Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I'd like to welcome everyone to the Rexford Industrial Inc. 4th quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. To withdraw your question, press star 1 again. We ask that you please limit yourself to one question. We enter the queue for any additional follow-ups. I'd now like to turn the conference over to Michaela Lynch, Director of Investor Relations and Capital Markets. Please go ahead.

Thank you, and welcome to Rexford Industrial's fourth quarter 2025 earnings conference call. In addition to yesterday's earnings release, we posted a supplemental package and earnings presentation in the investor relations section on our website to support today's remarks. As a reminder, management's remarks and responses to your questions may contain forward-looking statements as defined by federal securities laws, which are based on certain assumptions and subject to risks and uncertainties outlined in our 10-K and other SEC filings. As such, actual results may differ, and we assume no obligation to update any forward-looking statements in the future. We'll also discuss non-GAAP financial measures on today's call. Our earnings presentation and supplemental package provide GAAP reconciliations as well as an explanation of why these measures are useful to investors. Before we begin, our outgoing co-CEOs recorded some brief remarks that they'd like to share.

Good morning. Before the call begins, Michael and I wanted to share a brief personal note. Building Rexford from a startup into a leading industrial real estate company has been an extraordinary journey. What we've achieved reflects the talent, discipline, and commitment of a remarkable team as well as the trust and support of our partners and shareholders.

Thank you, Howard. I'd like to add that it's been a pleasure to build the company together with you over the prior 20 plus years. I'm deeply grateful to everyone who contributed to Rexford's growth and success and I'm proud of what the team has accomplished. Looking forward, I'm also excited for Rexford's opportunity to create significant shareholder value through its next phase of growth.

I'd like to thank Michael and Howard and wish them the very best going forward. Turning now to our fourth quarter earnings call, joining me today are Rexford's COO and incoming CEO, Laura Clark, together with our CFO, Mike Fitzmaurice. John Nahas, our Managing Director of Operations, will also be joining in the Q&A portion of today's call. I'd now like to turn the call over to COO and incoming CEO, Laura Clark. Laura?

Thank you, Michaela, and thank you all for joining us today. The Rexford team delivered a solid quarter of results, including the execution of 3 million square feet of leasing and meeting our guidance expectations. Rexford's portfolio continues to outperform the broader market and we remain confident in the long-term fundamentals of Enfield Southern California despite near-term pressure impacting our 2026 growth expectations. I'll provide additional detail on overall market dynamics following an update on our recent initiatives. In November, we outlined the immediate strategic priorities that position Rexford to enhance the quality of our cash flow, drive per share FFO and NAV growth, and optimize return for shareholders. I'm proud of the progress that we've made in just a few short months. First, we took a rigorous approach to re-underwriting our near-term development pipeline. At this point, we have identified six projects representing approximately 850,000 square feet of future development that we are not moving forward with and intend to dispose of giving us flexibility to redeploy capital into more accretive opportunities our decisive actions to reduce our development exposure have resulted in swift progress to date and we currently have all six projects under contract or accepted offer to be sold importantly as we continue to refine our strategy, maximizing risk-adjusted returns remains a critical component of driving value creation. All capital allocation decisions will be evaluated through our revamped, rigorous underwriting criteria that considers our current cost of capital and market dynamics. Second, a programmatic disposition plan is a key component of our broader capital allocation strategy. We are focused on disposing of properties that allow us to realize value creation as well as properties that enhance the quality of our future cash flow growth in 2025 we opportunistically sold seven properties totaling 218 million dollars looking forward to 2026 we are currently targeting between 400 and 500 million dollars dispositions that will support our ability to continue recycling capital to accretive opportunities third is our commitment to driving operating efficiencies across our business as outlined in our November release we targeted a reduction in GNA as a percentage of revenue below the peer average and based on 2026 guidance our GNA as a percentage of revenue will be 6% in line with our commitment we also communicated the importance of better aligning executive compensation with our shareholders. Per our December filing we recalibrated our short and long-term incentive compensation metrics as well as the absolute level of executive compensation underscoring our commitment to operate in direct alignment with shareholder priorities. We will continue to identify opportunities to drive further efficiencies across the business and we are confident we can further reduce gna as a percentage of revenue over time next I'll provide an overview of the conditions we are seeing across the overall infill southern California market observations that are shaping our strategic actions and informing our expectations going forward today tenant demand continues to be influenced by broader macroeconomic forces and elevated levels of market availability these conditions are contributing to to a more measured pace of demand. As a result, according to CBRE, market rents declined 10 basis points in the quarter and 9% year over year. Vacancy also increased 30 basis points during the quarter. Net absorption is another key metric we monitor closely as it typically begins to stabilize ahead of market rents. While net absorption was negative this quarter, reflecting broader market softness, we are starting to see some early signs of stabilization emerging across select sub-markets and size categories. Given the current market backdrop, we are maintaining rigorous capital discipline and aggressively prioritizing occupancy, driving leasing to maintain cash flow. By way of example, subsequent to year-end, we executed a strategic early renewal of our largest tenant, Tireco, who occupies our 1.1 million square foot production avenue property the three-year renewal allows us to significantly de-risk cash flow and preserve occupancy although we are not yet able to call an inflection point in the market we are excited about rexford's unique upside potential and believe rexford is a compelling investment opportunity today beyond the actions we are taking to position Rexford for outsized value creation, it is our unique assets, differentiated geographic focus, and on-the-ground operating expertise that underpin our confidence in our business model. Southern California stands as one of the most dynamic economic engines in the country, powered by a deep, highly skilled labor pool and a robust local consumption base that consistently fuels strong diverse tenant demand over the long term. We have a superior portfolio of high quality assets in a market where demand consistently outweighs supply. In fact, supply under construction in the market is near historic lows supporting future rent growth potential. We are confident that as a market influx, Rexford is well positioned to capture recovering demand to drive occupancy and NOI growth. We are entering 2026 with a clear action plan focused on maximizing risk-adjusted returns through executing on our programmatic dispositions, reducing development exposure, accretively recycling capital, driving operational efficiencies, and prioritizing occupancy. We will continue to thoroughly evaluate opportunities to increase per share FFO and NAB guided by our commitment to optimizing shareholder returns. Finally, I'd like to thank our exceptional Rexford team for their dedication that continues to drive our success today and through our next phase of growth. I also want to acknowledge and thank Howard and Michael on behalf of the entire Rexford team for their contributions in co-founding this incredible business. And we look forward to this next chapter at Rexford. I'll now turn the call over to Fitz.

Thank you, Laura, and good morning. I would also like to thank Michael and Howard for their leadership over many years and wish them both much success in their next chapter. Today, I'll discuss fourth quarter results and provide additional details on our 2026 outlook. Fourth quarter core FFO per share of 59 cents was in line with expectations, driven by higher same property and OI growth, lower G&A expense, and accretive share buybacks, partially offset by higher bad debt. For the full year after adjusting for the co-CEO transition severance charges and other non-recurring costs, core FFL per share was $2.40, placing us at the high end of our initial expectations. Note that co-CEO transition severance charges were fully recognized in the fourth quarter and will not impact 2026 results. During the quarter, we recognized $89 million of real estate impairments related to our development sites that we have elected to sell. These projects no longer meet our investment hurdles, and selling these assets allows us to redirect $285 million of capital into higher-yielding uses. This approach drives the best economic outcome and aligns with our strategic shift to de-risk cash flows and reduce development exposure. During the full-year operations, in 2025, we signed approximately 2 million square feet of repositioning and development leases, generating nearly 40 million of annualized incremental NOI. While we are encouraged by the pace of recent leasing activity, we continue to experience pressure on occupancy and market rent. Total portfolio occupancy end of the quarter at 90.2%, down to 160 basis points sequentially, largely driven by near-term repositioning and development starts. These opportunities are expected to achieve an overall stabilized yield of roughly 7%. Additional move-outs were primarily driven by large tenants pursuing consolidation or expansion, the expiration of short-term renewals, and in a limited number of cases, tenant financial difficulties. Regarding market rent, we continue to experience a deceleration compared to last quarter, with market rents within our portfolio down 1%. Market rents have now fallen 20% since the peak in early 2023, which has put pressure on our expected releasing spreads for 2026 as we address expiring leases that were signed near the height of the market. Touching on share buybacks, we continue to take advantage of market dislocation between our share price and intrinsic value. During the quarter, we repurchased $100 million of shares, bringing our 2025 full year total to $250 million. Share buybacks will remain a consideration in 2026, subject to a meaningful discount to intrinsic value, competing capital needs, and preservation of balance sheet strength. Moving to our 2026 expectations, we are introducing 2026 Core Fulfill Per Share guidance of $2.35 to $2.40. Our outlook reflects a mix of puts and takes which I'll walk through using the midpoint of the range. Starting with repositioning and development, we expect to stabilize and commence rent on approximately 1.2 million square feet of value-added projects, generating 20 million of annualized NOI with the majority coming online by mid-year. Conversely, approximately 12 million of annualized in-place NOI will come offline due to new construction starts, primarily related to our project at 9000 Airport Boulevard. The weighted average timing of the annualized NOI coming offline is late in the third quarter. Same property NOI growth on a net effective basis is expected to decline approximately 2%. Key assumptions include net effective releasing spreads of five to 10%, average occupancy of approximately 95%, and bad debt of 75 basis points of revenue. Of note, we expect unfavorable impact from lower termination income and the early renewal of the TARCO lease, as the above market rent was reset to current market levels. With respect to dispositions, we expect to sell roughly $450 million of assets with nearly $230 million already under contract or accepted offer. The proceeds will be redeployed toward the highest risk-injected returns, including future repositioning and development projects, as well as opportunistic share repurchases. Before I wrap it up, I'd like to genuinely express my gratitude to everyone on our team for their commitment and tireless effort throughout this quarter. I'd also like to congratulate Laura on her appointment as CEO. Laura's leadership, sound judgment, and vision have already made a meaningful impact, and And I'm excited to partner with her as we lead Rexford into its next chapter. With that, I'll turn the call back to the operator.

We will now begin the question and answer session. To ask a question, press star, then the number one on your telephone keypad. We ask that you please limit yourself to one question and re-enter the queue for any follow-ups. One moment, please, for our first question.

Thank you, Regina. Our first question comes from Greg McGinnis from Scotiabank. Greg, please go ahead.

Hey, good morning out there. I was just hoping just for a little more understanding on the TireCo lease re-signing there. And, you know, I think the original plan was in 2024. You looked out to 27, and there's kind of the expectation that you'd be able to release at a higher rent then. Has the competitive market changed much for that type of product? Or is there just more competition for that space out there? And then why address it now versus early next year or later in this year?

Yeah, Greg, this is Laura, thanks for joining us today. Really given the overall market backdrop, we made the decision here to prioritize occupancy and de-risk future cash flow growth. The lease was expiring a year from now in January of 2027, it's our single largest tenant. They came to us to discuss an early renewal and they were actually seeking a longer lease term of five plus years. And given the significant cash flow impacts from the downtime of that space, especially considering the capital investment that would be required to position that space for lease, we did engage in discussions around an early renewal. Although they were seeking a longer lease term, we strategically negotiated a three-year lease here, which allows us to reset at market rent sooner. So the TireCo lease was above market. The rolldown is about 30% on that space. And as I mentioned, the strategic renewal for us allows us to preserve occupancy and cash flow given the current market dynamics and de-risk future growth.

And Greg, the one thing I would add there is the impact of same property NOI for 2026 and our FFO per share impact as well. So it impacts same property about 50 basis points, and then an FFO per share impacts about a penny and a half.

Thank you, Greg. Our next question comes from Blaine Heck at Wells Fargo. Blaine, please go ahead.

Great. As you guys talked about, market rents showed less moderation during the quarter, down 1% overall in the fourth quarter. And, Laura, I know you said you're not calling an inflection today, but do you have any additional commentary on how much further you'd expect rents to decline based on, you know, what you're seeing from vacancy in the market and how aggressive some of your competitors have been on pricing? I guess, you know, would you expect that bottoming and inflection to come at some point during 2026?

Hey Blaine thanks so much for your question. I think it may be helpful to spend a little bit more time diving into the market and kind of what we're seeing across across the markets and as I mentioned in my prepared remarks we're certainly seeing some signs of stabilization while there's other indicators that show some continued challenge so collectively when I put all those together I think those are indicating that we're we're still bouncing around the bottom here and we're not going to be able to call an inflection point at this an inflection at this point but maybe you can talk about some of the positives that we're seeing around stabilization and then also maybe some of the challenges so on the positive side I'd say that third and fourth quarter leasing activities levels were steady although a portion of this activity was driven by some pent-up demand that we have seen in the first half of 25 we are seeing some tenants enter the market a bit sooner than they would historically and we're seeing some early renewals come to us like tire co I think that's a sign of tenants seeing where market rents are today and wanting to lock those in for longer terms. Some sub-markets in size ranges, as I mentioned, especially those in the, we'll call it sub 50,000 square foot area, seem to have stabilized. Other lease terms like concessions and TIs are steady quarter to quarter. That's another good indication of some stabilization in the market. And as you mentioned, market rent declines this quarter were down 1%. That's in line with what we saw in the third quarter, which were down 1%. And that has moderated for more elevated levels of decline in the first half. So I'd say those are all positive things that we're seeing and that you need to see, you know, in a more stable market. All that being said, I think there's some market challenges that really impede our ability to say we've hit the bottom. You know, leasing activity levels have moderated a bit as we've started the year. We measure activity on our vacant spaces. We have activity on about 75 percent of our vacant spaces today. that compares to about 80% this time last quarter I'll note though that we're trading paper on probably a lower percentage of that activity than we had had last quarter as I mentioned in my remarks that net absorption is a really key indicator that we pay really close attention to and and as we look at net absorption today continues to be negative in the market and to see to see the inflection and really to see that pricing power shift to landlords we need need to be in a at a point where we're experiencing some continued quarters of positive absorption a few other notes a few other notes about the market you know I'd say that I mean given the availability but availability in the market I'd say leasing is taking a bit longer tenants are certainly out shopping and and we're seeing tenants focused on you know wanting to capture more functional space in the market to operate their businesses so some consolidations are happening as well but you know Rexford is positioned well to capture that demand so all that being said challenging to to call to call the inflection point or when that will occur but I do feel like that we are you know seeing that we're we're bouncing around the bottom here we are prioritizing occupancy to drive cash flow making capital allocation decisions that take

into account these market dynamics thank you Blaine our next question comes from Craig's new man at Citigroup. Craig, please go ahead.

Hey, everyone. Lauren, since you both kind of gave some good color here on the leasing environment, I guess my question to dig a little deeper is, Lauren, you just, you know, mentioned you guys are prioritizing Occam City over rate, and I understand that, you know, maybe showing activity is down a little bit, but could you just give us a sense of what you guys are specifically seeing that's underpinning the occupancy decline versus, you know, what is just kind of a feel at this point? Like, are there big-known move-outs that we should be modeling in outside of the spaces coming off for redevelopment or repositioning? And maybe talk a little about, you know, the 75 base points of bad debt. I think you guys are running, you know, closer to a quarter of a point through the first three quarters, you know, what happened in the fourth quarter and kind of what does the watch list look like?

Here, Craig, I'll start. This is Fitz. You know, first, we're assuming a lot longer downtime in our occupancy assumption for 2026, both in the same property perspective and repositioning and redevelopment. From the same property perspective, we took about a million square feet back in the fourth quarter and it's taken a bit of time for that to lease up. Also, repositioning and redevelopment, given the mix in terms of a change relative to last year, it's a bit longer. Last year was around nine months. It's approaching 10 to 11 months this year. So that's what's driving the occupancy decline, both in the same property and early expectations in the same property and total portfolio.

Yeah, I'm happy to add a little bit more color. Hi, Craig. This is John. So for a couple of specific examples, if you're looking at our same property ending occupancy, we did have a sequential decline of about 50 basis points. There's a couple of bigger drivers in that bucket. We had two properties in the L.A. market that had some move outs that were expected. One was at our Rancho Pacifica Park, 144,000 square foot space that was leased to a temp tenant. And they moved out in the quarter. We've since released that space, and the new tenant moved in as of 1-1, so it's not showing in that quarterly number. The other big driver in the same property bucket was an asset that we own at 3880 Valley, and that was an expected move out as well that is on the market for release. With respect to the bucket of properties that moved out and going into repositioning and development, the bigger drivers there are three properties that are on our development pipeline. Those are Gale, Balboa, and 190th. These are assets that we are really excited to move forward with. They are great pieces of real estate, and the development returns are meeting our expectations, so we're very excited to move forward with those.

Thanks, Greg. In regard to bad debt, first in the watch list, if I compare year over year in terms of the size of our watch list, in terms of tenants and rent, it's about the same. In 2025, we experienced about 50 basis points of bad debt. That was tied to three tenants. We experienced one tenant that vacated in the first quarter. We had zero bad debt in the second and third quarter. And in the fourth quarter, we had two tenants, two large tenants vacate. As we look into 2026, same story. We have a handful of tenants that are larger tenants that we're keeping an eye on. And therefore, we're going to take the same expectation that we set in 2025 in terms of being prejudicious and having the appropriate bad debt reserve of about 75 basis points on revenues.

Thank you, Craig. Our next question comes from Andrew Berger from Bank of America. Andrew, please go ahead.

Great. Maybe just following up on the last question, Fitz, were there any particular industries for the 2026 reserves watch list?

Hi, Andrew. This is John. Yeah, you know, this quarter we have the same number of tenants on our watch list. The difference from Q3 is that there's some larger spaces that are showing up and there is some concentration in logistics. When we dive into each situation, they're a little different. There's specific business issues with the businesses that are operating in these properties. companies, many of the tenants in this space really are contending with changing rates from their customers, and so anytime there's some misalignment between their contract revenue and their occupancy costs, it can create some disruption. So it's something that we're very focused on and working with these tenants to resolve, but that is representing a higher concentration this time around.

Thank you, Andrew. Our next question comes from Michael Griffin from Evercore ISI. Griff, please go ahead.

Great, thanks. Thanks. Maybe just circling back to sort of expectations for leasing and rents on the year. You know, if I look at the expiration schedule, you've got about $16.50 rents expiring versus, you know, you were signing in the past quarter, call it $14.50, you know, $15. Maybe this is better for Fitch just on the guidance side, but if you're anticipating, you know, 5% to 10% releasing spreads this year, I guess does that imply you're going to be signing leases in the $17 range? Like, I'm just kind of curious how to marry the, you know, expectation for where rents could be versus what you've currently been signing. And I realize that, you know, you can have a mix issue quarter to quarter, but any context there would be great.

Yeah, it always comes down to a mix issue, Griff, for sure. But yeah, I think you're roughly around the right rent per square foot in terms of your It's between 16, 75, and 17 what we expect to sign. And like you said, on the net effective perspective in releasing spreads expectation, it is between five and ten percent you know some of that obviously is impacted by by tire co as laura mentioned earlier we do have a 30 percent negative spread on that lease and then from a cash perspective we'll give the other side of that as well we do expect those to be flat to negative five percent and that is one of the more significant you know drivers uh or lack of drivers and both are the same property, not effective in cash NOI expectations.

Thanks, Griff. Our next question comes from Michael Mueller from JP Morgan. Mike, please go ahead.

Yeah, hi. Your year-end Samester occupancy was 96.5 and it looks like the guidance is for about 95% average for the year.

So can you give us a little color on where you expect occupancy to end Hi Mike, good morning, so the 96.5 that we ended last year was based on a different same property pool. Our pool did change from 25 to 26 that was primarily driven by the acquisition activity that we experienced in 2024 that entered the same property pool in 2026. So the appropriate starting point is actually 95.6%. And we, our expectations that it will decelerate into 2026 and our midpoint of our guide is about 95% and it generally, it's a deceleration from this point throughout the year and with a little bit of acceleration in the fourth quarter.

Thanks, Mike. Our next question comes from Vince Tavone from Green Street. Vince, please go ahead.

Hi, good morning. I'd like to drill down further into the cash same-store guide. Based on the components you gave, I'm having trouble getting to the range of spreads are only going to be slightly negative, 60 basis point doc can see decline, and it seems like a modest headwind from bad debt, lease term fees, free rent, and contractual bumps are still three and a half.

So I just want to understand what I'm missing and just want to confirm, the Tireco lease extension does not have an impact on cash same store in 26 right so you can help me kind of stitch together how you know cash guidance is you know negative one to two given all those factors hi Vance good morning this is this is Fitz I appreciate the question but yeah to quickly answer your entire question on the cash side we do have concessions in 26 versus 25 so that is that is impacting. But to pull back and give you the components of the buildup. So our 60 basis point decline in average occupancy translates into about 100 basis puts of unfavorability. If you add on the NOI margin, which is correlated to occupancy, it's another 50 basis points. The lower term and lower term fees and the tire coat impact is about negative 75 basis points. and then bad debt which includes some straight line I'm sorry not straight line but about 50 basis points and that gets you like a negative 2.75 and then concessions brings you down even further it's about 200 basis points and then bumps brings you back up at about three and a quarter that gets you to the 1.5 percent at the midpoint on cash events our next question comes from Rich Anderson from Cantor Fitzgerald.

Rich, please go ahead.

Thanks. Good morning out there. So I guess a bigger picture question here. I'm wondering what the measurement of success will be from everything you're doing, you know, things that are under your control you're doing, you know, higher dispositions, lower development, lower GNA, but so much is out of your control when you think of the macro and politics and a blue state and tenant behaviors. So come a year from now or two years from now, if we're still talking about the same growth profile, does that incite the board to think to do something even more substantive with the company? Or do you think you have a few years to see this through? I understand, Laura, you're just fresh in the seat, so I don't mean to be overly aggressive with this question, but I am curious as to what the timeline is to sort of see some fruits of your labor.

Yeah, Rich, great question, and thanks so much for joining us today. Yeah, and in 2026, as we've outlined, I mean, we're focused on executing our strategic priorities, and we believe that this will position us to create long-term value. And you asked about what's the measurement of success. It's about driving outside shareholder returns for you all. So that's the guidepost, and that's the measurement stick. And our priority there is to drive those returns, and we are going to be the best stewards of your capital. So that's our commitment, is to continue to assess opportunities within the portfolio to drive value and position Rexford for future success. We're going to do that through a variety of ways. We've talked about how we're going to exercise a renewed capital allocation discipline. We're focused on driving to the highest risk adjusted returns, taking into account our cost of capital and market dynamics. We've embedded a more rigorous underwriting criteria into how we're making decisions. We're limiting our development exposure. We've adjusted the spreads at which we need to achieve to move forward with those projects. We're focused on executing on value creation. I mean, it's a key component of our business model, and that's really going to drive our cash flow and position us into the future. And we're committed to operating this company also as effectively and efficiently as possible. That allows us to maximize shareholder value, and we will continue to identify other ways to drive efficiencies across the business. So all that said, we're going to continue to assess those opportunities to drive value, and that is our focus today.

Thank you, Rich. Our next question comes from Vikram Malhotra from Azuho. Vikram, please go ahead.

Good morning. Thanks for the questions. I just want to clarify two things. So, one, I guess, just real quick, the mark-to-market kind of was only down 1%, and it seemed like no impact from, you know, either move out or re-leasing. So if you could just clarify, you know, kind of how you expect that mark-to-market to trend in the year. And then just clarifying on that last answer, I guess, you know, given what you've said, still very rapid leasing, et cetera, your rent spreads are probably a headwind next year, and then you have a lot of disposition. So sort of, Laura, if you right-size the ship, so to say, there will be a lot of dilution. If that's like a multi-year effort, in other words, you think it takes a while before we see earnings to drop. Thanks.

Good morning, Vikram. This is Fitz, I'll take the first question. We had offsetting items for the impact on both our net effective and cash mark-to-market for a portfolio. In the fourth quarter, leasing, we had a positive impact of about 50 basis points as we converted below-market leases to positive spreads. That was offset one-for-one by spaces that vacated during the quarter that had an above market rate.

Yeah, and in terms of how we're thinking about dispositions, we've got 230 million identified between the near-term development pipeline and other operating properties. But as we think about additional properties and what's the strategy, you know, it's comprised of future opportunistic sales where we can realize value creation, opportunities that we can sell that de-risk future cash flow growth, and then the potential for future repositioning and development properties as we assess the strategic plan for each asset and evaluate what the right appropriate risk adjuster return is to move forward with those assets. All that being said, the goal is to execute on a programmatic disposition strategy that's neutral to accretive, to FFO and NEV growth over time.

Yeah, and then the one piece I would add there is just the continued capital generation for our, excuse me, for repositioning and development. We had about 15 million or so that stabilized during the quarter, which is about 750,000 square feet. And then we have another 53 million that's in lease-up or under construction. 20 of that 53, as I mentioned in my prepared remarks, is going to commence in 2026, and then the remaining 33 will be in 2027 and beyond. So there are some offsetting impacts to the release of this quiz.

Thank you, Vikram. Our next question comes from Nick Tillman from Baird. Nick, please go ahead.

Hey, good morning out there. Maybe touching a little bit on that disposition side, maybe some color and what you guys are seeing from the bidder pool, the type of bidders you're seeing in the market and what you're seeing on the pricing front. And then it seems as though most of the dispositions are targeted towards redevelopment and repositioning properties that have some vacancy but as you are evaluating this portfolio is there anything you're seeing from the sub market level that has a changing thesis or targeting different sub markets are looking to exit as well as we just evaluate the portfolio construction today yeah Nick I'll start on this one in terms of the the buyer pool the buyer pool is really different depending on what what we're in the market selling in terms of the the six development sites six near-term development sites that we have under contract, that buyer pool is made up

of mostly developers that have local Southern California development expertise. The pool was pretty deep on out, you know, for the total sales value of those is about 135 million or $80 per land square foot on those six properties. I'll also note that those were projected to yield, those properties of 4% yield upon stabilization, which is why we didn't move forward with those projects in terms of other other buyers in the market I would say that we continue to see user sales have increased across the market and it was a significant portion of the the assets that we sold in 2025 user sales users typically pay premium pricing and we were able to take advantage of those opportunities selling that 218 million it on an average cap rate of 4.2%. As I look into the pool of what we have under contract, $135 million is in the near-term development and then another $95 million is under contract. And those are operating properties mostly to user sales at about a 4% cap rate.

Thank you, Nick. Our next question comes from Brendan Lynch from Barclays. Brendan, please go ahead.

Great. Thanks for taking my question. And I think in the past you've highlighted that your port exposure is somewhat limited, and that was kind of limiting some of the tariff risks over the past year. Has your view evolved at all on that consideration, and do you see it as a potential catalyst if some of these tariffs are removed in the relatively near future?

Yeah, I think overall, I mean, as we've talked about in the past, our tenant base is very much focused on the local consumption, and there hasn't been a direct – we haven't seen as much of a direct impact from changes in port volumes. You know, port volumes year-over-year are roughly flat in this market. All that being said, what I would say in terms of the impacts of tariffs with our tenants is they have a very keen focus on their expense structures and driving operating efficiency, and I think tariffs are certainly playing a role in how they're making decisions. They're taking a more conservative approach to decision-making, and we're seeing this come through in some of their decision-making, either if it's around consolidation or space rationalization needs and so yeah I do think tariffs are playing a role as as our tenants are looking to drive operate operating margins and efficiencies.

Thank you Brendan. Our next question comes from John Kim from BMO. John please go ahead. Thank you.

I wanted to ask on the on the roll down at Fireco of 30 percent how that compares to the the 12% roughly change in ABR. I'm wondering if this number is more of a net effective number that includes concessions and if not or just generally like how does this transaction work in terms of concessions and maybe lower annual escalators?

Sure, sure John good morning if this fits. So the new lease, the new lease shifted to a gross lease from a triple net lease. So on an apples-to-apples basis, the release is probably was an unfavorable 30%, including the rent and the triple net charges.

Thank you, John. Our last question comes from Vince DeBone from Green Street. Vince, please go ahead.

Hi, thanks for taking my follow-up. Can you just walk through the expected sources and uses of cash for 26? So if you sell the 400 to 500 million of properties this year with the guide, I'm just trying of get a sense of how much free cash flow after all development spend could be available to potentially buy back shares or redeploy in some fashion this year?

Yes, good question, Vin. So at the end of the year, we have 166 million of cash, including dispose at the midpoint of 450 that puts us at 616 million of sources. The redevelopment, I'm sorry, development and repositioning spend is expected to be about $203 million in 2026, so that leaves about $413 million of available cash to deploy to the highest risk adjusted returns and that can include share repurchases or future reposition or development.

Thank you, Vince. That concludes the Q&A portion of our fourth quarter 2025 earnings call. I'd now like to turn the call back over to Laura for some brief closing remarks.

Thank you all for joining us today and we look forward to connecting with you all over This will conclude today's call.

Thank you all for joining. You may now disconnect.