Griffin Announces Fiscal 2020 Fourth Quarter Leasing and Update on Rent Collection
Griffin Industrial Realty (Nasdaq: GRIF) reported solid leasing activity during the fourth quarter of 2020, with a total of 498,384 square feet renewed or leased, achieving a 92.3% portfolio occupancy rate. New leases included an early renewal with a Fortune 500 subsidiary and strong rent collections, with 99.8% collected across September to November. However, rent growth remained modest due to high initial rental rates set previously. Overall, Griffin demonstrated resilience against COVID-19 impacts, maintaining substantial occupancy and low rent relief requests.
- Leased 498,384 square feet in Q4 2020, with 94.3% of portfolio leased.
- Achieved 99.8% rent collection rate across September to November 2020.
- Renewed significant leases, including 131,000 and 280,000 square feet in Lehigh Valley.
- Rent growth modest at only 0.5% on cash basis due to previously high initial rates.
- Only one new lease signed in the 2020 fourth quarter, indicating limited new demand.
NEW YORK, Dec. 15, 2020 (GLOBE NEWSWIRE) -- Griffin Industrial Realty, Inc. (Nasdaq: GRIF) (“Griffin” or the “Company”) announced the following updates on leasing and the impact of the COVID-19 pandemic on rent collections:
Leasing
Griffin reported the following for its industrial/warehouse portfolio for the three months ended November 30, 2020 (the “2020 fourth quarter”):
Number of Leases1 | Square Feet | Weighted Avg. Lease Term in Years | Weighted Avg. Lease Costs PSF per Year2 | Weighted Avg. Rent Growth3 | |||||
Straight-line Basis | Cash Basis | ||||||||
New Leases | 1 | 8,400 | 3.0 | 2.5 | % | (0.5 | %) | ||
Renewals | 5 | 489,984 | 5.0 | 13.6 | % | 0.5 | % | ||
Total / Avg. | 6 | 498,384 | 5.0 | $0.52 | 13.3 | % | 0.5 | % |
Griffin’s industrial/warehouse portfolio’s percentage leased was as follows:
Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | |||||
Percentage Leased | 94.3 | % | 94.3 | % | 94.3 | % | 94.9 | % |
Percentage Leased – Stabilized Properties4 | 95.4 | % | 99.7 | % | 99.7 | % | 99.1 | % |
Approximately 411,000 square feet of the 498,000 square feet renewed or leased during this quarter related to two lease renewals of existing tenants in the Lehigh Valley of Pennsylvania. One of these leases was an early 5-year renewal of 131,000 square feet leased to the subsidiary of a Fortune 500 company, increasing the remaining lease term to nearly 7 years, and the other was a 5-year renewal of 280,000 square feet leased to the North American subsidiary of a multi-national provider of workplace equipment and technologies.
The renewal for 131,000 square feet was an early 5-year renewal, negotiated with the tenant as part of a response to their request for rent relief in the second fiscal quarter of 2020, during the early days of the COVID-19 pandemic in the United States. Griffin agreed to provide a
The renewal for 280,000 square feet was with the tenant who pre-leased a new building that Griffin constructed in the Lehigh Valley approximately five years ago. In connection with the original lease, the tenant required above standard improvements which Griffin provided as a turn-key service. The cost of these improvements was reflected in the base rental rate for the initial term of the original lease, resulting in that lease’s initial base rental rate being approximately
As of November 30, 2020, Griffin’s thirty industrial/warehouse buildings aggregated approximately 4,206,000 square feet and represented
For Griffin’s office/flex portfolio, one vacant building of approximately 40,000 square feet was sold during the quarter for gross proceeds of
Griffin’s total real estate portfolio of approximately 4,598,000 square feet was
Rent Collections/COVID-19 Impact
COVID-19 has not had a material impact on the Company’s rent collection during the 2020 fourth quarter and as of the date of this press release. Griffin collected
About Griffin
Griffin Industrial Realty, Inc. is a real estate business principally engaged in developing, acquiring, managing and leasing industrial/warehouse properties. Griffin owns 41 buildings totaling approximately 4.6 million square feet (4.2 million of which is industrial/warehouse space) in Connecticut, Pennsylvania, North Carolina and Florida in addition to over 3,400 acres of undeveloped land.
1 Excludes new leases and renewals with an initial term of twelve months or less.
2 Weighted average lease costs per square foot per year reflects total lease costs (tenant improvements, leasing commissions and legal costs) per square foot per year of the lease term.
3 Weighted average rent growth reflects the percentage change of annualized rental rates between the previous leases and the current leases. The rental rate change on a straight-line basis represents average annual base rental payments on a straight-line basis for the term of each lease including free rent periods. Cash basis rent growth represents the change in starting rental rates per the lease agreement on new and renewed leases signed during the period, as compared to the previous ending rental rates for that same space. The cash rent growth calculation excludes free rent periods. The change in rental rate calculations excludes leases for first generation space on properties acquired or developed by Griffin.
4 Stabilized properties reflect buildings that have reached
CONTACT:
Anthony Galici
Chief Financial Officer
(860) 286-1307
agalici@griffinindustrial.com
Ashley Pizzo
Director, IR & Capital Markets
(212) 218-7914
apizzo@griffinindustrial.com
FAQ
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