Peakstone Realty Trust outlines accelerated office divestiture and 25% IOS ABR growth while advancing industrial REIT strategy

Earnings Call Insights: Peakstone Realty Trust (PKST) Q2 2025

Management View

• Michael J. Escalante, CEO, highlighted ongoing advancement in the company’s transformation to an industrial REIT, with the industrial outdoor storage (IOS) subsector as a central focus. He stated, "We expanded our IOS portfolio with 2 acquisitions totaling approximately $52 million" and described a 27-acre Atlanta property and a 9.2-acre Port Charlotte, Florida, acquisition, both fully leased with long-term contracts and annual rent escalations. Escalante further emphasized, "We have increased our IOS ABR by over 25% since the beginning of the year."
• Office asset monetization has accelerated, with Escalante reporting, "Through quarter end, we sold 7 office properties for $158 million. Subsequent to quarter end, we closed on 2 additional sales...totaling $24 million, bringing our year-to-date office sales to 11 properties totaling $216 million."
• A noncash impairment of approximately $286 million was recognized, with Escalante explaining this reflects "shortened anticipated hold periods and updated expectations for sale pricing, consistent with our strategy to sell all of our office assets in the coming quarters."
• Javier F. Bitar, CFO, reported, "For the quarter ended June 30, total revenue was approximately $54 million and cash NOI was approximately $43 million. Net loss attributable to common shareholders was approximately $265 million or $7.22 per share, inclusive of noncash impairments of approximately $286 million recorded during the quarter."

Outlook

• Management reiterated its commitment to accelerating the shift to an industrial REIT. Escalante noted, "We`re reshaping the portfolio with intention, simplifying the platform, reallocating capital to higher-growth IOS opportunities and strengthening the balance sheet."...

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RSK: Just curious at what discount did they selll these offices and what price did they pay for the industrial and storge properties? Sounds like a major offload of office properties.