Plymouth Industrial REIT Adds to its Presence in Cincinnati with Acquisition of Small Bay Industrial Portfolio for $20.1 Million

Rhea-AI Summary

Plymouth Industrial REIT (NYSE: PLYM) has acquired a portfolio of nine small bay industrial properties in Cincinnati, Ohio for $20.1 million, yielding an initial NOI of 6.8%. The properties span 258,082 square feet and are 96.9% leased to 23 tenants with a 2.75-year weighted average lease term.

Additionally, PLYM has contracted a second tranche of four buildings totaling 240,578 square feet for $17.9 million, expected to close in Q1 2025. This portion yields 7.3% initially and is 98% leased to nine tenants with a 3.75-year weighted average lease term. The acquisition strengthens PLYM's Cincinnati presence to over 3 million square feet, with properties purchased below replacement cost and potential for improved returns through leasing and management.

Positive

• Initial NOI yield of 6.8% on first tranche and 7.3% on second tranche
• High occupancy rates: 96.9% for first tranche and 98% for second tranche
• Properties acquired below replacement cost
• Expansion of Cincinnati portfolio to over 3 million square feet
• Potential for higher returns through lease rate improvements

Negative

• Relatively short weighted average lease terms (2.75 and 3.75 years)
• Second tranche closing subject to conditions and not guaranteed

Insights

Real Estate Investment Analyst

The acquisition of Cincinnati industrial properties at $20.1 million with a 6.8% NOI yield represents a strategic expansion in a key market. The portfolio's 96.9% occupancy rate across 23 tenants provides stable income diversification. The below-replacement-cost purchase price and below-market rents create significant value-add potential through lease rate increases. The second tranche at $17.9 million with a higher 7.3% yield further strengthens the investment case. The short weighted average lease terms of 2.75 and 3.75 years actually present opportunities to capture market rent upside in the near term. Small bay industrial properties typically command higher rents per square foot and offer greater tenant diversification compared to larger facilities. Cincinnati's strategic location and growing industrial market make this a well-positioned acquisition for potential NOI growth.

Market Research Analyst

The Cincinnati industrial market has shown remarkable resilience and growth potential. The acquisition expands Plymouth's footprint to over 3 million square feet in this strategic logistics hub, demonstrating confidence in the market's fundamentals. Small bay industrial properties are particularly attractive in the current market environment, as they cater to a diverse tenant base of small and medium-sized businesses, reducing single-tenant risk. The 98% occupancy rate in the second tranche indicates strong demand in the submarket. The strategy of acquiring assets below replacement cost provides a competitive advantage and downside protection, while the below-market rents offer built-in growth potential through mark-to-market opportunities. This transaction aligns with broader industrial real estate trends favoring last-mile distribution and multi-tenant facilities.

Second Tranche of Portfolio to Close in First Quarter of 2025 for $17.9 Million

BOSTON, Dec. 20, 2024 (GLOBE NEWSWIRE) -- Plymouth Industrial REIT, Inc. (NYSE: PLYM) (the “Company”) today announced it has acquired a portfolio of primarily small bay industrial properties in Cincinnati, Ohio for $20.1 million, which equates to an anticipated initial NOI yield of 6.8%. The portfolio consists of nine buildings totaling 258,082 square feet that are currently 96.9% leased to 23 tenants with a weighted average lease term of approximately 2.75 years.

The Company has a second tranche of this portfolio that is under contract for $17.9 million, which equates to an anticipated initial yield of 7.3%, and is expected to close in the first quarter of 2025, contingent on the satisfaction of customary closing conditions, which cannot be assured. This portfolio consists of four buildings in Cincinnati totaling 240,578 square feet that are currently 98.0% leased to nine tenants with a weighted average lease term of approximately 3.75 years.

Jeff Witherell, Chairman and CEO of Plymouth Industrial REIT, noted, “We have an active pipeline of new investment opportunities we are pursuing in 2025. This portfolio is the first of these new transactions and is a strong addition to our existing presence that will now total over 3 million square feet in the Cincinnati market. We have purchased these buildings well below replacement cost with below-market rents. Consistent with the plans we have previously outlined to deploy our available capital, we expect to improve these initial returns significantly over the next two years through leasing and asset management.”

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, as well as statements regarding the timing of the consummation of the transactions, if at all, and the anticipated benefits therefrom, 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 statements, many of which may be beyond our control. 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.

Contacts:
Plymouth Industrial REIT, Inc.
Tripp Sullivan
SCR Partners
IR@plymouthreit.com

FAQ

How much did PLYM pay for the Cincinnati industrial portfolio acquisition?

PLYM paid $20.1 million for the first tranche of nine buildings and has contracted to pay $17.9 million for the second tranche, totaling $38 million for the complete portfolio.

What is the occupancy rate of PLYM's new Cincinnati acquisitions?

The first tranche is 96.9% leased to 23 tenants, while the second tranche is 98% leased to nine tenants.

What are the NOI yields for PLYM's Cincinnati portfolio acquisition?

The first tranche has an anticipated initial NOI yield of 6.8%, while the second tranche is expected to yield 7.3%.

When will PLYM close the second tranche of the Cincinnati portfolio?

The second tranche is expected to close in the first quarter of 2025, subject to customary closing conditions.

How many square feet of industrial space did PLYM acquire in Cincinnati?

The total acquisition includes 498,660 square feet, with 258,082 square feet in the first tranche and 240,578 square feet in the second tranche.