EL SEGUNDO, Calif.--(BUSINESS WIRE)--February 18, 2026--
Peakstone Realty Trust ("Peakstone" or the "Company") (NYSE: PKST), an industrial real estate investment trust with a strategic focus on the industrial outdoor storage ("IOS") sector, today announced its financial results for the quarter and full year ended December 31, 2025.
Proposed Merger
On February 2, 2026, the Company and PKST OP L.P., its operating partnership (the "Operating Partnership"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with certain affiliates of Brookfield Asset Management (NYSE: BAM, TSX: BAM) ("Brookfield") in which, upon the terms and subject to the conditions set forth in the Merger Agreement, a Brookfield private real estate fund would acquire all of the outstanding shares of Peakstone for $21.00 per share in cash (collectively with the other transactions contemplated by the Merger Agreement, the "Mergers"). The all-cash transaction represents an implied enterprise value of approximately $1.2 billion. The proposed purchase price represents a premium of 34% to Peakstone's share price on January 30, 2026, the last full trading day prior to the announcement of the Mergers, as well as a 46% premium to the Company's 30-day volume weighted average price (VWAP) and a 51% premium to the Company's 90-day VWAP, for the period ended January 30, 2026. The transaction was unanimously approved by the Peakstone Board of Trustees and is expected to close by the end of the second quarter of 2026, subject to customary closing conditions, including approval by the Company's common shareholders.
Fourth Quarter 2025 Highlights
-- Revenue: Approximately $26.0 million from continuing operations
(excludes approximately $12.8 million of revenue from Office Discontinued
Operations Properties).
-- Net income: Approximately $3.7 million; net income attributable to
common shareholders of approximately $3.5 million, or $0.09 per basic and
diluted share.
-- Core Funds from Operations ("Core FFO"): $0.28 per basic and diluted
share/unit.
-- Adjusted Funds from Operations ("AFFO"): $0.28 per basic and diluted
share/unit.
-- Same Store Cash Net Operating Income ("Same Store Cash NOI"): Increased
3.7% to approximately $11.5 million compared to the same quarter last
year. For the fourth quarter, the portfolio included in same store
metrics consisted solely of the 16 traditional industrial properties.
-- Leasing: Completed 11.4 acres of leasing at weighted average releasing
spreads of 9.7% (GAAP) and 3.7% (cash).
-- Acquisitions: Acquired six IOS properties for approximately $38.5
million.
-- Dispositions: Sold all remaining Office segment properties, consisting
of 16 assets, for approximately $443.9 million, eliminating the Office
segment as of December 31, 2025.
-- Debt: Reduced outstanding debt balance by $564.8 million, resulting in
total outstanding debt of $485.9 million and a Net Debt to Adjusted
EBITDAre ratio of 5.4x as of December 31, 2025.
Full Year 2025 Highlights
-- Revenue: Approximately $106.0 million from continuing operations
(excludes approximately $94.8 million of revenue from Office Discontinued
Operations Properties).
-- Net loss: Approximately $(332.6) million; net loss attributable to
common shareholders of approximately $(307.7) million, or $(8.37) per
basic and diluted share.
-- Core FFO: $1.98 per basic and diluted share/unit.
-- AFFO: $1.99 per basic and diluted share/unit.
-- Same Store Cash NOI: Increased 2.4% to approximately $45.5 million
compared to prior year.
-- Leasing: Completed 84.8 acres of leasing at weighted average releasing
spreads of 55.5% (GAAP) and 52.8% (cash).
-- Acquisitions: Acquired nine IOS properties for approximately $96.2
million.
-- Dispositions: Sold 33 office properties for approximately $883.7
million, completing the Company's exit from office, and three traditional
industrial properties for approximately $71.6 million.
-- Debt: Reduced outstanding debt balance by $874.4 million, resulting in
total outstanding debt of $485.9 million as of December 31, 2025.
Portfolio
At quarter end, the Company's portfolio was comprised of 76 Industrial segment properties, consisting of 60 IOS properties and 16 traditional industrial properties.
PORTFOLIO OVERVIEW
At December 31, 2025
-----------------------------------------------------------------------------------------------------
Occupancy
Percentage
(based on Occupancy
rentable Percentage
Number of square (based on usable WALT (in ABR ($ in Percentage
Properties feet) acres) years) thousands) of ABR
----------------- ---------- ---------- ---------------- ---------- ---------------- ----------
Operating
Properties 72 -- -- 4.5 $78,146 100.0%
IOS 56 -- 97.9% 4.2 $31,885 40.8%
Traditional
Industrial 16 100.0% -- 4.7 $46,261 59.2%
----------------- ---------- ---------- ---------------- ---------- ---------------- ----------
Redevelopment
Properties 4 -- -- -- -- --%
----------------- ---------- ---------- ---------------- ---------- ---------------- ----------
Portfolio Total /
Weighted-Average 76 100.0% 97.9% 4.5 $78,146 100.0%
----------------- ---------- ---------- ---------------- ---------- ---------------- ----------
Leasing Activity
Industrial Segment:
-- During the quarter ended December 31, 2025, the Company completed the
IOS leasing activity described below, totaling 11.4 usable acres. On a
combined basis, the weighted average releasing spreads were 9.7% on a
GAAP basis and 3.7% on a cash basis:
-- A new 11.3-year lease for 3.1 usable acres at an IOS property
located in Port Charlotte, Florida.
-- A 3-year lease renewal for 3.7 usable acres at an IOS property
located in Manassas, Virginia.
-- A 5-year lease renewal for 4.6 usable acres at an IOS property
located in Houston, Texas.
-- For the year ended December 31, 2025, the Company completed IOS leasing
activity totaling 84.8 usable acres. On a combined basis, this leasing
activity resulted in weighted average releasing spreads of 55.5% on a
GAAP basis and 52.8% on a cash basis.
IOS Acquisition Activity
-- During the quarter ended December 31, 2025, the Company acquired six
IOS properties for an aggregate contractual purchase price of
approximately $38.5 million, as described below:
-- A five-property IOS portfolio totaling 23.2 usable acres for
approximately $31.0 million. The portfolio was 77% leased to four
tenants, with a 5.8-year WALT and 3.6% average annual rent
escalations. The properties are located in the following markets:
Tampa, Florida; Atlanta, Georgia; and Chattanooga, Tennessee.
-- A 4.2-usable acre IOS property located in Plano, Texas for
approximately $7.5 million. The property was 100% leased to a
single tenant, with a 4.7-year WALT and 3.6% annual rent
escalations.
-- For the year ended December 31, 2025, the Company acquired nine IOS
properties for an aggregate contractual purchase price of approximately
$96.2 million.
Disposition Activity
Office Segment:
-- During the quarter ended December 31, 2025, the Company sold all of its
remaining office properties, consisting of 16 assets, for an aggregate
gross sales price of approximately $443.9 million, eliminating the Office
segment as of December 31, 2025.
-- For the year ended December 31, 2025, the Company sold 33 office
properties for an aggregate gross sales price of approximately $883.7
million, completing the Company's exit from office.
Industrial Segment:
-- There were no Industrial segment property dispositions in the fourth
quarter.
-- For the year ended December 31, 2025, the Company sold three
traditional industrial properties for an aggregate gross sales price of
approximately $71.6 million.
Financial Results for the Fourth Quarter
Revenue
For the quarter ended December 31, 2025, revenue from continuing operations was approximately $26.0 million, compared to approximately $29.8 million for the same quarter last year.
For the year ended December 31, 2025, revenue from continuing operations was approximately $106.0 million compared to approximately $116.4 million for the prior year. The change in revenue was primarily due to the Company's transition to an industrial-only portfolio and full disposition of the Company's office properties.
Net Income Attributable to Common Shareholders
For the quarter ended December 31, 2025, net income attributable to common shareholders was approximately $3.5 million, or $0.09 per basic and diluted share, compared to net income attributable to common shareholders of approximately $12.7 million, or $0.35 per basic and diluted share, for the same quarter last year.
For the year ended December 31, 2025, net loss attributable to common shareholders was approximately $(307.7) million, or $($8.37) per basic and diluted share, compared to net loss attributable to common shareholders of approximately $(10.4) million, or $(0.30) per basic and diluted share, for the prior year.
Core FFO and AFFO
For the quarter ended December 31, 2025, Core FFO was approximately $11.1 million, or $0.28 per basic and diluted share/unit, compared to $24.9 million, or $0.63 per basic and diluted share/unit, for the same quarter last year. AFFO was approximately $11.2 million, or $0.28 per basic and diluted share/unit, compared to $25.6 million, or $0.65 per basic and diluted share/unit, for the same quarter last year.
For the year ended December 31, 2025, Core FFO was approximately $78.6 million, or $1.98 per basic and diluted share/unit, compared to $100.0 million, or $2.53 per basic and diluted share/unit, for the prior year. For the year ended December 31, 2025, AFFO was approximately $79.0 million, or $1.99 per basic and diluted share/unit, compared to $106.6 million, or $2.69 per basic and diluted share/unit, for the prior year.
Same Store Cash NOI
For the quarter ended December 31, 2025, Same Store Cash NOI (reflecting only properties in continuing operations) was approximately $11.5 million compared to $11.1 million for the same quarter last year, an increase of 3.7%.
For the year ended December 31, 2025, Same Store Cash NOI (reflecting only properties in continuing operations) was approximately $45.5 million compared to $44.4 million for the prior year.
Same Store Cash NOI (USD
Segment in Thousands) % Change vs Q4 2024
------------------------- ------------------------- -------------------
Industrial $11,466 3.7%
IOS -- --
Traditional Industrial $11,466 3.7%
-------------------------- ------------------------- -------------------
Total / Weighted-Average $11,466 3.7%
========================== ========================= ===================
Balance Sheet
Below is a table showing select balance sheet metrics.
Metric ($ in millions, unless otherwise Balance Sheet noted) As of December 31, 2025 ------------------------------------------- ------------------------------ Total Debt $485.9 Cash and Cash Equivalents $138.7 Net Debt $347.3 Available Revolver Capacity $240.7 Total Liquidity $379.4 Weighted Average Debt Maturity 3.2 years Fixed Rate Debt, including Swaps (%) 100% SOFR Interest Rate Swaps (Wtd. Avg. Rate) $285mm through 7/1/29 at 3.58% Total Wtd. Avg. Effective Interest Rate (including Swaps) 5.33% Net Debt to Adjusted EBITDAre 5.4x
Dividends
The Company paid a dividend for the fourth quarter in the amount of $0.10 per common share on January 19, 2026 to holders of record of the Company's common shares on December 31, 2025. Pursuant to the terms of the Merger Agreement, Peakstone has agreed to suspend payment of its regular quarterly dividend, effective immediately, until the earlier of the closing or the termination of the Merger Agreement.
Discontinued Operations
During 2025, the Company completed its strategic transformation to an industrial-only REIT through the disposition of all properties in its Office segment. As a result, the Office segment was eliminated as of December 31, 2025. As of September 30, 2025, the Company's plan to dispose of its Office segment properties represented a strategic shift in its business that met the criteria for classification as discontinued operations. Accordingly, as of September 30, 2025, 27 Office segment properties (collectively, the "Office Discontinued Operations Properties") were classified within discontinued operations for all periods presented. All previously disposed Office segment properties not included within the Office Discontinued Operations Properties are included within continuing operations for all periods presented.
Fourth Quarter 2025 Earnings Webcast
In light of the proposed Mergers, the Company will not be hosting a webcast to present the fourth quarter 2025 results.
About Peakstone Realty Trust
Peakstone Realty Trust (NYSE: PKST) is an industrial real estate investment trust that owns and operates industrial outdoor storage (IOS) and traditional industrial properties, with a strategic focus on the IOS sector.
Additional information is available at www.pkst.com.
Cautionary Statement Regarding Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated expenses, anticipated events or trends and similar expressions concerning matters that are not historical facts, including statements relating to the growth of our industrial outdoor storage ("IOS") platform and the consummation of the Mergers (as defined below). In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
The forward-looking statements contained in this document reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: general economic and financial conditions; political uncertainty in the U.S.; the impact of tariffs and global trade disruptions on us and our tenants; market volatility; inflation; any potential recession or threat of recession; interest rates; disruption in the debt and banking markets; concentration in asset type; tenant concentration, geographic concentration, and the financial condition of our tenants; whether we are able to monitor the credit quality of our tenants and/or their parent companies and guarantors; competition for tenants and competition with sellers of similar properties if we elect to dispose of our properties; our access to, and the availability of capital; whether we will be able to refinance or repay debt; whether we will be successful in renewing leases or selling an applicable property, as leases expire; whether we will re-lease available space above or at current market rental rates; future financial and operating results; our ability to manage cash flows; our ability to manage expenses, including as a result of tenant failure to maintain our net-leased properties; dilution resulting from equity issuances; expected sources of financing, including the ability to maintain the commitments under our revolving credit facility, and the availability and attractiveness of the terms of any such financing; legislative and regulatory changes that could adversely affect our business; changes in zoning, occupancy, land use and safety regulations and/or changes in their applicability to our properties; cybersecurity incidents or disruptions to our or our third party information technology systems; our ability to maintain our status as a real estate investment trust (a "REIT") within the meaning of Section 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code") and our Operating Partnership as a partnership for U.S. federal income tax purposes; our future capital expenditures, operating expenses, net income or loss, operating income, cash flow and developments and trends of the real estate industry; whether we will be successful in the pursuit of our objectives, expectations and intentions, including any acquisitions, investments, or dispositions, including our acquisition of industrial outdoor storage assets; whether we are able to identify, source or complete acquisitions on acceptable terms; our ability to meet budgeted or stabilized returns on our redevelopment projects within expected time frames, or at all; whether we will succeed in our investment objectives; whether we are able to successfully operate our industrial outdoor storage properties; any fluctuation and/or volatility of the trading price of our common shares; risks associated with our dependence on key personnel whose continued service is not guaranteed; risks associated with our ability to obtain the shareholder approval required to consummate the Mergers and the timing of the closing, including the risks that a condition to closing will not be satisfied within the expected timeframe or at all or that the closing will not occur; the outcome of any legal proceedings that may be instituted
against the parties to, and others related to, the Mergers and the Merger Agreement (as defined below); the risk that shareholder litigation in connection with the Mergers may affect the timing or occurrence of the Mergers or result in significant costs of defense, indemnification and liability; unanticipated difficulties or expenditures relating to the Mergers, the response of business partners and competitors to the announcement of the Mergers, potential difficulties in our ability to retain and hire key personnel and maintain relationships with tenants and other third parties as a result of the Mergers, and/or potential difficulties in employee retention as a result of the announcement and pendency of the Mergers; and other factors, including those risks disclosed in Part I, Item 1A. "Risk Factors" and Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K filed with the US. Securities and Exchange Commission.
While forward-looking statements reflect our good faith beliefs, assumptions and expectations, they are not guarantees of future performance. The forward-looking statements speak only as of the date of this document. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this document, except as required by applicable law. We caution investors not to place undue reliance on any forward-looking statements, which are based only on information currently available to us.
Notice Regarding Non-GAAP Financial Measures
In addition to U.S. GAAP financial measures, this document contains and may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures and statements of why management believes these measures are useful to investors are included in the Appendix if the reconciliation is not presented on the page in which the measures are published.
Additional Information and Where to Find It
In connection with the proposed transaction, the Company will file with the Securities and Exchange Commission ("SEC") a proxy statement on Schedule 14A. Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement and a proxy card to each shareholder entitled to vote at the special meeting relating to the proposed transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT THE COMPANY FILES WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The definitive proxy statement, the preliminary proxy statement and any other documents filed by the Company with the SEC (when available) may be obtained free of charge at the SEC's website at www.sec.gov or by accessing the Investor Relations section of the Company's website at https://pkst.com or by contacting the Company's Investor Relations by email at ir@pkst.com.
Participants in the Solicitation
The Company and its trustees and certain of its executive officers may be deemed to be participants in the solicitation of proxies from the Company's shareholders with respect to the proposed transaction. Information about the Company's trustees and executive officers and their ownership of the Company's securities is set forth in the Company's proxy statement on Schedule 14A for its 2025 annual meeting of shareholders, filed with the SEC on April 11, 2025, and subsequent documents filed with the SEC.
Additional information regarding the identity of participants in the solicitation of proxies, and a description of their direct or indirect interests in the proposed transaction, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with the proposed transaction when they become available.
PEAKSTONE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands, except units and share amounts)
December 31,
----------------------------
2025 2024
---------- ----------
ASSETS
Cash and cash equivalents $ 138,673 $ 146,514
Restricted cash 7,767 7,696
Real estate:
Land 381,824 341,702
Building and improvements 810,112 1,009,286
In-place lease intangible assets 109,852 141,193
Construction in progress 4,233 962
---------- ----------
Total real estate 1,306,021 1,493,143
Less: accumulated depreciation and
amortization (211,099) (224,247)
---------- ----------
Total real estate, net 1,094,922 1,268,896
Assets related to discontinued
operations, net -- 1,101,356
Above-market lease intangible assets,
net 1,257 2,401
Deferred rent receivable 18,173 22,958
Deferred leasing costs, net 3,885 5,013
Goodwill 68,373 68,373
Right-of-use lease assets 1,325 755
Interest rate swap asset, at fair value -- 15,974
Other assets 18,449 36,296
---------- ----------
Total assets $ 1,352,824 $ 2,676,232
========== ==========
LIABILITIES AND EQUITY
Debt, net $ 474,006 $ 1,344,619
Interest rate swap liability, at fair
value 2,444 --
Distributions payable 3,818 8,477
Below-market lease intangible
liabilities, net 34,261 39,832
Right-of-use lease liabilities 1,334 744
Accrued expenses and other liabilities 58,258 62,312
Liabilities related to discontinued
operations -- 68,226
---------- ----------
Total liabilities $ 574,121 $ 1,524,210
========== ==========
Commitments and contingencies (Note 13)
Shareholders' equity:
Common shares, $0.001 par value;
800,000,000 shares authorized;
37,176,167 and 36,733,327 shares
outstanding in the aggregate as
of December 31, 2025 and December
31, 2024(,) respectively 37 37
Additional paid-in capital 3,025,954 3,016,804
Cumulative distributions (1,133,542) (1,109,215)
Accumulated earnings (1,145,986) (838,279)
Accumulated other comprehensive
(loss) income (1,038) 15,874
---------- ----------
Total shareholders' equity 745,425 1,085,221
Noncontrolling interests 33,278 66,801
---------- ----------
Total equity 778,703 1,152,022
---------- ----------
Total liabilities and equity $ 1,352,824 $ 2,676,232
========== ==========
PEAKSTONE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except share and per share amounts)
Three Months Ended
December 31, Year Ended December 31,
-------------------------- ----------------------------
2025 2024 2025 2024
---------- ---------- ---------- ----------
Revenue:
Rental income $ 25,988 $ 29,787 $ 105,981 $ 116,357
Expenses:
Property
operating
expense 1,804 3,016 6,006 13,664
Property tax
expense 2,291 2,364 8,289 9,918
General and
administrative
expenses 9,796 9,055 34,918 36,973
Corporate
operating
expenses to
related
parties 144 141 570 617
Real estate
impairment
provision -- 2,538 18,195 53,313
Depreciation
and
amortization 13,353 13,813 52,182 47,503
---------- ---------- ---------- ----------
Total expenses 27,388 30,927 120,160 161,988
---------- ---------- ---------- ----------
Loss before other
income (expenses) (1,400) (1,140) (14,179) (45,631)
Other income
(expenses):
Interest
expense (11,982) (14,389) (56,565) (55,978)
Other income,
net 2,012 1,677 7,351 14,479
Gain from
disposition of
assets -- 13,123 6,407 38,368
(Loss) gain on
extinguishment
of debt (2,482) 10,973 (2,482) 10,466
Goodwill
impairment
provision -- (5,680) -- (10,274)
Transaction
expenses (121) (243) (555) (821)
---------- ---------- ---------- ----------
Net loss from
continuing
operations (13,973) 4,321 (60,023) (49,391)
Discontinued
Operations:
Income (loss)
from
discontinued
operations 8,706 9,495 (305,081) 38,028
Gain from
disposition of
assets 9,015 -- 32,471 --
---------- ---------- ---------- ----------
Net income (loss)
from discontinued
operations 17,721 9,495 (272,610) 38,028
Net income (loss) 3,748 13,816 (332,633) (11,363)
---------- ---------- ---------- ----------
Net loss attributable
to noncontrolling
interests from
continuing
operations 1,016 (345) 4,498 4,077
Net income
attributable to
noncontrolling
interests from
discontinued
operations (1,288) (759) 20,428 (3,139)
---------- ---------- ---------- ----------
Net (income) loss
attributable to
noncontrolling
interests (272) (1,104) 24,926 938
Net income (loss)
attributable to
common shareholders $ 3,476 $ 12,712 $ (307,707) $ (10,425)
========== ========== ========== ==========
Basis and diluted
earnings per common
share:
Net loss per share
from continuing
operations $ (0.35) $ 0.11 $ (1.52) $ (1.26)
Net income per share
from discontinued
operations 0.44 0.24 $ (6.85) $ 0.96
---------- ---------- ---------- ----------
Net income (loss) per
share attributable
to common
shareholders, basic
and diluted $ 0.09 $ 0.35 (8.37) (0.30)
========== ========== ========== ==========
Weighted-average
number of common
shares outstanding,
basic and diluted 36,870,738 36,444,348 36,798,234 36,375,053
========== ========== ========== ==========
PEAKSTONE REALTY TRUST
Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations
(Unaudited; in thousands except share and per share amounts)
We use Funds from Operations ("FFO"), Core Funds from Operation ("Core FFO") and Adjusted Funds from Operations ("AFFO") as supplemental financial measures of our performance. These measures are used by management as supplemental financial measures of operating performance. We do not use these measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as indicators of our operating performance, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs.
The summary below describes the way we use these measures, provides information regarding why we believe these measures are meaningful supplemental measures of performance and reconciles these measures from net income or loss, the most directly comparable GAAP measures.
FFO
We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). FFO is defined as net income or loss computed in accordance with GAAP, excluding real estate related depreciation and amortization, impairment losses of depreciable real estate assets, gains (losses) from sales of depreciable real estate assets and after adjustments for unconsolidated joint ventures. FFO is used to facilitate meaningful comparisons of operating performance between periods and among other REITs, primarily because it excludes the effect of real estate depreciation and amortization and net gains (losses) from real estate sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, FFO can help facilitate comparisons of operating performance between periods and among other REITs. It should be noted, however, that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than we do, making comparisons less meaningful.
Core FFO
We compute Core FFO by adjusting FFO, as defined by NAREIT, to exclude certain items such as gain or loss from the extinguishment of debt, goodwill impairment, unrealized gains or losses on derivative instruments, employee separation expense, transaction expenses, lease termination fees, and other items not related to ongoing operating performance of our properties. We believe that Core FFO is a useful supplemental measure in addition to FFO because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core business operations. As with FFO, our reported Core FFO may not be comparable to Core FFO as defined by other REITs.
AFFO
AFFO is presented in addition to Core FFO. AFFO further adjusts Core FFO for certain other non-cash items, including straight-line rent adjustment, amortization of share-based compensation, deferred rent -- ground lease, non-cash amortization items (e.g., amortization of above- and below-market rent, net, debt premium and discount, net, ground lease interests, tax benefits and deferred financing costs) and other non-cash transactions. We believe AFFO provides a useful supplemental measure of our operating performance and is useful in comparing our operating performance with other REITs that may not be involved in similar transactions or activities. As with Core FFO, our reported AFFO may not be comparable to AFFO as defined by other REITs.
Our calculation of FFO, Core FFO, and AFFO is presented in the following table for the three months and full year ended December 31, 2025 and 2024 (dollars in thousands, except per share amounts):
Three Months Ended December
31, Year Ended December 31,
----------------------------- ----------------------------
Reconciliation of Net
Income (Loss) to FFO, Core
FFO, and AFFO (1) : 2025 (1) 2024 (1) 2025 (1) 2024 (1)
--------------- ------------ ------------ --------------
Net income (loss) $ 3,748 $ 13,816 $ (332,633) $ (11,363)
FFO Adjustments:
Depreciation of
building and
improvements 8,499 17,699 54,699 64,191
Amortization of
leasing costs and
intangibles 4,855 8,225 27,989 31,179
Real estate
impairment
provision -- 2,538 363,688 53,313
Gain from
disposition of
assets (9,015) (13,123) (38,878) (38,368)
---------- ---------- ---------- ----------
FFO 8,087 29,155 74,865 98,952
---------- ---------- ---------- ----------
FFO attributable to common
shareholders and
noncontrolling interests
(2) $ 8,087 $ 29,155 $ 74,865 $ 98,952
========== ========== ========== ==========
Core FFO Adjustments:
Loss (gain) on
extinguishment of
debt 3,020 (10,973) 3,725 (10,466)
Impairment
provision,
goodwill -- 5,680 -- 10,274
Unrealized (gain)
loss on
investments (7) 90 (115) (377)
Employee separation
expense -- 299 36 358
Transaction expenses 121 243 555 821
Lease termination
adjustments (45) 107 (287) 107
Other activities
adjustment (74) 252 (172) 364
---------- ---------- ---------- ----------
Core FFO attributable to
common shareholders and
noncontrolling interests
(2) $ 11,102 $ 24,853 $ 78,607 $ 100,033
========== ========== ========== ==========
AFFO Adjustments:
Straight-line rent
adjustment (628) (2,010) (2,943) (6,852)
Amortization of
share-based
compensation 1,596 2,059 6,380 7,896
Deferred rent -
ground lease 427 423 1,705 1,661
Amortization of
below market rent,
net (2,468) (1,332) (9,900) (2,232)
Amortization of debt
(discount)/premium,
net (73) (36) (490) 103
Amortization of
ground leasehold
interests -- (98) (290) (389)
Amortization of
below tax benefits -- 377 933 1,498
Amortization of
deferred financing
costs 1,286 1,206 4,966 4,757
Amortization of
lease inducements -- 127 -- 127
---------- ---------- ---------- ----------
AFFO attributable to
common shareholders and
noncontrolling interests
(2) $ 11,242 $ 25,569 $ 78,968 $ 106,602
========== ========== ========== ==========
FFO per share/unit, basic
and diluted $ 0.20 $ 0.74 $ 1.88 $ 2.50
========== ========== ========== ==========
Core FFO per share/unit,
basic and diluted $ 0.28 $ 0.63 $ 1.98 $ 2.53
========== ========== ========== ==========
AFFO per share/unit, basic
and diluted $ 0.28 $ 0.65 $ 1.99 $ 2.69
========== ========== ========== ==========
Weighted-average common
shares outstanding -
basic and diluted shares 36,870,738 36,444,348 36,798,234 36,375,053
Weighted-average OP Units
outstanding (2) 2,890,256 3,164,838 2,944,479 3,202,727
---------- ---------- ---------- ----------
Weighted-average common
shares and OP Units
outstanding - basic and
diluted 39,760,994 39,609,186 39,742,713 39,577,780
========== ========== ========== ==========
(1) FFO, Core FFO, and AFFO include amounts related to both continuing
operations and Office Discontinued Operations Properties for all
periods presented.
(2) Represents weighted-average outstanding OP Units that are owned by
unitholders other than Peakstone Realty Trust. Represents the
noncontrolling interest in the Operating Partnership.
PEAKSTONE REALTY TRUST
Net Operating Income, including Cash and Same Store Cash NOI
(Unaudited; in thousands)
Net operating income ("NOI") is a non-GAAP financial measure calculated as net income or loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, excluding (to the extent applicable during the periods presented) general and administrative expenses, corporate operating expenses to related parties, impairment of real estate, depreciation and amortization, interest expense, other income, net, gains or losses on early extinguishment of debt, gains or losses on sales of real estate, impairment of goodwill, investment income or loss, transaction expense and net income or loss from discontinued operations and equity in earnings of unconsolidated real estate joint ventures. NOI on a cash basis ("Cash NOI") is NOI adjusted to exclude the effect of straight-line rent, amortization of acquired above- and below-market lease intangibles, deferred termination income, other deferred adjustments and amortization of other intangibles. Cash NOI for our Same Store portfolio ("Same Store Cash NOI") is Cash NOI for properties held for the entirety of all periods presented, with adjustments for lease termination fees and rent abatements (to the extent applicable during the periods presented). We believe that NOI, Cash NOI and Same-Store Cash NOI are helpful to investors as additional measures of operating performance because we believe they help both investors and management to understand the core operations of our properties excluding corporate and financing-related costs and non-cash depreciation and amortization. NOI, Cash NOI and Same Store Cash NOI are unlevered operating performance metrics of our properties and allow for a useful comparison of the operating performance of individual assets or groups of assets. These measures thereby provide an operating perspective not immediately apparent from GAAP income from operations or net income (loss). In addition, NOI, Cash NOI and Same Store Cash NOI are considered by many in the real estate industry to be useful starting points for determining the value of a real estate asset or group of assets. Because NOI, Cash NOI and Same Store Cash NOI exclude depreciation and amortization and capture neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of NOI, Cash NOI and Same Store Cash NOI as measures of our performance is limited. Therefore, NOI, Cash NOI and Same Store Cash NOI should not be considered as alternatives to net income or loss, as computed in accordance with GAAP. NOI, Cash NOI and Same Store Cash NOI may not be comparable to similarly titled measures of other companies.
Our calculation of each of NOI, Cash NOI and Same Store Cash NOI is presented in the following table for the three months and full year ended December 31, 2025 and 2024 (dollars in thousands):
Three Months Ended
December 31, Year Ended December 31,
-------------------- -----------------------
2025 2024 2025 2024
------- ------- -------- -------
Reconciliation of Net
Income (Loss) to
Total NOI:
Net income
(loss) $ 3,748 $ 13,816 $(332,633) $(11,363)
General and
administrative
expenses 9,796 9,055 34,918 36,973
Corporate
operating
expenses to
related
parties 144 141 570 617
Real estate
impairment
provision -- 2,538 18,195 53,313
Depreciation and
amortization 13,353 13,813 52,182 47,503
Interest expense 11,982 14,389 56,565 55,978
Other income,
net (2,012) (1,677) (7,351) (14,479)
Loss (gain) on
extinguishment
of debt 2,482 (10,973) 2,482 (10,466)
Gain from
disposition of
assets -- (13,123) (6,407) (38,368)
Goodwill
impairment -- 5,680 -- 10,274
Transaction
expenses 121 243 555 821
Net (income)
loss from
discontinued
operations (17,721) (9,495) 272,610 (38,028)
------- ------- -------- -------
Total NOI $ 21,893 $ 24,407 $ 91,686 $ 92,775
======= ======= ======== =======
Cash NOI Adjustments
Industrial
Segment:
Industrial NOI $ 21,893 $ 17,610 86,218 55,678
Straight-line
rent (813) (1,577) (3,172) (4,931)
Amortization of
acquired lease
intangibles (2,464) (1,170) (9,383) (1,455)
Deferred
termination
income (5) 819 (783) 819
Other deferred
adjustments 5 -- 20 --
------- ------- -------- -------
Industrial Cash
NOI 18,616 15,682 72,900 50,111
Office Segment:
Office NOI -- 4,514 5,468 18,262
Straight-line
rent -- 10 75 (176)
Amortization of
acquired lease
intangibles -- 8 (24) 32
Deferred
termination
income -- 1,851 (652) 1,851
Other
intangible
amortization -- -- -- --
------- ------- -------- -------
Office Cash NOI -- 6,383 4,867 19,969
Other Segment:
Other NOI -- 2,283 -- 18,835
Straight-line
rent -- 147 -- 769
Amortization of
acquired lease
intangibles -- (33) -- (262)
Other deferred
adjustments -- 2 -- (40)
Inducement
Amortization -- 127 -- 127
------- ------- -------- -------
Other Cash NOI -- 2,526 -- 19,429
------- ------- -------- -------
Total Cash NOI $ 18,616 $ 24,591 $ 77,767 $ 89,509
======= ======= ======== =======
Same Store Cash NOI
Adjustments
Industrial Cash
NOI $ 18,616 $ 15,682 $ 72,900 $ 50,111
Adjustment for
acquired
properties (7,088) (4,105) (23,914) (4,105)
Adjustment for
disposed
properties (62) (1,220) (3,535) (4,804)
Rent abatements -- 703 -- 3,163
------- ------- -------- -------
Industrial Same
Store Cash NOI 11,466 11,060 45,451 44,365
Office Cash NOI -- 6,383 4,867 19,969
Adjustment for
disposed
properties -- (6,383) (4,867) (19,969)
------- ------- -------- -------
Office Same
Store Cash NOI -- -- -- --
Other Cash NOI -- 2,526 -- 19,429
Adjustment for
disposed
properties -- (2,399) -- (19,302)
Rent abatements -- (127) -- (127)
------- ------- -------- -------
Other Same
Store Cash NOI -- -- -- --
------- ------- -------- -------
Total Same Store Cash
NOI $ 11,466 $ 11,060 $ 45,451 $ 44,365
======= ======= ======== =======
PEAKSTONE REALTY TRUST
EBITDA, EBITDAre, and Adjusted EBITDAre
(Unaudited; in thousands)
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use EBITDA, EBITDAre and Adjusted EBITDAre , collectively, to help us evaluate our business. We use such non-GAAP financial measures to make strategic decisions, establish business plans and forecasts, identify trends affecting our business, and evaluate our operating performance. We believe that these non-GAAP financial measures, when taken collectively, may be helpful to investors because they allow for greater transparency into what measures we use in operating our business and measuring our performance and enable comparison of financial trends and results between periods where items may vary independent of business performance. These non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP.
We believe excluding items that neither relate to the ordinary course of business nor reflect our underlying business performance or that other companies, including companies in our industry, frequently exclude from similar non-GAAP measures enables us and our investors to compare our underlying business performance from period to period. Accordingly, we believe these adjustments facilitate a useful evaluation of our current operating performance and comparison to our past operating performance and provide investors with additional means to evaluate cost and expense trends. In addition, we also believe these adjustments enhance comparability of our financial performance and are similar measures that are widely used by analysts and investors as a means of evaluating a company's performance.
There are a number of limitations related to our non-GAAP measures. Some of these limitations are that these measures, to the extent applicable, exclude: (i) historical or future cash requirements for maintenance capital expenditures or growth and expansion capital expenditures; (ii) depreciation and amortization, a non-cash expense, where the assets being depreciated and amortized may have to be replaced in the future and these measures do not reflect cash capital expenditure requirements for such replacements; (iii) interest expense, net, or the cash requirements necessary to service interest or principal payments on our indebtedness, which reduces cash available to us; (iv) share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; (v) provision for income taxes, which may represent a reduction in cash available to us; and (vi) certain other items that we believe are not indicative of the performance of our portfolio. In addition, other companies, including companies in our industry, may calculate these non-GAAP measures or similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our disclosure of non-GAAP measures as a tool for comparison.
Because of these and other limitations, these non-GAAP measures should be considered along with other financial performance measures, including our financial results prepared in accordance with GAAP.
EBITDA
EBITDA is defined as earnings before interest, tax, depreciation and amortization.
EBITDAre
EBITDAre is defined by The National Association of Real Estate Investment Trusts ("NAREIT") as follows: (a) GAAP net income or loss, plus (b) interest expense, plus (c) income tax expense, plus (d) depreciation and amortization plus/minus (e) losses and gains on the disposition of depreciated properties, including losses/gains on change of control, plus (f) impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, plus (g) adjustments to reflect the entity's share of EBITDAre of consolidated affiliates.
Adjusted EBITDAre
Adjusted EBITDAre is defined as EBITDAre modified to exclude items such as acquisition-related expenses, employee separation expenses, share-based compensation expenses, and other items that we believe are not indicative of the performance of our portfolio. We also include an adjustment to reflect a full period of net operating income on the operating properties we acquire during the quarter and to remove net operating income on properties we dispose of during the quarter (in each case, as if such acquisition or disposition, as applicable, had occurred on the first day of the quarter). The adjustment for acquisitions is based on our estimate of the net operating income we would have received from such property if it had been owned for the full quarter; however, the net operating income we actually receive from such properties in future quarters may differ based on our experience operating such properties subsequent to closing of the acquisitions. We may also exclude the annualizing of other large transaction items such as termination income recognized during the quarter.
Our calculation of EBITDA, EBITDAre, and Adjusted EBITDAre is presented in the following table for the three months ended December 31, 2025 (dollars in thousands):
Three Months Ended December 31,
-----------------------------------
2025
---- ------------------------ ---
Reconciliation of Net Income to
EBITDA, EBITDAre, and Adjusted
EBITDAre (1) :
Net income $ 3,748
Interest expense 12,287
Depreciation and amortization 13,353
---- ------------------------ ---
EBITDA 29,388
Real estate impairment provision (9,015)
---- ------------------------
EBITDAre 20,373
Adjustment for acquisitions 509
Adjustment for dispositions (9,539)
Share-based compensation expense 1,596
Loss on extinguishment of debt 3,020
Lease termination adjustment (45)
Transaction expenses 121
Adjustment to exclude other
activities 158
---- ------------------------ ---
Adjusted EBITDAre $ 16,193
==== ======================== ===
(1) EBITDA, EBITDAre, and Adjusted EBITDAre include amounts related to both
continuing operations and Office Discontinued Operations Properties for
all periods presented.
PEAKSTONE REALTY TRUST
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS
(Unaudited; in thousands)
The following table summarizes net income (loss) from discontinued operations related to the Office Discontinued Operations Properties for the three months and full year ended December 31, 2025 and 2024 :
Three Months Ended
December 31, Year Ended December 31,
------------------ -----------------------
2025 2024 2025 2024
------ ------ -------- -------
Revenue
Rental income $12,812 $28,147 $ 94,842 $111,716
Expenses
Property
operating
expense 2,317 3,122 11,931 12,395
Property tax
expense 867 1,990 6,331 7,745
Real estate
impairment
provision -- 345,493 --
Depreciation
and
amortization -- 12,013 30,217 47,479
------ ------ -------- -------
Total expenses 3,184 17,125 393,972 67,619
Other income
(expenses):
Interest
expense (307) (1,527) (4,665) (6,072)
Other (expense)
income, net (77) -- (43) 3
Loss on
extinguishment
of debt (538) -- (1,243) --
------ ------ -------- -------
Income (loss) from
discontinued
operations 8,706 9,495 (305,081) 38,028
------ ------ -------- -------
Gain from
disposition of
assets 9,015 -- 32,471 --
------ ------ -------- -------
Net income (loss)
from discontinued
operations $17,721 $ 9,495 $(272,610) $ 38,028
====== ====== ======== =======
PEAKSTONE REALTY TRUST
Appendix
Annualized Base Rent, Net Debt, Occupancy, and WALT Definitions
"Annualized Base Rent" or "ABR" is calculated as the monthly contractual base rent for leases that have commenced as of the end of the quarter, excluding rent abatements, multiplied by 12 months and deducting base year operating expenses for gross and modified leases, unless otherwise specified. For leases in effect at the end of any quarter that provide for rent abatement during the last month of that quarter, the Company used the monthly contractual base rent payable following expiration of the abatement period.
"Net Debt" is total debt (excluding deferred financing costs and debt premiums/discounts) less cash and cash equivalents (excluding restricted cash).
"Occupancy" is the leased square footage or usable acres, as applicable, under leases that have commenced as of the end of the quarter. "Occupancy Percentage" is total applicable Occupancy divided by the total applicable leasable square footage or usable acres.
"Operating Property" is any property not classified as a Redevelopment Property. "Operating Portfolio" refers to all Operating Properties.
"Redevelopment Property" is a property where we intend to undertake "repositioning/redevelopment work" including (i) making capital improvements to enhance its functionality, (ii) removing existing structures, (iii) building a new facility from the ground up, and/or (iv) converting the property to a different use. A Redevelopment Property will be moved to the Operating Portfolio upon the earlier of (i) achieving 90% Occupancy of the intended use or (ii) 12 months after completion of the repositioning/redevelopment work. "Redevelopment Portfolio" refers to all Redevelopment Properties.
"WALT" is the weighted average lease term in years (excluding unexercised renewal options and early termination rights) based on Annualized Base Rent.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260218829781/en/
CONTACT: Investor Relations:
ir@pkst.com
(END) Dow Jones Newswires
February 18, 2026 16:05 ET (21:05 GMT)