Plymouth Industrial REIT, Inc. (NYSE: PLYM) (the “Company”) today
announced its financial results for the third quarter ended
September 30, 2023 and other recent developments.
Third Quarter and Subsequent
Highlights
- Reported results for the third
quarter of 2023 reflect net income attributable to common
stockholders of $0.17 per weighted average common share; Core Funds
from Operations attributable to common stockholders and unit
holders (“Core FFO”) of $0.46 per weighted average common share and
units; and Adjusted FFO (“AFFO”) of $0.42 per weighted average
common share and units.
- Same store NOI (“SS NOI”) increased
0.8% on a GAAP basis excluding early termination income for the
third quarter compared with the same period in 2022; increased 5.4%
on a cash basis excluding early termination income. SS NOI
increased 2.7% on a GAAP basis excluding early termination income
for the first nine months of 2023 compared with the same period in
2022; increased 6.8% on a cash basis excluding early termination
income.
- Commenced leases during the third
quarter experienced a 24.1% increase in rental rates on a cash
basis from leases greater than six months with new leases
experiencing a 25.9% increase on a cash basis and renewal leases
experiencing a 23.6% increase on a cash basis. Through November 1,
2023, executed leases scheduled to commence during 2023, excluding
leases associated with new construction, total an aggregate of
5,546,550 square feet, all of which are associated with terms of at
least six months. The Company will experience a 20.1% increase in
rental rates on a cash basis from these leases.
- Issued approximately 2.1 million
common shares through its ATM program at an average price of $23.04
per share, raising approximately $48.1 million in net
proceeds.
- Completed the disposition of an
industrial building in Chicago for $19.9 million, yielding a 4.9%
cap rate on in-place NOI and an IRR of 31.1% over a six-year hold
period; the sale resulted in $14.0 million of net proceeds after
the payoff of a secured mortgage and other adjustments.
- Redeemed all outstanding shares of
the 7.50% Series A Cumulative Redeemable Preferred Stock for a
total redemption payment of $48.8 million.
- Paid a regular quarterly cash
dividend for the third quarter of 2023 of $0.225 per share for the
common stock and a prorated cash dividend of $0.34647 per share for
the Preferred Stock.
- On November 1, repaid the AIG Loan
in full in the amount of approximately $110 million, or $106.9
million after factoring the release of lender escrows; the
repayment leaves the Company with only $18.6 million of debt
maturing until August 2025.
- Affirmed the full year 2023
guidance range for Core FFO of $1.84 to $1.86 per weighted average
common share and units previously issued on August 3, 2023,
increased its range of net income to $0.32 to $0.34 per weighted
average common share and units and adjusted the accompanying
assumptions.
Jeff Witherell, Chairman and Chief Executive
Officer of Plymouth Industrial REIT, noted, “The strong demand for
our space within the Golden Triangle continues to support our
portfolio performance as occupancy remains within our targets,
leases are signing consistent with the 18% to 20% mark-to-market in
the existing portfolio, and the remaining space in our new
developments continues to be absorbed. With the multi-year buildup
expected from the Golden Triangle’s manufacturing resurgence, we
believe our type of industrial space and our properties are
well-positioned for the leasing opportunities we are anticipating
in 2024 and 2025. We have also made significant progress in
simplifying our balance sheet and bringing leverage below our
year-end target earlier than we had anticipated.”
Financial Results for the Third Quarter
of 2023
Net income attributable to common stockholders
for the quarter ended September 30, 2023 was $7.5 million, or $0.17
per weighted average common share outstanding, compared with net
loss attributable to common stockholders of $8.0 million, or
$(0.19) per weighted average common share outstanding, for the same
period in 2022. The year-over-year improvement was primarily due to
a $12.1 million net gain on sale of real estate and an increase in
net operating income, partially offset by increased interest
expense resulting from higher interest rates. Weighted average
common shares outstanding for the third quarters ended September
30, 2023 and 2022 were 44.1 million and 41.1 million,
respectively.
Consolidated total revenues for the quarter
ended September 30, 2023 were $49.8 million, compared with $47.8
million for the same period in 2022.
NOI for the quarter ended September 30, 2023 was
$34.0 million compared with $33.3 million for the same period in
2022. Same store NOI (“SS NOI”) excluding early termination income
– GAAP basis for the quarter ended September 30, 2023 was $30.1
million compared with $29.9 million for the same period in 2022, an
increase of 0.8%. SS NOI excluding early termination income – Cash
basis for the quarter ended September 30, 2023 was $29.8 million
compared with $28.3 million for the same period in 2022, an
increase of 5.4%. SS NOI for the third quarter was positively
impacted by rent escalations and renewal and new leasing spreads.
The same store portfolio is comprised of 182 buildings totaling
30.8 million square feet, or 90.3% of the Company’s total
portfolio, and was 98.6% occupied as of September 30, 2023.
EBITDAre for the quarter ended September 30,
2023 was $30.7 million compared with $29.2 million for the same
period in 2022.
Core FFO for the quarter ended September 30,
2023 was $20.6 million compared with $19.4 million for the same
period in 2022, primarily as a result of the growth in same-store
NOI, contribution from developments placed into service and a
decrease in preferred stock dividends resulting from the full
conversion of the Series B Convertible Stock and redemption of the
Series A Cumulative Preferred Stock, partially offset by an
increase in interest expense. The Company reported Core FFO for the
quarter ended September 30, 2023 of $0.46 per weighted average
common share and unit compared with $0.46 per weighted average
common share and unit for the same period in 2022. Weighted average
common shares and units outstanding for the third quarters ended
September 30, 2023, and 2022 were 44.9 million and 41.9 million,
respectively.
AFFO for the quarter ended September 30, 2023
was $19.0 million, or $0.42 per weighted average common share and
unit, compared with $17.0 million, or $0.40 per weighted average
common share and unit, for the same period in 2022. The results
reflected the aforementioned changes in Core FFO and a reduction in
straight-line rent adjustments.
See “Non-GAAP Financial Measures” for complete
definitions of NOI, EBITDAre, Core FFO and AFFO and the financial
tables accompanying this press release for reconciliations of net
income to NOI, EBITDAre, Core FFO and AFFO.
Liquidity and Capital Markets Activity
As of November 1, 2023, the Company’s current
cash balance was approximately $9.1 million, excluding operating
expense escrows of approximately $5.7 million, and it has
approximately $178.1 million of capacity under the existing
unsecured line of credit.
During the third quarter, the Company issued
approximately 2.1 million common shares through its ATM program at
an average price of $23.04 per share, raising approximately $48.1
million in net proceeds.
On September 6, 2023, the Company redeemed all
of its outstanding 7.50% Series A Cumulative Redeemable Preferred
Stock for a total redemption payment of $48.8 million at a
redemption price equal to $25.00 per share. On the same date, a
dividend in the amount of $0.34647 per share of Series A Preferred
Stock was paid in cash to holders of record at the close of
business on August 25, 2023. The shares of Preferred Stock were
delisted from trading on the NYSE American.
On November 1, 2023, Plymouth repaid the AIG
Loan in full in the amount of approximately $110 million, or $106.9
million after factoring the release of lender escrows. The
repayment was funded with a $106.9 million draw on the Company’s
unsecured credit facility. The previously encumbered assets under
the AIG Loan were added to the unencumbered pool of the unsecured
credit facility, thereby expanding availability on the line of
credit by approximately $19 million after factoring the draw. The
Company intends to execute an interest rate swap for the full
outstanding balance of the unsecured credit facility over the
remaining term, which matures in August 2025.
Investment and Disposition Activity
As of September 30, 2023, the Company had real
estate investments comprised of 211 industrial buildings totaling
34.1 million square feet.
On September 15, 2023, Plymouth sold its
306,552-square-foot industrial building at 6510 West 73rd Street in
Chicago for $19.9 million to an undisclosed owner-user. Plymouth’s
net proceeds after the payoff of a $6.7 million mortgage secured by
the property, return of lender escrowed reserves and other
adjustments were $14.0 million. The Company used the proceeds to
pay down outstanding borrowings on its credit facility and fund its
development program. The sale yielded a 4.9% cap rate on in-place
NOI and an IRR of 31.1% over a six-year hold period.
Plymouth has one additional industrial building
under contract to sale by year end. The sale is expected to
generate approximately $16.8 million in proceeds.
During the quarter, the Company delivered its
180,000-square-foot industrial building in Atlanta and its
40,572-square-foot industrial building in Jacksonville. Plymouth
signed 119,000 square feet of new construction leases that
commenced during the quarter, bringing the occupancy in its
delivered development projects to 68.3% at September 30, 2023. For
the remaining 215,000 square feet of space yet to be leased in its
development program, Plymouth has active proposals under
consideration for 100% of this space.
Plymouth has two fully leased projects in
Jacksonville totaling 92,670 square feet in the current phase of
its development program with approximately 50% of the expected
$12.5 million in development costs funded as of September 30, 2023.
The first building is expected to come online in the fourth quarter
of 2023, and the second building is expected to come online during
mid-2024.
Leasing Activity
Leases commencing during the third quarter ended
September 30, 2023 totaled an aggregate of 1,761,715 square feet,
all of which are associated with terms of at least six months. The
Company will experience a 24.1% increase in rental rates on a cash
basis from these leases. These leases included 1,194,817 square
feet of renewal leases (9.1% of these leases were associated with
contractual renewals) with a 23.6% increase in rental rates on a
cash basis and 566,898 square feet of new leases with a 25.9%
increase in rental rates on a cash basis. Total portfolio occupancy
at September 30, 2023 was 97.6% and reflects recent new
developments now in service. Same store occupancy at September 30,
2023 was 98.6%.
Through November 1, 2023, executed leases
scheduled to commence in 2023 total an aggregate of 5,546,550
square feet, all of which are associated with terms of at least six
months. The Company will experience a 20.1% increase in rental
rates on a cash basis from these leases. These leases included
1,601,526 square feet of new leases with a 29.4% increase in rental
rates on a cash basis and 3,945,024 square feet of renewal leases
(10.7% of these leases were associated with contractual renewals)
with a 16.3% increase in rental rates on a cash basis. Of the 2023
space leased, 96,979 square feet was vacant at the start of 2023,
leaving a net 393,163 square feet, or 6.5% of 2023 expirations, to
be addressed.
The Company has leased 2,241,077 square feet of
space that will commence during 2024, all of which are associated
with terms of at least six months. The Company will experience a
14.3% increase in rental rates on a cash basis from these leases.
These leases included 418,294 square feet of new leases with a
42.6% increase in rental rates on a cash basis and 1,822,783 square
feet of renewal leases (43.2% of these leases were associated with
contractual renewals) with an 9.3% increase in rental rates on a
cash basis for these leases.
Quarterly Distributions to
Stockholders
On October 31, 2023, the Company paid a regular
quarterly common stock dividend of $0.225 per share for the third
quarter of 2023 to stockholders of record on September 29,
2023.
Guidance for 2023
Plymouth affirmed the full year 2023 guidance
range for Core FFO of $1.84 to $1.86 per weighted average common
share and units previously issued on August 3, 2023, increased its
range of net income to $0.32 to $0.34 per weighted average common
share and units and adjusted the accompanying assumptions, which
can be found in the tables below.
(Dollars, shares and units in
thousands) |
|
Full Year 2023 Range1 |
|
|
Low |
|
High |
Core FFO attributable to common stockholders and unit holder per
share |
|
$ |
1.84 |
|
|
|
$ |
1.86 |
|
|
Same Store Portfolio NOI growth –
cash basis2 |
|
|
7.25 |
% |
|
|
|
7.75 |
% |
|
Average Same Store Portfolio
occupancy – full year |
|
|
98.4 |
% |
|
|
|
98.8 |
% |
|
General and administrative
expenses3 |
|
$ |
14,600 |
|
|
|
$ |
14,200 |
|
|
Interest expense, net |
|
$ |
39,600 |
|
|
|
$ |
39,000 |
|
|
Weighted average common shares
and units outstanding4 |
|
|
44,411 |
|
|
|
|
44,411 |
|
|
Reconciliation of net income attributable to common
stockholders and unit holders per share to Core FFO
guidance: |
|
|
Full Year 2023 Range1 |
|
|
Low |
|
High |
Net income |
|
$ |
0.32 |
|
|
|
$ |
0.34 |
|
|
Real estate depreciation & amortization |
|
2.09 |
|
|
|
2.09 |
|
|
Gain on sale of real estate |
|
(0.51 |
) |
|
|
(0.51 |
) |
|
Preferred stock dividends |
|
(0.06 |
) |
|
|
(0.06 |
) |
|
Core FFO |
|
$ |
1.84 |
|
|
|
$ |
1.86 |
|
|
|
|
|
1) Our 2023 guidance refers to the Company's
in-place portfolio as of November 1, 2023 and an anticipated
property disposition at the end of Q4 2023 representing a total
contract price of $16.8 million. The disposition is subject to
customary closing conditions. As such, there can be no assurance
that we will complete the disposition. Our 2023 guidance does not
include prospective acquisitions, additional dispositions, or
additional capitalization activities that have not closed.2) The
Same Store Portfolio consists of 182 buildings aggregating
30,832,615 rentable square feet, representing approximately 90% of
total in-place portfolio square footage. The Same Store projected
performance reflects an annual NOI on a cash basis, excluding
termination income.3) Includes non-cash stock compensation of $3.0
million for 2023.4) As of November 1, 2023, the Company has
45,740,483 common shares and units outstanding.
Earnings Conference Call and Webcast
The Company will host a conference call and live
audio webcast, both open for the general public to hear, later
today at 9:00 a.m. Eastern Time. The number to call for this
interactive teleconference is (844) 784-1727 (international
callers: (412) 717-9587). A replay of the call will be available
through November 9, 2023, by dialing (877) 344-7529 and entering
the replay access code, 1910241.
The live audio webcast of the Company’s
quarterly conference call will be available online in the Investor
Relations section of the Company’s website at ir.plymouthreit.com.
The online replay will be available approximately one hour after
the end of the call and archived for approximately 90 days.
About Plymouth
Plymouth Industrial REIT, Inc. (NYSE: PLYM) is a
full service, vertically integrated real estate investment company
focused on the acquisition, ownership and management of single and
multi-tenant industrial properties. Our mission is to provide
tenants with cost effective space that is functional, flexible and
safe.
Forward-Looking Statements
This press release includes “forward-looking
statements” that are made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1933 and of Section 21E of the
Securities Exchange Act of 1934. The forward-looking statements in
this release do not constitute guarantees of future performance.
Investors are cautioned that statements in this press release,
which are not strictly historical statements, including, without
limitation, statements regarding management's plans, objectives and
strategies, constitute forward-looking statements. Such
forward-looking statements are subject to a number of known and
unknown risks and uncertainties that could cause actual results to
differ materially from those anticipated by the forward-looking
statement, many of which may be beyond our control, including,
without limitation, those factors described under the captions
“Cautionary Note Regarding Forward-Looking Statements” and “Risk
Factors” in the Company’s Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q filed with the Securities and Exchange
Commission. Forward-looking statements generally can be identified
by the use of forward-looking terminology such as “may,” “plan,”
“seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,”
“believe” or “continue” or the negative thereof or variations
thereon or similar terminology. Any forward-looking information
presented herein is made only as of the date of this press release,
and we do not undertake any obligation to update or revise any
forward-looking information to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.
PLYMOUTH
INDUSTRIAL REIT, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
UNAUDITED |
(In thousands,
except share and per share amounts) |
|
|
|
|
|
|
|
September
30, |
|
December
31, |
|
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
|
Real estate
properties |
$ |
1,570,624 |
|
|
$ |
1,555,846 |
|
|
Less accumulated depreciation |
|
(254,402 |
) |
|
|
(205,629 |
) |
|
Real estate properties, net |
|
1,316,222 |
|
|
|
1,350,217 |
|
|
|
|
|
|
|
Cash |
|
12,034 |
|
|
|
11,003 |
|
|
Cash held in
escrow |
|
11,143 |
|
|
|
13,376 |
|
|
Restricted
cash |
|
7,095 |
|
|
|
6,834 |
|
|
Deferred
lease intangibles, net |
|
56,316 |
|
|
|
70,718 |
|
|
Interest
rate swaps |
|
34,115 |
|
|
|
30,115 |
|
|
Other
assets |
|
39,585 |
|
|
|
39,055 |
|
Total assets |
$ |
1,476,510 |
|
|
$ |
1,521,318 |
|
|
|
|
|
|
Liabilities, Preferred Stock and Equity |
Liabilities: |
|
|
|
|
Secured
debt, net |
|
377,714 |
|
|
|
389,531 |
|
|
Unsecured
debt, net |
|
447,823 |
|
|
|
447,345 |
|
|
Borrowings
under line of credit |
|
65,000 |
|
|
|
77,500 |
|
|
Accounts
payable, accrued expenses and other liabilities |
|
75,112 |
|
|
|
72,551 |
|
|
Deferred
lease intangibles, net |
|
6,604 |
|
|
|
8,918 |
|
|
Financing
lease liability |
|
2,265 |
|
|
|
2,248 |
|
|
Total Liabilities |
|
974,518 |
|
|
|
998,093 |
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.01 per share, 100,000,000 shares
authorized, |
|
|
Series A; 0 and 1,955,513 shares issued and outstanding at
September 30, 2023 and December 31, 2022, respectively (aggregate
liquidation preference of $0 and $48,888 at September 30, 2023 and
December 31, 2022, respectively) |
|
- |
|
|
|
46,844 |
|
|
|
|
|
|
Equity: |
|
|
|
|
Common stock, $0.01 par value: 900,000,000 shares authorized;
45,250,184 and 42,849,489 shares issued and outstanding at
September 30, 2023 and December 31, 2022, respectively |
|
452 |
|
|
|
428 |
|
|
|
|
Additional
paid in capital |
|
654,346 |
|
|
|
635,068 |
|
|
Accumulated
deficit |
|
(191,882 |
) |
|
|
(194,243 |
) |
|
Accumulated
other comprehensive income |
|
33,695 |
|
|
|
29,739 |
|
Total stockholders' equity |
|
496,611 |
|
|
|
470,992 |
|
Non-controlling interest |
|
5,381 |
|
|
|
5,389 |
|
Total equity |
|
501,992 |
|
|
|
476,381 |
|
Total liabilities, preferred stock and equity |
$ |
1,476,510 |
|
|
$ |
1,521,318 |
|
|
|
|
|
|
PLYMOUTH
INDUSTRIAL REIT, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
UNAUDITED |
(In thousands,
except share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months |
|
For the Nine
Months |
|
|
|
Ended September 30, |
|
Ended September 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Rental revenue |
|
$ |
49,736 |
|
|
$ |
47,788 |
|
|
$ |
149,006 |
|
|
$ |
136,120 |
|
Management fee revenue and other income |
|
|
29 |
|
|
|
2 |
|
|
|
58 |
|
|
|
90 |
|
Total revenues |
|
|
49,765 |
|
|
|
47,790 |
|
|
|
149,064 |
|
|
|
136,210 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Property |
|
|
15,754 |
|
|
|
14,495 |
|
|
|
47,398 |
|
|
|
42,369 |
|
|
Depreciation
and amortization |
|
|
22,881 |
|
|
|
24,860 |
|
|
|
70,098 |
|
|
|
71,759 |
|
|
General and
administrative |
|
|
3,297 |
|
|
|
4,078 |
|
|
|
10,586 |
|
|
|
11,776 |
|
Total operating expenses |
|
|
41,932 |
|
|
|
43,433 |
|
|
|
128,082 |
|
|
|
125,904 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(9,473 |
) |
|
|
(8,983 |
) |
|
|
(28,592 |
) |
|
|
(23,303 |
) |
|
Earnings
(loss) in investment of unconsolidated joint venture |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(147 |
) |
|
Loss on
extinguishment of debt |
|
|
(72 |
) |
|
|
- |
|
|
|
(72 |
) |
|
|
(2,176 |
) |
|
Gain on sale
of real estate |
|
|
12,112 |
|
|
|
- |
|
|
|
12,112 |
|
|
|
- |
|
|
(Appreciation) depreciation of warrants |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,760 |
|
Total other income (expense) |
|
|
2,567 |
|
|
|
(8,983 |
) |
|
|
(16,552 |
) |
|
|
(23,866 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
10,400 |
|
|
$ |
(4,626 |
) |
|
$ |
4,430 |
|
|
$ |
(13,560 |
) |
Less: Net income (loss) attributable to non-controlling
interest |
|
$ |
114 |
|
|
$ |
(55 |
) |
|
$ |
46 |
|
|
$ |
(170 |
) |
Net income (loss) attributable to Plymouth Industrial REIT,
Inc. |
|
$ |
10,286 |
|
|
$ |
(4,571 |
) |
|
$ |
4,384 |
|
|
$ |
(13,390 |
) |
Less: Preferred Stock dividends |
|
|
677 |
|
|
|
930 |
|
|
|
2,509 |
|
|
|
3,949 |
|
Less: Series B Preferred Stock accretion to redemption value |
|
|
- |
|
|
|
2,371 |
|
|
|
- |
|
|
|
4,621 |
|
Less: Loss on extinguishment/redemption of Series A Preferred
Stock |
|
|
2,021 |
|
|
|
56 |
|
|
|
2,023 |
|
|
|
80 |
|
Less: Amount allocated to participating securities |
|
|
83 |
|
|
|
62 |
|
|
|
253 |
|
|
|
194 |
|
Net income (loss) attributable to common stockholders |
|
$ |
7,505 |
|
|
$ |
(7,990 |
) |
|
$ |
(401 |
) |
|
$ |
(22,234 |
) |
Net income (loss) per share attributable to common stockholders —
basic |
|
$ |
0.17 |
|
|
$ |
(0.19 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.57 |
) |
Net income (loss) per share attributable to common stockholders —
diluted |
$ |
0.17 |
|
|
$ |
(0.19 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.57 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding — basic |
|
|
44,056,855 |
|
|
|
41,128,421 |
|
|
|
43,108,039 |
|
|
|
38,838,811 |
|
Weighted-average common shares outstanding — diluted |
|
|
44,139,603 |
|
|
|
41,128,421 |
|
|
|
43,108,039 |
|
|
|
38,838,811 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures Definitions
Net Operating Income (NOI): We consider net
operating income, or NOI, to be an appropriate supplemental measure
to net income in that it helps both investors and management
understand the core operations of our properties. We define NOI as
total revenue (including rental revenue and tenant reimbursements)
less property-level operating expenses. NOI excludes depreciation
and amortization, general and administrative expenses, impairments,
gain/loss on sale of real estate, interest expense, and other
non-operating items.
EBITDAre: We
define earnings before interest, taxes, depreciation and
amortization for real estate in accordance with the standards
established by the National Association of Real Estate Investment
Trusts (“NAREIT”). EBITDAre represents net income (loss), computed
in accordance with GAAP, before interest expense, tax, depreciation
and amortization, gains or losses on the sale of rental property,
appreciation (depreciation) of warrants, loss on impairments, and
loss on extinguishment of debt. We believe that EBITDAre is helpful
to investors as a supplemental measure of our operating performance
as a real estate company as it is a direct measure of the actual
operating results of our industrial properties.
Funds from Operations (“FFO”): Funds from
operations, or FFO, is a non-GAAP financial measure that is widely
recognized as a measure of REIT operating performance. We consider
FFO to be an appropriate supplemental measure of our operating
performance as it is based on a net income analysis of property
portfolio performance that excludes non-cash items such as
depreciation. The historical accounting convention used for real
estate assets requires straight-line depreciation of buildings and
improvements, which implies that the value of real estate assets
diminishes predictably over time. Since real estate values rise and
fall with market conditions, presentations of operating results for
a REIT, using historical accounting for depreciation, could be less
informative. In December 2018, NAREIT issued a white paper
restating the definition of FFO. The purpose of the restatement was
not to change the fundamental definition of FFO, but to clarify
existing NAREIT guidance. The restated definition of FFO is as
follows: Net Income (calculated in accordance with GAAP),
excluding: (i) Depreciation and amortization related to real
estate, (ii) Gains and losses from the sale of certain real estate
assets, (iii) Gain and losses from change in control, and (iv)
Impairment write-downs of certain real estate assets and
investments in entities when the impairment is directly
attributable to decreases in the value of depreciable real estate
held by the entity.
We define FFO consistent with the NAREIT definition. Adjustments
for unconsolidated partnerships and joint ventures will be
calculated to reflect FFO on the same basis. Other equity REITs may
not calculate FFO as we do, and, accordingly, our FFO may not be
comparable to such other REITs’ FFO. FFO should not be used as a
measure of our liquidity, and is not indicative of funds available
for our cash needs, including our ability to pay dividends.
Core Funds from Operations (“Core FFO”): Core
FFO represents FFO reduced by dividends paid (or declared) to
holders of our preferred stock, acquisition and transaction related
expenses for transactions not completed, and certain non-cash
operating expenses such as impairment on real estate lease,
appreciation (depreciation) of warrants and loss on extinguishment
of debt. As with FFO, our reported Core FFO may not be comparable
to other REITs’ Core FFO, should not be used as a measure of our
liquidity, and is not indicative of our funds available for our
cash needs, including our ability to pay dividends.
Adjusted Funds from Operations
(“AFFO”): Adjusted funds from operations, or AFFO, is
presented in addition to Core FFO. AFFO is defined as Core FFO,
excluding certain non-cash operating revenues and expenses,
capitalized interest and recurring capitalized expenditures.
Recurring capitalized expenditures include expenditures required to
maintain and re-tenant our properties, tenant improvements and
leasing commissions. AFFO further adjusts Core FFO for certain
other non-cash items, including the amortization or accretion of
above or below market rents included in revenues, straight line
rent adjustments, non-cash equity compensation and non-cash
interest expense.
We believe AFFO provides a useful supplemental measure of our
operating performance because it provides a consistent comparison
of our operating performance across time periods that is comparable
for each type of real estate investment and is consistent with
management’s analysis of the operating performance of our
properties. As a result, we believe that the use of AFFO, together
with the required GAAP presentations, provide a more complete
understanding of our operating performance. As with Core FFO, our
reported AFFO may not be comparable to other REITs’ AFFO, should
not be used as a measure of our liquidity, and is not indicative of
our funds available for our cash needs, including our ability to
pay dividends.
PLYMOUTH
INDUSTRIAL REIT, INC. |
SUPPLEMENTAL
RECONCILIATION OF NON-GAAP DISCLOSURES |
UNAUDITED |
(In thousands,
except share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months |
|
For the Nine
Months |
|
|
|
Ended September 30, |
|
Ended September 30, |
NOI: |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income (loss) |
|
$ |
10,400 |
|
|
$ |
(4,626 |
) |
|
$ |
4,430 |
|
|
$ |
(13,560 |
) |
|
General and
administrative |
|
|
3,297 |
|
|
|
4,078 |
|
|
|
10,586 |
|
|
|
11,776 |
|
|
Depreciation
and amortization |
|
|
22,881 |
|
|
|
24,860 |
|
|
|
70,098 |
|
|
|
71,759 |
|
|
Interest
expense |
|
|
9,473 |
|
|
|
8,983 |
|
|
|
28,592 |
|
|
|
23,303 |
|
|
(Earnings)
loss in investment of unconsolidated joint venture |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
147 |
|
|
Loss on
extinguishment of debt |
|
|
72 |
|
|
|
- |
|
|
|
72 |
|
|
|
2,176 |
|
|
Gain on sale
of real estate |
|
|
(12,112 |
) |
|
|
- |
|
|
|
(12,112 |
) |
|
|
- |
|
|
Appreciation
(depreciation) of warrants |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,760 |
) |
|
Management
fee revenue and other income |
|
|
(29 |
) |
|
|
(2 |
) |
|
|
(58 |
) |
|
|
(90 |
) |
NOI |
|
$ |
33,982 |
|
|
$ |
33,293 |
|
|
$ |
101,608 |
|
|
$ |
93,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months |
|
For the Nine
Months |
|
|
|
Ended September 30, |
|
Ended September 30, |
EBITDAre: |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income
(loss) |
|
$ |
10,400 |
|
|
$ |
(4,626 |
) |
|
$ |
4,430 |
|
|
$ |
(13,560 |
) |
|
Depreciation
and amortization |
|
|
22,881 |
|
|
|
24,860 |
|
|
|
70,098 |
|
|
|
71,759 |
|
|
Interest
expense |
|
|
9,473 |
|
|
|
8,983 |
|
|
|
28,592 |
|
|
|
23,303 |
|
|
Loss on
extinguishment of debt |
|
|
72 |
|
|
|
- |
|
|
|
72 |
|
|
|
2,176 |
|
|
Gain on sale
of real estate |
|
|
(12,112 |
) |
|
|
- |
|
|
|
(12,112 |
) |
|
|
- |
|
|
Appreciation
(depreciation) of warrants |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,760 |
) |
EBITDAre |
|
$ |
30,714 |
|
|
$ |
29,217 |
|
|
$ |
91,080 |
|
|
$ |
81,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months |
|
For the Nine
Months |
|
|
|
Ended September 30, |
|
Ended September 30, |
FFO: |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income
(loss) |
|
$ |
10,400 |
|
|
$ |
(4,626 |
) |
|
$ |
4,430 |
|
|
$ |
(13,560 |
) |
|
Gain on sale
of real estate |
|
|
(12,112 |
) |
|
|
- |
|
|
|
(12,112 |
) |
|
|
- |
|
|
Depreciation
and amortization |
|
|
22,881 |
|
|
|
24,860 |
|
|
|
70,098 |
|
|
|
71,759 |
|
|
Depreciation
and amortization from unconsolidated joint ventures |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
268 |
|
FFO: |
|
$ |
21,169 |
|
|
$ |
20,234 |
|
|
$ |
62,416 |
|
|
$ |
58,467 |
|
|
Preferred
stock dividends |
|
|
(677 |
) |
|
|
(930 |
) |
|
|
(2,509 |
) |
|
|
(3,949 |
) |
|
Acquisition
expenses |
|
|
- |
|
|
|
51 |
|
|
|
85 |
|
|
|
201 |
|
|
Appreciation
(depreciation) of warrants |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,760 |
) |
|
Loss on
extinguishment of debt |
|
|
72 |
|
|
|
- |
|
|
|
72 |
|
|
|
2,176 |
|
Core FFO |
|
$ |
20,564 |
|
|
$ |
19,355 |
|
|
$ |
60,064 |
|
|
$ |
55,135 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares and units outstanding |
|
|
44,922 |
|
|
|
41,906 |
|
|
|
43,966 |
|
|
|
39,614 |
|
Core FFO per share |
|
$ |
0.46 |
|
|
$ |
0.46 |
|
|
$ |
1.37 |
|
|
$ |
1.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months |
|
For the Nine
Months |
|
|
|
Ended September 30, |
|
Ended September 30, |
AFFO: |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Core
FFO |
|
$ |
20,564 |
|
|
$ |
19,355 |
|
|
$ |
60,064 |
|
|
$ |
55,135 |
|
|
Amortization
of debt related costs |
|
|
570 |
|
|
|
565 |
|
|
|
1,708 |
|
|
|
1,597 |
|
|
Non-cash
interest expense |
|
|
(50 |
) |
|
|
676 |
|
|
|
402 |
|
|
|
1,582 |
|
|
Stock
compensation |
|
|
827 |
|
|
|
518 |
|
|
|
2,128 |
|
|
|
1,498 |
|
|
Capitalized
interest |
|
|
(282 |
) |
|
|
(315 |
) |
|
|
(968 |
) |
|
|
(521 |
) |
|
Straight
line rent |
|
|
(216 |
) |
|
|
(1,319 |
) |
|
|
(1,833 |
) |
|
|
(3,045 |
) |
|
Above/below
market lease rents |
|
|
(417 |
) |
|
|
(541 |
) |
|
|
(1,820 |
) |
|
|
(2,632 |
) |
|
Recurring
capital expenditures(1) |
|
|
(1,965 |
) |
|
|
(1,985 |
) |
|
|
(4,863 |
) |
|
|
(5,440 |
) |
AFFO: |
|
$ |
19,031 |
|
|
$ |
16,954 |
|
|
$ |
54,818 |
|
|
$ |
48,174 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares and units outstanding |
|
|
44,922 |
|
|
|
41,906 |
|
|
|
43,966 |
|
|
|
39,614 |
|
AFFO per share |
|
$ |
0.42 |
|
|
$ |
0.40 |
|
|
$ |
1.25 |
|
|
$ |
1.22 |
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes
non-recurring capital expenditures of $8,132 and $20,517 for the
three months ended September 30, 2023 and 2022, respectively, and
$24,185 and $42,960 for the nine months ended September 30 2023 and
2022, respectively. |
|
|
|
|
|
|
|
|
|
|
Contact:Tripp SullivanSCR
PartnersIR@plymouthreit.com
Plymouth Industrial REIT (NYSE:PLYM)
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