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    SEC Form 10-Q filed by Peakstone Realty Trust

    5/8/25 4:25:24 PM ET
    $PKST
    Real Estate Investment Trusts
    Real Estate
    Get the next $PKST alert in real time by email
    pkst-20250331
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    Table of Contents
    UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION
    WASHINGTON, D.C. 20549
    ____________________________________________________

    FORM 10-Q
    ____________________________________________________
    ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended March 31, 2025
    ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period from                     to                     
    Commission File Number: 001-41686
    Peakstone Realty Trust
    (Exact name of Registrant as specified in its charter)
    ________________________________________________
    Maryland46-4654479
    (State or other jurisdiction of
    incorporation or organization)
    (IRS Employer
    Identification No.)

    1520 E. Grand Ave
    El Segundo, California 90245
    (Address of principal executive offices)
    (310) 606-3200
    (Registrant’s telephone number)
    N/A
    (Former name, former address and former fiscal year, if changed from last report.)

    Securities registered pursuant to Section 12(b) of the Act:
    Title of each classTrading Symbol(s)Name of each exchange on which registered
    Common shares, $0.001 par value per share
    PKSTNew York Stock Exchange
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.   Yes x    No  ¨
    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ý    No  ¨
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
    Large accelerated filer☐
    Accelerated filer
     ☒
    Non-accelerated filer☐Smaller reporting company ☐
    Emerging growth company☐
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
    As of May 5, 2025, there were 36,772,845 common shares outstanding.
    1

    Table of Contents
    FORM 10-Q
    PEAKSTONE REALTY TRUST
    TABLE OF CONTENTS
      Page No.
    Cautionary Note Regarding Forward-Looking Statements
    3
    PART I. FINANCIAL INFORMATION
    Item 1.Financial Statements:
    Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024
    5
    Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (unaudited)
    6
    Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024 (unaudited)
    7
    Consolidated Statements of Equity for the Three Months Ended March 31, 2025 and 2024 (unaudited)
    8
    Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (unaudited)
    9
    Notes to Consolidated Financial Statements (unaudited)
    11
    Item 2.
    Management’s Discussion and Analysis of Financial Condition and Results of Operations
    31
    Item 3.
    Quantitative and Qualitative Disclosures About Market Risk
    50
    Item 4.
    Controls and Procedures
    50
    PART II. OTHER INFORMATION
    Item 1.
    Legal Proceedings
    51
    Item 1A.
    Risk Factors
    51
    Item 2.
    Unregistered Sales of Equity Securities and Use of Proceeds
    51
    Item 3.
    Defaults Upon Senior Securities
    51
    Item 4.
    Mine Safety Disclosures
    51
    Item 5.
    Other Information
    51
    Item 6.
    Exhibits
    51
    SIGNATURES
    53
    2

    Table of Contents
    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
    This Quarterly Report on Form 10-Q 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 events or trends and similar expressions concerning matters that are not historical facts. 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 Quarterly Report on Form 10-Q 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 repay debt and comply with our obligations under our indebtedness; the attractiveness of industrial and/or office assets; 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 and land use 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 business plans, objectives, expectations and intentions, including any acquisitions, investments, or dispositions, including our acquisition of industrial outdoor storage assets; the effects on our portfolio from the divestment of our office properties; 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; 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; and other factors, including those risks disclosed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in this Quarterly Report on Form 10-Q, as well as 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, and any subsequent Quarterly Reports on Form 10-Q.

    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 Quarterly Report on Form 10-Q. 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 Quarterly Report on Form 10-Q, 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.
    3

    Table of Contents
    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 this Quarterly Report on Form 10-Q.
    Available Information
    We make available on the “SEC Filings” subpage of the investors section of our website (www.pkst.com) free of charge our quarterly reports on Form 10-Q, including this Quarterly Report on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, proxy statements, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as practicable after we electronically file such reports with the Securities and Exchange Commission (the “SEC”). Our electronically filed reports can also be obtained on the SEC’s internet site at http://www.sec.gov. Further, copies of our Code of Business Conduct and Ethics and the charters for the Audit, Compensation, and Nominating and Corporate Governance Committees of our Board of Trustees (the “Board”) are also available on the “Governance - Governance Documents” subpage of the “Investors” section of our website. We use our website (www.pkst.com) as a routine channel of distribution of company information, including press releases, presentations, and supplemental information, and as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our website in addition to following press releases, SEC filings, and public conference calls and webcasts. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts.
    4

    Table of Contents
    PART I. FINANCIAL INFORMATION
    PEAKSTONE REALTY TRUST
    CONSOLIDATED BALANCE SHEETS
    (Unaudited; in thousands, except units and share amounts)
    March 31, 2025 December 31, 2024
    ASSETS
    Cash and cash equivalents$204,017 $146,514 
    Restricted cash7,973 7,696 
    Real estate:
    Land434,618 450,217 
    Building and improvements1,769,397 1,952,742 
    In-place lease intangible assets343,153 380,599 
    Construction in progress1,434 1,017 
    Total real estate2,548,602 2,784,575 
    Less: accumulated depreciation and amortization(493,812)(520,527)
    Total real estate, net2,054,790 2,264,048 
    Assets held for sale, net108,886 — 
    Above-market lease and other intangible assets, net
    26,381 28,015 
    Deferred rent receivable54,570 60,371 
    Deferred leasing costs, net12,834 13,865 
    Goodwill68,373 68,373 
    Right-of-use lease assets
    32,565 32,967 
    Interest rate swap asset, at fair value
    4,570 15,974 
    Other assets20,238 38,409 
    Total assets$2,595,197 $2,676,232 
    LIABILITIES AND EQUITY
    Debt, net$1,345,686 $1,344,619 
    Interest rate swap liability, at fair value
    713 — 
    Distributions payable8,565 8,477 
    Below-market lease and other intangible liabilities, net44,771 46,976 
    Right-of-use lease liabilities
    46,708 46,887 
    Accrued expenses and other liabilities69,958 77,251 
    Total liabilities$1,516,401 $1,524,210 
    Commitments and contingencies (Note 13)
    Shareholders’ equity:
    Common shares, $0.001 par value; 800,000,000 shares authorized; 36,762,170 and 36,733,327 shares outstanding in the aggregate as of March 31, 2025 and December 31, 2024, respectively
    37 37 
    Additional paid-in capital3,019,703 3,016,804 
    Cumulative distributions(1,117,625)(1,109,215)
    Accumulated earnings(887,661)(838,279)
    Accumulated other comprehensive income4,698 15,874 
    Total shareholders’ equity1,019,152 1,085,221 
    Noncontrolling interests59,644 66,801 
    Total equity1,078,796 1,152,022 
    Total liabilities and equity$2,595,197 $2,676,232 
    The accompanying notes are an integral part of these consolidated financial statements.
    5




    PEAKSTONE REALTY TRUST
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited; in thousands, except share and per share amounts)
     Three Months Ended March 31,
     20252024
    Revenue:
    Rental income$56,971 $59,227 
    Expenses:
    Property operating expense4,644 7,090 
    Property tax expense4,127 4,510 
    General and administrative expenses8,553 9,680 
    Corporate operating expenses to related parties141 166 
    Real estate impairment provision51,957 1,376 
    Depreciation and amortization25,439 23,415 
    Total expenses94,861 46,237 
    (Loss) income before other income (expenses)(37,890)12,990 
    Other income (expenses):
    Interest expense(15,978)(16,148)
    Other income, net1,136 4,045 
    (Loss) gain from disposition of assets(479)9,177 
    Goodwill impairment provision— (4,594)
    Transaction expenses(190)— 
    Net (loss) income(53,401)5,470 
    Net loss (income) attributable to noncontrolling interests4,019 (445)
    Net (loss) income attributable to controlling interests(49,382)5,025 
    Net (loss) income attributable to common shareholders$(49,382)$5,025 
    Net (loss) income attributable to common shareholders per share, basic and diluted$(1.35)$0.14 
    Weighted-average number of common shares outstanding, basic and diluted36,726,154 36,309,019 
    The accompanying notes are an integral part of these consolidated financial statements.
    6




    PEAKSTONE REALTY TRUST
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
    (Unaudited; in thousands)
    Three Months Ended March 31,
    20252024
    Net (loss) income$(53,401)$5,470 
    Other comprehensive (loss) income:
    Change in fair value of swap agreements(12,086)133 
    Total comprehensive (loss) income(65,487)5,603 
    Comprehensive loss (income) attributable to noncontrolling interests4,929 (456)
    Comprehensive (loss) income attributable to common shareholders$(60,558)$5,147 
    The accompanying notes are an integral part of these consolidated financial statements.
    7




    PEAKSTONE REALTY TRUST
    CONSOLIDATED STATEMENTS OF EQUITY
    (Unaudited; in thousands, except share data)
    Common SharesAdditional
    Paid-In
    Capital
    Cumulative
    Distributions
    Accumulated DeficitAccumulated Other Comprehensive Income (Loss)Total
    Shareholders’ Equity
    Non-
    controlling
    Interests
    Total
    Equity
    SharesAmount
    Balance as of December 31, 202336,304,145 $36 $2,990,085 $(1,076,000)$(827,854)$25,817 $1,112,084 $91,629 $1,203,713 
    Share-based compensation41,674 — 1,579 — — — 1,579 — 1,579 
    Shares withheld to satisfy employee tax withholding requirements on vesting restricted shares(4,875)— (79)— — — (79)— (79)
    Dividends declared to common shareholders
    — — — (8,273)— — (8,273)— (8,273)
    Exchange of noncontrolling interests5,664 — 486 — — — 486 (486)— 
    Distributions to noncontrolling interest— — — — — — — (723)(723)
    Net income — — — — 5,025 — 5,025 445 5,470 
    Other comprehensive income— — — — — 121 121 12 133 
    Balance as of March 31, 202436,346,608 $36 $2,992,071 $(1,084,273)$(822,829)$25,938 $1,110,943 $90,877 $1,201,820 









    PEAKSTONE REALTY TRUST
    CONSOLIDATED STATEMENTS OF EQUITY
    (Unaudited; in thousands, except share data)


     Common SharesAdditional Paid-In CapitalCumulative DistributionsAccumulated EarningsAccumulated Other Comprehensive (Loss) Income
    Total Shareholders’ Equity
    Non-controlling InterestsTotal Equity
     SharesAmount
    Balance December 31, 202436,733,327 $37 $3,016,804 $(1,109,215)$(838,279)$15,874 $1,085,221 $66,801 $1,152,022 
    Share-based compensation19,975 — 1,452 — — — 1,452 — 1,452 
    Shares withheld to satisfy employee tax withholding requirements on vesting restricted shares(9,673)— (113)— — — (113)— (113)
    Dividends declared to common shareholders
    — — — (8,410)— — (8,410)— (8,410)
    Exchange of noncontrolling interests18,541 — 1,560 — — — 1,560 (1,560)— 
    Distributions to noncontrolling interest— — — — — — — (668)(668)
    Net loss
    — — — — (49,382)— (49,382)(4,019)(53,401)
    Other comprehensive loss
    — — — — — (11,176)(11,176)(910)(12,086)
    Balance as of March 31, 202536,762,170 $37 $3,019,703 $(1,117,625)$(887,661)$4,698 $1,019,152 $59,644 $1,078,796 

    The accompanying notes are an integral part of these consolidated financial statements.
    8




    PEAKSTONE REALTY TRUST
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited; in thousands)
    Three Months Ended March 31,
    20252024
    Operating Activities:
    Net (loss) income$(53,401)$5,470 
    Adjustments to reconcile net (loss) income to net cash provided by operating activities:
    Depreciation of building and building improvements17,147 15,564 
    Amortization of leasing costs and intangibles, including ground leasehold interests and leasing costs8,660 8,223 
    Amortization of above- and (below-market) leases, net
    (1,862)(259)
    Amortization of deferred financing costs and debt premium1,068 1,157 
    Amortization of swap interest31 31 
    Deferred rent(1,102)(410)
    Net loss (gain) from disposition of assets479 (9,177)
    Loss (gain) from investments
    23 (189)
    Real estate impairment provision
    51,957 1,376 
    Goodwill impairment provision
    — 4,594 
    Share-based compensation1,452 1,579 
    Discount amortization - note receivable(60)(119)
    Change in operating assets and liabilities:
    Deferred leasing costs and other assets2,839 1,239 
    Accrued expenses and other liabilities(7,015)(12,888)
    Net cash provided by operating activities20,216 16,191 
    Investing Activities:
    Proceeds from disposition of properties33,004 62,414 
    Payments for construction in progress(1,116)(1,846)
    Purchase of investments— (41)
    Proceeds from repayment of note receivable15,000 — 
    Net cash provided by investing activities46,888 60,527 

    9




    Three Months Ended March 31,
    20252024
    Financing Activities:
    Principal payoff of secured indebtedness - Mortgage Debt— (18,868)
    Principal amortization payments on secured indebtedness— (1,594)
    Deferred financing costs— (682)
    Offering costs(10)86 
    Repurchase of common shares to satisfy employee tax withholding requirements(113)(79)
    Distributions to noncontrolling interests(672)(724)
    Dividends to common shareholders
    (8,318)(8,193)
    Financing lease payment(211)(210)
    Net cash used in financing activities(9,324)(30,264)
    Net increase in cash, cash equivalents and restricted cash57,780 46,454 
    Cash, cash equivalents and restricted cash at the beginning of the period154,210 401,010 
    Cash, cash equivalents and restricted cash at the end of the period$211,990 $447,464 
    Supplemental disclosure of cash flow information:
    Cash paid for interest$14,909 $14,326 
    Supplemental disclosures of non-cash investing and financing transactions:
    Dividends payable to common shareholders
    $8,423 $8,273 
    Distributions payable to noncontrolling interests$668 $723 
    Common share redemptions funded subsequent to period-end$175 $— 
    Exchange of noncontrolling interest to common stock$1,560 $486 
    Accrued for construction in progress$232 $53 
    Accrued tenant obligations and other
    $7,599 $665 
    (Decrease) increase in fair value swap agreement
    $(12,085)$132 
    Note receivable, net
    $60 $(14,405)
    Capitalized transaction costs accrued$324 $— 

    The accompanying notes are an integral part of these consolidated financial statements.
    10

    Table of Contents
    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)

    1.     Organization
    Peakstone Realty Trust (“PKST” or the “Company”) is a real estate investment trust that is executing a strategic transition to an industrial REIT, targeting growth in the industrial outdoor storage (“IOS”) subsector. As part of this strategy, PKST is actively reshaping its portfolio by divesting non-core assets, primarily office properties, to position the Company for long-term value creation. The Company’s fiscal year-end is December 31.
    PKST OP, L.P., our operating partnership (the “Operating Partnership”), owns, directly and indirectly all of the Company’s assets. As of March 31, 2025, the Company owned, directly and indirectly through a wholly-owned subsidiary, approximately 93.0% of the outstanding common units of limited partnership interest in the Operating Partnership (“OP Units”).
    As of March 31, 2025, our portfolio is comprised of 101 properties, consisting of 96 operating properties and five redevelopment properties (those designated for redevelopment or repositioning) reported in two segments - Industrial and Office.
    2.     Basis of Presentation and Summary of Significant Accounting Policies
    There have been no significant changes to the Company’s accounting policies since the Company filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2024. For further information about the Company’s accounting policies, refer to the Company’s filed Annual Report on Form 10-K for the year ended December 31, 2024 with the Securities and Exchange Commission (the “SEC”).
    The accompanying unaudited consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. In addition, see the risk factors identified in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
    The consolidated financial statements of the Company include all accounts of the Company, the Operating Partnership, and its consolidated subsidiaries. Intercompany transactions are shown on the consolidated statements if and to the extent required pursuant to GAAP. Each property-owning entity is a wholly-owned subsidiary which is a special purpose entity (“SPE”).
    11

    Table of Contents
    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Segment Information
    As of March 31, 2025, the Company has two reportable segments: Industrial and Office. The Industrial segment consists of i) IOS properties which have a low building-to-land ratio, or low coverage, maximizing yard space for the display, movement, and storage of materials and equipment and ii) traditional industrial assets, which include distribution, warehouse and light manufacturing properties. The Office segment includes office, R&D and data center properties. Prior to December 31, 2024, the Company presented a third reportable segment, Other, which consisted of vacant and non-core properties, together with other properties in the same cross-collateralized loan pools. On December 31, 2024, the Company sold the final property in its Other segment, and as a result, the Other segment was eliminated. The Company presented the results of the Other segment through the year ended December 31, 2024. See Note 14, Segment Reporting, for details regarding each of the Company’s segments.
    Use of Estimates
    The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.
    Earnings Per Share
    Basic earnings per share is computed by dividing net (loss) income attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net (loss) income attributable to common shareholders by the weighted-average number of outstanding common shares plus the potential effect of any dilutive securities (e.g. unvested time-based restricted share units and unvested time-based restricted shares (together, “Unvested Restricted Shares”), OP Units, etc.), using the more dilutive of either the two-class method or the treasury stock method.
    For all periods presented, (a) OP Units were excluded from the dilutive earnings per share computation because they were not dilutive, and (b) using the treasury stock method, the Unvested Restricted Shares (in the amounts set forth below) were excluded from dilutive earnings per share because the inclusion would have been anti-dilutive.
    Three Months Ended March 31,
    20252024
    Unvested Restricted Shares(1)
    291,100 131,094 
    (1)    Unvested Restricted Shares that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to either the two-class method or treasury stock method, as applicable.
    Restricted Cash
    Restricted cash is presented on the consolidated balance sheets and consists primarily of reserves that the Company funded as required by the applicable governing documents with certain lenders in conjunction with debt financing or transactions. The table below summarizes the Company’s restricted cash:
    Balance as of
    March 31, 2025December 31, 2024
    Cash reserves$4,393 $4,092 
    Restricted lockbox3,580 3,604 
    Total restricted cash$7,973 $7,696 

    Reclassifications
    As applicable, certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current period presentation.
    12

    Table of Contents
    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Income Taxes
    The Company has elected to be taxed as a REIT under the Internal Revenue Code (“Code”). To qualify as a REIT, the Company must meet certain organizational and operational requirements. The Company intends to adhere to these requirements and maintain its REIT status for the current year and subsequent years. As a REIT, the Company generally will not be subject to federal income taxes on taxable income that is distributed to shareholders. However, the Company may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income, if any. If the Company fails to qualify as a REIT in any taxable year, the Company will then be subject to federal income taxes on the taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service (“IRS”) grants the Company relief under certain statutory provisions. Such an event could materially adversely affect net income and net cash available to pay dividends to shareholders. As of March 31, 2025, the Company believes it has satisfied the REIT requirements.
    Pursuant to the Code, the Company has elected to treat its corporate subsidiary as a taxable REIT subsidiary (“TRS”). In general, the TRS may perform non-customary services for the Company’s tenants and may engage in any real estate or non-real estate-related business. The TRS will be subject to corporate federal and state income tax.
    Recently Issued Accounting Pronouncements
    On November 4, 2024, the FASB issued ASU 2024-03, which requires public business entities to provide disaggregated disclosures of certain expense categories that are included in the income statement. The guidance does not change the presentation of expenses on the face of the income statement but mandates additional tabular disclosures for line items in continuing operations. Expenses that are already disclosed under existing U.S. GAAP should be incorporated into these disaggregated disclosures, while any remaining amounts should be described qualitatively. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The disclosures will be required on both an annual and interim basis. We are currently evaluating the potential impact of adopting ASU 2024-03 on our consolidated financial statements and related disclosures.
    3.     Real Estate
    The following table summarizes the Company’s gross investment in real estate as of March 31, 2025 and December 31, 2024:
    March 31, 2025December 31, 2024
    Land$434,618 $450,217 
    Building and improvements1,769,397 1,952,742 
    In-place lease intangible assets
    343,153 380,599 
    Construction in progress1,434 1,017 
    Total real estate$2,548,602 $2,784,575 
    Depreciation expense for buildings and improvements for the three months ended March 31, 2025 and 2024 was $17.1 million and $15.6 million, respectively. Amortization expense for intangibles, including but not limited to, in-place lease intangible assets for the three months ended March 31, 2025 and 2024 was $8.4 million and $7.9 million, respectively.
    Acquisitions of Real Estate
    The Company had no acquisitions of real estate during the three months ended March 31, 2025 and March 31, 2024.
    13

    Table of Contents
    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Dispositions of Real Estate
    The following table summarizes information for dispositions during the three months ended March 31, 2025 and March 31, 2024:
    Sale DateSegmentLocation
    Gross Sales Price
    Gain (Loss)
    2025 Dispositions
    February 7, 2025OfficeHunt Valley, Maryland$26,000 $(553)
    March 5, 2025OfficeFort Worth, Texas8,031 74 
    Total for the Three Months Ended March 31, 2025
    $34,031 $(479)
    2024 Dispositions
    January 31, 2024
    (1)
    Office
    Johnston, Iowa
    $30,000 $(17)
    March 15, 2024
    Other
    Columbia, Maryland
    15,000 5,326 
    March 26, 2024
    Other
    Jefferson City, Missouri
    26,090 4,690 
    March 28, 2024
    Other
    Houston, Texas
    8,435 (822)
    Total for the Three Months Ended March 31, 2024
    $79,525 $9,177 
    (1)This Office segment property was sold to an affiliate of the then existing tenant for $30.0 million. In connection with the sale, the Company issued a one-year $15.0 million promissory note and received the full repayment on the maturity date of January 31, 2025.
    Real Estate Held for Sale
    As of March 31, 2025, three Office segment properties met the criteria for classification as held for sale and were recorded at fair value less estimated cost to sell. As of December 31, 2024, no properties met the criteria for classification as held for sale.
    The following summary presents the major components of assets and liabilities related to real estate properties held for sale as of March 31, 2025:
    ASSETS
    As of March 31, 2025 (1)
    Land$6,034 
    Building and improvements103,645 
    In-place lease intangible assets
    18,828 
    Total real estate128,507 
    Less: accumulated depreciation(26,509)
    Total real estate, net101,998 
    Above-market lease and other intangible assets, net
    218 
    Deferred rent6,688 
    Total real estate and other assets held for sale$108,904 
    LIABILITIES
    Below-market lease and other intangible liabilities, net
    $18 
    Liabilities of real estate assets held for sale$18 
    Assets held for sale, net
    $108,886 
    (1)On April 24, 2025, two related Office segment properties were sold together for a total gross sales price of $106.8 million.On April 30, 2025, one Office Segment property was sold for a gross sales price of $3.5 million.
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Real Estate Impairments
    Where indicators of impairment exist, the Company evaluates the recoverability of its real estate assets by comparing the carrying amounts of the assets to the estimated undiscounted cash flows. Recoverability of real estate assets requires estimates of future market and economic conditions, including assumptions related to estimated selling prices, anticipated hold periods, potential vacancies, capitalization rates, market rental income amounts subsequent to the expiration of current lease agreements, and property operating expenses.
    During the three months ended March 31, 2025, the Company recorded a real estate impairment provision of approximately $52.0 million on six Office segment properties, including three properties held for sale. The impairment resulted from the estimated selling prices and changes to anticipated hold periods of the properties, which impacted the recoverability of these assets.
    During the three months ended March 31, 2024, the Company recorded a real estate impairment provision of approximately $1.4 million related to one Other segment property, which met the criteria for classification as held for sale. The impairment resulted from the estimated selling price of the property, which impacted the recoverability of the asset.
    See Note 8, Fair Value Measurements, for details regarding fair value inputs.
    Real Estate and Acquired Lease Intangibles
    The following table summarizes the Company’s allocation of acquired and contributed real estate asset value related to in-place leases, above- and below-market lease intangibles, and other intangibles, net of the amortization for the three months ended March 31, 2025 and year ended December 31, 2024:
    March 31, 2025 December 31, 2024
    In-place lease intangible assets
    $343,153 $380,599 
    In-place lease intangible assets - accumulated amortization
    (190,125)(199,871)
    In-place lease intangible assets, net (1)
    $153,028 $180,728 
    Above-market lease intangible assets
    $16,055 $17,652 
    Above-market lease intangible assets - accumulated amortization
    (11,355)(11,686)
    Above-market lease intangible assets, net
    4,700 5,966 
    Other intangible assets
    32,028 32,028 
    Other intangible assets - accumulated amortization
    (10,347)(9,979)
    Other intangible assets, net
    21,681 22,049 
    Above-market lease and other intangible assets, net (1)
    $26,381 $28,015 
    Below-market lease intangible liabilities
    $(57,071)$(58,200)
    Land leasehold interest (above-market)
    (3,072)(3,072)
    Below-market lease & land leasehold interest - accumulated amortization
    15,471 14,412 
    Intangibles - other (above-market)
    (99)(116)
    Below-market lease and other intangible liabilities, net (1)
    $(44,771)$(46,976)
    (1)The weighted average remaining amortization period of the Company’s in-place leases, above- and below-market lease intangibles and other intangibles was 10.2 years and 10.1 years as of March 31, 2025 and December 31, 2024, respectively.
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    The amortization of the intangible assets and other leasing costs for the respective periods is as follows:
    Three Months Ended March 31,
    20252024
    Above and below market leases, net$(1,862)$(259)
    In-place lease intangible assets$7,928 $7,450 
    Ground leasehold amortization (below market)$(96)$(97)
    Other leasing costs amortization$460 $498 
    4.    Investments in Unconsolidated Entities
    As of August 28, 2024, the Company no longer has an investment in any unconsolidated entities. The Company, through its subsidiary GRT VAO OP, LLC (“GRT VAO Sub”), previously invested a combined $184.2 million for an approximately 49% interest in a joint venture (“Galaxy REIT, LLC” or the “Office Joint Venture”), through which it owned indirectly an approximate 49% interest in a 46-property office portfolio (the “JV Office Portfolio”). Following the impairment of the JV Office Portfolio as of September 30, 2023, the Company no longer recorded any equity income or losses related to the Office Joint Venture. On August 28, 2024, GRT VAO Sub transferred all of its ownership interest in the Office Joint Venture to the other members of the Office Joint Venture. Rule 3-09 of Regulation S-X requires the Company to present the summarized financial statements of the Office Joint Venture below as of December 31, 2024 and for the three months ended March 31, 2024.

    The table below presents the condensed balance sheet for the unconsolidated Office Joint Venture:
    December 31, 2024 (1)
    Assets
    Real estate properties, net$1,060,234 
    Other assets244,075 
    Total Assets$1,304,309 
    Liabilities
    Mortgages payable, net$1,066,023 
    Other liabilities81,635 
    Total Liabilities$1,147,658 
    (1)Due to the reporting of the Office Joint Venture on a one quarter lag, amounts are as August 27, 2024, the date through which information was available prior to the Company’s transfer of its entire ownership interest in the Office Joint Venture on August 28, 2024.

    The table below presents condensed statements of operations of the unconsolidated Office Joint Venture:
    Three Months Ended March 31,
    2024 (1)
    Total revenues$50,206 
    Expenses:
    Operating expenses(19,458)
    General and administrative(1,126)
    Depreciation and amortization(29,910)
    Interest expense(31,817)
    Other income, net262 
    Total Expenses(82,049)
    Net Loss$(31,843)
    (1)Amounts represent the period of October 1, 2023 to December 31 2023, due to the recording of the Office Joint Venture’s activity on a one quarter lag.
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    5.     Debt
    As of March 31, 2025 and December 31, 2024, the Company’s consolidated debt consisted of the following:
    Carrying Value
    March 31, 2025December 31, 2024
    Contractual Interest 
    Rate (1)
    Effective Interest Rate (2)
    Loan
    Maturity (3)
    Secured Debt
    BOA II Loan(4)
    $250,000 $250,000 4.32%4.37%May 2028
    Georgia Mortgage Loan(5)
    37,722 37,722 5.31%5.31%November 2029
    Illinois Mortgage Loan(6)
    23,000 23,000 6.51%6.60%November 2029
    Florida Mortgage Loan(7)
    49,604 49,604 5.48%5.48%May 2032
    Total Secured Debt 360,326 360,326 4.77%
    Unsecured Debt
    Revolving Loan465,000 465,000 
    SOF Rate + 1.65%
    5.05%July 2028
    2026 Term Loan150,000 150,000 
    SOF Rate + 1.25%
    3.36%April 2026
    2028 Term Loan I210,000 210,000 
    SOF Rate + 1.60%
    3.72%July 2028
    2028 Term Loan II175,000 175,000 
    SOF Rate + 1.60%
    3.72%
    October 2028 (8)
    Total Unsecured Debt1,000,000 1,000,000 4.28%
    Total Debt1,360,326 1,360,326 4.41%
    Unamortized Deferred Financing Costs and Discounts, net(14,640)(15,707)
    Total Debt, net$1,345,686 $1,344,619 
    (1)The Contractual Interest Rate for the Company’s unsecured debt uses the applicable Secured Overnight Financing Rate ("SOFR" or “SOF rate"). As of March 31, 2025, the applicable rates were 4.31% (SOFR, as calculated per the credit facility), plus spreads of 1.25% (2026 Term Loan), 1.60% (2028 Term Loan I), 1.60% (2028 Term Loan II), and 1.65% (Revolving Loan) and a 0.1% index.
    (2)The Effective Interest Rate is calculated on a weighted average basis, using the Actual/360 interest method (where applicable), and is inclusive of the Company's $750.0 million floating to fixed interest rate swaps maturing on July 1, 2025, which have the effect of converting SOFR to a weighted average fixed rate of 1.97% (Note: The Company entered into forward-starting, floating to fixed interest rate swaps with a notional amount of $550.0 million. These swaps become effective July 1, 2025, mature July 1, 2029 and have the effect of converting SOFR to a weighted average fixed rate of 3.58%. Refer to 6. Interest Contracts). The Effective Interest Rate is calculated based on the face value of debt outstanding (i.e., excludes debt premium/discount and debt financing costs). When adjusting for the effect of amortization of discounts/premiums and deferred financing costs, and excluding the impact of interest rate swaps, the Company’s weighted average effective interest rate was 6.04%.
    (3)Reflects the loan maturity dates as of March 31, 2025.
    (4)The BOA II Loan has a fixed-rate of interest and is secured by properties located in Chicago, Illinois; Columbus, Ohio; Las Vegas, Nevada; and Birmingham, Alabama.
    (5)The Georgia Mortgage Loan has a fixed-rate of interest and is secured by a property in Savannah, Georgia.
    (6)The Illinois Mortgage Loan has a fixed-rate of interest and is secured by a property in Chicago, Illinois.
    (7)The Florida Mortgage Loan has a fixed-rate of interest and is secured by a property in Jacksonville, Florida.
    (8)The 2028 Term Loan II has a contractual maturity of October 31, 2027. We have a one-year option to extend the maturity date to October 31, 2028, subject to certain conditions.
    Second Amended and Restated Credit Agreement
    As of March 31, 2025, the Second Amended and Restated Credit Agreement dated as of April 30, 2019 as amended by the following documents (collectively, the “Second Amended and Restated Credit Agreement”): First Amendment to the Second Amended and Restated Credit Agreement dated as of October 1, 2020 (the “First Amendment”), Second Amendment to the Second Amended and Restated Credit Agreement dated as of December 18, 2020 (the “Second Amendment”), Third Amendment to the Second Amended and Restated Credit Agreement dated as of July 14, 2021 (the “Third Amendment”), Fourth Amendment to the Second Amended and Restated Credit Agreement dated as of April 28, 2022 (the “Fourth Amendment”), Fifth Amendment to the Second Amended and Restated Credit Agreement dated as of September 28, 2022 (the “Fifth Amendment”), Sixth Amendment to the Second Amended and Restated Credit Agreement dated as of November 30, 2022 (the “Sixth Amendment”), Seventh Amendment to the Second Amended and Restated Credit Agreement dated as of March 21, 2023 (the “Seventh Amendment”), Eighth Amendment to the Second Amended and Restated Credit Agreement
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    dated as of July 25, 2024 (the “Eighth Amendment”) and Ninth Amendment to the Second Amended and Restated Credit Agreement dated as of October 31, 2024 (the “Ninth Amendment”), with KeyBank National Association (“KeyBank”) as administrative agent, and a syndicate of lenders, provided the Operating Partnership, as the borrower, with a $1.1 billion credit facility (with the right to elect to increase total commitments to $1.3 billion) consisting of (i) a $547.0 million senior unsecured revolving credit facility (the “Revolving Credit Facility”), under which the Operating Partnership has drawn $465.0 million (the “Revolving Loan”) maturing in July 2028, (ii) a $210.0 million senior unsecured term loan maturing in July 2028 (the “2028 Term Loan I”), (iii) a $175.0 million senior unsecured term loan maturing in October 2028, assuming the one-year extension option is exercised (the “2028 Term Loan II”) and (iv) a $150.0 million senior unsecured term loan maturing in April 2026 (the “2026 Term Loan” and together with the Revolving Loan, the 2028 Term Loan I and the 2028 Term Loan II, the “KeyBank Loans”). The Second Amended and Restated Credit Agreement also provides the option, subject to obtaining additional commitments from lenders and certain other customary conditions, to increase the commitments under the Revolving Credit Facility, to increase the existing term loans and/or incur new term loans by up to an additional $218.0 million in the aggregate. As of March 31, 2025, the available undrawn capacity under the Revolving Credit Facility was $82.0 million.
    Debt Covenant Compliance
    Pursuant to the terms of the Company’s secured debt and the KeyBank Loans, the Operating Partnership, in consolidation with the Company, is subject to certain loan compliance covenants. There have been no significant changes in the Company’s debt covenants from what was disclosed in the Company’s most recent Annual Report on Form 10-K. The Company was in compliance with all of its debt covenants as of March 31, 2025.
    The following summarizes the future scheduled principal repayments of all loans as of March 31, 2025 per the loan terms discussed above:
    As of March 31, 2025
    2025
    $— 
    2026150,000 
    2027— 
    20281,100,000 
    202960,722 
    Thereafter49,604 
    Total principal1,360,326 
    Unamortized debt premium/(discount)1,811 
    Unamortized deferred loan costs(16,451)
    Total$1,345,686 


    6.     Interest Rate Contracts
    Risk Management Objective of Using Derivatives
    The Company is exposed to certain risks arising from both business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of debt funding and the use of derivative financial instruments. Specifically, the Company enters into interest rate hedging instruments (collectively, “Interest Rate Swaps”) to provide greater predictability in interest expense by protecting against potential increases in floating interest rates and allow for more precise budgeting, financial planning and forecasting. Interest Rate Swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not use derivatives for trading or speculative purposes.
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Derivative Instruments
    As of March 31, 2025 and December 31, 2024, the Company has Interest Rate Swaps in place to hedge the variable cash flows associated with its variable-rate debt (which consists of the KeyBank Loans as of both periods). The Interest Rate Swaps are cross-defaulted to other indebtedness of the Operating Partnership, if that indebtedness exceeds certain thresholds. The change in the fair value of the Interest Rate Swaps designated and qualifying as cash flow hedges is initially recorded in accumulated other comprehensive income (“AOCI”) and is subsequently reclassified into earnings through interest expense as interest payments are made on the Company's variable-rate debt.
    The following table sets forth a summary of the Interest Rate Swaps at March 31, 2025 and December 31, 2024:
    Fair Value (1)
    Current Notional Amounts
    Derivative InstrumentEffective DateMaturity DateInterest Strike RateMarch 31, 2025December 31, 2024March 31, 2025December 31, 2024
    Assets
    Current Interest Rate Swaps
    Interest Rate Swap3/10/20207/1/20250.83%$1,341 $2,605 $150,000 $150,000 
    Interest Rate Swap3/10/20207/1/20250.84%892 1,732 100,000 100,000 
    Interest Rate Swap3/10/20207/1/20250.86%665 1,291 75,000 75,000 
    Interest Rate Swap7/1/20207/1/20252.82%495 938 125,000 125,000 
    Interest Rate Swap7/1/20207/1/20252.82%395 748 100,000 100,000 
    Interest Rate Swap7/1/20207/1/20252.83%394 747 100,000 100,000 
    Interest Rate Swap7/1/20207/1/20252.84%388 738 100,000 100,000 
    Total$4,570 $8,799 $750,000 $750,000 
    Forward Interest Rate Swaps(2)
    Interest Rate Swap7/1/20257/1/20293.57%$(88)$1,346 $100,000 $100,000 
    Interest Rate Swap7/1/20257/1/20293.57%(93)1,341 100,000 100,000 
    Interest Rate Swap7/1/20257/1/20293.60%(182)1,255 100,000 100,000 
    Interest Rate Swap7/1/20257/1/20293.58%(124)1,310 100,000 100,000 
    Interest Rate Swap7/1/20257/1/20293.57%(92)1,338 100,000 100,000 
    Interest Rate Swap7/1/20257/1/20293.62%(134)585 50,000 50,000 
    Total$(713)$7,175 $550,000 $550,000 
    (1)The Company records all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly there are no offsetting amounts that net assets against liabilities. As of March 31, 2025, derivatives in an asset or liability position are included in the line item “Interest rate swap asset” or “Interest rate swap liability”, respectively, in the consolidated balance sheets at fair value.
    (2)In connection with the Eighth Amendment, the Operating Partnership entered into certain interest rate swaps, in the form of forward-starting, floating to fixed SOFR interest rate swaps with a notional amount of $550.0 million. These swaps become effective July 1, 2025, and mature July 1, 2029 and have the effect of converting SOFR to a weighted average fixed rate of 3.58%.
    The following table sets forth the impact of the Interest Rate Swaps on the consolidated statements of operations for the periods presented:
    Three Months Ended March 31,
    20252024
    Interest Rate Swaps in Cash Flow Hedging Relationship:
    Amount of gain (loss) recognized in AOCI on derivatives$(7,453)$6,692 
    Amount reclassified from AOCI into earnings under “Interest expense”$(4,632)$(6,560)
    Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded$15,978 $16,148 
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    During the twelve months subsequent to March 31, 2025, the Company estimates that an additional $5.4 million of its income will be recognized from AOCI into earnings.
    The Company is not required to post collateral related to these agreements.
    7.     Accrued Expenses and Other Liabilities
    Accrued expenses and other liabilities consisted of the following as of March 31, 2025 and December 31, 2024:
    March 31, 2025December 31, 2024
    Other liabilities$27,517 $32,613 
    Interest payable16,255 15,400 
    Deferred compensation10,047 10,201 
    Prepaid tenant rent9,321 9,867 
    Real estate taxes payable2,647 3,492 
    Property operating expense payable1,214 2,696 
    Accrued tenant improvements2,199 2,402 
    Due to related parties526 580 
    Accrued construction in progress232 — 
    Total$69,958 $77,251 

    8.     Fair Value Measurements
    The Company is required to disclose fair value information about all financial instruments, for which it is practicable to estimate fair value, whether or not recognized in the consolidated balance sheets. The Company measures and discloses the estimated fair value of financial assets and liabilities utilizing a fair value hierarchy that distinguishes between data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels, as follows: (i) quoted prices in active markets for identical assets or liabilities, (ii) “significant other observable inputs,” and (iii) “significant unobservable inputs.” “Significant other observable inputs” can include quoted prices for similar assets or liabilities in applicable markets, as well as inputs that are observable for the asset or liability, such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. “Significant unobservable inputs” are typically based on an entity’s own assumptions, since there is little, if any, related market activity. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers between the levels in the fair value hierarchy during the three months ended March 31, 2025 and March 31, 2024.
    Recurring Measurements
    The following table sets forth the assets and liabilities that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of March 31, 2025 and December 31, 2024:
    Assets/(Liabilities)Total Fair ValueQuoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable InputsSignificant Unobservable Inputs
    March 31, 2025
    Interest Rate Swap Asset$4,570 $— $4,570 $— 
    Mutual Funds Asset$10,488 $10,488 $— $— 
    Interest Rate Swap Liability $(713)$— $(713)$— 
    December 31, 2024
    Interest Rate Swap Asset$15,974 $— $15,974 $— 
    Mutual Funds Asset$11,971 $11,971 $— $— 
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Nonrecurring Measurement - Real Estate Impairment
    The following table is a summary of the quantitative fair value information for the six impaired Office segment properties for the three months ended March 31, 2025 and one impaired Other segment property for March 31, 2024. The Company used estimated selling prices based on quoted market values and comparable property sales, which the Company considered as Level 2 measurements within the fair value hierarchy:
    March 31, 2025March 31, 2024
    Range of Inputs
    Office segment
    Other segment
    Estimated selling price (per square foot)
    $44.31 - $234.19
    $134.00
    Nonrecurring Measurement - Goodwill Impairment
    The Company’s goodwill has an indeterminate life and is not amortized. Goodwill is tested for impairment on October 1st of each year for each reporting unit, as applicable, or more frequently if events or changes in circumstances indicate that goodwill is more likely than not impaired. The Company performs a qualitative assessment to determine whether a potential impairment of goodwill exists prior to quantitatively estimating the fair value of each relevant reporting unit. If an impairment exists, the Company recognizes an impairment of goodwill based on the excess of the reporting unit’s carrying value compared to its fair value, up to the amount of goodwill for that reporting unit.
    There was no impairment of goodwill recorded for the three months ended March 31, 2025.
    During the three months ended March 31, 2024, the Company sold three properties for $49.5 million within the Other segment. As a result of the sales, the Company performed a quantitative assessment to estimate the fair value in the Other reporting unit. Based on the results, the Company concluded that it was more likely than not that the fair value of the Other reporting unit was less than the carrying amount. Thus, the Company recorded a $4.6 million impairment of the goodwill allocated to the Other reporting unit. The Company estimated the fair value of the real estate in the Other segment by using the discounted cash flow method, which the Company considered as Level 3 measurements within the fair value hierarchy. The following is a summary of the quantitative fair value information used in the goodwill impairment calculation:
    March 31, 2024
    Range of Inputs
    Reporting Unit: Other
    Market rent per square foot
    $5.00 - $27.50
    Discount rate
    7.25% - 15.00%
    Terminal capitalization rate
    6.25% - 9.50%
    As part of the nonrecurring fair value measurement of secured debt within the goodwill impairment analysis for March 31, 2024, the Company determined that current borrowing rates available to the Company for debt instruments with similar terms and maturities ranged from 3.69% to 7.90%. The Company considered these inputs as Level 2 measurements within the fair value hierarchy. For the remaining assets and liabilities included within the goodwill impairment calculation, the Company determined that amounts within the consolidated financial statements approximated fair value.
    As of March 31, 2025, the Company’s remaining goodwill balance was $68.4 million, all of which was allocated to the Industrial segment. Refer to Note 14, Segment Reporting, for allocation of goodwill presented for each segment.
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Financial Instruments at Fair Value
    Financial instruments as of March 31, 2025 and December 31, 2024 consisted of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, accrued expenses and other liabilities, and consolidated debt, as defined in Note 5, Debt. With the exception of the secured debt in the table below, the amounts of the financial instruments presented in the consolidated financial statements substantially approximate their fair value as of March 31, 2025 and December 31, 2024.
    The fair value of the secured debt in the table below is estimated by discounting each loan’s principal balance over the remaining term of the loan using current borrowing rates available to the Company for debt instruments with similar terms and maturities. The Company determined that the secured debt valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt.
     March 31, 2025December 31, 2024
     Fair Value
    Carrying Value (1)
    Fair Value
    Carrying Value (1)
    BOA II Loan$231,036 $250,000 $226,870 $250,000 
    Florida Mortgage Loan47,850 49,604 47,057 49,604 
    Georgia Mortgage Loan36,877 37,722 36,381 37,722 
    Illinois Mortgage Loan23,234 23,000 22,810 23,000 
    Total Secured Debt$338,997 $360,326 $333,118 $360,326 
    (1)The carrying values do not include the debt premium/(discount) or deferred financing costs as of March 31, 2025 and December 31, 2024. See Note 5, Debt, for details.

    9.     Equity
    Common Equity
    On April 13, 2023, the Company listed its common shares on the New York Stock Exchange (the “Listing”).
    As of March 31, 2025, there were 36,762,170 common shares outstanding.
    ATM Program
    In August 2023, the Company entered into an at-the-market equity offering (the “ATM”) pursuant to which the Company may sell common shares up to an aggregate purchase price of $200.0 million. The Company may sell such shares in amounts and at times to be determined by the Company from time to time, but the Company has no obligation to sell any of such shares. Actual sales, if any, will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the Company’s common shares, and the Company’s determinations of its capital needs and the appropriate sources of funding. As of March 31, 2025, the Company has not sold any shares under the ATM.
    Issuance of Restricted Shares - Long-Term Incentive Plan
    On April 5, 2023, the Compensation Committee of the Board approved the Peakstone Realty Trust Second Amended and Restated Employee and Trustee Long-Term Incentive Plan (as amended, the “Initial Plan”) which provides for the grant of share-based awards to the Company’s non-employee trustees, executive officers and other full-time employees of the Company or any affiliate of the Company, and certain persons who perform bona fide consulting or advisory services for the Company or any affiliate of the Company.
    At the Company’s annual meeting of shareholders on June 18, 2024, the Company’s shareholders approved a First Amendment to the Initial Plan (the Initial Plan, as amended by the First Amendment, the “Plan”), which increased the aggregate number of common shares of beneficial interest of the Company that may be issued pursuant to awards under the Plan by 1,285,700 shares.

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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Awards granted under the Plan may consist of restricted share units and restricted shares (together, “Restricted Shares”), share options, share appreciation rights, distribution equivalent rights, profit interests in the Operating Partnership, and other equity-based awards.
    The share-based awards are measured at fair value at issuance and recognized as compensation expense over the vesting period. The maximum number of shares authorized under the Plan is 2,063,478 shares. As of March 31, 2025, 400,847 common shares remained for issuance pursuant to awards granted under the Plan.
    On April 1, 2025, upon the recommendation of the Compensation Committee, the Board approved a Second Amendment to the Plan (the “Second Amendment”), which is subject to approval by the shareholders of the Company. If approved by shareholders, on the date of the Company’s 2025 annual meeting of shareholders, the Second Amendment would increase the aggregate number of common shares of beneficial interest of the Company that may be issued under awards pursuant to the Plan by 2,000,000 shares.
    As of March 31, 2025 and March 31, 2024, there was $10.9 million and $7.0 million, respectively, of unrecognized compensation expense remaining, which vests between two months and approximately 2.7 years.
    Total compensation expense related to Restricted Shares for the three months ended March 31, 2025 and March 31, 2024 was approximately $1.5 million and $1.6 million, respectively.
    The following table summarizes the activity of unvested Restricted Shares for the periods presented:
    Number of Unvested Shares of Restricted SharesWeighted-Average Grant Date Fair Value per Share
    Balance at December 31, 2023159,553 
    Granted541,700 $11.63 
    Forfeited(10,649)$26.65 
    Vested(298,038)$28.09 
    Balance at December 31, 2024392,566 
    Granted507,490 $12.17 
    Forfeited(8,168)$19.89 
    Vested (1)
    (19,972)$43.40 
    Balance as of March 31, 2025871,916 
    (1)    Total shares vested include 9,673 common shares that were withheld (i.e., forfeited) by employees during the three months ended March 31, 2025 to satisfy statutory tax withholding requirements associated with the vesting of Restricted Shares.
    10.     Noncontrolling Interests
    Noncontrolling interests are OP Units owned by previously affiliated and unaffiliated third parties (the “limited partners”).
    As of March 31, 2025, the limited partners of the Operating Partnership owned approximately 2.97 million OP Units consisting of approximately (i) 2.95 million OP Units, which were issued to previously affiliated parties and unaffiliated third parties in exchange for the contribution of certain properties to the Company and in connection with the Self-Administration Transaction (as defined in below), and (ii) 0.02 million OP Units, which were issued to unaffiliated third parties unrelated to property contributions.
    As of March 31, 2025, assuming all OP Units held by the limited partners were converted to common shares, noncontrolling interests would constitute approximately 7.0% of total shares outstanding and 7.5% of weighted-average shares outstanding.
    All limited partners of the Operating Partnership have the right (the “Exchange Right”) to redeem their OP Units, pursuant and subject to the limited partnership agreement of the Operating Partnership and applicable contribution agreement, at an exchange price equal to the value of an equivalent number of common shares (“Share Value”). The Operating Partnership is obligated to satisfy the Exchange Right for cash equal to the Share Value unless the Company, as the general partner of the
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Operating Partnership, in its sole and absolute discretion, elects to directly (i) purchase the OP Units for cash equal to the Share Value or (ii) purchase the limited partner’s OP Units by issuing common shares of the Company for the OP Units, subject to certain transfer and ownership limitations included in the Company’s charter and the limited partnership agreement of the Operating Partnership.
    The following summarizes the activity for noncontrolling interests recorded as equity for the three months ended March 31, 2025 and March 31, 2024:
    Three Months Ended March 31, 2025
    Three Months Ended
    March 31, 2024
    Beginning balance$66,801 $91,629 
    Exchange of noncontrolling interests(1,560)(486)
    Distributions to noncontrolling interest(668)(723)
    Net (loss) income(4,019)445 
    Other comprehensive (loss) income(910)12 
    Ending balance$59,644 $90,877 
    Redemption of OP Units from Self-Administration Transaction
    In connection with the transaction that resulted in the internalization of management of Griffin Capital Essential Asset REIT, Inc. (our “Predecessor”) in December 2018 (the “Self-Administration Transaction”), Griffin Capital, LLC (“GC LLC”), an entity controlled by our former Executive Chairman, Kevin A. Shields, and affiliated with the sponsor of our Predecessor Griffin Capital Company, LLC (“GCC”), received OP units (approximately 2.7 million taking into effect the 9 to 1 reverse split) as consideration in exchange for the sale to our Predecessor of the advisory, asset management and property management business of Griffin Capital Real Estate Company, LLC (n/k/a PKST Management Company, LLC, the “Management Company”). GC LLC assigned approximately 50% of the OP Units received in connection with the Self-Administration Transaction to then participants in GC LLC’s long-term incentive plan. Mr. Shields is the plan administrator of such long-term incentive plan.
    As previously disclosed, certain of our current and former employees and executive officers, including Michael Escalante, our Chief Executive Officer, and Javier Bitar, our Chief Financial Officer and Treasurer, were employed by affiliates of GC LLC prior to the Self-Administration Transaction and are therefore participants in a GC LLC ‘s long term incentive plan that made grants to such participants in connection with services rendered prior to the Self-Administration Transaction. Participants in GC LLC’s long-term incentive plan, including Messrs. Escalante and Bitar, are entitled to receive distributions from the long-term incentive plan in the form of either cash, common shares, or other property, or a combination thereof, as elected by the plan administrator.
    The Listing required that certain awards under GC LLC’s long-term incentive plan be settled during the fourth quarter 2023 and in four annual installments thereafter, unless waived or modified.
    On December 15, 2023, GC LLC settled the first of such installments by electing to redeem 209,954 OP Units, and we satisfied such redemption request with our common shares. On December 23, 2024, GC LLC settled the second installment by electing to redeem 213,043 OP Units, and we satisfied such redemption request with our common shares.
    If GC LLC elects to redeem additional OP Units for further installments, the Company intends to satisfy such redemption request with our common shares. Any future redemption of OP Units in exchange for common shares would have no economically dilutive effect on our common shareholders.
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    11.     Related Party Transactions
    Summarized below are the related party transaction expenses and payable as of March 31, 2025 and December 31, 2024 (which are presented in “Accrued expenses and other liabilities” on the Consolidated Balance Sheet):
    Incurred for the Three Months EndedPayable as of
    March 31,March 31,December 31,
    2025202420252024
    Expensed
    Office rent and related expenses$141 $166 $— $55 
    Other
    Distributions526 573 526 525 
    Total$667 $739 $526 $580 
    Office Sublease
    The Operating Partnership is party to a sublease agreement dated March 25, 2022 with GCC (as amended, the “El Segundo Sublease”) for the building located at 1520 E. Grand Ave, El Segundo, CA (the “Building”) which is the location of the Company’s corporate headquarters and where the Company conducts day-to-day business. The Building is part of a campus that contains other buildings and parking (the “Campus”). The El Segundo Sublease also entitles the Company to use certain common areas on the Campus. The Campus is owned by GCPI, LLC (“GCPI”), and the Building is master leased by GCPI to GCC. GCC is the sublessor under the El Segundo Sublease. GCC is controlled by, and GCPI is affiliated with the Company’s former Executive Chairman, who beneficially owns more than 5% of our common shares.
    As of March 31, 2025, the El Segundo sublease has an expiration date of June 30, 2026 and a monthly base rent of $0.04 million, subject to annual escalations of 3%.
    As of March 31, 2025, the right-of-use lease asset and liability related to the El Segundo Sublease was approximately $0.6 million, which is included in Right-of-use lease assets and Right-of-use lease liabilities on the Company’s consolidated balance sheet.
    12.     Leases
    Lessor
    The Company, as Lessor, leases industrial and office space to tenants primarily under leases classified as non-cancelable operating leases that generally contain provisions for contractual base rents plus reimbursement for certain recoverable operating expenses including, without limitation, real estate taxes, insurance, common area maintenance (“Recoverable Operating Expenses”). Total contractual base rent payments are recognized in rental income on a straight-line basis over the term of the related lease. Estimated reimbursements from tenants for Recoverable Operating Expenses are recognized in rental income in the period that the expenses are incurred.
    The Company recognized $50.1 million and $51.6 million of lease income related to operating lease payments for the three months ended March 31, 2025 and March 31, 2024, respectively.
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    The Company's current third-party tenant leases have expirations ranging from 2025 to 2044. The following table (i) sets forth undiscounted cash flows for future contractual base rents to be received under operating leases as of March 31, 2025, and (ii) excludes estimated reimbursements of Recoverable Operating Expenses:
    March 31, 2025
    Remaining 2025$140,107 
    2026187,004 
    2027169,450 
    2028153,440 
    2029137,110 
    Thereafter493,540 
    Total$1,280,651 
    Lessee - Ground Leases
    As of March 31, 2025, the Company is the tenant (lessee) under (i) three ground leases classified as operating leases, and (ii) two ground leases classified as financing leases. Each of these ground leases were assigned to the Company as part of its acquisition of the applicable assets and no incremental costs were incurred for such ground leases. These ground leases are classified as non-cancelable and contain no renewal options.
    Lessee - Office Leases
    As of March 31, 2025, the Operating Partnership or a wholly-owned subsidiary is the tenant (lessee) under the following two office space leases, each of which is classified as a non-cancelable operating lease: (i) the El Segundo Sublease described in Note 11, Related Party Transactions, above, and (ii) a lease for its office space in Chicago, Illinois (“Chicago Office Lease”).

    On March 31, 2025, the Chicago Office Lease was amended to provide for, among other things, (a) the relocation of its premises to another space in the same building, (b) the scheduled expiration of the term for its existing premises (i.e., June 29, 2025) to be extended until the commencement date of its relocation space, which will occur after the landlord has completed certain required work, and (c) the expiration of the term of the relocation space to occur on June 30, 2031.

    Lessee Summary - Ground Leases and Office Leases
    For ground leases and office leases in which the Company is a lessee, the Company incurred costs of approximately $0.9 million and $1.0 million for the three months ended March 31, 2025 and March 31, 2024, respectively, which are included in “Property operating expense” and “Corporate operating expenses to related parties,” as applicable, in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $0.5 million and $0.5 million for the three months ended March 31, 2024, respectively.
    The following table sets forth the weighted-average for the lease term and the discount rate for the ground leases and office leases in which the Company is a lessee as of March 31, 2025:
    As of March 31, 2025
    Lease Term and Discount RateOperatingFinancing
    Weighted-average remaining lease term in years75.316.0
    Weighted-average discount rate (1)
    4.96%3.54%
    (1)Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate at the commencement of each lease, the Company considered rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements.
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amounts)
    Maturities of lease liabilities as of March 31, 2025 were as follows:
    As of March 31, 2025
    OperatingFinancing
    2025$1,524 $359 
    20261,748 375 
    20271,527 381 
    20281,595 386 
    20291,630 391 
    Thereafter247,063 2,681 
    Total undiscounted lease payments255,087 4,573 
    Less: imputed interest(211,105)(1,847)
    Total lease liabilities$43,982 $2,726 

    13.    Commitments and Contingencies
    Capital Expenditure Projects, Leasing, and Tenant Improvement Commitments
    As of March 31, 2025 the Company had an aggregate remaining contractual commitment for capital expenditure projects, leasing commissions and tenant improvements of approximately $8.0 million.

    Litigation
    From time to time, the Company may become subject to legal and regulatory proceedings, claims and litigation arising in the ordinary course of business. The Company is not a party to, nor is the Company aware of any material pending legal proceedings nor is property of the Company subject to any material pending legal proceedings.
    Environmental Matters
    In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters in the ordinary course of business. As of March 31, 2025, the Company is not aware of any environmental condition that it believes will have a material adverse effect on the results of operations.

    14.    Segment Reporting
    Segment Profit/(Loss) Measures
    Michael Escalante, the Company's Chief Executive Officer, has been identified as the chief operating decision maker (“CODM”). The CODM evaluates the Company's portfolio and assesses the ongoing operations and performance of its properties utilizing the following reportable segments: Industrial and Office. The Industrial segment consists of i) IOS properties which have a low building-to-land ratio, or low coverage, maximizing yard space for the display, movement, and storage of materials and equipment and ii) traditional industrial assets, which include distribution, warehouse and light manufacturing properties. The Office segment includes office, R&D and data center properties.
    The CODM evaluates performance of each segment based on segment net operating income (“NOI”), which is defined as property revenue less property expenses. This measure is used by the CODM to make decisions about resource allocation and evaluate the financial performance of each segment. Segment NOI is not a measure of operating income or cash flows from operating activities, is not indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate segment profit measures in the same manner. The Company considers segment NOI to be an appropriate supplemental measure to net income or loss because it assists both investors and management in understanding the core operations of our properties.

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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amount)
    The following table presents segment NOI and net income for the three months ended March 31, 2025 and March 31, 2024 is as follows:
    Three Months Ended March 31,
    2025
    2024(1)
    Industrial
    Total Industrial revenues$24,033 $14,833 
    Less:
    Industrial property operating expense (2)
    1,271 1,201 
    Industrial property tax expense (2)
    1,950 1,115 
    Industrial NOI
    20,812 12,517 
    Office
    Total Office revenues32,938 32,999 
    Less:
    Office property operating expense (2)
    3,373 3,341 
    Office property tax expense (2)
    2,177 2,144 
    Office NOI
    27,388 27,514 
    Other
    Total Other revenues— 11,395 
    Less:
    Other property operating expense (2)
    — 2,548 
    Other property tax expense (2)
    — 1,251 
    Other NOI
    — 7,596 
    Total NOI
    $48,200 $47,627 
    Unallocated amounts:
    Depreciation and amortization (3)
    25,439 23,415 
    Real estate impairment provision (3)
    51,957 1,376 
    General and administrative expenses (4)
    8,553 9,680 
    Income before other income (expenses)(37,749)13,156 
    Less:
    Other (expenses) income:
    Interest expense(15,978)(16,148)
    Other income, net
    1,136 4,045 
    Net (loss) gain from disposition of assets(479)9,177 
    Goodwill impairment provision— (4,594)
    Corporate operating expenses to related parties(141)(166)
    Transaction expenses(190)— 
    Net (loss) income
    $(53,401)$5,470 
    (1)On December 31, 2024, the Company sold the final property in its Other segment, and as a result, the Other segment was eliminated. Amounts presented herein reflect the Company’s ownership of Other segment properties through December 31, 2024. The Other segment consisted of vacant and non-core properties, together with other properties in the same cross-collateralized loan pool.
    (2)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
    (3)Asset value information by segment are not reported because the CODM does not use these measures to assess performance or make decisions to allocate resources; therefore, depreciation and amortization expense and asset impairment are not allocated among segments. Refer to Segment Reporting sections below, for allocation of real estate assets and goodwill presented for each segment.
    (4)General and administrative expenses are not reported by segment because the CODM evaluates these expenses at the corporate level and does not use this measure on a segment-by-segment basis for performance assessment or resource allocation decisions; therefore, general and administrative expenses are not allocated among segments.

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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amount)
    A reconciliation of net income (loss) to NOI for the three months ended March 31, 2025 and March 31, 2024 is as follows:
    Three Months Ended March 31,
    20252024
    Reconciliation of Net Income (Loss) to Total NOI
    Net (loss) income$(53,401)$5,470 
    General and administrative expenses8,553 9,680 
    Corporate operating expenses to related parties141 166 
    Real estate impairment provision51,957 1,376 
    Depreciation and amortization25,439 23,415 
    Interest expense15,978 16,148 
    Other income, net(1,136)(4,045)
    Loss (gain) from disposition of assets479 (9,177)
    Goodwill impairment provision— 4,594 
    Transaction expenses190 — 
    Total NOI$48,200 $47,627 
    The following table presents the Company’s goodwill by segment as of March 31, 2025 and December 31, 2024:
    March 31,December 31,
    20252024
    Goodwill
    Industrial$68,373 $68,373 
    Total Goodwill$68,373 $68,373 
    The following table presents the Company’s total real estate assets, net, which includes accumulated depreciation and amortization and excludes intangibles, for each segment as of March 31, 2025 and December 31, 2024:
    March 31,December 31,
    20252024
    Industrial Real Estate, net
    Total real estate$1,282,232 $1,281,815 
    Accumulated depreciation and amortization(192,411)(180,879)
    Industrial real estate, net1,089,821 1,100,936 
    Office Real Estate, net
    Total real estate1,266,370 1,502,760 
    Accumulated depreciation and amortization(301,401)(339,648)
    Office real estate, net964,969 1,163,112 
    Total Real Estate, net$2,054,790 $2,264,048 
    Total Real Estate Held for Sale, net
    Total real estate$128,507 $— 
    Accumulated depreciation and amortization(26,509)— 
    Real estate held for sale, net$101,998 $— 
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    PEAKSTONE REALTY TRUST
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    March 31, 2025
    (Unaudited; dollars in thousands unless otherwise noted and excluding per share amount)
    15.    Declaration of Dividends and Distributions
    On February 18, 2025, the Board declared an all-cash dividend for the quarter ended March 31, 2025 in the amount of $0.225 per common share and an all-cash distribution in the amount of $0.225 per OP Unit. The Company paid such amounts on April 17, 2025 to shareholders and holders of OP Units of record as of March 31, 2025.

    16.    Subsequent Events
    Declaration of Dividends and Distributions
    On May 6, 2025, the Board declared an all-cash dividend for the quarter ended June 30, 2025 in the amount of $0.225 per common share and all-cash distribution in the amount of $0.225 per OP Unit. Such amounts are payable on or about July 17, 2025 to shareholders and holders of OP Units of record as of June 30, 2025.
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    ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the Company’s consolidated financial statements and the notes thereto contained in Part I of this Quarterly Report on Form 10-Q, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations, Consolidated Financial Statements, and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
    Overview
    Peakstone Realty Trust (“PKST” or the “Company”) is a real estate investment trust that is executing a strategic transition to an industrial REIT, targeting growth in the industrial outdoor storage (“IOS”) subsector. As part of this strategy, PKST is actively reshaping its portfolio by divesting non-core assets, primarily office properties, to position the Company for long-term value creation.
    PKST OP, L.P., our operating partnership (the “Operating Partnership”), owns, directly and indirectly all of the Company’s assets. As of March 31, 2025, the Company owned, directly and indirectly through a wholly-owned subsidiary, approximately 93.0% of the outstanding common units of limited partnership interest in the Operating Partnership (“OP Units”).
    As of March 31, 2025, the Company’s portfolio was comprised of 101 properties, consisting of 96 operating properties and five redevelopment properties (those designated for redevelopment or repositioning) reported in two segments – Industrial and Office.


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    Revenue Concentration
    The Company presents the following concentrations based on Annualized Base Rent (“ABR”), which 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.
    By State:
    The percentage of ABR by state for the Company’s portfolio as of March 31, 2025 is presented as follows (dollars in thousands):
    State
    ABR
    (unaudited)
    Number of
    Properties
    Percentage of
    ABR
    Arizona$20,366 5 11.1 %
    Colorado14,095 4 7.7 
    Massachusetts12,839 3 7.0 
    California12,610 2 6.9 
    New Jersey11,669 8 6.4 
    South Carolina11,423 7 6.2 
    Florida10,891 8 5.9 
    Ohio10,767 4 5.9 
    Tennessee10,392 7 5.7 
    Alabama9,597 1 5.2 
    Subtotal$124,649 49 68.0 %
    All Others (1)
    58,418 52 32.0 
    Total$183,067 101 100.0 %
    (1)     “All others” account for less than 5.1% of ABR on an individual state basis.
    By Industry:
    The percentage of ABR by industry for the Company’s portfolio as of March 31, 2025 is presented as follows (dollars in thousands):
    Industry (1)
    ABR
     (unaudited)
    Number of
    Lessees
    Percentage of
    ABR
    Capital Goods$35,039 26 19.1 %
    Materials19,381 6 10.6 
    Food, Beverage & Tobacco17,237 3 9.4 
    Retailing12,138 4 6.6 
    Utilities11,701 2 6.4 
    Health Care Equipment & Services11,521 4 6.3 
    Consumer Services11,236 2 6.1 
    E-Commerce9,978 2 5.5 
    Diversified Financials8,853 1 4.8 
    Commercial & Professional Services8,419 5 4.6 
    Subtotal$145,503 55 79.4 %
    All Others (2)
    37,564 25 20.6 
    Total$183,067 80 100.0 %
    (1)     Industry classification based on the Global Industry Classification Standard.
    (2)     “All others” account for less than 4.3% of total ABR on an individual industry basis.


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    Top Ten Tenants:
    No lessee or property generated more than 6.5% of our total ABR as of March 31, 2025. The top 10 tenants by ABR for the Company’s portfolio as of March 31, 2025 is presented as follows (dollars in thousands):
    TenantABR
    (unaudited)
    Percentage of
    ABR
    Keurig Dr. Pepper$11,897 6.5 %
    Amazon9,978 5.5 
    Southern Company9,597 5.2 
    LPL 8,853 4.8 
    Maxar 7,916 4.3 
    Freeport McMoRan7,867 4.3 
    RH7,637 4.2 
    McKesson 6,354 3.5 
    Travel & Leisure5,928 3.2 
    IGT 5,308 2.9 
    Subtotal$81,335 44.4 %
    All Others (1)
    101,732 55.6 
    Total$183,067 100.0 %
    (1)     “All others” account for less than 2.9% of ABR on an individual tenant basis.


    Lease Expirations:
    The tables below provide a summary of our upcoming lease expirations in our portfolio, excluding unexercised renewal options and early termination rights.
    As of March 31, 2025, the lease expirations by ABR for the Company’s portfolio are presented as follows (dollars in thousands):
    Year of Lease Expiration (1)
    ABR
    (unaudited)
    Percentage of Annualized Base Rent
    2025$1,845 1.0 %
    202610,194 5.6 
    202718,900 10.3 
    202820,332 11.1 
    202932,351 17.7 
    203027,985 15.3 
    203120,161 11.0 
    203211,483 6.3 
    20339,679 5.3 
    20341,741 1.0 
    >2034
    28,396 15.4 
    Total$183,067 100.0 %
    (1) Expirations that occur on the last day of the year are shown as expiring in the subsequent year.

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    As of March 31, 2025, the lease expirations for leases based on square footage are presented as follows:
    Year of Lease Expiration (1)
    ABR
    (unaudited in thousands)
    Percentage of
    ABR
    Number of
    Leases
    Approx. Square Feet
    ABR
    (per square foot)(2)
    Annualized Net Effective Base Rent
    (per square foot) (3)
    2025$1,509 1.0 %2 73,000 $20.67 $20.25 
    20267,790 4.9 2 1,154,500 6.75 6.37 
    202714,524 9.2 7 570,700 25.45 23.97 
    202815,888 10.0 7 1,762,500 9.01 8.58 
    202930,267 19.1 7 2,015,100 15.02 14.88 
    203026,248 16.5 5 2,342,700 11.20 11.00 
    203116,369 10.3 4 1,379,500 11.87 11.88 
    20329,266 5.8 4 1,333,900 6.95 7.22 
    20338,466 5.3 4 1,454,900 5.82 5.99 
    2034— — — — — — 
    >203428,396 17.9 9 1,964,500 14.45 16.34 
    Vacant— — — 60,000 — — 
    Total / Weighted Average
    $158,723 100.0 %51 14,111,300 $11.25 $17.23 
    (1)Expirations that occur on the last day of the year are shown as expiring in the subsequent year.
    (2)ABR (per square foot) is calculated as (i) ABR divided by (ii) square footage under lease as of the end of the quarter.
    (3)Annualized Net Effective Base Rent (per square foot) is calculated as (i) the contractual base rent for leases that have commenced as of the end of the quarter calculated on a straight-line basis, including amortization of rent abatements, but without regard to tenant improvement allowances and leasing commissions, and deducting base year operating expenses for gross and modified gross leases, unless otherwise specified, multiplied by 12 months divided by (ii) square footage under lease as of the end of the end of the quarter. Rent abatements include rent credits that are granted from time to time in connection with unused tenant improvement allowances.

    As of March 31, 2025, the lease expirations for leases based on usable acreage are presented as follows:
    Year of Lease Expiration (1)
    ABR
    (unaudited, in thousands)
    Percentage of Annualized Base RentNumber of
    Leases
    Approx. Usable Acres
    ABR
    (per usable acre) (2)
    Annualized Net Effective Base Rent
    (per usable acre) (3)
    2025$336 1.4 %1 9 $37,333 $52,414 
    20262,404 9.9 7 29 82,897 78,644 
    20274,376 18.0 12 62 70,581 73,893 
    20284,444 18.3 9 91 48,835 50,871 
    20292,084 8.6 5 37 56,324 59,820 
    20301,737 7.1 4 21 82,714 95,190 
    20313,792 15.5 3 64 59,250 42,330 
    20322,217 9.0 4 23 96,391 123,407 
    20331,213 5.0 2 20 60,650 68,750 
    20341,741 7.2 1 37 47,054 169,378 
    >2034— — — — — — 
    Vacant— — — 2 — — 
    Redevelopment properties(4)
    — — — 45 — — 
    Total / Weighted Average
    $24,344 100.0 %48 440 $61,944 $74,753 
    (1)Expirations that occur on the last day of the year are shown as expiring in the subsequent year.
    (2)ABR (per usable acre) is calculated as (i) ABR divided by (ii) usable acreage under lease as of the end of the quarter.
    (3)Annualized Net Effective Base Rent (per usable acre) is calculated as (i) the contractual base rent for leases that have commenced as of the end of the quarter calculated on a straight-line basis, including amortization of rent abatements, but without regard to tenant improvement allowances and leasing commissions, and deducting base year operating expenses for gross and modified gross leases, unless otherwise specified, multiplied by 12 months divided by (ii) usable acreage under lease as of the end of the quarter. Rent abatements include rent credits that are granted from time to time in connection with unused tenant improvement allowances.
    (4)Represents unleased space at redevelopment properties.
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    Leasing Information
    As of March 31, 2025 we estimate that the current average market rental rates for all leases in our operating portfolio that are scheduled to expire within the next four years are: (i) for our Industrial segment, approximately 30% to 35% greater than the weighted average in-place cash rental rates; and (ii) for our Office segment, approximately 5% to 10% less than the weighted average in-place cash rental rates.
    Our estimates regarding current average market rental rates are based on our internal analysis and/or third-party broker input, when available, and there is no assurance that these estimates will prove to be accurate. Market rental rates and the demand for our properties are impacted by general economic conditions, including the pace of economic growth, inflation, interest rates, and labor market and demographic trends in the submarkets in which our properties are located. Therefore, there is no assurance that expiring leases will be renewed or that available space will be re-leased above, below or at current market rental rates.

    The following tables set forth certain information regarding our leasing activity during the three months ended March 31, 2025 for our leases based on square feet, in the cases of traditional industrial and office properties, and usable acres, in the case of IOS properties. For each lease, the Company presents (i) “GAAP Rent Change”, which is calculated as the percentage change between GAAP rents for new/renewal leases and the expiring GAAP rents of comparable leases for the same space and (ii) “Cash Rent Change”, which is calculated as the percentage change between cash rents for new/renewal leases and the expiring cash rents of comparable leases for the same space, excluding any rent abatements. We do not calculate GAAP Rent Change and Cash Rent Change for lease comparisons if either lease involved has any of the following characteristics, as we believe such leases do not provide a reliable basis for comparison: (i) the lease is for space that has never been leased under our ownership, (ii) the lease is for space that has been redeveloped or repositioned, (iii) the lease has a structure that is not comparable to the other lease or (iv) the lease term is less than 12 months.

    Leases Commenced - Square Feet (1):
    Number of LeasesApprox. Square FeetWeighted Average Lease Term
    (in years)
    Leasing Commissions
    (per square foot)
    Tenant Improvements
    (per square foot)
    GAAP Rent Change (2)
    Cash Rent Change (2)
    Renewal Leases12,5000.3$— $— N/A
    (3)
    N/A
    (3)
    Total / Weighted Average12,5000.3$— $— N/AN/A

    (1)Represents leasing activity for leases based on square footage that commenced during the period.
    (2)Reported as a weighted average based on the square footage of the leases included in the calculation.
    (3)Excluded from GAAP Rent Change and Cash Rent Change because the lease term is less than 12 months.
    Leases Executed - Square Feet (1):
    Number of LeasesApprox. Square FeetWeighted Average Lease Term
    (in years)
    Leasing Commissions
    (per square foot)
    Tenant Improvements
    (per square foot)
    GAAP Rent Change (2)
    Cash Rent Change (2)
    Renewal Leases12,5000.3$— $— N/A
    (3)
    N/A
    (3)
    Total / Weighted Average12,5000.3$— $— N/AN/A
    (1)Represents leasing activity for leases based on square footage that were executed during the period.
    (2)Reported as a weighted average based on the square footage of the leases included in the calculation.
    (3)Excluded from GAAP Rent Change and Cash Rent Change because the lease term is less than 12 months.
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    Leases Commenced - Usable Acres (1):
    Number of LeasesUsable AcresWeighted Average Lease Term
    (in years)
    Leasing Commissions
    (per usable acre)
    Tenant Improvements
    (per usable acre)
    GAAP Rent Change (2)
    Cash Rent Change (2)
    New Leases
    137.09.8$— $— N/A
    (3)
    N/A
    (3)
    New Leases
    (Previously Executed)
    13.36.5$— $— 218.1 %
    (4)
    185.1 %
    (4)
    Renewal Leases18.70.5$— $— N/A
    (5)
    N/A
    (5)
    Total / Weighted Average349.07.9$— $— 218.1 %185.1 %

    (1)Represents leasing activity for leases based on usable acreage that commenced during the quarter.
    (2)Reported as a weighted average based on the usable acreage of the leases included in the calculation.
    (3)Excluded from GAAP Rent Change and Cash Rent Change because the lease is for space that has never been leased under our ownership. Represents an IOS lease for a property that was re-classified from a redevelopment property in prior quarter to an operating property in the current period.
    (4)Represents an IOS lease renewal that was executed prior to the acquisition of the property and commenced in the current quarter.
    (5)Excluded from GAAP Rent Change and Cash Rent Change because the lease term is less than 12 months.

    Leases Executed - Usable Acres (1):
    Number of LeasesUsable AcresWeighted Average Lease Term
    (in years)
    Leasing Commissions
    (per usable acre)
    Tenant Improvements
    (per usable acre)
    GAAP Rent Change (2)
    Cash Rent Change (2)
    New Leases
    137.09.8$— $— N/A
    (3)
    N/A
    (3)
    Renewal Leases18.70.5$— $— N/A
    (4)
    N/A
    (4)
    Total / Weighted Average245.78.0$— $— N/AN/A
    (1)Represents leasing activity for leases based on usable acreage that were executed during the quarter.
    (2)Reported as a weighted average based on the usable acreage of the leases included in the calculation.
    (3)Excluded from GAAP Rent Change and Cash Rent Change because the lease is for space that has never been leased under our ownership. Represents an IOS lease for a property that was re-classified from a redevelopment property in prior quarter to an operating property in the current period.
    (4)Excluded from GAAP Rent Change and Cash Rent Change because the lease term is less than 12 months.
    Results of Operations
    Overview
    Our strategic focus is to become an industrial REIT with growth in the IOS subsector as a key component of our long-term plan. While our current industrial portfolio includes both IOS and traditional industrial assets, we are prioritizing expansion within the IOS subsector, supported by strong market fundamentals and compelling growth potential. To support this evolution, we are actively divesting non-core assets—with particular emphasis on the disposition of office properties—to enhance the performance of our portfolio. We remain committed to a balanced approach to capital allocation—prioritizing IOS investments while maintaining prudent management of leverage.

    Business Environment
    Real estate investors are closely monitoring current market conditions, which are shaped by a mix of economic factors, geopolitical tensions, and changes in monetary and trade policies, including tariffs. These factors have created an environment where caution has been the prevailing sentiment. Despite these challenges, investors continue to seek opportunities to generate returns through real estate investments.
    In the industrial sector, trends including onshoring and nearshoring of manufacturing and warehousing operations, a predicted rise in U.S. industrial production, and the continued growth of e-commerce are anticipated to drive sustained demand for our properties and the sector as a whole. Major supply factors include the slowing pace of construction, limited quantity of existing sites zoned for broad industrial uses, increasing resistance from municipalities for new industrial development and steady redevelopment of infill properties into other uses, all of which are expected to decrease supply. Although vacancy rates are higher compared to recent years, we believe the combination of long-term demand drivers and supply constraints will benefit strong long-term demand for industrial real estate.
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    In the office sector, according to third-party market data, office investment activity totaled more than $10 billion during the first quarter of 2025, representing an increase of over 60% compared to the first quarter of 2024. This activity marks the most significant year-over-year gain since transaction volumes began to moderate in 2022. The reported increase in transaction activity appears to be driven, in part, by enhanced visibility into office utilization trends and continued investor preference for high-quality assets across all property types, including office. Although capital markets remain dynamic, expectations of potential interest rate cuts, increased availability of debt capital, and tightening credit spreads may contribute to a more liquid investment environment. The Company believes that, if these liquidity conditions improve and investor sentiment remains constructive, demand for high-quality office properties-- particularly those that serve a central role in tenant operations –is likely to strengthen.
    For a discussion of material trends and uncertainties that have impacted or may impact the Company’s financial condition, results of operations or cash flows, see (i) the discussion above, (ii) the risks highlighted in the “Cautionary Note Regarding Forward-Looking Statements” section of this Quarterly Report on Form 10-Q, and (iii) the risks highlighted in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K.
    Segment Information
    Michael Escalante, the Company's Chief Executive Officer, is identified as the chief operating decision maker ("CODM"). The CODM evaluates the Company's portfolio and assesses the ongoing operations and performance of its properties utilizing the following reportable segments: Industrial and Office. The Industrial segment consists of i) industrial outdoor storage (“IOS”) properties which have a low building-to-land ratio, or low coverage, maximizing yard space for the display, movement, and storage of materials and equipment and ii) traditional industrial assets, which include distribution, warehouse and light manufacturing properties. The Office segment includes office, R&D and data center properties.
    The CODM evaluates performance of each segment based on segment net operating income (“NOI”), which is defined as property revenue less property expenses. The Company excludes the following from segment NOI because they are addressed on a corporate level: (i) depreciation and amortization, (ii) real estate impairment, and (iii) general administrative expenses. Segment NOI is not a measure of operating income or cash flows from operating activities, is not indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate segment profit measures in the same manner. The Company considers segment NOI to be an appropriate supplemental measure to net income or loss because it assists both investors and management in understanding the core operations and valuations of our properties.
    On December 31, 2024, the Company sold the final property in its Other segment (i.e., vacant and non-core properties, together with other properties in the same cross-collateralized loan pool), and as a result, the Other segment was eliminated. Amounts presented herein reflect the Company’s ownership of Other segment properties through December 31, 2024, which were also evaluated by the CODM based on segment NOI.
    Reconciliation of Net Income (Loss) to Same Store NOI
    Total net (loss) income for the three months ended March 31, 2025 and March 31, 2024 was $(53.4) million and $5.5 million, respectively. The following table reconciles net (loss) income to Same Store NOI for the three months ended March 31, 2025 and March 31, 2024 (dollars in thousands). Refer to the NOI and Cash NOI sections for further details:
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    Three Months Ended March 31,
    20252024
    Reconciliation of Net (Loss) Income to Same Store NOI
    Net (loss) income
    $(53,401)$5,470 
    General and administrative expenses8,553 9,680 
    Corporate operating expenses to related parties141 166 
    Real estate impairment provision51,957 1,376 
    Depreciation and amortization25,439 23,415 
    Interest expense15,978 16,148 
    Other income, net(1,136)(4,045)
    Loss (gain) from disposition of assets479 (9,177)
    Goodwill impairment provision— 4,594 
    Transaction expenses190 — 
    Total NOI$48,200 $47,627 
    Same Store Adjustments:
    Adjustment for Acquired Properties (1)
    (7,926)— 
    Adjustment for Disposed Properties (2)
    (1,173)(9,320)
    Corporate related adjustment2 (16)
    Total Same Store NOI$39,103 $38,291 
    (1)     “Acquired Properties” represent (a) for 2024, all properties acquired by the Company from April 1, 2023 through March 31, 2024; and (b) for 2025, all properties acquired by the Company from April 1, 2024 through March 31, 2025.
    (2)     “Disposed Properties” represent (a) for 2024, all properties sold or disposed of from January 1, 2024 through March 31, 2024; and (b) for 2025, all properties sold or disposed of from January 1, 2025 through March 31, 2025.
    Same Store Analysis
    Comparison of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024.
    For the three months ended March 31, 2025, our “Same Store” portfolio consisted of 50 properties, including 19 Industrial properties and 31 Office properties, encompassing approximately 14.1 million square feet. Our Same Store portfolio includes properties which were held in-service for a full period for all periods presented. Thus, the portfolio of 51 industrial outdoor storage properties acquired on November 4, 2024 (“IOS Portfolio”) is excluded for all periods presented. The following table provides a comparative summary of the results of operations for our Same Store portfolio for the three months ended March 31, 2025 and March 31, 2024 (dollars in thousands):
    Three Months Ended March 31,
    20252024ChangePercentage Change
    Industrial Same Store NOI
    Total Industrial revenues$15,058 $14,833 $225 2 %
    Industrial operating expenses(2,172)(2,316)(144)(6)%
    Industrial Same Store NOI12,886 12,517 369 3 %
    Office Same Store NOI
    Total Office revenues31,454 30,703 751 2 %
    Office operating expenses(5,237)(4,929)308 6 %
    Office Same Store NOI26,217 25,774 443 2 %
    Total Same Store NOI$39,103 $38,291 $812 2 %
    Same Store NOI
    Total Same Store NOI increased by $0.8 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
    Industrial Same Store NOI increased $0.4 million primarily due to leasing activity throughout prior year 2024.
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    Office Same Store NOI increased $0.4 million primarily due to a lease commencement in 2024 and the timing of certain expense recoveries in the current period.
    Portfolio Analysis
    Comparison of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024
    Net (Loss) Income
    For the three months ended March 31, 2025, the Company recorded a net loss of $(53.4) million compared to a net income of $5.5 million for the three months ended March 31, 2024. The reasons for the change are discussed below.
    The following table reconciles net (loss) income to NOI for the three months ended March 31, 2025 and three months ended March 31, 2024 (dollars in thousands):
    Three Months Ended March 31,
    20252024ChangePercentage
    Change
    Reconciliation of Net (Loss) Income to Total NOI
    Net (loss) income$(53,401)$5,470 $(58,871)(1076)%
    General and administrative expenses8,553 9,680 (1,127)(12)%
    Corporate operating expenses to related parties141 166 (25)(15)%
    Real estate impairment provision51,957 1,376 50,581 3676 %
    Depreciation and amortization25,439 23,415 2,024 9 %
    Interest expense15,978 16,148 (170)(1)%
    Other income, net(1,136)(4,045)2,909 (72)%
    Loss (gain) from disposition of assets479 (9,177)9,656 (105)%
    Goodwill impairment provision— 4,594 (4,594)(100)%
    Transaction expenses190 — 190 100 %
    Total NOI$48,200 $47,627 $573 1 %
    The following table provides further detail regarding segment NOI:
    Three Months Ended March 31,
    20252024ChangePercentage
    Change
    Industrial NOI
    Industrial revenues$24,033 $14,833 $9,200 62 %
    Industrial operating expenses(3,221)(2,316)905 39 %
    Industrial NOI20,812 12,517 8,295 66 %
    Office NOI
    Office revenues32,938 32,999 (61)— %
    Office operating expenses(5,550)(5,485)65 1 %
    Office NOI27,388 27,514 (126)— %
    Other NOI
    Other revenues— 11,395 (11,395)(100)%
    Other operating expenses— (3,799)(3,799)(100)%
    Other NOI— 7,596 (7,596)(100)%
    Total NOI$48,200 $47,627 $573 1 %
    NOI
    Total NOI increased by $0.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
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    Industrial NOI increased $8.3 million primarily due to the acquisition of the IOS Portfolio and increased leasing activity throughout prior year 2024.
    Office NOI decreased $0.1 million primarily due to property dispositions in 2024 and 2025, partially offset by a lease commencement in 2024 and the timing of certain expense recoveries in the current period.
    Other NOI decreased $7.6 million due to property dispositions that resulted in the elimination of the Other segment as of December 31, 2024.
    General and Administrative Expense
    General and administrative expense decreased $1.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to a decrease in share-based compensation expenses, professional fees, and insurance expenses.
    Corporate Operating Expenses to Related Parties
    Corporate operating expenses to related parties remained materially consistent for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
    Real Estate Impairment
    Real estate impairment increased approximately $50.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 due to additional real estate impairments in the Office segment recorded in the current quarter.
    Depreciation and Amortization
    Depreciation and amortization increased by approximately $2.0 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to the acquisition of the IOS Portfolio in the fourth quarter of 2024, partially offset by property dispositions and impairments.
    Interest Expense
    Interest expense decreased approximately $0.2 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to debt payoffs in 2024, partially offset by (i) secured mortgage loans entered into in November 2024 and (ii) a reduction in interest swap payments.
    Other Income, Net
    The decrease in other income, net of $2.9 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 is primarily due to a decrease in interest income earned from money market accounts.
    Goodwill Impairment Provision
    Goodwill impairment decreased approximately $4.6 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to the goodwill impairment in the first quarter of 2024 related to the Other segment. There was no goodwill impairment during the three months ended March 31, 2025.
    Loss From Disposition of Assets
    The Company generated a loss of $0.5 million from disposition of assets for the three months ended March 31, 2025 as compared to a gain of $9.2 million from the disposition of assets for the three months ended March 31, 2024.
    Transaction Expenses
    Transaction expenses increased by $0.2 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to increased transactional activities during the current quarter.
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    Critical Accounting Estimates
    We have established accounting estimates which conform to GAAP. The preparation of our consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. If our judgment or interpretation of the facts and circumstances relating to the various transactions had been different, it is possible that different estimates would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may use different estimates and assumptions that may impact the comparability of our financial condition and results of operations to those companies.
    There have been no significant changes to the critical accounting policies and estimates during the period covered by this report. For a summary of certain of our critical accounting policies and estimates, refer to our filed Annual Report on Form 10-K for the year ended December 31, 2024 and Note 2, Basis of Presentation and Summary of Significant Accounting Policies to the consolidated financial statements under Item 1 of this report on Form 10-Q.
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    Funds from Operations, Core Funds from Operations, and Adjusted Funds from Operations
    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 of 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 gains (losses) from sales of depreciable real estate assets, impairment losses of depreciable real estate assets, real estate related depreciation and amortization 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 goodwill impairment, gain or loss from the extinguishment of debt, unrealized gains or losses on derivative instruments, transaction costs, 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, amortization of in-place lease valuation 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.
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    Our calculation of FFO, Core FFO, and AFFO is presented in the following table for the three months ended March 31, 2025 and 2024 (dollars in thousands, except per share amounts):
     Three Months Ended March 31,
     20252024
    Net (loss) income
    $(53,401)$5,470 
    Adjustments:
    Depreciation of building and improvements17,147 15,564 
    Amortization of leasing costs and intangibles8,387 7,947 
    Impairment provision, real estate51,957 1,376 
    Loss (gain) from disposition of assets, net
    479 (9,177)
    FFO24,569 21,180 
    FFO attributable to common shareholders and limited partners (1)
    $24,569 $21,180 
    Reconciliation:
    FFO attributable to common shareholders and limited partners (1)
    $24,569 $21,180 
    Adjustments:
    Impairment provision, goodwill— 4,594 
    Unrealized loss (gain) on investments23 (189)
    Employee separation expense32 — 
    Transaction expenses190 — 
    Lease termination adjustments(375)— 
    Other activities adjustment 178 — 
    Core FFO attributable to common shareholders and noncontrolling interests
    $24,617 $25,585 
    Adjustments:
    Straight-line rent adjustment(1,150)(826)
    Deferred rent - ground lease423 416 
    Amortization of share-based compensation1,452 1,432 
    Amortization of above/(below) market rent, net(1,862)(259)
    Amortization of debt premium/(discount), net(144)107 
    Amortization of ground leasehold interests(96)(97)
    Amortization of below tax benefit amortization368 372 
    Amortization of deferred financing costs1,212 1,050 
    AFFO available to common shareholders and limited partners$24,820 $27,780 
    FFO per share/unit, basic and diluted$0.62 $0.54 
    Core FFO per share/unit, basic and diluted$0.62 $0.65 
    AFFO per share/unit, basic and diluted$0.62 $0.70 
    Weighted-average common shares outstanding - basic and diluted shares36,726,154 36,309,019 
    Weighted-average OP Units outstanding (1)
    2,989,355 3,218,826 
    Weighted-average common shares and OP Units outstanding - basic and diluted FFO/AFFO39,715,509 39,527,845 
    (1)Represents weighted-average outstanding OP Units that are owned by unitholders other than Peakstone Realty Trust. Represents the noncontrolling interest in the Operating Partnership.
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    NOI and Cash NOI
    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 general and administrative expenses, interest expense, depreciation and amortization, impairment of real estate, impairment of goodwill, gains or losses on early extinguishment of debt, gains or losses on sales of real estate, investment income or loss, termination income, and equity in earnings of any unconsolidated real estate joint ventures. NOI on a cash basis (“Cash NOI”) is NOI adjusted to exclude the effect of straight-line rent and amortization of acquired above- and below-market lease intangibles adjustments required by GAAP. We believe that NOI and 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 and 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. In addition, NOI and 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 and 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 and Cash NOI as measures of our performance is limited. Therefore, NOI and Cash NOI should not be considered as alternatives to net income or loss, as computed in accordance with GAAP. NOI and Cash NOI may not be comparable to similarly titled measures of other companies.
    Our calculation of each of NOI and Cash NOI are presented in the following tables for three months ended March 31, 2025 and 2024 (dollars in thousands):
    Three Months Ended March 31,
    20252024
    Reconciliation of Net (Loss) Income to Total NOI
    Net (loss) income
    $(53,401)$5,470 
    General and administrative expenses8,553 9,680 
    Corporate operating expenses to related parties141 166 
    Real estate impairment provision51,957 1,376 
    Depreciation and amortization25,439 23,415 
    Interest expense15,978 16,148 
    Other income, net
    (1,136)(4,045)
    Loss (gain) from disposition of assets479 (9,177)
    Goodwill impairment provision— 4,594 
    Transaction expenses190 — 
    Total NOI$48,200 $47,627 
    44

    Table of Contents
    Three Months Ended March 31,
    20252024
    Cash NOI Adjustments
    Industrial Segment:
    Industrial NOI$20,812 $12,517 
    Straight-line rent(951)(604)
    Amortization of acquired lease intangibles (1,715)(96)
    Deferred termination income277 — 
    Industrial Cash NOI18,423 11,817 
    Office Segment:
    Office NOI27,388 27,514 
    Straight-line rent(199)(689)
    Amortization of acquired lease intangibles(147)(126)
    Deferred termination income(652)— 
    Deferred ground/Office lease423 433 
    Other intangible amortization368 372 
    Office Cash NOI27,181 27,504 
    Other Segment:
    Other NOI— 7,596 
    Straight-line rent— 467 
    Amortization of acquired lease intangibles— (37)
    Deferred ground/Office lease— (17)
    Other Cash NOI— 8,009 
    Total Cash NOI$45,604 $47,330 
    45

    Table of Contents
    Liquidity and Capital Resources
    Overview
    We believe that cash flow generated from our properties, including proceeds from dispositions, will continue to enable us to fund our normal operating expenses, regular debt service obligations, capital expenditures, possible acquisitions of, or investments in, assets, and all dividends and distribution requirements in accordance with applicable REIT requirements in both the short-term and long-term. Furthermore, we expect that cash on hand, borrowings from our Revolving Credit Facility, proceeds from mortgage financing and other debt, proceeds from the sale of properties, and issuances of equity will provide other potential sources of capital. To the extent we are not able to secure other potential sources of capital, we will be heavily dependent upon income from operations and our current financing.
    Sources of Liquidity
    Cash Resources
    As of March 31, 2025, we had approximately $204.0 million of cash and cash equivalents on hand. Our principal source of liquidity is cash flow generated from our properties, which we expect to be adequate to fund our liquidity needs. However, a number of factors could have an adverse impact, including decreases in occupancy levels and rental rates, the ability and willingness of our tenants to pay rent, the timing and success of our investment activities, the impact of our disposition activities and general financial and economic conditions.

    Credit Facility
    As of March 31, 2025, pursuant to the Second Amended and Restated Credit Agreement with KeyBank National Association, as administrative agent, and a syndicate of lenders, the Operating Partnership, as the borrower, has been provided with a $1.1 billion credit facility (with the right to elect to increase total commitments to $1.3 billion) consisting of (i) a $547.0 million senior unsecured revolving credit facility (the “Revolving Credit Facility”), under which the Operating Partnership has drawn $465.0 million (the “Revolving Loan”) maturing in July 2028, (ii) a $210.0 million senior unsecured term loan maturing in July 2028 (the “2028 Term Loan I”), (iii) a $175.0 million senior unsecured term loan maturing in October 2028, assuming the one-year extension option is exercised (the “2028 Term Loan II”) and (iv) a $150.0 million senior unsecured term loan maturing in April 2026 (the “2026 Term Loan” and together with the Revolving Loan, the 2028 Term Loan I and the 2028 Term Loan II, the “KeyBank Loans”). The Second Amended and Restated Credit Agreement also provides the option, subject to obtaining additional commitments from lenders and certain other customary conditions, to increase the commitments under the Revolving Credit Facility, existing term loans and/or incur new term loans by up to an additional $218.0 million in the aggregate. As of March 31, 2025, the available undrawn capacity under the Revolving Credit Facility was $82.0 million.
    ATM Program
    In August 2023, we entered into an at-the-market equity offering (the “ATM”) pursuant to which we may sell common shares up to an aggregate purchase price of $200.0 million. We may sell such shares in amounts and at times to be determined by us from time to time, but we have no obligation to sell any of the shares. Actual sales, if any, will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of our common shares, capital needs, and our determinations of the appropriate sources of funding. As of March 31, 2025, we have not sold any shares under the ATM program.
    Other Potential Sources of Capital
    Other potential sources of capital include proceeds from private or public offerings of our common shares, proceeds from secured or unsecured financings from banks or other lenders, including debt assumed in a real estate transaction, and entering into joint venture arrangements to invest in assets. If necessary, we may use other sources of capital in the event of unforeseen expenditures.
    46

    Table of Contents
    Uses of Liquidity
    During the 12 months following March 31, 2025 and thereafter, we expect our significant cash requirements will include:
    •making scheduled principal and interest payments on our outstanding debt obligations (see “Debt and Ground Lease Obligations” section below);
    •paying dividends and distributions to shareholders and holders of OP Units, as applicable (refer to “Dividends and Distributions” section below);
    •making scheduled ground lease obligations (see “Debt and Ground Lease Obligations” section below);
    •funding future capital expenditure projects, leasing commissions and tenant improvements (as of March 31, 2025, the aggregate remaining contractual commitment was approximately $8.0 million); and
    •other normal recurring operating expenses.
    Debt and Ground Lease Obligations
    The following amounts represent our debt and ground lease obligations for the next 12 months following March 31, 2025 and thereafter:
    Debt and Ground Lease ObligationsTotal PaymentsRemaining 2025Thereafter
    Outstanding debt obligations (1)
    $1,360,326 $— $1,360,326 
    Interest on outstanding debt obligations (2)
    269,743 58,441 211,302 
    Ground lease obligations 260,364 1,703 258,661 
    Total$1,890,433 $60,144 $1,830,289 
    (1)Amounts only include principal payments. The payments on our secured debt do not include the premium/discount or debt financing costs.
    (2)Projected interest payments are based on the outstanding principal amounts at March 31, 2025. Projected interest payments on our KeyBank Loans are based on the Contractual Interest Rates (refer to “Outstanding Indebtedness” section below) in effect at March 31, 2025.
    Dividends and Distributions
    Dividends and distributions, as applicable, will be authorized at the discretion of our Board and be paid to our shareholders and holders of OP Units as of the record date selected by our Board. We expect to pay dividends and distributions, as applicable, on a quarterly basis unless our results of operations, our general financial condition, general economic conditions, or other factors inhibit us from doing so. During the three months ended March 31, 2025, our Board declared an all-cash dividend in the amount of $0.225 per common share and all-cash distribution in the amount of $0.225 per OP Unit.
    Additionally, to qualify as a REIT, we must meet a number of organizational and operational requirements on a continuing basis, including the requirement that we annually distribute at least 90% of our REIT taxable income, determined without regard to the dividends and distributions paid deduction and excluding net capital gain, to our shareholders and holders of OP Units. As a result of this requirement, we cannot rely on retained earnings to fund our business needs to the same extent as other entities that are not REITs. If we do not have sufficient funds available to us from our operations to fund our business needs, we will need to find alternative ways to fund those needs. As of March 31, 2025, the Company believes it has satisfied the REIT requirements and distributed all of its taxable income.
    47

    Table of Contents
    Outstanding Indebtedness
    As of March 31, 2025 and December 31, 2024, the Company’s consolidated debt consisted of the following:
    March 31, 2025December 31, 2024
    Contractual Interest 
    Rate (1)
    Effective Interest Rate (2)
    Loan
    Maturity (3)
    Secured Debt
    BOA II Loan(4)
    $250,000 $250,000 4.32%4.37%May 2028
    Georgia Mortgage Loan(5)
    37,722 37,722 5.31%5.31%November 2029
    Illinois Mortgage Loan(6)
    23,000 23,000 6.51%6.60%November 2029
    Florida Mortgage Loan(7)
    49,604 49,604 5.48%5.48%May 2032
    Total Secured Debt 360,326 360,326 4.77%
    Unsecured Debt
    Revolving Loan465,000 465,000 
    SOF Rate + 1.65%
    5.05%July 2028
    2026 Term Loan150,000 150,000 
    SOF Rate + 1.25%
    3.36%April 2026
    2028 Term Loan I210,000 210,000 
    SOF Rate + 1.60%
    3.72%July 2028
    2028 Term Loan II175,000 175,000 
    SOF Rate + 1.60%
    3.72%
    October 2028 (8)
    Total Unsecured Debt1,000,000 1,000,000 4.28%
    Total Debt1,360,326 1,360,326 4.41%
    Unamortized Deferred Financing Costs and Discounts, net(14,640)(15,707)
    Total Debt, net$1,345,686 $1,344,619 
    (1)The Contractual Interest Rate for the Company’s unsecured debt uses the applicable Secured Overnight Financing Rate ("SOFR" or “SOF rate"). As of March 31, 2025, the applicable rates were 4.31% (SOFR, as calculated per the credit facility), plus spreads of 1.25% (2026 Term Loan), 1.60% (2028 Term Loan I), 1.60% (2028 Term Loan II), and 1.65% (Revolving Loan) and a 0.1% index.
    (2)The Effective Interest Rate is calculated on a weighted average basis, using the Actual/360 interest method (where applicable), and is inclusive of the Company's $750.0 million floating to fixed interest rate swaps maturing on July 1, 2025, which have the effect of converting SOFR to a weighted average fixed rate of 1.97% (Note: The Company entered into forward-starting, floating to fixed interest rate swaps with a notional amount of $550.0 million. These swaps become effective July 1, 2025, mature July 1, 2029 and have the effect of converting SOFR to a weighted average fixed rate of 3.58%. Refer to 6. Interest Contracts.). The Effective Interest Rate is calculated based on the face value of debt outstanding (i.e., excludes debt premium/discount and debt financing costs). When adjusting for the effect of amortization of discounts/premiums and deferred financing costs, and excluding the impact of interest rate swaps, the Company’s weighted average effective interest rate was 6.04%.
    (3)Reflects the loan maturity dates as of March 31, 2025.
    (4)The BOA II Loan has a fixed-rate of interest and is secured by properties located in Chicago, Illinois; Columbus, Ohio; Las Vegas, Nevada; and Birmingham, Alabama.
    (5)The Georgia Mortgage Loan has a fixed-rate of interest and is secured by a property in Savannah, Georgia.
    (6)The Illinois Mortgage Loan has a fixed-rate of interest and is secured by a property in Chicago, Illinois.
    (7)The Florida Mortgage Loan has a fixed-rate of interest and is secured by a property in Jacksonville, Florida.
    (8)The 2028 Term Loan II has a contractual maturity of October 31, 2027. We have a one-year option to extend the maturity date to October 31, 2028, subject to certain conditions.

    Debt Covenants
    Pursuant to the terms of the Company’s mortgage loans and the KeyBank Loans, the Operating Partnership, in consolidation with the Company, is subject to certain loan compliance covenants.
    The Company was in compliance with all of its debt covenants as of March 31, 2025.
    48

    Table of Contents
    Summary of Cash Flows
    Comparison of cash flow activity as of March 31, 2025 and March 31, 2024 is as follows (in thousands):
    Three Months Ended March 31,
    20252024Change
    Net cash provided by operating activities$20,216 $16,191 $4,025 
    Net cash provided by investing activities$46,888 $60,527 $(13,639)
    Net cash used in financing activities
    $(9,324)$(30,264)$20,940 
    Cash and cash equivalents and restricted cash were $212.0 million and $447.5 million as of March 31, 2025 and March 31, 2024 respectively.
    Operating Activities. Cash flows provided by operating activities are primarily dependent on the occupancy level, the rental rates of our leases, the collectability of rent and recovery of operating expenses from our tenants, and the timing and success of our investing activities. During the three months ended March 31, 2025, we generated $20.2 million in cash from operating activities compared to $16.2 million for the three months ended March 31, 2024. The increase in cash from operating activities was primarily attributable to an increase in cash flows from our Same Store portfolio, partially offset by changes in working capital.
    Investing Activities. Cash provided by investing activities for the three months ended March 31, 2025 and 2024 consisted of the following (in thousands):
     Three Months Ended March 31,
    20252024Change
    Sources of cash provided by investing activities:
    Proceeds from disposition of properties$33,004 $62,414 $(29,410)
    Proceeds from repayment of note receivable15,000 — 15,000 
    Total sources of cash provided by investing activities$48,004 $62,414 $(14,410)
    Uses of cash for investing activities:
    Payments for construction in progress$(1,116)$(1,846)$730 
    Purchase of investments— (41)41 
    Total uses of cash used in investing activities $(1,116)$(1,887)$771 
     Net cash provided by investing activities$46,888 $60,527 $(13,639)
    Financing Activities. Cash used in financing activities for the three months ended March 31, 2025 and 2024 consisted of the following (in thousands):
    Three Months Ended March 31,
    20252024Change
    Sources of cash provided by (used in) financing activities:
    Total sources of cash provided by financing activities$— $— $— 
    Uses of cash for financing activities:
    Principal payoff of secured indebtedness - Mortgage Debt— (18,868)18,868 
    Principal amortization payments on secured indebtedness— (1,594)1,594 
    Deferred financing costs— (682)682 
    Offering costs(10)86 (96)
    Repurchase of common shares to satisfy employee tax withholding requirements(113)(79)(34)
    Distributions to noncontrolling interests(672)(724)52 
    Dividends to common shareholders
    (8,318)(8,193)(125)
    Financing lease payment(211)(210)(1)
    Total sources of cash used in financing activities$(9,324)$(30,264)$20,940 
     Net cash used in financing activities
    $(9,324)$(30,264)$20,940 
    49

    Table of Contents
    ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    In this section, market risk generally refers to risks that affect market sensitive instruments, such as changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other relevant market changes. In this context, the primary market risk to which we believe we may be exposed is interest rate risk, including the risk of changes in the underlying rates on our variable rate debt, which may result from factors that are beyond our control. Our current indebtedness consists of the KeyBank loans and other loans and property secured mortgages as described in Note 5, Debt, to our consolidated financial statements included in this Quarterly Report on Form 10-Q. These instruments were not entered into for trading purposes.
    We may enter into interest rate hedging instruments (collectively, “Interest Rate Swaps”) to provide greater predictability in interest expense by protecting against potential increases in floating interest rates and allow for more precise budgeting, financial planning and forecasting. We will not enter into these instruments for trading or speculative purposes. The use of these types of instruments to hedge a portion of our exposure to changes in interest rates carries additional risks, such as counterparty credit risk and the legal enforceability of hedging contracts.
    Changes in interest rates have different impacts on the fixed and variable rate debt. A change in interest rates on fixed rate debt impacts its fair value but has no effect on interest incurred or cash flows. A change in interest rates on variable rate debt could affect the interest incurred and cash flows and its fair value. Our future earnings and fair values relating to variable rate debt are primarily dependent upon prevalent market rates of interest, such as SOFR. However, our Interest Rate Swaps are intended to reduce the effects of interest rate changes.
    As of March 31, 2025, our debt, excluding unamortized deferred financing cost and discounts/premiums, consisted of approximately $1.1 billion in fixed rate debt (including the effect of interest rate swaps) and $250.0 million of variable rate debt. As of March 31, 2025, the effect of an increase of 100 basis points in interest rates, assuming a SOFR floor of 0%, on our variable-rate debt, including our KeyBank Loans, after considering the effect of our Interest Rate Swaps, would decrease our future earnings and cash flows by approximately $4.6 million annually.
    Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur, which may result in us taking actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.
    ITEM 4. CONTROLS AND PROCEDURES
    Evaluation of Disclosure Controls and Procedures
    As of the end of the period covered by this Quarterly Report on Form 10-Q, management, with the participation of our principal executive and principal financial officers, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon, and as of the date of the evaluation, our chief executive officer and chief financial officer concluded that the disclosure controls and procedures were effective to provide reasonable assurance as of the end of the period covered by this Quarterly Report on Form 10-Q that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
    Changes in Internal Control Over Financial Reporting
    Our management is responsible for establishing and maintaining adequate internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
    50

    Table of Contents
    PART II. OTHER INFORMATION
    ITEM 1. LEGAL PROCEEDINGS
    None.
    ITEM 1A. RISK FACTORS
    There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
    ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    Recent Sales of Unregistered Securities
    During the three months ended March 31, 2025, there were no sales of unregistered securities.
    Issuer Purchases of Equity Securities
    During the three months ended March 31, 2025, the Company did not repurchase any shares.
    ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    None.

    ITEM 4. MINE SAFETY DISCLOSURES
    Not applicable.
    ITEM 5. OTHER INFORMATION
    During the three months ended March 31, 2025, no trustee or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” each term as defined in Item 408(a) of Regulation S-K.
    ITEM 6. EXHIBITS
    The following exhibits are included in this Quarterly Report on Form 10-Q for the period ended March 31, 2025 (and are numbered in accordance with Item 601 of Regulation S-K).
    51

    Table of Contents
    Exhibit
    No.
    Description
    3.1
    Declaration of Trust, incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on January 20, 2023, SEC File No. 000-55605
    3.2
    Articles of Amendment to Declaration of Trust, incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on March 10, 2023, SEC File No. 000-55605
    3.3
    Articles of Amendment to Declaration of Trust, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed on April 17, 2023, SEC File No. 001-41686
    3.4
    Second Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on March 20, 2023, SEC File No. 000-55605
    10.1*
    Form of Restricted Stock Unit Agreement (Trustees) for 2025
    31.1*
    Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    31.2*
    Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    32.1**
    Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    32.2**
    Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    101*
    The following Peakstone Realty Trust financial information for the period ended March 31, 2025 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive (Loss) Income (unaudited), (iv) Consolidated Statements of Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Financial Statements (unaudited).
    104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
    *
    Filed herewith.
    **
    Furnished herewith.
    52

    Table of Contents
    SIGNATURES
    Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
    PEAKSTONE REALTY TRUST
    (Registrant)

    Dated:May 8, 2025By: 
    /s/ Javier F. Bitar
     
    Javier F. Bitar
     On behalf of the Registrant and as Chief Financial Officer and Treasurer (Principal Financial Officer)
    53
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      POS EX - Peakstone Realty Trust (0001600626) (Filer)

      5/8/25 4:36:21 PM ET
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      Real Estate Investment Trusts
      Real Estate
    • SEC Form 10-Q filed by Peakstone Realty Trust

      10-Q - Peakstone Realty Trust (0001600626) (Filer)

      5/8/25 4:25:24 PM ET
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      Real Estate Investment Trusts
      Real Estate
    • Peakstone Realty Trust filed SEC Form 8-K: Results of Operations and Financial Condition, Financial Statements and Exhibits

      8-K - Peakstone Realty Trust (0001600626) (Filer)

      5/8/25 4:23:33 PM ET
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      Real Estate Investment Trusts
      Real Estate

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    Insider Trading

    Insider transactions reveal critical sentiment about the company from key stakeholders. See them live in this feed.

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    • CFO Bitar Javier F covered exercise/tax liability with 751 shares, decreasing direct ownership by 0.49% to 153,289 units (SEC Form 4)

      4 - Peakstone Realty Trust (0001600626) (Issuer)

      3/27/25 5:14:52 PM ET
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      Real Estate Investment Trusts
      Real Estate
    • CEO and President Escalante Michael J covered exercise/tax liability with 2,627 shares, decreasing direct ownership by 0.43% to 607,601 units (SEC Form 4)

      4 - Peakstone Realty Trust (0001600626) (Issuer)

      3/27/25 5:04:07 PM ET
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      Real Estate Investment Trusts
      Real Estate
    • COO and CLO Sitzer Nina Momtazee covered exercise/tax liability with 412 shares, decreasing direct ownership by 0.26% to 159,235 units (SEC Form 4)

      4 - Peakstone Realty Trust (0001600626) (Issuer)

      3/27/25 4:58:50 PM ET
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      Real Estate Investment Trusts
      Real Estate

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    Analyst Ratings

    Analyst ratings in real time. Analyst ratings have a very high impact on the underlying stock. See them live in this feed.

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    • UBS initiated coverage on Peakstone Realty Trust with a new price target

      UBS initiated coverage of Peakstone Realty Trust with a rating of Buy and set a new price target of $15.00

      1/16/25 7:51:45 AM ET
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      Real Estate Investment Trusts
      Real Estate
    • BofA Securities initiated coverage on Peakstone Realty Trust with a new price target

      BofA Securities initiated coverage of Peakstone Realty Trust with a rating of Underperform and set a new price target of $27.00

      6/13/23 7:25:10 AM ET
      $PKST
      Real Estate Investment Trusts
      Real Estate
    • Truist initiated coverage on Peakstone Realty Trust with a new price target

      Truist initiated coverage of Peakstone Realty Trust with a rating of Hold and set a new price target of $24.00

      6/2/23 7:36:31 AM ET
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      Real Estate Investment Trusts
      Real Estate