Download PDF

1. Company Snapshot

1.a. Company Description

Griffin Capital Essential Asset REIT, Inc.– America's Blue-Chip Landlord– is a self-managed, publicly registered, non-traded REIT with a portfolio consisting primarily of single-tenant, business essential office and industrial properties throughout the United States, diversified by corporate credit, physical geography, product type, and lease duration.GCEAR's portfolio as of September 30, 2020, consisted of 99 office and industrial properties (122 buildings), totaling 27.1 million rentable square feet, located in 25 states, representing a total enterprise value of approximately $4.5 billion.

Show Full description

1.b. Last Insights on PKST

Peakstone Realty Trust's recent performance has been positively driven by its strategic transition to an industrial REIT, with industrial assets now comprising 48% of ABR, up from 26% a year ago. The company's Q2 AFFO jumped 1,120%, showcasing significant growth. Additionally, Peakstone's focus on the industrial outdoor storage (IOS) sector is promising, and its upcoming Q3 2025 earnings release may provide further insights into its progress. The company's efforts to preserve capital, including a recent dividend cut, aim to support its transformation.

1.c. Company Highlights

2. Peakstone Realty Trust's Strategic Transformation Yields Mixed Q3 2025 Results

Peakstone Realty Trust reported total revenue of approximately $25.8 million from continuing operations, with net income attributable to common shareholders of approximately $3.5 million or $0.09 per share. However, the actual EPS came out at -$0.18 relative to estimates at $0.55, indicating a significant deviation from expectations. Funds From Operations (FFO) was approximately $18.3 million or $0.46 per share on a fully diluted basis.

Publication Date: Nov -24

📋 Highlights
  • Strategic Shift to Industrial Focus: Industrial portfolio generates 60%+ of ABR, with 12 office properties sold for $363M and $300–$350M expected for remaining dispositions.
  • Balance Sheet Strengthening: Debt reduced by $450M, pro forma debt-to-EBITDA at 5.4x (below 6x target), and total liquidity of $438M ($326M cash + $112M revolver).
  • IOS Portfolio Growth: $1M+ incremental ABR from new leases/modifications, $58M spent on 3 IOS acquisitions, and 3 industrial properties sold for $72M at 6.9% cap rate.
  • Financial Performance: Q3 revenue $25.8M, net income $3.5M ($0.09/share), and FFO $18.3M ($0.46/share fully diluted).
  • Office Sale Proceeds Allocation: $250–$300M of $300–$350M office sale proceeds to pay down debt, with remaining assets "virtually every asset engaged and under control."

Balance Sheet Strengthening

The company's balance sheet has been strengthened by reducing debt by approximately $450 million, bringing the debt to 5.4x on a pro forma basis, below the target level of 6x. Peakstone Realty Trust has approximately $438 million of total liquidity, consisting of cash and available revolver capacity. The cash balance, excluding restricted cash, was approximately $326 million, and available revolver capacity was approximately $112 million.

Industrial Outdoor Storage Portfolio Performance

The IOS portfolio remains solid, with strong tenant demand and persistent supply constraints. The company has executed new leases, renewals, and proactive lease modifications across the IOS portfolio, generating more than $1 million of incremental IOS ABR. As Mike Escalante mentioned, "Our IOS portfolio remains solid, with strong tenant demand and persistent supply constraints."

Office Dispositions and Debt Reduction

The company expects to complete the sale of a majority of its remaining office properties by the end of this year, with total proceeds ranging from $300 million to $350 million. Approximately $250 million to $300 million of those proceeds will be used to pay down debt, further strengthening the balance sheet.

Valuation and Growth Prospects

With a P/E Ratio of -1.51, P/B Ratio of 0.67, and EV/EBITDA of 11.54, the market is pricing in significant distress. Analysts estimate next year's revenue growth at -25.5%, indicating a challenging environment. However, the Dividend Yield stands at 5.78%, providing some support to the stock. The company's strategic transformation into an industrial-only REIT focused on growth in the IOS sector is expected to drive future growth.

3. NewsRoom

Card image cap

Peakstone's Transformation Takes Hold (Upgrade)

Dec -02

Source: seekingalpha.com

Card image cap

Peakstone Realty Trust Completes Sale of Two Properties for $84.5 Million

Nov -14

Source: businesswire.com

Card image cap

Peakstone Realty Trust (PKST) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

Card image cap

Peakstone Realty Trust (PKST) Misses Q3 FFO and Revenue Estimates

Nov -06

Source: zacks.com

Card image cap

Peakstone Realty Trust Reports Third Quarter 2025 Results

Nov -05

Source: businesswire.com

Card image cap

Peakstone Realty Trust Announces Date for Third Quarter 2025 Earnings Release and Webcast

Oct -22

Source: businesswire.com

Card image cap

Slacking Into A Rate Cut

Sep -07

Source: seekingalpha.com

Card image cap

From Offices To Industrial: Peakstone Realty's Bold (And Risky) Transformation

Sep -06

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.83%)

6. Segments

Office

Expected Growth: 3.8%

The 3.8% growth of Office segment from Peakstone Realty Trust is driven by increasing demand for Class-A office spaces, particularly in urban areas, fueled by the growing need for modern and amenity-rich workspaces. Additionally, the rise of coworking and flexible office spaces, as well as the expansion of industries such as tech and healthcare, contribute to this growth.

Industrial

Expected Growth: 4.2%

Peakstone Realty Trust's 4.2% growth in Industrial segment is driven by increasing e-commerce demand, rising need for logistics and distribution centers, and growing popularity of last-mile delivery. Additionally, the shift towards omnichannel retailing and the need for modern, high-ceiling warehouses with proximity to urban areas are also contributing to this growth.

Other

Expected Growth: 3.5%

Peakstone Realty Trust's 3.5% growth is driven by increasing demand for industrial and logistics spaces, fueled by e-commerce growth and supply chain shifts. Additionally, strategic acquisitions and development of high-quality properties, coupled with a strong balance sheet and disciplined capital allocation, support the trust's growth momentum.

7. Detailed Products

Office Properties

Peakstone Realty Trust offers a diverse portfolio of office properties, including Class A and Class B office buildings, providing tenants with high-quality spaces to conduct business.

Industrial Properties

Peakstone Realty Trust's industrial properties include warehouses, distribution centers, and manufacturing facilities, catering to businesses requiring functional spaces for logistics and production.

Retail Properties

Peakstone Realty Trust's retail properties comprise shopping centers, strip malls, and freestanding stores, offering prime locations for retailers to connect with customers.

Multifamily Properties

Peakstone Realty Trust's multifamily properties include apartments, condominiums, and townhomes, providing residents with comfortable living spaces and amenities.

Hotel Properties

Peakstone Realty Trust's hotel properties offer a range of accommodations, from budget-friendly options to luxury resorts, catering to travelers and tourists.

8. Peakstone Realty Trust's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Peakstone Realty Trust is moderate, as there are alternative options for customers to invest in real estate, such as direct property investment or other real estate investment trusts.

Bargaining Power Of Customers

The bargaining power of customers for Peakstone Realty Trust is low, as individual customers have limited negotiating power in the real estate market.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Peakstone Realty Trust is moderate, as the company relies on a network of suppliers for property management and maintenance services.

Threat Of New Entrants

The threat of new entrants for Peakstone Realty Trust is high, as the real estate investment trust industry is highly competitive and new entrants can easily enter the market.

Intensity Of Rivalry

The intensity of rivalry for Peakstone Realty Trust is high, as the company operates in a highly competitive industry with many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 56.36%
Debt Cost 3.95%
Equity Weight 43.64%
Equity Cost 20.38%
WACC 11.12%
Leverage 129.17%

11. Quality Control: Peakstone Realty Trust passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Alexander & Baldwin

A-Score: 6.2/10

Value: 4.3

Growth: 3.7

Quality: 6.3

Yield: 8.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Global Net Lease

A-Score: 6.1/10

Value: 6.9

Growth: 3.3

Quality: 3.6

Yield: 10.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Peakstone Realty Trust

A-Score: 5.5/10

Value: 7.0

Growth: 5.1

Quality: 3.6

Yield: 9.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
Medalist Diversified REIT

A-Score: 4.8/10

Value: 5.0

Growth: 4.7

Quality: 2.8

Yield: 5.0

Momentum: 8.0

Volatility: 3.7

1-Year Total Return ->

View Full Report
Stock-Card
Generation Income Properties

A-Score: 4.3/10

Value: 7.0

Growth: 5.4

Quality: 3.9

Yield: 3.0

Momentum: 5.0

Volatility: 1.3

1-Year Total Return ->

View Full Report
Stock-Card
Empire State Realty Trust

A-Score: 4.2/10

Value: 5.7

Growth: 4.4

Quality: 4.4

Yield: 3.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.84$

Current Price

13.84$

Potential

-0.00%

Expected Cash-Flows