FR
#<UNK>, do want to handle that.
We'll break down the components of the same-store for the second quarter.
Overall we are at 6.3%.
And where that came from was rent bumps and cash increases are, what, 3%.
The drop in free rent was about 2.5%.
And as you mentioned on the expenses, the other major contributor was a drop in the landlord expenses.
And the real estate tax refund, that was about another 60 basis points.
Going forward, we still have some opportunity on the real estate tax refunds, but it may not be quite as much as we've seen in the past.
And then, <UNK>, this is <UNK>.
In the second-quarter outperform, that caused us to raise the midpoint of our same-store guidance by about 50 basis points.
That's a little over $1 million or about $0.01 a share.
Again this is actual compared to our guidance.
About half of that, or $500,000, is due to lower bad debt.
Again, we budget about $750,000; that came in at $225,000.
And the other $0.005 had to do with lower landlord expenses, and a little bit of pickup on same-store average occupancy compared to plan.
<UNK>, the other part, the main part of the drop was just overall utilities.
Landlord utilities was a big factor in there, too, also.
Correct.
I think the math that we are getting, <UNK>, is if you look at our midpoint guidance of 5%, and you back out our first two quarters of actual, you get a little over 3% same-store growth.
That's basically comprised of rental rate bumps and increases in rental rates.
Now, the first half of the year, we got the benefit of free rent burning off that we're not getting the benefit for the second half of the year.
Now, keep in mind, there could be some other upside potential as we had in the first two quarters.
For third quarter and fourth quarter, we've budgeted $750,000 each quarter for bad debt expense.
If we come in the same as the first quarter and the second quarter, which is about $200,000, our same-store would go up roughly about 80 basis points.
So that's the construct of what we're looking like for the back end of the year.
I'll have <UNK> jump in on that.
But we feel very good about what we're seeing in Southern California.
We're very excited about The Ranch in the Chino/Eastvale market, submarket.
We've had great success and we've got a great team.
And <UNK>, why don't you talk about that.
But I would expect that if we can find more product, we would continue to do it.
We do it and we have great success.
Let me add one more thing ---+ and <UNK> can talk about it ---+ we also have again a wonderful site that can accommodate about a 1.4 million square feet that is ---+ you might talk about that.
So we are bullish on Southern California.
And now you should expect us to continue to be pretty bullish on that.
Now, don't be rude like <UNK>.
I mean, that (multiple speakers).
I would say we're very encouraged.
We have narrowed down the candidate list.
And again leadership is the number-one thing.
But we are very excited about it and we've got great candidates, and we're making good progress.
But other than that, we're not going to say anything until we announce something.
But we are very confident that we'll have my replacement in place prior to the end of the year.
My successor, exactly.
Right.
Let me have <UNK> handle that.
<UNK>, this is <UNK>.
In Minneapolis, you're correct; we have some opportunity there.
Most of our vacancies are in the Northwest submarket, a series of different buildings ranging in size from about 25,000 feet to 221,000 square feet.
That Northwest submarket has seen a fair amount of new supply, and absorption has been a little bit slower; so, certainly competitive.
But we have continued to make progress on the smaller 25,000 to 30,000 square foot spaces.
But we still have work to do on getting the larger of those, particularly the 221,000 square foot space, done.
But we're confident in our team's ability to do that and drive the occupancy up there.
And then in St.
Louis, which has been a pretty consistent performer for us, we have a couple of spaces there that certainly meet the market from 25,000, 50,000, 100,000 square feet.
And we have work to do.
But those spaces have been occupied, and again we have confidence in our team's ability to have them reoccupied.
As far as 2017, we'll give you when we do the 2017 guidance.
And we'll report at that time.
<UNK>.
<UNK>, one quarter does not really make a trend.
And we actually said in our comments, we talked about the renewal sign and commencing in all of 2016.
That overall cash rental rate increase is 6.1%.
And then you also heard that right now we only have 2% or 1.4 million square feet of the portfolio is rolling the remainder of the year.
So that's ---+ again, that one quarter just doesn't really make a trend.
<UNK>, there was one transaction.
They already brought that down.
<UNK>, do want to take that.
<UNK>, do you want to take that.
Make sure you execute on your developments and we are executing [free up] new capacity.
And <UNK>, again if we have a build-to-suit, that doesn't count because that's ---+
And <UNK>, that includes the four starts that we presented on the call ---+ the four new stores in third quarter and fourth quarter, as well.
(multiple speakers) Park 94.
<UNK>, you want to take that.
Yes, on Southern California, the big ---+ let's do our property (multiple speakers) our $1.4 million (multiple speakers).
And The Ranch land is a lot more expensive.
Great.
Well, thank you for joining us on the call.
If you have any questions, as always, please call <UNK>, <UNK>, or myself, and we'd be happy to answer them.
And we appreciate your interest in First Industrial.
Thank you.
