Plymouth Industrial REIT Provides Activity Update for Fourth Quarter 2023

Rhea-AI Summary

Plymouth Industrial REIT, Inc. (NYSE: PLYM) announced its leasing, development, and disposition activity for Q4 2023, including details for its earnings conference call on February 22, 2024. The company experienced a significant increase in rental rates and portfolio occupancy, with plans to reduce debt and redeploy capital. Leasing, development, and disposition activities were detailed, along with information on the upcoming earnings call.

Insights

Market Research Analyst

Plymouth Industrial REIT's announcement regarding its leasing, development and disposition activities for the fourth quarter of 2023 could signal robust health in the industrial real estate sector. The reported 23.4% increase in rental rates and 98.3% total portfolio occupancy are indicative of strong demand and the ability to command higher rents, which is typically a positive sign for revenue growth. This performance outpaces the historical average occupancy rates for industrial REITs, which usually hover around 95%.

The strategic disposition of assets, leading to a 6.3% cap rate and an 18.2% IRR, showcases efficient capital recycling and a solid return on investment, reflecting well on management's ability to execute its business plan. The proactive marketing of their largest lease expiration in 2024 suggests a forward-thinking approach to asset management, potentially mitigating risks associated with tenant turnover.

Financial Analyst

The financial implications of Plymouth's Q4 activities are multifaceted. The increase in rental rates and high occupancy rates should bolster the company's NOI (Net Operating Income), which is a critical measure of profitability for REITs. Additionally, the reduction of debt from the proceeds of asset sales aligns with conservative financial management, potentially improving the company's credit profile and reducing interest expense.

The capitalization rate (cap rate) of 6.3% for the Marlton property sale is within the normal range for industrial properties, suggesting that Plymouth is transacting at market-consistent valuations. Investors should note that cap rates inversely reflect property value — lower cap rates often indicate higher property values and vice versa.

Real Estate Investment Expert

The leasing and development activity within the 'Golden Triangle' positions Plymouth Industrial REIT in a strategic location that could benefit from regional economic growth. The mention of development lease-ups and cash rent increases points to a strong market absorption rate for new industrial spaces, which is crucial for the success of REITs focused on development.

Moreover, the company's ability to execute over 40% of its 2024 lease expirations ahead of time with a 14.6% increase in rental rates minimizes the risk of future revenue dips due to unleased space. This preemptive leasing strategy is a sign of a strong tenant demand and could provide a stable income stream for the REIT.

Announces Details for Fourth Quarter Earnings Conference Call

BOSTON, Jan. 04, 2024 (GLOBE NEWSWIRE) -- Plymouth Industrial REIT, Inc. (NYSE: PLYM) announced its leasing, development and disposition activity for the fourth quarter of 2023. The Company also announced details for its fourth quarter earnings conference call and webcast to be held on February 22, 2024.

Jeff Witherell, Chief Executive Officer and Co-Founder of Plymouth, noted, “The Golden Triangle is creating new opportunities for us to leverage our leasing and asset management expertise with cash rent increases and development lease up consistent with our expectations. The ability to capture strong returns with $37 million of select dispositions accelerated our plans to reduce debt in 2023 and should allow us to redeploy capital within the Golden Triangle.”

Leasing Activity
Leases commencing during the fourth quarter ended December 31, 2023 totaled an aggregate of 966,167 square feet, all of which are associated with terms of at least six months. The Company will experience a 23.4% increase in rental rates on a cash basis from these leases. These leases included 664,157 square feet of renewal leases and 302,010 square feet of new leases. Total portfolio occupancy at December 31, 2023 was 98.3% and reflects recent new developments now in service. Same store occupancy at December 31, 2023 was 98.6%.

Executed leases scheduled to commence during 2023, excluding leases associated with new construction, total an aggregate of 5,599,943 square feet, all of which are associated with terms of at least six months. The Company will experience a 21.0% increase in rental rates on a cash basis from these leases. These leases included 3,945,024 square feet of renewal leases and 1,654,919 square feet of new leases of which 109,098 square feet was vacant at the start of 2023.

The Company has already executed 2,860,339 square feet of leases that will commence during 2024, or 41.4% of its total 2024 expirations, with a 14.6% increase in rental rates on a cash basis (29.3% of these leases were associated with contractual renewals). The Company’s largest remaining lease expiration in 2024 is its 769,500-square-foot Class A industrial building in the Metro East submarket of St. Louis. Although the tenant is not required to notify the Company that it is exercising its renewal option until January 31, 2024, Plymouth is proactively marketing the space in the event that the current tenant does not in fact renew. The in-place lease, which represents approximately 2.2% of the Company’s rentable square feet, expires on July 31, 2024. The Company intends to provide an update on the status of this lease when it reports fourth quarter 2023 earnings results.

Development Activity
During the fourth quarter, Plymouth delivered a fully leased industrial building in Jacksonville totaling 39,750 square feet. The final project in the first phase of its development program, a 52,920-square-foot, fully leased building in Jacksonville, is expected to come online in the third quarter of 2024. During the fourth quarter, Plymouth also signed a seven-year, 108,000-square-foot lease at its 180,000-square-foot industrial building in Atlanta, bringing the new development to 100% occupancy.

Disposition Activity
During the fourth quarter, Plymouth completed the previously announced sale of its 156,634-square-foot industrial building in Marlton, New Jersey for $16.8 million. The Company intends to use the net proceeds of $16.2 million to pay down outstanding borrowings on its credit facility. The sale yielded a 6.3% cap rate on in-place NOI and an IRR of 18.2% over a nine-year hold.

Fourth Quarter 2023 Earnings Call
The Company plans to issue its earnings release before the market opens on Thursday, February 22, 2024, and will host a conference call and live audio webcast, both open for the general public to hear, later that day 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 February 29, 2024, by dialing (877) 344-7529 and entering the replay access code, 8599062.

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 one year.

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 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.

Contact:
Tripp Sullivan
SCR Partners
IR@plymouthreit.com

FAQ

What did Plymouth Industrial REIT, Inc. (NYSE: PLYM) announce?

Plymouth announced its leasing, development, and disposition activity for Q4 2023, along with details for its fourth-quarter earnings conference call on February 22, 2024.

What did Plymouth's leasing activity look like in Q4 2023?

Leases commencing in Q4 2023 totaled 966,167 square feet, with a 23.4% increase in rental rates on a cash basis. The total portfolio occupancy was 98.3% at the end of December 2023.

What development activities did Plymouth undertake in Q4 2023?

Plymouth delivered a fully leased industrial building in Jacksonville and signed a seven-year lease at its 180,000-square-foot industrial building in Atlanta, bringing it to 100% occupancy.

What was Plymouth's disposition activity in Q4 2023?

Plymouth completed the sale of its 156,634-square-foot industrial building in Marlton, New Jersey, using the net proceeds to pay down outstanding borrowings on its credit facility.

When is Plymouth's fourth-quarter earnings conference call?

The earnings conference call is scheduled for February 22, 2024, at 9:00 a.m. Eastern Time, with the earnings release to be issued before the market opens on the same day.