California-based Peakstone Realty Trust is selling its remaining office holdings to cement its pivot to industrial, with a focus on outdoor storage, the REIT announced Wednesday.

Peakstone, which announced its new IOS focus a year ago, has spent the last quarter selling off its office properties to prioritize industrial leasing and acquisitions.

“We continued to execute on our strategy to transform Peakstone into an industrial-only REIT focused on growth in the industrial outdoor storage sector,” Peakstone CEO Michael Escalante said in a statement.

The REIT sold eight office properties spanning 1.2M SF for $247.5M combined during the third quarter, the company said in its earnings release. It put its remaining 16 offices up for sale and has sold four since the end of the quarter, removing another 1M SF from its portfolio and bringing in $116M.

It plans to complete the sales by the end of the year or in early 2026, generating between $300M and $350M in proceeds, Chief Financial Officer Javier Bitar said on the company's earnings call.

The company plans to use between $250M and $300M of its proceeds from office sales to continue to pay its debt down, Bitar said. Peakstone reduced its debt by $450M in the third quarter, bringing its total debt below $1B, Escalante said during the call.

Office still makes up a sizable part of Peakstone's business. It ended the quarter with $25.8M in revenue from its 66 industrial properties and $25.2M from office buildings. It reported $11.4M in net operating income for assets held over the past year, representing a 3.7% year-over-year increase.

Part of the industrial focus includes the redevelopment of four of its existing industrial assets, and it also spent $57.5M acquiring three fully leased industrial buildings during Q3.

The market for industrial and office properties has improved this year, with prices for office buildings up 7% in the 12 months ending in October and industrial prices up 4%, according to MSCI. Long-term, the asset classes are still on vastly different trajectories, with office values down 17% over the past three years and industrial prices up 11%.