Peakstone Realty Trust reported a net income of $3.5 million, or $0.09 per share, for the quarter ended October 31, 2025, a turnaround from the $24.4 million loss recorded in the same period a year earlier. Revenue from continuing operations fell to $25.8 million, down 3.6% from $26.7 million in Q3 2024, while core FFO declined to $19.1 million from $24.0 million year‑ago, yet remained positive as the company’s industrial‑only focus begins to generate cash flow.
The earnings per share of $0.09 missed the consensus estimate of $0.57 by $0.48, a 84% shortfall. The miss reflects the ongoing divestiture of the office portfolio, which has reduced revenue and diluted earnings, and the fact that the company is still in the transition phase where capital is being redeployed to industrial assets. Management noted that the loss of office income is offset by gains in the industrial outdoor storage (IOS) segment, but the timing of sales proceeds and the need to pay down debt have constrained earnings growth.
Revenue fell 3.6% to $25.8 million, missing the consensus estimate of $48.98 million by $23.18 million. The decline is largely attributable to the sale of office properties, which historically contributed a larger share of the company’s top line. At the same time, the IOS portfolio grew, with 50 IOS properties contributing $28.7 million in annualized base rent, but the overall revenue impact of the office divestiture outweighs the IOS gains for the quarter.
Peakstone’s portfolio now consists of 70 industrial properties and 16 office assets held for sale, a shift that has increased the industrial share of the company’s net book value to roughly 65%. Net debt stands at $724.7 million, giving a net debt to adjusted EBITDA ratio of 5.4×, while total liquidity of $438.0 million includes $111.9 million of revolver capacity. Industrial assets generate $74.6 million in annualized base rent, representing about 51% of total ABR, underscoring the company’s focus on high‑margin industrial assets.
CEO Mike Escalante said, “Our strategic transformation into an industrial‑only REIT focused on growth in the industrial outdoor storage sector continues to advance. We delivered strong IOS leasing results and redeployed sales proceeds toward both IOS investments and debt reduction. We ended the quarter at 5.4× net debt to Adjusted EBITDA, with ample liquidity and a strong pipeline of IOS opportunities.” CFO Javier Bitar added, “Total proceeds from office transactions are expected to range from $300 million to $350 million, and we intend to use approximately $250 million to $300 million of those proceeds to pay down debt.”
The market reacted positively to the earnings release, with investors citing the company’s progress in transitioning to an industrial‑only REIT, the robust performance of its IOS segment, and the improvement in leverage metrics as key drivers of the favorable reaction.
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