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Q3-2025 Earnings Call
AI Summary
Earnings Call on Nov 14, 2025
Portfolio Durability: Management expressed optimism about the company’s resilience and strong balance sheet despite ongoing market volatility and small size.
Acquisition Pipeline: Deal flow had slowed but has recently picked up, with more acquisition opportunities emerging in the past weeks, though quality remains a challenge.
Asset Sales: The company has formally listed two properties (Costco and Clara) for sale, aiming to close at least one by year-end or early next year, and expects further systematic asset recycling.
Capital Markets Outlook: Management is waiting for greater clarity on interest rate trends before pursuing external growth capital, and is cautious about raising capital through preferred stock or equity at current valuations.
Cap Rates: Most acquisition opportunities are showing cap rates in the 7% range, with some higher but little evidence of tighter spreads.
Tenant Health & Tariffs: No notable tenant credit issues; tenants have largely adapted to tariff risks and are not currently impacted by recent tariff uncertainty.
Property Expenses: Disposing of held-for-sale assets may reduce property expenses by roughly $100,000, with further reductions possible as non-core properties are recycled.
Management described the quarter as volatile, with a sense that capital remains on the sidelines as investors wait for 'super sweetheart' deals. The market saw some false starts in acquisition activity, influenced by factors like the timing of the Fed's decisions and general macroeconomic uncertainty. Despite the cloudiness, the CEO expressed optimism about the company’s position, citing a strong balance sheet and improved operational clarity.
The pace of acquisition opportunities slowed in late summer but has recently picked up, with more deals appearing over the last one and a half weeks than in the prior month and a half. While quantity has improved, management emphasized they have become more selective, focusing on higher-quality, better-fitting assets for their portfolio.
Two properties, including Clara and the Costco property, are held for sale and actively being marketed, with the goal of closing sales by year-end or early next year. Systematic recycling of non-core and legacy assets is expected to continue, with timing influenced by market stability and tax considerations. Management noted that some non-core assets would sell easily but are being held until cap rates are more favorable.
Management is cautious about raising external growth capital, citing the current wide spread between their yield and larger REITs, as well as a lack of clarity on interest rate trends. They are monitoring recent preferred equity deals by peers but are hesitant to lock in high-cost capital, preferring to wait for more favorable market conditions before issuing equity or preferred stock.
Most cap rates for potential acquisitions are in the 7% range, with some as high as 8%. There are few opportunities at tighter cap rates, and brokers are still aggressively pricing assets. The company is prioritizing deals that fit its strategy rather than chasing yield.
Tenants are reported to be stable, with little notable credit risk or distress. While tariff policy remains a source of uncertainty, most tenants have adapted their supply chains to minimize exposure. Rent growth on existing leases is averaging around 2.5% per year, with newer acquisitions tending to have higher escalation rates.
Disposing of held-for-sale properties like Costco and Clara is expected to reduce property operating expenses by roughly $100,000, with additional reductions likely as other non-core properties are recycled. However, the impact on overall expense levels is expected to be moderate, as most remaining properties have stable cost profiles.
The solar property, vacant since September, is nearing readiness for sale after a lengthy entitlement and construction process. Management expects to bring it to market in early 2026, targeting owner-users as the best buyer profile.
Good day, and welcome to Modiv Industrial, Inc. Third Quarter 2025 Conference Call. [Operator Instructions] On today's call, management will provide remarks and then we will open up the call for your questions. [Operator Instructions] Please note that this event is being recorded.
I would now like to turn the conference over to John Raney, Chief Operating Officer and General Counsel. Please, go ahead, sir.
Thank you, Chloe, and thank you, everyone, for joining us for Modiv Industrial's Third Quarter 2025 Earnings Call. We issued our earnings release after market closed today, and it's available on our website at modiv.com.
I'm here today with Aaron Halfacre, Chief Executive Officer; and Ray, Chief Financial Officer.
Before we begin, I would like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate or other comparable words and phrases. Statements that are not historical facts such as statements about our expected acquisitions or dispositions and business plans are also forward-looking statements.
Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause the results to differ materially from these forward-looking statements are contained in our SEC filings, including our reports on Form 10-K and 10-Q.
With that, I'd like to turn the call over to Aaron. Aaron?
Thanks, John. Hello, everyone. Hope you're doing well. This time, we're going to do -- we're doing everything a little bit differently. Certainly, I had the call on a Friday in the afternoon. I'm surprised to see as many of you dialed in as you did. Hopefully, you have a cocktail in your hand.
But we're not going to do prepared remarks. I put a little more context into the press release. So we're going to free for all the questions, but I think what I'll say is kind of an iteration. It's really grindy, and I really like that. We purposely waited toward the end of the earnings season because some of the early reporters, it was interesting to see them come out like, "Wow, it's pretty solid."
And then they just got s*** on in the market. And I was like, "Okay, let's see what else comes out." And so it was really -- I really wanted to spend some time observing because I -- candidly, it doesn't really move the needle when we come out. And typically, when we come out, you're stacked for deep and you guys don't have a chance to breathe and I wanted to give you a chance to breathe.
And so that's the only reason. So there's nothing else into it other than that. We won't do this that often. But I feel generally optimistic. I mean, look, I don't -- no one knows where December -- will Powell be in December. Are they done or not? But I think we all probabilistically underwrite that there's going to be a new Fed regime come May.
And so -- and that regime has a high propensity to be easing. So at some point in the future, we should see easing. And so Modiv share price is very easy to predict in a 5-minute pattern and probably on a 5-year pattern, but not sort of in between. But if you think you've got easing, you think you've got a long period of capitulation.
We started to see sort of nonequity, and when I say noncommon equity, I guess. We've seen preferred and debt deals being done, which I think are tea leaves of capital market activity. I think July, we saw I think -- at least I got a palpable sense that there was some interest. And we saw the deals like we saw with the Fundamental deal, and we saw the pre-version of the Plymouth deal announced, and we saw the sort of ElmTree and we were starting to see pipeline and then it kind of went like sideways in late August, September or early October where it's just like people got spooked and the shadows we're seeing.
For instance, we saw -- we were in the process bidding on a pipeline deal that we liked, and it was a company that was doing a propco sell along with an opco transaction, and they were like guns are blazing and then they pulled it. Now we've seen some of that stuff over the course of the last quarter.
So it was a bit of sort of a volatile quarter where people thought they had a look and then the market gave them a head fake and then they're like, pausing on the margin. But I think we get this real palpable sense that there's still a lot of money on the sidelines. I think still right now, a lot of people just want like blood bath returns.
They really want to shave people who they think that are desperate. And some of those people are being picked off, right? We're seeing more REIT stuff that I think either they waved the white flag or they just didn't have the wherewithal or whatever. But -- and so I think that capital is still really sort of -- let's just be patient and let's just only get the super, super sweetheart deals.
But if we start to see real easing and we start to see some consistent trends for REITs, I don't know if that means we need a consolidation on the sort of the rest of the S&P and NASDAQ to get that or not, it's hard to say because you could argue that until tech and some of these names cool off, then no one is really going to ever consider boring REITs.
But at the same time, if they force correct, is that just going to drag everyone back down. So it remains to see, it's pretty cloudy. But even despite that cloudiness, I feel pretty optimistic about what I'm seeing. And again, it's because I'm gritty and grindy and I like that. So that doesn't mean we're off to the races, but it does feel like -- I mean, for us, I mean, we're like a goddam cockroach that could survive a nuclear war.
There's no real fundamental reason why we should be as durable as we are given how small we are now in the context. I mean, we -- as a reminder, and I've said this before, we came out 2 weeks before Putin invaded Ukraine, and we came out like, what was it, 3.5 weeks before the Fed started raising rates. So the entire publicly traded existence of us has been like dogs***.
Yet we -- I feel like our balance sheet is stronger. I feel like our [indiscernible] was better. I feel -- I just -- I have much more clarity now than I did even a year ago. And so I think that leads to optimism.
But enough of me, rambling, let's open it up to questions. Shall we?
[Operator Instructions] Our first question comes from the line of Craig Kucera from Lucid Capital Markets.
Just a few for me. Were there any onetime revenue adjustments in your other property income? And how should we think about that going forward?
Ray? Yes, I'm trying to get Ray to respond.
Yes, there was a $300,000 fee that we obtained for terminating some easement rights that are marked for property, and that's it.
So to add a little clarity to that. So our Northrop property, which is in Melbourne Space Coast, there was a large piece of sort of underutilized near-vacant land and it was a former like, I don't know, call it, like a kids park or something like an amusement park, and that's getting redeveloped into a housing project, a townhouse type of arrangement.
And the prospective buyer had come to us because there were certain easements and they wanted certain rights. And so we negotiated. It took a while, candidly. I would say we probably negotiated for 9 to 12 months and basically gave us a fee for -- to sign a paper. And so that's what that was.
Got it. And will that all recognized here in the third quarter or will we expect any additional fees going forward?
That's it. Onetime.
Okay. Got it. It looks like you added another asset to the held-for-sale bucket. Can you give us some color on what you're looking to sell here? And are you actively marking that for sale as well?
Yes. So obviously, we've had Costco in the held-for-sale up into this point. And then, I guess, about 6 weeks ago, we formally engaged a broker to sell Clara. So Clara is held for sale. And we're in the process right now of, I think -- our anticipation is that we would try to get this sold either by the end of the year or probably early January. So that's the other property that's in the held for sale.
Got it. And speaking of the Costco property, I think KB Home was expected to extend a couple of times until maybe December. Are you getting any change in sort of their viewpoint on the asset, are they're still expected to close?
Yes. So they did extend to December. We've had some conversations recently about they're wanting to time the closing for their -- for a demolition permit. But they've got to go through their process. But as it stands right now, per the agreement, we have not been heard if they're going to extend beyond December 15. So they have one more extension that would take us through to, I think, February 15. But right now, it's through December 15. If I were to bet, my bet is [indiscernible] close by then.
Okay. Fair enough. And just one more for me. I feel like last quarter, you were saying you were seeing an increasing number of acquisition opportunities. I'm just sort of curious, based on your opening commentary, it sounds like things are maybe were loosening up, but now sort of ceased, what's your -- is that sort of your viewpoint currently or do you think things are coming back?
Yes. So it's interesting. So I would say that we were seeing some stuff in that sort of July time frame and then -- and we started throwing out some bids and then it kind of contracted because we got a little sideways. And I would say we've seen more in the last 1.5 weeks than we had probably in the prior 1.5 months.
So I don't know what it was about it. I mean the markets were this volatile, maybe it was because the end of summer, maybe it was because we knew we had the September Fed decision, I'm not sure. But it kind of -- we didn't see much. And now we're starting to see more. Like now it actually feels -- like I'm measuring it by quantity, not quality.
It's starting to feel healthier. Like there's definitely -- I mean, I think John, Ray, I'm thinking, we've probably looked at 4 or 5 deals in the last week, right?
Yes, at least.
Now quantity is challenged -- I mean, quality is still challenging, right? I mean we -- I think the one thing that -- like if you imagine us as a steel blade or a knife, we're constantly sort of sharpening and sharpening on the grindstone and getting better at what we want and knowing better what we want. And so our box -- our buy box has probably gotten a lot tighter. And there's stuff that I probably would have been willing to bid on 2 years ago and like, f*** it, I'm out, I don't want to bother.
So we've gotten much more selective. But that said, it feels right now at least and it's usually odd because candidly, you don't tend to see a lot at year-end. You tend to see I'm waiting early January, right? That's where pipeline tends to pick up normally. Like now you would generally think it's going to slow down because these take anywhere from 30 to 60-ish days to close and so things are like smack in the holidays and you like -- so I think that's an interesting sign.
I think some of -- I think what we are seeing sort of tea leave wise is there's probably more PE activity going on, which I think is always an indicator -- an early indicator, right? PE and hedge funds sometimes tend to -- you generally consider them to be smarter capital, maybe not smart capital than sort of people who have just got long bias or doing 1031s or something like that where they're forced by mandate to do something. These guys are looking for something. So we have seen a little bit of PE activity pickup.
Our next question is from Gaurav Mehta from Alliance Global Partners.
Following up on your comments on acquisition. Can you comment on where the cap rates are for the kind of properties you're looking at?
Cap rates are mainly 7 handles, that's first year, right? We've seen some 8, but mainly 7 handles, not necessarily low 7 handles, but 7 handles. Like I think brokers are certainly asking for the moon, and that's their job and I get it. On a weighted average basis, those are probably 10s, right? So now I guess, in fairness, we've seen some wider ones, but you're like, I don't want to own that. Have we seen any tighter ones at all? I don't know that I have right now, to be honest with you.
Okay. Second question on, I guess, your asset recycling as the acquisition market picks up for your target assets, should we expect that you may sell more assets to fund those acquisitions?
You should expect that we will be deliberate and systematic about asset recycling. If you think back, right, so we did the asset recycling the GFPR, which is a large bulk. And so just for everyone's education purposes, generally speaking, if you sell -- if you do 7 individual transactions to 7 individual buyers in a given year, that's sort of the limit from an IRS perspective.
If you go over that, you tend to have to get what is called a private letter ruling to sort of get exemptive relief because otherwise, it might be deemed trader, you're dealing. And so when we sold that big bunch of office and dollar stores to GFPR, that was one transaction. And then that was sort of kicked it off.
In earnest, we sold the one in Nashville, we sold one out in California. And then it just kind of got really super volatile. And we've been sitting on the KB thing for the Costco purchase for a while, looking forward to that closing soon. As I said, OES has this purchase option, so we can't do anything with that until we actually have conversations with them and their process is they have time on their clock.
So that one just wasn't going to happen immediately. And then the solar property, we've been 4 years of trying to get a lot split. So San Diego is like really difficult to work with in terms of doing anything. So that's taken long. So it's felt really like long in the tooth, like we haven't really shown much recycling. And I think at the same time, we have other assets we could -- would fly off the shelf, right?
They would just immediately go. And what I say these other assets is, obviously, there's the Kia asset, which is a noncore, but we also have in our industrial bucket, some legacy assets, not all -- there's a handful ones that are like -- that are not absolute -- that I don't like because it's leakage and it's not scale efficient. Some of them are just not the very focused sharpened knife blade of manufacturing that we want.
And so those would have flown off the shelf in this period of time. But at the same time, we're saying they're not hurting us, they're very comfortable credits, let's see if we get a little bit of more stability in the cap rate markets. If the cap rates start to tighten, then we can comfortably roll those off, and we're not like leaving a lot of chips on the table.
And so I think what you'll see over the next period of time is we will continue to do that, start recycling those. And I think it will be systematic, and we'll use -- and we sense those have a long legacy that we'll have to -- we'll have -- in terms of a low basis, we've held them for a long time that they will be 1031s or they'll be tax sensitive. So we will be sort of timing, rolling into new acquisitions with the advent of those being sold, if that makes sense.
Our next question is from John Massocca from B. Riley Securities.
As you think about maybe over a longer time horizon, the outlook for like true growth, what's kind of interesting maybe is the Fed dynamic changes a little bit in terms of a sources of capital perspective. And I just maybe hop in on your preferred stocks had a little bit of a run, there's been some smaller REITs that have been out there in the preferred market, but that would, in same people's mind, be a leveraging transaction if you did raise in that market. Just kind of curious where we should be thinking about sources of kind of external growth capital in the future if and when the market gets a little more accommodative?
Well, I think when we know the market is accommodative, I think that will be a better time to ask that question. I think for us, and I've kind of alluded to this, is that like that question predates that we have to grow and we have to find sources for it, right? And I kind of revel against that question, in general, right now.
And I don't -- I know the answer is underwhelming, like, if you don't have external growth capital, you can't really grow. And I was like, I don't -- I have several assets that are going to -- can trade low 6s and then I can rotate them into mid- to high 7s. And so that's growth, right? And that's something to do in the near term.
Until it makes it clear that we're -- the trend because you think about we're in a downward trend in REITs or we have been, generally speaking, and it's correlated to rates. And so until we have clarity on where rates are, then I think we will start to see where pricing is. And another way I think -- and a couple of ways I think about it, right? And I'll talk about the preferred stuff, too, in a second.
But look at (O) or W. P. Carey, I mean, I think their dividend yields are like high 5s, right, mid-5s, high 5s, and we're about 8. So we're roughly 250 basis points off of them, 200 to 250 basis points. That doesn't seem terrible to me. I don't like it. I think we're certainly undervalued, right, from a standpoint.
But arguably, everyone is, right? I mean (O) was forever was like sub-4 dividend yield, and they're trading fairly wide. I mean that's much wider than the money market. And do they have a lot of risk in them? I don't -- I mean they have risk that they may not grow. But -- so I think we need to see the broader, more liquid, the more easily bought, the easily loved names, right, the big names to start to see some love from the broader institutional community, which they haven't seen because flows into the REITs have not been good.
When you start to see that, then the next sign would be, okay, are we -- we're the tail, do we start to see that, right? So obviously, price of -- our share price, if it's at a realm that's accretive, then we would start to access that. But we're not there yet. And so until it is, I can't do anything with that, right?
The strategic capital stuff, look, we're always looking. I think -- look, we've had -- we've seen 3 preferred deals really in the last week. GMRE, we saw PINE and we saw FrontView. I thought the deal that Preston and Fitzgerald did, it was really -- I like that. It was clever, right? I'd love to have conversations with them and reach out to them to do it, but I think that was a clever deal, right?
I think that one is a constructive deal that will cause growth. If I look at GMRE's and PINE's, look, I get it, it's cheaper. That 8% preferred is cheaper than your equity was. But you got to step back. And so that answers the question, which source of capital do I want to use? And I want to step back with the primary question and say, should I be using either of those?
And if I have a hammer and the hammer says hammer every mill that says growth on it, then you're going to use capital. But like think about it, if you just pull back on a time horizon and you underwrite that we could be in an easing environment and that this time next year, our returns -- our share prices could be better as a category, then won't it feel a little like a jump to have issued a bunch of perpetual preferred at 8% when you could have just waited and maybe your dividend yield and your equity could have been issued at 7.5% or 7%?
But clearly, I get that they will make that accretive. So it's not like it's bad. It's not like they're going to destroy themselves by no means. I mean they're probably finding paper that's -- I mean, investments that are wider than that 8%, so it's going to be accretive. But they are also just burdening their franchise with this thing that they've got to have to deal with.
And so to me, I just want to step back and say, hey, what is -- does it really make sense? Do I need to post stats for the quarter because that's what everyone else does. But that was kind of my framework about being a small REIT is the bigger guys, yes, I get it. They've got super low cost of capital. They do need to show activity, right?
But our smaller folks, I mean, is that the right blueprint? So many small-cap REITs just try to follow this bigger mantra of the normalized REIT and they're just not. And I know it's a circular thing. Like you said, well, if you don't grow, then you're never going to get capital, and therefore, you're always going to be small. And I'm like, maybe, but maybe you could actually create a really valuable franchise that people will buy.
And -- but that just -- that's an experiment that we're doing. I fundamentally take the view that if I improve the durability and quality of the income coming in and I sort of rightsize the balance sheet and make it stronger, not weaker, and that I continuously do the right things over time that as I think Warren Buffett says, "When the tide goes out, we'll see who don't have their swim trunks on."
And so right now, I don't know where those buckets of -- I know the categories of where those buckets of capital is, but I don't have a line of sight to tell you, yes, I've got someone who's going to give me equity at $18 a share. Because if I did, I would just -- I would take it and I would go put it to work. But I just -- I haven't seen it happen in the big REITs, so I don't expect it to happen for us necessarily right now.
Okay. With the in-place portfolio, just kind of broadly, what's the feeling amongst tenants as you reach out given maybe you have a little more certainty even versus the last earnings call around the tariff outlook, I know it's still some uncertainty. But just kind of curious how they're feeling and if there's anything maybe notable from a tenant credit perspective worth calling out?
No. Look, most of these operators, quarters don't move that much, right? They look annually, they look at cycles, they're getting orders. I think the tariff news is, if anything, it's old, right? I mean the volatility is certainly tempered. I mean, you tell me, I don't think we've heard the verdict yet on the Supreme Court.
And even if we do, there's 2 other tariffs that he can implement. And so no one fu***** knows, right? But what we do know is it hasn't -- there's no been -- there's no blood in the streets and our businesses are operating. I mean most of our businesses buy U.S. and sell U.S., right?
We own a lot of durable businesses. So we haven't seen anything new on the radar that says, "Oh, no, this is -- tariffs are going to squeeze us." I think, look, people would love to have clarity on tariffs. I think tariffs do economically impact you. But the near-term noise is there's not really been anything. And we kind of said, I think, 2 quarters ago that most of our -- the vast majority of our tenants learned from COVID and then the first Trump administration, it's not the first time he talked about tariffs that they didn't want to have dependencies on places that could get squeezed, aka China, right?
And so a lot of them over the ensuing years have mitigated that risk in as this is good business practice. And that happens to look like a good reaction to the near-term conversations about tariffs, but we haven't heard anything recently or at all. Since our first conversations, I think everyone was alarmed because like Liberation Day, people are like charged, right? And now it's like, yes, okay, let's wait until we actually know something else and then maybe that's -- then maybe we can then sort of reforecast, but nothing yet.
Okay. And then on just kind of line item by line item basis, probably more likely into 2026, what's the potential impact to property operating expense, maybe particularly like a net property operating expense from completing the former Costco headquarters transaction and maybe even the Clara if you're able to sell Clara's former property?
So I would give you characterization that right now, as we roll -- I'd say that Costco delta on operating expense vis-a-vis the fee, right, so the extension fees, is we're probably running -- we're probably bleeding about $40,000 a month on that property, right? So you're not going to -- and so there's a fair amount of CapEx, but we have also gotten these extension fees that sort of offset that from an AFFO perspective.
But there's probably about $40,000 a month bleed on that, how we think about it in the sort of third quarter. Clara actually is -- it's been lumpy. It's -- you got security fences in there, things like that. Like, if we get that flushed out, I don't think you're going to see like -- and Ray, you correct if I'm wrong, I don't think we're going to see world-changing property expenses go down just because those clear out.
We're fairly neutral on that. But I mean, there's a little bit of movement in 2026. I think as we get rid of some of -- we have a -- like I said, a small handful of nonabsolute triple nets, I think on the margin, that could reduce property expense next year. But Ray, what are your thoughts on property expense?
Well, I think it will go down a bit, maybe $100,000-or-so. But I think as we sell some of the other properties, as we do the recycling, there are some others that -- where there's some leakage. And so over time, it will probably go down a little bit further. Does that help?
Yes, it's very helpful. I appreciate all the detail. That's it for me.
Great. Thanks.
Our next question is from Steve Chick from Sebis Garden Capital.
I'm wondering if you could -- or if you know of what the same-store rental income would be? Rental income was down 2%, but I think there's an overhang, obviously, from Costco and solar is probably in there as well. Do you calculate what same-store rental income would be or a figure like that?
We don't. And I think the general view of reason why is because there's so much movement in our portfolio that we have -- but I think it's fair that once we complete a recycling that, that would be -- and we think we're largely baked, particularly if we don't have external growth capital. I think it's fair that we would start implementing same-store. We may try to run that for you and publish out sometime before year end or something like that, but I don't think we have a handy.
Ray, to you.
No. But I'd say that our overall average is 2.5% rent growth for the year just based on escalations in the leases. So that gives you some idea of what's happening there.
And I would characterize that as we recycle those, a lot of the legacy ones have the lower bumps, right? They're 2s or they're every 5 kind of thing every 5 years. So I think that if you look at -- there's a pie chart on our website, it shows kind of the weighting of those. A lot of the stuff that we put in the last 2 years or last 3 years sort of averaged north of 2.5%. So I think over time, that could -- our same-store could trend that way.
Okay. That's helpful. And then can you say -- I didn't catch it. On solar, did you say when you thought that property would be resolved or sold?
We're a lot, lot closer than we ever were. I mean, so we literally started this process in 2021, where we engaged consultants and went through the process. And so we're 4 years into it. We're doing some last -- so we had to get the split and negotiate certain easements and then have the city look at it.
And ultimately, I don't have the details 100%. But at a high level, we had to do some modest construction work to the entrance of the driveway to be -- meet the new ADA compliance standards of the city. And so it took us a while to get them to give us the green light to do the construction. The construction is now underway, asking which is not a very long job, it's probably a couple of weeks.
But then we have to go back and then get approval of all that stuff. But my guess right now, it's been a constant debate internally. There are some people who think we can get it done by year-end, and I generally sort of hedge the downside. So I think it's a first quarter event. Ideally, it's an early first quarter event, but who knows. But once we're like locked and loaded, then we'll -- that property will be taken to market.
So that will be another held-for-sale. And it's like the tenant has just finished -- they left in September, their lease end of September. They cleaned it all out. It's a beautiful box inside. It's good. We've had people -- we've had brokers come and looking at it. Our intent is not to lease it, but it's to sell it to an owner user. And we think that's the best end result for that property.
There are no questions at this time. I would now like to turn the conference back to Mr. Halfacre. Please go ahead.
Great. Thank you, everyone. I appreciate what you've -- for you dialing in and listening. We look forward to giving you updates as time goes ahead. I hope you have a great weekend, and I hope you can all rest up for the Thanksgiving holiday. And for those who are curious, we will not be at NAREIT. I don't want to go to Denver -- Dallas in December, and it's just not -- it's not relevant for us, I think, at this point, but enjoy the conference, and I wish you guys all the best.
This concludes today's conference call. Thank you for participating. You may now disconnect.