Hello, and thank you for joining us. My name is Mark, and I will be your conference operator today. I would like to welcome everyone to the LXP Industrial Trust Third Quarter Earnings Call and Webcast. Now I will turn the call over to Heather Gentry from Investor Relations. Please proceed.

Thank you, operator. Welcome to LXP Industrial Trust Third Quarter 2025 Earnings Conference Call and Webcast. The earnings release was distributed this morning and both the release and quarterly supplemental are available on our website in the Investors section and will be furnished to the SEC on a Form 8-K. Certain statements made during this conference call regarding future events and expected results may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. LXP believes that these statements are based on reasonable assumptions. However, certain factors and risks, including those included in today's earnings press release and those described in reports that LXP files with the SEC from time to time could cause LXP's actual results to differ materially from those expressed or implied by such statements. Except as required by law, LXP does not undertake a duty to update any forward-looking statements. In the earnings press release and quarterly supplemental disclosure package, LXP has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure. Any references in these documents to adjusted company FFO refer to adjusted company funds from operations available to all equity holders and unitholders on a fully diluted basis. Operating performance measures of an individual investment are not intended to be viewed as presenting a numerical measure of LXP's historical or future financial performance, financial position or cash flows. On today's call, Will Eglin, Chairman and CEO; and Nathan Brunner, CFO, will provide a recent business update and commentary on third quarter results. Brendan Mullinix, CIO; and James Dudley, Executive Vice President and Director of Asset Management, will be available for the Q&A portion of this call. I will now turn the call over to Will.

Thanks, Heather, and good morning, everyone. We had a great third quarter, highlighted by the transformative sale of our 2 vacant million square foot development projects in Central Florida and Indianapolis to a user buyer. This transaction was exceptionally impactful to our overall business, providing immediate earnings accretion while also materially reducing leverage, 2 positive outcomes rarely achieved in tandem. The aggregate gross sale price of $175 million represented a 20% premium to the gross book value of the properties and is a superior outcome compared to leasing the assets. The transaction drove portfolio occupancy up 370 basis points, significantly decreased leverage to 5.2x net debt to adjusted EBITDA from 5.8x and will generate an estimated 6% accretion to adjusted company FFO per share, reflecting the property operating cost savings and interest expense savings from debt reduction. The net proceeds from the sale of $151 million were used to repay $140 million of our $300 million, 6.75% senior notes due in 2028, pursuant to a cash tender offer that closed subsequent to quarter end, considerably improving our balance sheet and financial flexibility. We have now successfully leased or sold 98% of our development program. Our program has contributed to LXP having the youngest industrial portfolio in the public market with 15 facilities developed since 2019, totaling 9.1 million square feet at a weighted average estimated stabilized cash yield of 7.1%. Additionally, the 2 development property sales and a leased land sale completed late last year produced gains of $91 million or 54% over our cost of $170 million. Year-to-date sales volume totaled $273 million with an average cash capitalization rate of 5.1% on stabilized assets. The investment sales market remains healthy, and we are currently marketing approximately $115 million of assets for sale in our nontarget markets for opportunistic reinvestment, which may include opportunities in our land bank. During the quarter, we further added to our target market exposure and acquired an approximately 157,000 square foot Class A industrial facility in the Atlanta market for $30 million to satisfy a 1031 exchange requirement. We continue to focus on our 12-market investment strategy in the Sunbelt and select lower Midwest states, which account for approximately 85% of our gross assets. Market fundamentals improved during the third quarter with our 12 target markets outperforming the broader market. We continue to see robust net absorption in our target markets, which accounted for roughly 33 million square feet of the overall U.S. net absorption of approximately 45 million square feet in the third quarter. Dallas, Houston, Phoenix and Indianapolis were standouts with net absorption of between 4 million and 8 million square feet in each of these markets. Furthermore, Atlanta, Greenville-Spartanburg, Columbus and Central Florida each experienced net absorption of over 2 million square feet. In addition to demand from large retailers and 3PLs, it's notable to highlight that manufacturing-related demand has been a meaningful contributor to demand in our markets, reflecting the significant onshoring investment across our geographic footprint. During the quarter, flight to quality continued with large corporate users driving the absorption into newer facilities, and we saw an increase in demand for larger spaces. We stand to benefit from both of these trends, given our portfolio is the newest in the industrial REIT space and our focus is on bulk logistics. U.S. vacancy held relatively steady around 7%, primarily due to positive demand and a further decline in new completions. Construction starts remain below historical levels with the construction pipeline in our 12 markets of approximately 88 million square feet, down nearly 73% from the 2022 peak of approximately 330 million square feet. Today, we also announced that the Board of Trustees authorized an annualized dividend increase of $0.02 per share to an annualized rate of $0.56 per share on a pre-split basis. The newly declared common share dividend represents an increase of 3.7% over the prior dividend and will be paid in the first quarter of 2026. In summary, our company is in a great position. The sale of the development projects accelerated and derisked several of our most critical operating objectives, resulting in meaningfully higher occupancy, lower leverage and earnings accretion. We believe this outcome, combined with our high-quality young portfolio of primarily Class A assets in markets that are outperforming, consistent contractual rent growth, inexpensive rents in relation to market, above-average tenant credit with an investment-grade balance sheet, moderate payout ratio and a land bank to be utilized for accretive growth opportunities, positions us well for success going forward. With that, Nathan will now discuss our financials, leasing and balance sheet in more detail.

Thanks, Will. We produced adjusted company FFO in the third quarter of $0.16 per diluted common share for approximately $47 million. This morning, we increased the midpoint and tightened the range of our 2025 adjusted company FFO guidance to $0.63 to $0.64 per share. The revised guidance reflects the accretive impact from the sale of the development projects and debt repayment. As Will discussed, the Central Florida and Indianapolis development properties were sold for an aggregate gross sale price of $175 million, which represented a 20% premium to the cost basis or $29 million over the gross book value of the properties. Based on our underwriting of market rents, TI, leasing and holding period costs and free rent, we estimated the yield implied by the sale price to be approximately 5%, which demonstrates the attractive valuation achieved in the sale. Our share of net proceeds of approximately $151 million was used to tender for the 6.75% senior notes due 2028. The tender resulted in the repayment of bonds with a principal amount of $140 million and will produce savings in interest expense and amortization of deferred financing costs of approximately $10 million per year. We will also save roughly $1.8 million of property operating costs per year at these 2 properties, which were previously expensed in the income statement. In aggregate, these interest and property operating costs totaled approximately $12 million per year or $0.04 per share, which represents 6% accretion versus our adjusted company FFO in the third quarter. This significant earnings accretion is paired with a 0.6 turn reduction in leverage, making this transaction even more compelling. Turning to the same-store portfolio. We produced same-store NOI growth of 4% year-to-date and 2% for the third quarter with our same-store portfolio 96.9% leased at quarter end. We narrowed our full year 2025 same-store NOI growth guidance to 3% to 3.5%. As a reminder, our same-store pool does not include the 1 million square foot development property in Greenville that we leased in May and the benefit of this lease is not included in the same-store growth metrics. Our portfolio occupancy increased to 96.8% during the quarter, up from 94.1% in the previous quarter, primarily driven by the successful execution of the sale transaction. We also continue to see our rent escalators trend higher with an increase in the average annual escalator to 2.9%. As market fundamentals trend upward, tenant sentiment appears to be improving with increased activity, although decision-making timelines continue to be extended. Our current mark-to-market on leases expiring through 2030 remains attractive with in-place rents 17% below market based on brokers' estimates. Regarding 2025 expiration, subsequent to quarter end, we leased a 380,000 square foot facility in the Indianapolis market to a new tenant for 10 years with 3.5% annual rent bumps. This was a July 2025 expiration in which the previous tenant held over through the end of September. This was a great outcome with the new rent representing a 34% increase over the prior rent. We continue to see promising activity where we have experienced tenant move-outs with lease rents approximately 30% below market. We've made good progress on our 2026 lease expirations, addressing approximately 1.8 million square feet or 27% of total 2026 expirations at an average base cash rental increase of approximately 31%, excluding one fixed rate renewal. Our remaining 2026 lease roll represents roughly 8.5% of our ABR with good prospects for attractive mark-to-market outcomes. During the third quarter, this leasing included a 3-year renewal with 3.25% annual bumps on a September 2026 expiring lease at our approximately 500,000 square foot facility in the Dallas market. The new rent represents an 8% increase over the prior rent. Subsequent to quarter end, we extended a June 2026 expiring lease at our 70,000 square foot facility in the Greenville-Spartanburg market for 5 years with 3.5% annual bumps, representing an increase in rent of approximately 7% over the prior rent. Additionally, the tenant at our approximately 650,000 square foot facility in Cleveland with an October 2026 expiration exercised their 5-year fixed-rate renewal option with 2.5% annual escalators. Our 600,000 square feet of redevelopment projects continue to progress. As a reminder, this includes a 350,000 square foot redevelopment in Orlando and a 250,000 square foot redevelopment in Richmond. Both facilities are expected to be completed in the first quarter of 2026 and producing yields on cost in the low teens. Moving to balance sheet. At quarter end, our net debt to adjusted EBITDA was 5.2x. We had $230 million of cash on the balance sheet at quarter end and approximately $80 million pro forma for the bond tender. As we noted in our earnings release, the Board approved a 1-for-5 reverse stock split, which is scheduled to take effect on November 10 for trading on a post-split basis beginning on November 11. The earnings press release includes further details. The dividend for the first quarter of 2026, reflecting the dividend increase announced today, will be adjusted for the reverse stock split on a pro rata basis. With that, I'll turn the call back over to Will.

Thanks, Nathan. In closing, we're pleased with our third quarter results and our outlook moving forward. The accretive sale of the vacant development projects addressed our most important operating objectives in 2025 and positions LXP for a strong 2026 and beyond. We remain focused on creating value for our shareholders by marking rents to market, raising rents through annual escalators, capitalizing on our lease-up opportunities and concentrating on our 12-market investment strategy. With that, I'll turn the call back over to the operator.

And our first question comes from the line of Jon Petersen with Jefferies.

Congrats on the property sales. Your debt is now down to 5.2x debt to EBITDA. So I wonder if you could just talk about the decision-making on deploying capital in the future for external growth, whether it's acquisitions or development. Or are you guys more focused on, I guess, internal growth at the moment?

Well, we have a very good internal growth profile, Jon, beginning with contractual rent escalations and expensive rents and hopefully some occupancy gains that we're working on. Our orientation on the external growth side would still be focused on build-to-suit. And there are a handful of places in the land bank where some modest spec development could be in the cards next year if tenant demand continues to stay strong, but those would be smaller boxes and the overall scale would be pretty small in relation to our overall liquidity. Acquisitions are really not something that we're looking at from time to time. As we've discussed, if we have a property sale and we're trying to manage tax gain, we may purchase something like we did with the Atlanta asset.

Got it. All right. That's helpful. And then in your presentation, there's a lot of focus on your 12 target markets. So it kind of raises the question, what about the other markets? I think it's about 15% of your revenue comes from outside of those 12 markets. Is that something we should think about as a medium-term disposition target?

We have been selling assets from those markets to generate liquidity for reinvestment, and we are currently evaluating several opportunities that fit this strategy. We see this portfolio as a crucial source of liquidity for our other initiatives, and we are dedicated to maximizing the value we can achieve in each case. Some assets may need lease extensions to support optimal sale outcomes. Therefore, we plan to proceed carefully, viewing this portfolio as a pathway for reinvestment.

And your next question comes from the line of Todd Thomas with KeyBanc Capital Markets.

Will, I just wanted to go back to your comments. You mentioned the company is marketing on the non-target market side, about $115 million of assets. Can you just elaborate on that a little bit, what the timeline might be for some additional dispositions to materialize and what the disposition cap rate might sort of look like for those assets? Perhaps you can sort of book...

Yes, Todd, it’s four buildings. They’re not currently under contract, but we believe there’s a good chance they will close in December. Regarding cap rates, we anticipate something in the low 6s, which is somewhat higher than our early-year trading, but we are considering the overall plan, which should land in the 5.5% to 5.75% range. We see this as a positive outcome, and there’s some accretion from where we’ve redeployed capital this year.

Okay. And then Nathan, you talked about the stronger in-place escalator that you've been sort of achieving here. You're close to 3%. You have about 10% of ABR expiring in '26. Sorry if I missed this, but can you talk about the expected mark-to-market in '26, what that might look like and whether there are any other meaningful considerations that we should be thinking about as it relates to same-store NOI growth?

James, do you want to address the mark-to-market first?

Yes, sure. So we're projecting about a 20% mark-to-market for 2026 remaining lease expirations, which is up slightly from last quarter because we did pull that Dallas deal out that had a slightly lower mark-to-market on it. I do want to talk about that one just for a second, though we marked it up 8%. But if you remember, that was a 3-year deal that we marked up 3% in the duration.

In addition to that, I have a few other observations. You mentioned the contractual rent escalators, which are gradually increasing. We are close to 3% now, with an average of 2.9% across the portfolio. Regarding expirations, at the end of the quarter, we had about 10% set to expire in 2026. However, due to subsequent developments, this has reduced to approximately 8.5%, and we have addressed 27% of the 2026 expirations overall. Lastly, I would like to note that for the same-store metric next year, we will benefit from the income generated by the 1 million square foot Greenville property, which will be included in the same-store pool for 2026 but is not part of the metrics for 2025.

Okay. And then it sounded like you see an opportunity for occupancy growth as well. What level of retention are you anticipating in '26? And what's that been trending like in '25, if you can just remind us?

In '26, we expect to return to about 80% of our historical norm, and we have a good amount of visibility on this. The majority of the lease expirations are scheduled for the latter half of the year. We've already addressed two major leases in our Dallas and Cleveland assets. We're progressing well in that area. Last year, '25, was unique due to our exposure to third-party logistics, which led to a significant amount of vacancy. We're currently working to resolve that, with around 1 million square feet of second-generation leasing still needed. Activity in that portfolio is strong right now, so we're optimistic about positive results, especially with the opportunity for mark-to-market adjustments, which is projected to be slightly over 30%.

And your next question comes from the line of Mitch Germain with Citizens Bank.

Congrats on the sale. How long were those discussions ongoing? I'm just curious to see how the leasing and sale discussions were taking place.

We received an unsolicited offer for the buildings while we were under an access agreement that began in May. Therefore, we possessed material nonpublic information for a significant period during both the second and third quarters. It took a long time to go from May to the closing, but the process had been in progress for quite some time.

Great. That's helpful. And then how much of the portfolio is subject to these fixed renewals versus you able to kind of drive rents kind of within line with kind of what your expectations are for '26 and beyond?

Yes, it's probably about 15% of the portfolio. We do have some near-term large ones that kind of drive down that mark-to-market. Mitch, I would just remind you that our mark-to-market numbers always incorporate those fixed rate renewals. We have 3 more that are coming up this year, and then we have a couple of large ones with our Nissan leases in 2027. When we have the opportunity and it does present itself periodically, sometimes we can negotiate around them if the tenant is looking for capital dollars or something else kind of outside the base lease terms.

Okay, great. For my last question, were the same-store results this quarter somewhat affected by a few vacancies? Did that contribute to the lower results compared to your previous trends? Is there anything specific you would like to highlight?

Yes, Mitch, on same-store, you're spot on, the delta between Q2 and Q3 is the impact of those move-outs at the end of Q2 and during the course of Q3. So simplistically, the building blocks of the outcome are top line contractual rent escalators and the benefit of renewals and new leasing outcomes is about 4.75% as a positive impact, and then the drag from lower occupancy was about 2.7%. Mitch, just as a reminder, Greenville asset is not in the pool, but had it been in the pool for the quarter, we would have had a 1.8% positive impact and so the result for Q3 rather being 2%, would be 3.8%. As I said earlier, we'll obviously get the benefit of that next year.

And your next question comes from the line of Vince Tibone with Green Street.

I wanted to follow up on same-store NOI as well. If I heard correctly, it seems that full-year guidance was revised down at the high end from 4% to 3.5%. I believed that all the move-outs in the third quarter were anticipated. Could you explain what led to the reduction of the high end of expectations? Was it due to bad debt, or did it involve excluding any new leasing that could have helped reach the high end? From my calculations, it looks like the fourth quarter is expected to show further acceleration on a same-store basis. Could you discuss these aspects?

Yes. Thanks, Vince. So we did narrow the guidance range for same-store. It was 3% to 4% previously. It's 3% to 3.5%. As a reminder, that outcome will still be in the range of outcomes we expect in Q2, but also in the range of outcomes we expected at the beginning of the year when we initially released guidance. Clearly, the change on the high end is really a reflection of the passage of time since our last call. The high end on our last call really required a conversion of a lot of leasing prospects with very near-term needs. We have good activity across the move outs we've had in 2025, but the conversion of those spaces to tenancies is going to take a little bit more time and not going to result in us getting to high end of the Q2 guidance.

No, that's helpful. And then just to confirm, it doesn't sound like bad debt at all is an issue. Can you just confirm that's the case, spot on, bad debt?

So no bad debt in the quarter or year-to-date in these collective rents.

Great. And then maybe just one last one for me. And sorry if you already touched on this. But just on the press release, you mentioned 1.1 million square foot of leasing post quarter end. Are you able to split that between renewals and new leasing on a square footage basis?

Yes, they are renewals. Just to clarify, there were 2 renewals and there was one new lease, which is the 380 in Indianapolis that we described in the prepared remarks.

And your next question comes from the line of Jim Kammert with Evercore ISI.

With the apparent mania happening in data centers and AI, I'm just curious what your latest thoughts are on the Phoenix land. If there's any additional opportunity for Lexington there to monetize, sell to other developers or proceed on your own? Just curious.

Well, this is Brendan. It's an avenue that we're certainly very interested in. In Phoenix, most of the data center markets in the country, the limiting factor is power and access to power. So that's the focus there. I think that we'll continue to explore whether there are opportunities to power the site, which would allow for data center development. But in the meanwhile, we're incredibly encouraged by the tightening in that market, which will put us in a great position to compete on build-to-suit and in the future potentially consider spec there. So the market fundamentals there for just conventional warehouse distribution are improving really dramatically there.

Fair enough. And second question, I forgotten are the 2 large Nissan expirations, I realize not until Q1 '27, but are those fixed escalations, do they extend or not?

Yes, they certainly have no adoptions.

Okay. Can you say the percentage or you're not disclosing?

1.5%.

There's no further questions at this time. I will now turn the call back over to Will Eglin for closing remarks. Will?

We appreciate everyone joining our call this morning, and we look forward to updating you on our progress over the balance of the year. Thanks again for joining us today.

This concludes today's call.