Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Plymouth Industrial REIT Inc (PLYM, Financial) secured a strategic transaction with Sixth Street, providing capital for up to $500 million in acquisitions.
- The company enhanced its borrowing capacity by refinancing and upsizing its unsecured credit facilities to $1.5 billion.
- Plymouth Industrial REIT Inc (PLYM) completed a significant acquisition of a Memphis portfolio and has another portfolio under contract in Cincinnati.
- The company's pursuit pipeline is robust, with over 11 million square feet and over $1 billion in size, primarily in existing markets.
- Plymouth Industrial REIT Inc (PLYM) has a vertically integrated platform, managing about 75% of its properties in-house, allowing for close tenant engagement and swift issue resolution.
Negative Points
- Plymouth Industrial REIT Inc (PLYM) faced unexpected tenant challenges, including evictions and legal disputes in Cleveland, affecting occupancy and financials.
- The company experienced a slowdown in leasing activity, attributed to external factors such as the election and economic uncertainty.
- There is a significant vacancy in the St. Louis and Chicago properties, impacting the overall vacancy rate.
- Some leases expected to start generating cash in Q4 have been delayed to 2025, affecting short-term financial performance.
- The company is dealing with legal contentions related to tenant interference, which could delay leasing resolutions and financial recovery.
Q & A Highlights
Q: Can you elaborate on the tenant issues in Cleveland and how they were addressed?
A: Jim Connolly, Executive Vice President of Asset Management, explained that in Cleveland, one tenant abruptly laid off employees and couldn't pay rent, leading to eviction. They are now far along with a new tenant for early 2025 and have a backup tenant. Another tenant left equipment behind, costing $500,000 to clear. Legal action is ongoing, and new prospects are lined up for next year.
Q: Are you engaging more with tenants to foresee potential issues?
A: Jeff Witherell, CEO, stated that they have a vertically integrated platform, managing 75% of properties in-house, engaging daily with tenants. The issues were swift and not portfolio-wide, and they are quickly backfilling spaces.
Q: Can you provide details on the Cincinnati portfolio acquisition?
A: Jeff Witherell mentioned it's a $40 million multi-tenant acquisition expected to close before year-end, with a promising yield and growth similar to the Memphis portfolio.
Q: How does the Sixth Street transaction impact your acquisition strategy?
A: Jeff Witherell explained that the transaction provides capital for acquisitions, with three portfolios in negotiation. They are focusing on good starting yields and growth, with Sixth Street providing ample capital for expansion.
Q: What is the outlook for growth in 2025 given the current challenges?
A: Jeff Witherell expressed confidence in significant growth, citing opportunities to mark the market in Memphis and Cincinnati, and prospects for leasing up vacant spaces in Cleveland and St. Louis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
