closer to 0 than 50. However, the range is probably 10 to 60 or 70 basis points, averaging around 50.

Okay. And then, it sounds like that was just a prudent decision right now. Are you seeing any change at all in market pricing? Can you just comment maybe a little bit more broadly on price trends for assets that you're seeing today?

Jojo, do you want to give your thoughts on what's going on?

Sure. There is a significant difference in the decline in trades, making it challenging to determine current market cap rates. However, for the transactions that have closed in the past few weeks, the cap rates are similar to those from a quarter to two quarters ago, indicating minimal change. While there has been a lot of discussion about retrades in the marketplace, it has not occurred frequently. Sellers have largely maintained their expectations and have not walked away from deals. Our market survey shows there aren't many substantial retrades happening. Thus, as Peter mentioned, there is currently a lack of visibility. We believed it would be unwise not to adjust the cap rate, so while we are not asserting that these are the accurate cap rates, we felt it was necessary to adopt a more conservative approach.

The rent growth opportunity remains tremendous. And so this period of price discovery may last a while. I don't think that at some point, you're far better off keeping the asset and enjoying the rent growth over time, than you are taking a haircut relative to, call it, the pricing of the first quarter. So this could take some time for this to shake out.

Okay. That's helpful. And then the land bank decreased in the quarter as development starts picked up and you had sort of minimal land acquisitions in the quarter. Should we expect to see the land bank decrease further? Or was it mostly timing? And can you talk a little bit about what you're seeing on the acquisition side just in terms of land and maybe land pricing as well?

We remain active in looking for new land opportunities across the country, and that hasn’t changed. Our return expectations are a bit higher. Currently, we have about 3 to 5 years of supply on the balance sheet. Everything else has stayed the same. What was the last part of your question?

Just around the appetite. Well, I guess, so your appetite for land acquisitions hasn't changed. Just I guess, pricing for land and price trends.

Yes. I believe that for the most valuable and well-situated land, especially if it has entitlements, which are rare these days, those land values are likely to keep rising as rental rates also increase to support those higher prices.

And we'll take our next question.

Anthony Powell of Barclays. About the comment on the 1.1 million square foot leased from the e-commerce retailer was pretty positive, given all the headlines. Are you seeing any change in behavior just demand from tenants in this uncertain environment? Or do you continue to see tenants continue to seek out space as they were a few quarters ago?

Yes, Anthony, it's Peter Schultz. I would say it's the same as it was in the first half of the year. Most, if not all, of the requirements we are seeing remain focused on growth and the net addition of space. Nobody is relocating from one 300,000 square foot building to another. Demand, as we've mentioned a couple of times earlier, continues to be really strong nationwide. Tenants are generally in a rush to secure spaces because their options are limited, especially in high barrier markets and where we are developing. Therefore, we remain quite optimistic about the demand side of the business.

Maybe on Amazon, could you give us an update on anything you're seeing in terms of sublease activity or renewal activity or anything like that in the Amazon portfolio that you have currently?

We aren't currently having any discussions with Amazon regarding our spaces. In the spaces we do have with them, the rents are below market. While we would welcome some conversations, they seem satisfied with our spaces. Regarding the overall market, the headlines are much larger than the actual situation. Yes, they have listed a few spaces for sublease, which is interesting because they are all short-term. This suggests they may need that space again soon and are just trying to manage costs temporarily. Other than that, I don't have much data to provide. Jojo or Peter, do you have anything to add?

It's Peter. The only other thing I'd add is we've seen to make incremental investments in a couple of our spaces during this time. So reinforcing their commitment. We think that this whole Amazon discussion is a little overblown. Jojo?

And in the markets we focus on, we haven't really seen subleases in the markets that we're focusing on in terms of our investments. If there were any, I can tell you in some parts of the West, basically, the subleasing by Amazon happened within a couple of months. It was not even a market that long. And there was a flurry of activity, and it got leased. And this is a particular West Coast submarket. It got leased within 2 months of announcing. That's how strong these markets are.

And we'll take our next question.

This is Vince Tibone with Green Street. Could you provide some color on the secured debt markets for industrial today? I understand this is in a big part of your balance sheet, but it is important to the overall health of the transaction market. So I wanted to get your views there.

I would say the secured debt markets are pretty open for life company-type executions and the rates there are probably in the mid-4s, but albeit at lower leverage. The CMBS market right now is still very challenged, and I haven't really seen that market open back up.

So what is the pricing on CMBS? Or is this even no deals to point to on how wide that pricing might be earlier in the year?

You're going to be wider than the life company market; exactly where that data point is, is very challenging because they’re just. Again, it hasn't been a lot of financing activity to point to.

So what are buyers doing that? Like are they using the life codes, in their local bank relationships? How are most financing their purchase? I'm not talking about the massive institutions in more of the local players that you'll sometimes run into.

Well, again, I would say you just haven't seen a lot of deal activity, but those transactions that you have seen hit, I would say, more life company and more of the local and regional bank market is where a lot of those buyers are getting their financing.

And we'll take our next question.

Sorry about that. Mike Mueller. Just a quick question. Most other things have been answered. But for the remaining, I think it was 200, 219 acres in Camelback for the JV. Is the game plan there to sell that opportunistically over time or keep it and develop on it?

Sure. The plan remains unchanged. Currently, the 219 acres have freeway frontage, which is advantageous, especially on 303. It's the closest group of sites to the intersection of 10 and 303, making it a prime location. The strategy continues to focus on value creation for a joint venture, which could include various approaches such as speculative buildings or strategic sales to users looking for the highest and best use. We can utilize all aspects of value creation here, but there are no new updates to share at this time, Mike.

Got it. And then, Scott, what are the after-tax proceeds expected to be on the sale?

Mike, let me check the supplemental information quickly. I believe the income taxes will be approximately $24 million from those sales proceeds.

And we'll take our next question.

Scott, where is your best source of incremental debt capital today? And where is that price net of swaps or something if it's a term loan or other variable rate debt?

I believe the bank market remains the best option to consider, Rob. It is still active, although it is tightening somewhat. Many other companies are attempting to access it, similar to our efforts in April of this year. Our banks indicate that spreads are stable, which for us translates to 85 basis points at a BBB flat rating. We find that to be appealing capital. I need to check the current market on the swap site. A couple of days ago, I received an email from one of our banks, and it seemed that if you swapped it for 5 years, the rate was likely between 2.75 and 2.85 at that time. Nevertheless, the bank market continues to provide the most favorable source of debt capital.

Okay. And then, Scott, if you guys don't like the pricing on the $100 million to $150 million of dispositions, how are you thinking about financing the development spend given the pullback in the stock price? It's 50 or high 40s, does that still give you enough room there? Do you think about doing something else, JV-ing something? How should we be thinking about that?

Yes. I think we're in really good shape, Rob. We've got about $200 million of spend in our development for the rest of this year. That's going to be taken care of with a little over $100 million of cash that we have on our balance sheet. A lot of that came from the joint venture sale. We still have excess cash flow after CapEx and dividend. We can hit the sales market. Our guidance is still 1 to 150. And again, as I mentioned before, if we wanted to raise other capital, we can look to the bank term loan market as well. I think that would be our plan.

And we'll take our next question.

This is Ki Bin again from Truist. Just a quick question on your underwriting philosophy. I was wondering if you can just kind of share some broad thoughts on what that underwriting philosophy looks like? And should the macro picture worsen, where could the pocket of weakness lay in your portfolio?

In terms of underwriting, we have put the word out that we're going to increase our return requirements. We have increased our return requirements. We've always been pretty conservative in our underwriting, Ki Bin. We have always had a step-up in the residual cap rate from the going in. Sometimes when we lose opportunities, we lose to people who don't do that. We've been pretty concerned...

Sorry to cut you. I meant tenant underwriting, tenant credit, sorry.

Tenant credit. Yes, we've always been very, very focused on tenant credit. We have an in-house team that analyzes every new tenant that we consider taking on. That hasn't changed. And the tenant quality of our portfolio is very strong. In fact, if you want to look at a time when it was tested, I guess, it would have been in 2020 when we had the lockdowns in COVID and we still collected 100% of our 2020 rents in 2020. And just one more factoid out of our roughly 1,000 tenants, we only had 14 deferral agreements. So tenant credit is important to us, and I think our team does a great job. What was the last part of your question?

Just if the macro picture should worsen, where could the pockets of weakness be, if any? Would that be retailers or?

Yes. We spent the last dozen years building and reconfiguring our portfolio so that we have one now that we think will do very well through a cycle. Hard to say where pockets of weakness would be, Ki Bin. Clearly, in terms of the overall market, the bigger risk is one on the demand side and the supply side in these higher barrier markets where land is so difficult to come by. Yes, it's a good question.

And we'll take our next question.

Rich Anderson here, SMBC. Can you hear me?

Yes.

Okay. So first question, you went over some national statistics regarding vacancy, absorption, and completion. Do you have a general assumption about national market rent growth and how it may have changed compared to previous periods?

Yes, when we execute, we typically analyze the market at both the market and submarket levels. This is how we approach our investments and manage our portfolio. Overall, I would say that for the entire U.S., year-to-date market rents have risen in the 10% to 15% range. Of course, some markets are experiencing increases of about 3%, 4%, or 5%, while others are seeing significantly higher rises. Coastal markets, in particular, have growth exceeding 15%. Overall, the entire industrial market has remained strong, with around a 15% increase year-to-date.

Okay. And really no discernible change, you mentioned since the Amazon news, everything is pretty much unchanged as far as what you're seeing today?

Yes, you're correct.

Okay. And then my second question is on Amazon specifically. You have the amount saying 10 million to 30 million square feet of giveback, whatever the number ultimately will be, we're comparing that against a static Amazon. But I would argue that 2020, Amazon added, yes, I don't know the number of 100 million square feet of distribution space that we should really be talking about that is the basis of comparison and not 0. So it's not a 30 million square feet reduction, but 130 million square feet reduction as it relates to your planning and your vision of the growth of the business. So I'm curious how you think about that. And if a decline from them relative to the big growth of the past couple of years and them and others is impacting your underwriting at all at this point? Or have you given any kind of thought to that, not relative to 0, but relative to what we were seeing from a growth perspective a couple of years ago and last year?

In 2020, they occupied between 70 million and 80 million square feet, surpassing the combined total of the next 30 most active tenants. They were the dominant player that year. The other companies that took very little space have been gradually working to reestablish and expand their presence and enhance their competitive positions. This additional space is now being utilized by third-party logistics providers, which have significantly increased their leasing. General retail and wholesale sectors are also seeing substantial leasing activity. No one in that sector was acquiring space in 2020. The food and beverage industry has grown considerably, and manufacturing has improved its leasing share, along with building materials and construction. Although Amazon was the most active in 2020, others weren't, but they are now catching up. This development addresses the gap you've identified. Looking ahead, we see a broad-based demand, where tenant needs currently exceed what the industry in high-barrier markets can provide, which is why rent growth has not only remained steady but has actually accelerated.

Okay. So the Amazon news, it should not be just to broaden the point, should not be extrapolated to a broader industry move. In fact, it's the opposite. You're saying they're sapping up the giveback that Amazon is providing. Is that the way to think about it?

More than that, they're taking up the giveback. And as you say, Amazon took 80 in 1 year, who's taken that 80 the next year, right? So they're taking up that much as well. And lastly, I mean, Amazon is going to continue to grow. It's been a little bit surprising that they have taken so long to begin to rationalize their space. Every company does eventually. And it doesn't make a lot of sense to have your space growth growing faster than your sales forever and ever. So clearly, once that we get through this period, Amazon will continue to grow, and they'll continue to take up more space over time.

And that concludes today's question-and-answer session. At this time, I will turn the conference back to Peter Baccile for any additional or closing remarks.

Well, thank you, operator, and thanks to everyone for participating on our call today. We look forward to connecting with many of you in person in the coming months, be well.

This concludes today's call. Thank you for your participation. You may now disconnect.