A real estate investment trust that owns and operates industrial properties — warehouses, distribution centers, and improved land — concentrated in six coastal U.S. markets: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C. The company went public in 2010 and focuses on buying functional infill properties near transportation hubs in supply-constrained areas, renting them to hundreds of business customers.
Net income fell 38% as property sale gains dropped to $12M from $55M, while same-store cash NOI rose 7.1% on a 27.7% cash rent spread.
Property sale gains fell sharply, pulling down with them. rose 11.1% to $124.7 million and same-store cash grew 7.1%, driven by new and renewed leases signed at rates 27.7% above prior rents. The core leasing business is strengthening even as the company's reliance on dispositions makes earnings lumpier.
Key takeaways
fell 38.3% to $57.6 million, driven almost entirely by a drop in gains on property sales to $12.0 million from $54.6 million in Q2 2025.
rose 7.1% to $74.8 million, as higher rental rates on new and renewed leases and contractual rent increases took effect.
Cash rents on new and renewed leases commencing in the quarter were approximately 27.7% higher than prior rates for the same space, up from 22.6% in Q2 2025 and 22.4% in Q1 2026, reversing the multi-quarter moderation in rent spreads.
Section summaries
Management's Discussion and Analysis
Q2 2026 net income fell 38.3% to $57.6M on lower property sale gains, while same-store NOI grew 6.7% driven by higher rents.
⌄
Total revenues rose 11.1% to $124.7M, driven by a 6.4% increase in same-store rental revenues and contributions from 2025 and 2026 acquisitions.
Total grew 11.1% to $124.7 million, with same-store rental revenue up 6.4% and the remainder from properties acquired during 2025 and 2026.
The company acquired four industrial properties for $172.3 million and raised $130.5 million in net equity proceeds under its at-the-market programs during the quarter.
Total debt stood at $945.9 million with a weighted average interest rate of 3.8%, and $400.0 million in variable-rate borrowings carried a 4.8% rate with no interest rate caps in place.
What changed
Cash rent spreads on new and renewed leases rose to 27.7%, up from 22.6% in Q2 2025 and 22.4% in Q1 2026, suggesting the multi-quarter decline that began in mid-2023 has reversed rather than merely stabilized.
Property sale gains fell to $12.0 million from $54.6 million in Q2 2025 and $27.2 million in Q1 2026, confirming that disposition gains remain lumpy and are not following a steady quarterly cadence.
Same-store cash growth of 7.1% held roughly in line with the 7.3% recorded in Q2 2025 and the 8.9% in Q1 2026, indicating the core portfolio is generating consistent mid-to-high single-digit growth.
The company repaid a $50.0 million senior note in July 2026, the first debt reduction since adding $200 million in term loans earlier in the year, and continues to carry no interest rate caps on $400 million in variable-rate borrowings despite flagging this as a consideration across multiple prior filings.
What to watch
Whether the 27.7% on new and renewed leases is sustained in Q3 2026 or proves to be a one-quarter bounce, and what that means for same-store cash growth as 15.7% of annualized base rent expires in 2026.
The pace and cap rates of acquisitions following the $172.3 million deployed in Q2, and whether the $130.5 million in ATM equity proceeds signals continued reliance on equity funding for growth.
Whether property sale gains, which fell to $12.0 million in Q2 after totaling $238.4 million in FY2025, recur in the second half and at what level, given the growing dependence on dispositions to shape reported .
Whether the company adds interest rate caps or refinances the $400 million in variable-rate borrowings at a 4.8% weighted-average rate, as previously indicated across multiple filings.
Same-store cash-basis grew 7.1% to $74.8M, primarily due to higher rental rates on new and renewed leases and contractual rent increases.
Cash rent changes on new and renewed leases commencing during the quarter were approximately 27.7% higher than prior rates for the same space.
decreased 38.3% to $57.6M, largely because gains on property sales dropped to $12.0M from $54.6M in the prior-year period.
The company acquired four industrial properties for $172.3M and issued $130.5M in net equity proceeds under its ATM programs during the quarter.
Total debt was $945.9M with a weighted average interest rate of 3.8%, and the company repaid a $50.0M senior note in July 2026.
Quantitative and Qualitative Disclosures About Market Risk
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business strategies, the primary market risk which we are exp…
⌄
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business strategies, the primary market risk which we are exposed to is interest rate risk. We are exposed to interest rate changes primarily as a result of debt used to maintain liquidity, fund capital expenditures and expand our investment portfolio and operations. We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. As described below, some of our outstanding debt bears interest at variable rates, and we expect that some of our future outstanding debt will have variable interest rates. We may use interest rate caps and/or swap agreements to manage our interest rate risks relating to our variable rate debt. We expect to replace variable rate debt on a regular basis with fixed rate, long-term debt to finance our assets and operations.
As of June 30, 2026, we had $400.0 million of borrowings outstanding under our Amended Facility, none of which were subject to interest rate caps. Amounts borrowed under our Amended Facility bear interest at a variable rate based on SOFR plus an applicable SOFR margin. The weighted average interest rate on borrowings outstanding under our Amended Facility was 4.8% as of June 30, 2026. If the SOFR rate were to fluctuate by 0.25%, interest expense would increase or decrease, depending on rate movement, future earnings and cash flows by approximately $1.0 million annually on the total of the outstanding balances on our Amended Facility as of June 30, 2026.
Except to the extent updated below or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2—Management’s Discussion and Analysis…
⌄
Except to the extent updated below or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.