INDUS Realty Trust (INDT) 10-Q 2022 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2022

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM              TO             

Commission File Number 1-12879

INDUS REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland	06-0868496
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
641 Lexington Avenue, New York, New York	10022
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code (212) 218-7910

______________________________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	INDT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of Common Stock outstanding at November 3, 2022: 10,192,416

INDUS REALTY TRUST, INC.

FORM 10-Q

Index

PART I -		FINANCIAL INFORMATION
	ITEM 1	Financial Statements
		Consolidated Balance Sheets (unaudited) as of September 30, 2022 and December 31, 2021	3
		Consolidated Statements of Operations (unaudited) for the Three Months and Nine Months Ended September 30, 2022 and 2021	4
		Consolidated Statements of Comprehensive Income (unaudited) for the Three Months and Nine Months Ended September 30, 2022 and 2021	5
		Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Three Months and Nine Months Ended September 30, 2022 and 2021	6
		Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2022 and 2021	7
		Notes to Consolidated Financial Statements (unaudited)	8
	ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	33
	ITEM 4	Controls and Procedures	33
PART II -		OTHER INFORMATION
	ITEM 1	Legal Proceedings	34
	ITEM 1A	Risk Factors	34
	ITEM 2	Not Applicable
	ITEM 3-5	Not Applicable
	ITEM 6	Exhibits	34
		SIGNATURES	39

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

INDUS REALTY TRUST, INC.

Consolidated Balance Sheets

(dollars in thousands, except per share data)

(unaudited)

	September 30, 2022	December 31, 2021
ASSETS
Real estate assets at cost, net	$ 479,561	$ 387,647
Cash and cash equivalents	25,741	150,263
Restricted cash	267	10,644
Interest rate swap assets	7,573	188
Assets of discontinued operations	9,585	7,990
Other assets	45,054	33,914
Total assets	$ 567,781	$ 590,646
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage loans and construction loan, net of debt issuance costs	$ 80,172	$ 169,818
Delayed draw term loan, net of debt issuance costs	58,639	—
Deferred revenue	7,377	7,365
Accounts payable and accrued liabilities	11,608	9,671
Interest rate swap liabilities	—	3,995
Dividends payable	1,631	1,629
Liabilities of discontinued operations	859	832
Other liabilities	10,099	11,259
Total liabilities	170,385	204,569
Stockholders' Equity
Common stock, par value $0.01 per share, 50,000,000 shares authorized, 10,192,416 and 10,183,730 shares issued and outstanding, respectively	102	102
Additional paid-in capital	400,963	399,754
Accumulated deficit	(11,554)	(10,869)
Accumulated other comprehensive income (loss)	7,885	(2,910)
Total stockholders' equity	397,396	386,077
Total liabilities and stockholders' equity	$ 567,781	$ 590,646

See Notes to Consolidated Financial Statements.

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INDUS REALTY TRUST, INC.

Consolidated Statements of Operations

(dollars and share count in thousands, except per share data)

(unaudited)

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Rental revenue	$	13,044	$	10,243	$	36,291	$	29,076
Expenses:
Operating expenses of rental properties		1,194		1,040		3,533		3,409
Real estate taxes		1,659		1,601		4,643		4,341
Depreciation and amortization expense		4,823		3,739		13,301		10,048
General and administrative expenses		2,906		2,283		8,238		7,977
Total expenses		10,582		8,663		29,715		25,775
Other income (expense):
Interest expense		(1,507)		(1,700)		(3,178)		(5,160)
Impairment of real estate assets		—		(3,000)		—		(3,000)
Change in fair value of financial instruments		—		(2,027)		—		(2,746)
Gain on sales of real estate assets		—		1,450		—		1,792
Investment and other income		90		119		195		241
Losses on early extinguishment of debt		(189)		—		(653)		—
Other expense		(26)		—		(32)		—
		(1,632)		(5,158)		(3,668)		(8,873)
Income (loss) from continuing operations before income taxes		830		(3,578)		2,908		(5,572)
Income tax (provision) benefit		—		(24)		585		(24)
Income (loss) from continuing operations		830		(3,602)		3,493		(5,596)
Discontinued operations:
Income from discontinued operations		286		55		511		130
Gain on sale of equipment		—		—		203		—
		286		55		714		130
Net income (loss)	$	1,116	$	(3,547)	$	4,207	$	(5,466)
Income (loss) per Common Share-Basic:
Income (loss) from continuing operations	$	0.08	$	(0.47)	$	0.34	$	(0.78)
Income from discontinued operations	$	0.03	$	0.01	$	0.07	$	0.02
Net income (loss) per common share	$	0.11	$	(0.46)	$	0.41	$	(0.76)
Income (loss) per Common Share-Diluted:
Income (loss) from continuing operations	$	0.08	$	(0.47)	$	0.34	$	(0.78)
Income from discontinued operations	$	0.03	$	0.01	$	0.07	$	0.02
Net income (loss) per common share	$	0.11	$	(0.46)	$	0.41	$	(0.76)
Weighted average shares outstanding - basic		10,192		7,724		10,188		7,231
Weighted average shares outstanding - diluted		10,292		7,724		10,365		7,231

See Notes to Consolidated Financial Statements.

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INDUS REALTY TRUST, INC.

Consolidated Statements of Comprehensive Income (Loss)

(dollars in thousands)

(unaudited)

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net income (loss)	$	1,116	$	(3,547)	$	4,207	$	(5,466)
Other comprehensive income (loss):
Reclassifications included in net income (loss)		46		510		(403)		1,504
Unrealized gain on cash flow hedges		7,387		114		11,198		2,083
Total other comprehensive income		7,433		624		10,795		3,587
Total comprehensive income (loss)	$	8,549	$	(2,923)	$	15,002	$	(1,879)

See Notes to Consolidated Financial Statements.

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INDUS REALTY TRUST, INC.

Consolidated Statements of Changes in Stockholders’ Equity

(dollars in thousands)

(unaudited)

For the Three Months Ended September 30, 2022 and 2021
	Shares of			Additional				Accumulated Other
	Common Stock	Common		Paid-in		Accumulated		Comprehensive
	Issued	Stock		Capital		Deficit		Income (Loss)		Total
Balance at June 30, 2022	10,192,316	$	102	$	400,556	$	(11,039)	$	452	$	390,071
Stock-based compensation expense	—		—		404		—		—		404
Exercise of stock options	100		—		3		—		—		3
Common stock dividend, $0.16 per share	—		—		—		(1,631)		—		(1,631)
Net income	—		—		—		1,116		—		1,116
Total other comprehensive income, net of tax	—		—		—		—		7,433		7,433
Balance at September 30, 2022	10,192,416	$	102	$	400,963	$	(11,554)	$	7,885	$	397,396
Balance at June 30, 2021	7,721,671	$	77	$	233,907	$	(24,144)	$	(4,892)	$	204,948
Stock-based compensation expense	—		—		305		—		—		305
Exercise of stock options	9,052		—		239		—		—		239
Reclassification of warrants	—		—		12,192		—		—		12,192
Common stock dividend, $0.15 per share	—		—		—		(1,159)		—		(1,159)
Net loss	—		—		—		(3,547)		—		(3,547)
Total other comprehensive income, net of tax	—		—		—		—		624		624
Balance at September 30, 2021	7,730,723	$	77	$	246,643	$	(28,850)	$	(4,268)	$	213,602

For the Nine Months Ended September 30, 2022 and 2021
	Shares of			Additional				Accumulated Other
	Common Stock	Common		Paid-in		Accumulated		Comprehensive
	Issued	Stock		Capital		Deficit		Income (Loss)		Total
Balance at December 31, 2021	10,183,730	$	102	$	399,754	$	(10,869)	$	(2,910)	$	386,077
Equity awards issued	3,371		—		—		—		—		—
Stock-based compensation expense	—		—		1,085		—		—		1,085
Shares acquired to satisfy employee tax withholding requirements on stock awards	(285)		—		(23)		—		—		(23)
Exercise of stock options	5,600		—		147		—		—		147
Common stock dividends, $0.48 per share	—		—		—		(4,892)		—		(4,892)
Net income	—		—		—		4,207		—		4,207
Total other comprehensive income, net of tax	—		—		—		—		10,795		10,795
Balance at September 30, 2022	10,192,416	$	102	$	400,963	$	(11,554)	$	7,885	$	397,396
Balance at December 31, 2020	5,663,040	$	57	$	116,732	$	(9,817)	$	(7,855)	$	99,117
Stock-based compensation expense	—		—		810		—		—		810
Exercise of stock options	15,422		—		407		—		—		407
Sale of common stock, net	1,927,049		19		108,657		—		—		108,676
Special dividend	125,212		1		7,845		(11,250)		—		(3,404)
Reclassification of warrants	—		—		12,192		—		—		12,192
Common stock dividends, $0.30 per share	—		—		—		(2,317)		—		(2,317)
Net loss	—		—		—		(5,466)		—		(5,466)
Total other comprehensive income, net of tax	—		—		—		—		3,587		3,587
Balance at September 30, 2021	7,730,723	$	77	$	246,643	$	(28,850)	$	(4,268)	$	213,602

See Notes to Consolidated Financial Statements.

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INDUS REALTY TRUST, INC.

Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)

	For the Nine Months Ended
	September 30, 2022		September 30, 2021
Net income (loss)	$	4,207	$	(5,466)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		13,537		10,702
Noncash rental revenue including straight-line rents		(3,424)		(1,610)
Amortization of terminated swap agreements and related income tax benefit		(1,812)		—
Stock-based compensation expense		1,085		810
Amortization of debt issuance costs		719		819
Losses on early extinguishment of debt		653		—
Gain on sales of equipment		(203)		—
Change in fair value of financial instruments		—		2,746
Gain on sales of real estate assets		—		(1,792)
Noncash impairment charge		—		3,000
Changes in assets and liabilities:
Other assets		(2,765)		(5,110)
Accounts payable and accrued liabilities		1,822		(331)
Deferred revenue		1,692		1,371
Other liabilities		(1,470)		553
Net cash provided by operating activities		14,041		5,692
Investing activities:
Acquisitions of land and buildings		(63,413)		(77,954)
Additions to real estate assets		(43,322)		(33,692)
Deposits on building and land acquisitions		(5,288)		(6,455)
Deferred leasing costs and other		(1,493)		(2,490)
Proceeds from sale of equipment, net of expenses		250		—
Proceeds from sales of real estate assets, net of expenses		—		9,982
Net cash used in investing activities		(113,266)		(110,609)
Financing activities:
Principal payments on mortgage loans and construction loan		(90,720)		(3,826)
Proceeds from delayed draw term loan and construction loan		60,069		14,662
Dividends paid to stockholders		(4,890)		(5,721)
Payment of debt issuance costs		(1,507)		(1,863)
Proceeds from termination of interest rate swap agreements		1,227		—
Proceeds from exercise of stock options		147		407
Proceeds from sale of common stock		—		108,676
Net cash (used in) provided by financing activities		(35,674)		112,335
Net (decrease) increase in cash and cash equivalents and restricted cash		(134,899)		7,418
Cash and cash equivalents and restricted cash at beginning of period		160,907		30,675
Cash and cash equivalents and restricted cash at end of period	$	26,008	$	38,093

See Notes to Consolidated Financial Statements.

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INDUS REALTY TRUST, INC.

Notes to Consolidated Financial Statements

(dollars in thousands unless otherwise noted, except per share data)

(unaudited)

1.    Summary of Significant Accounting Policies

Basis of Presentation

INDUS Realty Trust, Inc., a Maryland corporation, (“INDUS” or the “Company”) is a real estate business that has elected to be taxed as a real estate investment trust (“REIT”) as defined in the Internal Revenue Service Code of 1986, as amended (the “Code”) and is principally engaged in developing, acquiring, managing and leasing high-quality industrial and logistics properties in select supply-constrained and high growth markets in the United States. The Company conducts substantially all of its business through its operating partnership, INDUS RT, LP, a Maryland limited partnership (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. As used herein, the “Company” refers to INDUS Realty Trust, Inc. and its consolidated subsidiaries and partnerships, including the Operating Partnership, except where context otherwise requires.

As of September 30, 2022, INDUS owned 42 industrial/logistics properties aggregating approximately 6.1 million square feet located in Connecticut, Pennsylvania, North Carolina, South Carolina and Florida. INDUS seeks to add to its property portfolio through the acquisition and development of land or the acquisition of modern, market-appropriate logistics buildings in the regions it targets, all of which can serve multiple drivers of demand in the modern supply chain. INDUS also owns undeveloped land parcels, much of which is not consistent with the Company’s core industrial and logistics strategy, and, as such, the Company sells certain parcels periodically over time.

The results of operations for the three months and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year. Certain amounts from the prior year periods have been reclassified to conform to the current presentation.

INDUS’ consolidated financial statements reflect its accounts and its consolidated subsidiaries. INDUS consolidates the subsidiaries it controls through (i) voting rights or similar rights or (ii) by means other than voting rights if INDUS is the primary beneficiary of a variable interest entity (“VIE”). There have been no VIEs in which INDUS is not a primary beneficiary.

These financial statements have been prepared in conformity with the standards of accounting measurement set forth by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 270, “Interim Reporting” and in accordance with the accounting policies stated in INDUS’ audited consolidated financial statements for the year ended December 31, 2021 included in INDUS’ Annual Report on Form 10-K, filed with the SEC on March 11, 2022. These financial statements should be read in conjunction with the Notes to Consolidated Financial Statements appearing in that report. All adjustments, comprising only normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of results for the interim periods, have been reflected and all intercompany transactions have been eliminated.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The actual results experienced by INDUS may differ materially and adversely from INDUS’ estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

There are various accounting updates recently issued which represent technical corrections to the accounting literature or apply to specific industries. INDUS does not expect the application of any of these updates to have an impact on its consolidated financial statements.

Cash, Cash Equivalents and Restricted Cash

INDUS considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. INDUS’ restricted cash primarily consists of reserves for real estate taxes as required by certain mortgage note obligations as well as proceeds from property sales held by a qualified intermediary to be used for a tax deferred Section 1031 Like-Kind Exchange (“1031 Like-Kind Exchange”) under the Code.

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The following table presents a reconciliation of cash, cash equivalents and restricted cash:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	25,741	$	150,263
Restricted cash		267		10,644
Total cash, cash equivalents and restricted cash	$	26,008	$	160,907

Discontinued Operations

Operating results and the gain or loss on sale for a component or groups of components, whose disposition represents a strategic shift that has or will have a major effect on the Company’s operations and financial results, are presented as discontinued operations in the consolidated statements of operations and the assets and liabilities of the component to be disposed of are classified as held for sale. In March 2022, INDUS commenced the sale process to fully exit its legacy investment in its remaining office/flex properties (“Office/Flex Portfolio”). The Office/Flex Portfolio is comprised of seven buildings totaling approximately 175,000 square feet located in Bloomfield, Connecticut. Additionally, INDUS intends to sell an approximately 18,000 square foot storage building that had been used in the operations of the Office/Flex Portfolio and is located within the same business park. In March 2022, the Company closed its Landscaping Division which primarily served the Office/Flex Portfolio and recorded a gain on sale of $203 for the nine months ended September 30, 2022. The disposition of the Office/Flex Portfolio represents a strategic shift and following the sale, the Company will be positioned as a pure-play industrial/logistics real estate business with a modern portfolio located in select high-growth markets. The Office/Flex Portfolio is recorded as a discontinued operation as of September 30, 2022 and for all prior periods presented, the related assets and liabilities are presented as assets and liabilities of discontinued operations on the consolidated balance sheets and the related operating results are presented as income (loss) from discontinued operations on the consolidated statements of operations. In September 2022, the Company signed a definitive agreement for the sale of the Office/Flex Portfolio at a gross purchase price of $11,000 and expects to close the transaction in the fourth quarter of 2022 (see Note 4).

Reclassifications

Reclassifications were made related to discontinued operations as discussed in Discontinued Operations above. These reclassifications did not affect the Company's total financial position, results of operations or cash flows.

2. Sales of Common Stock

Public Offering

On February 2, 2021, INDUS filed a universal shelf registration statement on Form S-3 (the “Universal Shelf”) with the SEC. Under the Universal Shelf, the Company could offer and sell up to $500,000 of a variety of securities including the Company’s common stock (“Common Stock”), preferred stock, warrants, depositary shares, units or any combination of such securities. Under the Universal Shelf, the Company may periodically offer one or more types of securities in amounts, at prices and on terms announced.

On March 5, 2021, under its Universal Shelf, INDUS completed an underwritten public offering of 1,750,000 shares of its Common Stock at a price to the underwriters of $56.85 per share. On March 15, 2021, the underwriters exercised their option to purchase an additional 177,049 shares of Common Stock from INDUS at the same price. INDUS received net proceeds of $108,676, after expenses, from the aggregate of 1,927,049 shares issued on March 5, 2021, and March 15, 2021. The Company has used the proceeds from the issuance of its Common Stock to finance its acquisition and development pipeline and for other corporate purposes.

On July 9, 2021, INDUS and INDUS RT, LP filed an updated universal shelf registration statement on Form S-3 (the “Updated Universal Shelf”) with the SEC. Under the Updated Universal Shelf, the Company may offer and sell up to $500,000 of a variety of securities including Common Stock, preferred stock, debt securities, warrants, depositary shares, rights or units, INDUS RT, LP’s debt securities or guarantees thereof by the Company, or any combination of such securities during the three year period that commenced on August 10, 2021. Under the Updated Universal Shelf, which adds debt securities of the Company and of INDUS RT, LP that the Universal Shelf did not include, the Company may periodically offer one or more types of securities in amounts, at prices and on terms announced. When INDUS obtains additional capital by issuing equity, the interests of its existing stockholders will be diluted. If the Company incurs additional indebtedness, that indebtedness may impose financial and other

9

covenants that may significantly restrict INDUS’s operations. Effective September 1, 2021, the Company’s Board of Directors approved the establishment of an “at the market” equity issuance program (“ATM Program”), pursuant to which the Company may offer and sell Common Stock with an aggregate gross sales price of up to $100,000. There have not been any issuances of Common Stock under the ATM Program.

3.    Fair Value

INDUS applies the provisions of ASC 820, “Fair Value Measurement,” which establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs, when measuring fair value. The categorization of an asset or liability within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value, as follows:

Level 1 applies to assets or liabilities for which there are quoted market prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 2 assets and liabilities include INDUS’ interest rate swap agreements (see Note 5). These inputs are readily available in public markets or can be derived from information available in publicly quoted markets, therefore, INDUS has categorized these derivative instruments as Level 2 within the fair value hierarchy.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The following are INDUS’ financial assets and liabilities carried at fair value and measured at fair value on a recurring basis:

	September 30, 2022
	Quoted Prices in		Significant		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)
Interest rate swap assets	$	—	$	7,573	$	—
Interest rate swap liabilities	$	—	$	—	$	—

	December 31, 2021
	Quoted Prices in		Significant		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)
Interest rate swap asset	$	—	$	188	$	—
Interest rate swap liabilities	$	—	$	3,995	$	—

The amounts included in the consolidated financial statements for cash and cash equivalents, leasing receivables from tenants, accounts payable and accrued liabilities and interest rate swap assets and liabilities approximate their fair values because of the short-term maturities of these instruments. The fair values of the interest rate swaps (used for purposes other than trading) are determined based on discounted cash flow models that incorporate the cash flows of the derivatives as well as the current Overnight Index Swap Rate and swap curve along with other market data, taking into account current interest rates and the credit worthiness of the counterparty for assets and the credit worthiness of INDUS for liabilities.

The fair values of the mortgage loans, delayed draw term loan and construction loan, net of debt issuance costs, are estimated based on current rates offered to INDUS for similar debt of the same remaining maturities and, additionally, INDUS considers its credit worthiness in determining the fair value of its mortgage loans. At September 30, 2022 and December 31, 2021,

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the carrying values of the mortgage loans, delayed draw term loan and construction loan were $138,811 and $169,818, respectively, and the fair values of the mortgage loans, delayed draw term loan and construction loan were $136,669 and $180,731, respectively.

4.    Real Estate Assets and Discontinued Operations

Real estate assets consist of:

	Estimated
	Useful Lives	September 30, 2022		December 31, 2021
Land		$	71,155	$	55,104
Land improvements	10 to 30 years		72,198		65,520
Buildings and improvements	10 to 40 years		349,962		295,964
Tenant improvements	Shorter of useful life or terms of related lease		30,249		31,576
Construction in progress			45,992		20,799
Development costs			3,831		3,673
			573,387		472,636
Accumulated depreciation			(93,826)		(84,989)
		$	479,561	$	387,647

Total depreciation expense related to real estate assets was as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Depreciation expense	$	4,187	$	3,126	$	11,577	$	8,571

On June 8, 2022, INDUS closed on the purchase of an approximately 205,000 square foot, fully leased portfolio in Florida for $31,652, including transaction costs. This portfolio is comprised of two buildings in the Palm Beach market totaling approximately 84,000 square feet and an approximately 121,000 square foot property in the Orlando market.

On January 19, 2022, INDUS closed on the purchase of 782 Paragon Way, an approximately 217,000 square foot, fully leased building in the Charlotte, North Carolina market for $24,026, including transaction costs.

The purchase prices for acquisitions for the nine month period ended September 30, 2022 were allocated as follows:

	782 Paragon Way		3312 Shader Road		6600 High Ridge Road		7700 High Ridge Road		Rock Hill, SC Land		Allentown, PA Land		Total
Land	$	1,469	$	2,828	$	1,673	$	2,346	$	1,121	$	6,614	$	16,051
Land improvements		329		213		194		174		—		—		910
Buildings and improvements		22,228		11,179		6,318		5,696		—		—		45,421
Tenant improvements		—		107		44		40		—		—		191
Intangible assets		—		684		421		383		—		—		1,488
Intangible liabilities		—		(186)		—		(462)		—		—		(648)
	$	24,026	$	14,825	$	8,650	$	8,177	$	1,121	$	6,614	$	63,413

In March 2022, the Company announced its intention to sell its Office/Flex Portfolio (see Note 1). The Office/Flex Portfolio is comprised of seven buildings totaling approximately 175,000 square feet located in Bloomfield, Connecticut. Additionally, INDUS intends to sell an approximately 18,000 square foot storage building that had been used in the operations of the Office/Flex Portfolio and is located within the same business park. The disposition of the Office/Flex Portfolio represents a strategic shift for the Company and, as such, is being treated as a discontinued operation as of September 30, 2022. Accordingly, for all prior periods presented, the related assets and liabilities are presented as assets and liabilities of discontinued operations on the consolidated balance sheets.

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In September 2022, the Company signed a definitive agreement for the sale of the Office/Flex Portfolio at a gross purchase price of $11,000 and expects to complete the transaction in the fourth quarter of 2022.

Real estate assets in discontinued operations consist of:

	September 30, 2022		December 31, 2021
Land	$	31	$	31
Land improvements		1,844		1,840
Buildings and improvements		15,622		15,396
Tenant improvements		3,758		3,485
Construction in progress		1,771		338
		23,026		21,090
Accumulated depreciation		(14,778)		(14,571)
		8,248		6,519
Other assets		1,337		1,471
Total assets of discontinued operations	$	9,585	$	7,990
Accounts payable and accrued liabilities	$	122	$	67
Deferred revenue		581		620
Other liabilities		156		145
Total liabilities of discontinued operations	$	859	$	832

In the three months ended September 30, 2021, the Company recorded an impairment charge of $3,000 to reduce the carrying values of two of its office/flex properties in Windsor, Connecticut, based on management’s assessment of the current market prices for those properties. Both of those properties were sold in the fourth quarter of 2021.

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5.    Mortgages Loans, Construction Loan, Delayed Draw Term Loan and Interest Rate Swaps

INDUS’ nonrecourse mortgage loans and construction loan consist of:

Mortgage loans:	September 30, 2022		December 31, 2021
3.97%, due September 1, 2027	$	10,984	$	11,174
4.57%, due February 1, 2028 *		16,789		17,145
3.60%, due January 2, 2030 *		6,051		6,182
3.48%, due February 1, 2030		13,982		14,287
3.50%, due July 1, 2030 *		4,813		4,914
4.33%, due August 1, 2030		15,573		15,867
4.51%, due April 1, 2034		13,098		13,356
4.39%, due January 2, 2025 *		—		17,824
4.17%, due May 1, 2026 *		—		12,291
3.79%, due November 17, 2026 *		—		23,152
4.39%, due August 1, 2027 *		—		9,476
Mortgage loans		81,290		145,668
Debt issuance costs		(1,118)		(1,745)
Mortgage loans, net of debt issuance costs		80,172		143,923
Construction loan:
One-month LIBOR plus 1.40%, due May 7, 2023		—		26,273
Debt issuance costs		—		(378)
Construction loan, net of debt issuance costs		—		25,895
Mortgage loans and construction loan, net of debt issuance costs	$	80,172	$	169,818

*Variable rate loans for which INDUS entered into interest rate swap agreements to effectively fix the interest rates on these loans to the rates reflected above.

INDUS’ weighted average interest rate on its outstanding mortgage loans, delayed draw term loan and construction loan, including the effect of its interest rate swap agreements, was 4.13% and 3.76% as of September 30, 2022 and December 31, 2021, respectively. The Company accounts for its interest rate swap agreements as effective cash flow hedges. Amounts in accumulated other comprehensive income (“AOCI”) will be reclassified into interest expense over the term of the swap agreements to achieve fixed interest rates on each variable rate mortgage. None of the interest rate swap agreements contain any credit risk related contingent features. In the nine months ended September 30, 2022 and 2021, INDUS recognized gains, included in other comprehensive income, of $10,795 and $3,587, respectively, on its interest rate swap agreements. As of September 30, 2022, $2,121 was expected to be reclassified over the next twelve months to AOCI from interest expense. Interest income related to INDUS’ interest rate swap agreements in the nine months ended September 30, 2022 was $403 and interest expense related to INDUS’ interest rate swap agreements in the nine months ended September 30, 2021 was $1,504.

On April 21, 2022, INDUS entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) for a $250,000 secured credit facility (the “New Credit Facility”) (see Note 6), amending and restating the $100,000 credit facility executed on August 5, 2021 (the “Existing Credit Facility”) to include the addition of a delayed draw term loan facility (the “DDTL Facility”) of $150,000 for a term of five years, pursuant to which up to three separate draws may be made prior to April 21, 2023 (the first two of which must each be in a minimum amount of $25,000).

The Company made the first of such draws under the DDTL Facility in May 2022 and as of September 30, 2022, INDUS had drawn $60,000 under the DDTL Facility (see Note 6). The Company used these proceeds to repay four of its nonrecourse mortgage loans, that had encumbered ten buildings, in the amount of $61,787, resulting in a loss on early extinguishment of debt of $464. In connection with the repayments, the Company also terminated associated interest rate hedges resulting in a gain of $1,227 recorded against interest expense and recognized an income tax benefit of $585 related to the reclassification of gains included in other comprehensive income for the nine months ended September 30, 2022. As of September 30, 2022, the net debt issuance costs related to the DDTL Facility were $1,361. The ten buildings previously encumbered by the nonrecourse mortgage loans that were prepaid (as discussed above) were added to the borrowing base of the Company’s New Credit Facility.

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The DDTL Facility bears interest at the Secured Overnight Financing Rate (“SOFR”) plus 1.15%, based on the Company’s ratio of total indebtedness to total assets. Concurrent with the closing on the DDTL Facility, the Company entered into an interest rate swap agreement to fix the interest rate on the DDTL Facility at an effective rate of 4.15%.

On August 25, 2022, INDUS repaid its construction loan (the “JPM Construction Loan”) with JPMorgan, which had provided the funds for the site work and development of 9817 Old Statesville Road, Charlotte, North Carolina. The JPM Construction Loan was due on May 7, 2023, held a one-year extension at the Company’s option and a rate of one-month LIBOR plus 1.40%. INDUS paid the principal amount then outstanding of $26,342 and wrote off $189 of unamortized financing costs recorded as a loss on early extinguishment of debt for the three months ended September 30, 2022.

The following table summarizes the notional and fair values of our interest rate swaps designated as cash flow hedges at September 30, 2022 and December 31, 2021:

							Fair Value of Interest Rate
			LIBOR	SOFR	Current Notional Value		Derivative Assets/(Liabilities)
Effective	Maturity		Interest	Interest	September 30,	December 31,	September 30,	December 31,
Date	Date		Strike Rate	Strike Rate	2022	2021	2022	2021
July 1, 2022	April 21, 2027		n/a	2.933%	$ 60,000	$ -	$ 5,148	$ -
March 15, 2017	March 1, 2027	(a)	2.501%	n/a	10,375	10,621	569	(641)
February 1, 2018	February 1, 2028	(a)	2.782%	n/a	6,414	6,524	363	(641)
January 2, 2020	January 1, 2030		1.849%	n/a	6,051	6,182	658	(219)
July 1, 2020	July 1, 2030		0.942%	n/a	4,813	4,914	835	188
September 1, 2013	September 1, 2023	(b)	2.840%	n/a	-	7,204	-	(249)
January 1, 2015	January 1, 2025	(b)	2.260%	n/a	-	9,068	-	(390)
January 1, 2016	January 1, 2025	(b)	1.932%	n/a	-	1,552	-	(40)
September 1, 2015	September 1, 2025	(c)	2.118%	n/a	-	9,608	-	(334)
December 10, 2015	September 1, 2025	(c)	2.015%	n/a	-	2,185	-	(68)
November 17, 2016	November 17, 2026	(c)	2.085%	n/a	-	11,359	-	(518)
May 3, 2016	May 1, 2026		1.910%	n/a	-	12,291	-	(369)
July 14, 2017	August 1, 2027		4.390%	n/a	-	9,476	-	(526)
					$ 87,653	$ 90,984	$ 7,573	($ 3,807)
(a) (b) and (c) represent multiple interest rate swap agreements against a single mortgage

In July 2017, the Financial Conduct Authority in the United Kingdom, which regulates the London Interbank Offered Rate (“LIBOR”), announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after June 30, 2023. INDUS currently expects LIBOR-indexed rates to be available through that date, however, it is possible that they will become unavailable prior to that time. The interest rate on INDUS’ floating rate debt under nonrecourse mortgage loans is based on LIBOR, however, INDUS entered into interest rate swap agreements whereby the floating LIBOR rates under all mortgage loans are hedged, effectively fixing the interest rate on those loans. INDUS’ loan documents contain provisions that contemplate alternative methods to determine the base rate applicable to our LIBOR-indexed debt to the extent LIBOR-indexed rates are not available. INDUS will continue to monitor and evaluate the impact, if any, on debt payments and the value of the Company’s floating rate debt.

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6.    Revolving and Delayed Draw Term Loan Facility Credit Agreement

On April 21, 2022, the Credit Agreement was amended and restated to provide for, among other things: (1) the addition of the DDTL Facility of $150,000 (see Note 5), pursuant to which up to three separate draws may be made prior to April 21, 2023 (the first two of which each must be in a minimum amount of $25,000), and (2) the transition from LIBOR to SOFR for floating rate borrowings for all purposes under the Credit Agreement. The DDTL Facility will mature on April 21, 2027. The New Credit Facility continues to include a $100,000 revolving credit facility (the “Revolving Credit Facility”), however, the maturity of the Revolving Credit Facility has been extended to April 21, 2025. The two one-year extensions at the Company’s option under the Existing Credit Facility remain in place under the New Credit Facility. The New Credit Facility also increases the uncommitted incremental facility, which, as amended, would enable the Company to increase the New Credit Facility by up to $250,000 in the aggregate, for a total of $500,000.

Borrowings under the New Credit Facility will continue to bear interest subject to a pricing grid for changes in the Company’s total leverage.  Based on the Company’s current leverage, the initial annual interest rates under the New Credit Facility would be (i) SOFR plus 1.20% for revolving borrowings (the same applicable margin as under the Existing Credit Facility), and (ii) SOFR plus 1.15% for term borrowings (compared with LIBOR plus 1.20% under the Existing Credit Facility). The annual interest rate under the Existing Credit Facility was one-month LIBOR plus 1.20%. As of September 30, 2022, the Company had drawn $60,000 under the DDTL Facility (see Note 5).

Under the terms of the New Credit Facility, INDUS must maintain: (i) a consolidated tangible net worth of $319,149 plus 75% of the aggregate increases in stockholders’ equity of the Company by reason of issuance or sale of equity of the Company after March 31, 2021; (ii) a fixed charge coverage ratio of (a) 1.25 to 1.0 through March 31, 2022, and (b) 1.50 to 1.0 on and after June 30, 2022; (iii) a maximum leverage ratio of total indebtedness to total assets of less than 60% on the last day of any fiscal quarter; (iv) a maximum secured leverage ratio of total secured indebtedness to total asset value of (a) 50% through December 31, 2022, and (b) 40% on and after March 31, 2023; (v) a minimum borrowing base of (a) $75,000 through December 30, 2022 (compared with $30,000 under the Existing Credit Facility), (b) $125,000 from December 31, 2022 through December 30, 2023 (compared with $50,000 under the Existing Credit Facility), and (c) $250,000 on and after December 31, 2023 (compared with $100,000 under the Existing Credit Facility); and (vi) a minimum of (a) five industrial unencumbered properties from June 30, 2021 through December 30, 2023, and (b) eight industrial unencumbered properties on and after December 31, 2023.

As of September 30, 2022, the Company was in compliance with the covenants of the New Credit Facility and based on the unencumbered properties pledged, the maximum amount available could be borrowed. In addition to the $60,000 drawn under the DDTL Facility, the New Credit Facility also secures certain unused standby letters of credit aggregating $5,873 that are related to INDUS' development activities.

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7.    Stockholders’ Equity

Per Share Results

Basic and diluted per share results were based on the following:

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net income (loss)	$	1,116	$	(3,547)	$	4,207	$	(5,466)
Weighted average shares outstanding for computation of basic per share results		10,192		7,724		10,188		7,231
Incremental shares from assumed exercise of stock options and warrants and the grant of restricted stock units (a)		100		—		177		—
Adjusted weighted average shares for computation of diluted per share results		10,292		7,724		10,365		7,231

(a) Incremental shares from the assumed exercise of INDUS stock options are not included in periods where the inclusion of such shares would be anti-dilutive. The incremental shares from the assumed exercise of stock options and warrants for the three months and nine months ended September 30, 2021 would have been 175 and 150, respectively.

Equity Compensation Plans

Stock Options

There were no stock options granted in either the 2022 nine month period or the 2021 nine month period.

As of September 30, 2022, the unrecognized compensation expense related to unvested stock options that will be recognized during future periods is as follows:

Balance of 2022	$	90
2023	$	231
2024	$	111
2025	$	15

Number of option holders at September 30, 2022 14

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A summary of INDUS’ stock option activity is as follows:

	For the Nine Months Ended
	September 30, 2022			September 30, 2021
	Number of		Weighted Avg.	Number of		Weighted Avg.
	Shares		Exercise Price	Shares		Exercise Price
Outstanding at beginning of period	220,937	$	36.47	246,150	$	36.06
Adjustment for stock dividend	—	$	—	5,413	$	34.29
Exercised	(5,600)	$	26.31	(15,422)	$	26.37
Forfeited	(3,635)	$	27.50	(1,067)	$	37.49
Outstanding at end of period	211,702	$	36.89	235,074	$	35.85

				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Outstanding Options	September 30, 2022	Exercise Price		(in years)	Value
$23.00 - $28.00	74,663	$	26.29	3.5	$	1,947
$28.00 - $32.00	14,073	$	29.84	2.8		317
$32.00 - $47.00	122,966	$	44.13	7.3		1,014
	211,702	$	36.89	5.7	$	3,278
Vested options	109,492	$	28.88	4.1	$	2,572

Restricted Stock Units

A summary of restricted stock units of Common Stock (“RSUs”) awarded under the INDUS Realty, LLC 2020 Incentive Award Plan for the nine months ended September 30, 2022 and 2021 is as follows:

	Time-based vesting
	September 30, 2022			September 30, 2021
	Number of		Grant Date Fair	Number of		Grant Date Fair
	Units		Value Weighted Avg.	Units		Value Weighted Avg.
Outstanding at beginning of period	12,829	$	64.43	—	$	—
Granted	13,514	$	68.68	13,191	$	64.62
Adjustment for dividends	121	$	—	47	$	—
Vested and distributed	(3,391)	$	63.97	—	$	—
Forfeited	(813)	$	63.15	(409)	$	63.15
Outstanding at end of period	22,260	$	66.78	12,829	$	64.43

	Performance-based vesting
	September 30, 2022			September 30, 2021
	Number of		Grant Date Fair	Number of		Grant Date Fair
	Units		Value Weighted Avg.	Units		Value Weighted Avg.
Outstanding at beginning of period	8,136	$	78.97	—	$	—
Granted	7,999	$	100.19	8,508	$	79.33
Adjustment for dividends	89	$	—	37	$	—
Forfeited	(1,219)	$	79.33	(409)	$	79.33
Outstanding at end of period	15,005	$	89.79	8,136	$	78.97

The time-based vesting RSUs granted to employees vest over three years in equal installments subject to the recipient’s continued employment. The time-based vesting RSUs granted to non-employee directors vest in one year. The performance-based vesting RSUs granted to employees vest after a period of three years and will be measured over the three-year period on pre-established goals. The holders of RSUs will receive credit for dividends, but do not have voting rights. The RSUs may not be sold, assigned, transferred, pledged or otherwise disposed of and are subject to risk of forfeiture prior to the expiration of the applicable vesting period.

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As of September 30, 2022, the unrecognized compensation expense related to RSUs that will be recognized during future periods is as follows:

Balance of 2022	$	307
2023	$	830
2024	$	359
2025	$	585

Compensation expense for stock options and RSUs was as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Compensation expense	$	404	$	305	$	1,085	$	810

Dividends

For the nine months ended September 30, 2022, the Company’s common dividends were as follows:

Quarter Ended	Record Date	Payment Date	Common dividend per share
March 31, 2022	March 31, 2022	April 15, 2022	$0.16
June 30, 2022	June 30, 2022	July 15, 2022	$0.16
September 30, 2022	September 30, 2022	October 14, 2022	$0.16

On January 13, 2021, in conjunction with its election to be taxed as a REIT, INDUS announced a special dividend of $11,250 or $1.99 per share payable on March 8, 2021 in the form of cash or additional shares of the Company’s Common Stock, to holders of record as of January 22, 2021. The cash portion of the special dividend paid to stockholders was $3,404 and 125,212 shares of Common Stock were issued.

INDUS declared cash dividends of $0.15 per share on its Common Stock on September 1, 2021 and May 7, 2021. INDUS paid $1,159 and $1,158, respectively, for these dividends on September 30, 2021 and June 30, 2021.

8.     Leases

The Company’s rental revenue reflects the leasing of space to tenants primarily under non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum lease payments are recognized in rental income on a straight-line basis over the term of the related lease and estimated reimbursements from tenants for real estate taxes, insurance, common area maintenance and other recoverable operating expenses are recognized in rental income in the period that the expenses are incurred. INDUS does not have any variable payment leases with its tenants.

All of INDUS’ leases with its tenants are classified as operating leases with the exception of a sixty-five year ground lease of a small land parcel which is a sale-type lease. As such, a gain of approximately $1,000 on that lease is included in gain on sales of real estate assets in the Company’s consolidated statements of operations for the three months and nine months ended September 30, 2021.

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The following is a schedule of minimum future cash rentals on the Company’s industrial/logistics operating leases as of September 30, 2022. The schedule does not reflect future rental revenues from the renewal or replacement of existing leases or for leases on facilities not yet in service and excludes real estate taxes and property operating expense reimbursements:

Balance of 2022	$	9,539
2023		39,086
2024		38,193
2025		34,692
2026		28,269
Thereafter		76,506
	$	226,285

Expenses related to operating leases where INDUS is the lessee were $104 in each of the 2022 and 2021 nine month periods. The weighted average remaining lease term for these leases as of September 30, 2022, was 4.1 years.

Maturities of lease liabilities as of September 30, 2022 are as follows:

Balance of 2022	$	36
2023		144
2024		143
2025		143
2026		117
Total undiscounted payments		583
Less: imputed interest		(40)
Present value of minimum lease payments	$	543

9.    Supplemental Financial Statement Information

Other Assets

INDUS' other assets are comprised of the following:

	September 30, 2022		December 31, 2021
Deposits on building and land acquisitions	$	15,088	$	9,800
Straight-line rents		7,244		5,909
Deferred leasing costs, net		7,181		6,310
Intangible assets, net		6,124		5,495
Prepaid expenses		5,190		3,236
Accounts receivable (primarily leases)		1,497		399
Deferred financing costs related to revolving lines of credit		696		917
Furniture, fixtures and equipment, net		636		369
Right-of-use assets		514		593
Registration statement costs		341		341
Prepaid development costs		89		143
Other		454		402
Total other assets	$	45,054	$	33,914

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Accounts Payable and Accrued Liabilities

INDUS' accounts payable and accrued liabilities are comprised of the following:

	September 30, 2022		December 31, 2021
Accrued construction costs and retainage	$	5,300	$	5,800
Accrued salaries, wages and other compensation		1,497		1,796
Trade payables		1,331		481
Accrued lease commissions		1,069		468
Accrued real estate taxes		841		46
Accrued interest payable		595		556
Other		975		524
Total accounts payable and accrued liabilities	$	11,608	$	9,671

Other Liabilities

INDUS' other liabilities are comprised of the following:

	September 30, 2022		December 31, 2021
Intangible liability, net	$	3,321	$	3,000
Deferred compensation plan		3,091		5,097
Prepaid rent from tenants		1,762		1,483
Security deposits of tenants		1,229		900
Lease liabilities		543		626
Other		153		153
Total other liabilities	$	10,099	$	11,259

Supplemental Cash Flow Information

Accounts payable and accrued liabilities related to additions to real estate assets decreased by $431 in the nine months ended September 30, 2022 and increased $6,910 in the nine months ended September 30, 2021.

Interest payments were as follows:

For the Three Months Ended				For the Nine Months Ended
September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
$	1,657	$	1,727	$	3,674	$	5,117

Capitalized interest related to real estate assets was as follows:

For the Three Months Ended				For the Nine Months Ended
September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
$	430	$	470	$	1,254	$	815

Cash flows from discontinued operations were as follows:

	For the Nine Months Ended
	September 30, 2022		September 30, 2021
Net cash provided by operating activities of discontinued operations	$	511	$	455
Net cash used in investing activities of discontinued operations	$	(1,686)	$	(64)
Net cash provided by financing activities of discontinued operations	$	—	$	—

10.    Commitments and Contingencies

From time to time, INDUS is a party to various litigation matters that are considered routine litigation arising in the ordinary course of business. In the opinion of management, based on the advice of legal counsel, the ultimate liability, if any, with

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respect to these matters is not expected to be material, individually or in the aggregate, to the Company’s consolidated financial position, results of operations or cash flows.

As of September 30, 2022, INDUS had commitments of approximately $84,425 for construction work and tenant improvements under the terms of leases with certain of the Company’s tenants.

11.    Subsequent Events

In accordance with FASB ASC 855, “Subsequent Events,” INDUS has evaluated all events or transactions occurring after September 30, 2022, the balance sheet date, and noted that there have been no such events or transactions which would require recognition or disclosure in the consolidated financial statements as of and for the period ended September 30, 2022, other than the disclosures herein.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

INDUS Realty Trust, Inc., a Maryland corporation (“INDUS” or the “Company”) is a real estate business that has elected to be taxed as a real estate investment trust (“REIT”) as defined in the Internal Revenue Service Code of 1986, as amended (the “Code”) and is principally engaged in developing, acquiring, managing and leasing high-quality industrial and logistics properties in select supply-constrained and high growth markets in the United States. The Company conducts substantially all of its business through its operating partnership, INDUS RT, LP, a Maryland limited partnership (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. As used herein, the “Company” refers to INDUS Realty Trust, Inc. and its consolidated subsidiaries and partnerships, including the Operating Partnership, except where context otherwise requires.

During the three and nine months ended September 30, 2022, economic uncertainty and equity and debt market volatility have increased due to a number of factors such as investor sentiment and recession concerns, rapidly increasing interest rates, rising inflation, lingering supply chain disruptions and current geopolitical events. While these factors have not had a significant adverse impact on INDUS to date, they may adversely impact the Company in the future. Substantially all of the Company’s leases include scheduled rent increases and require the tenants to pay operating expenses, insurance and real estate taxes for the spaces they occupy. These lease provisions help to mitigate the Company’s exposure to increases in operating expenses resulting from inflation or other factors.  Costs that are not related to building operations are not passed through to tenants and, accordingly, increases in the Company’s cost of doing business such as wages and interest expense could adversely affect the Company’s results of operations.  Additionally, any one or a combination of these factors may also adversely impact the financial stability of one or more of the Company’s tenants, which in turn has the potential to negatively impact the Company’s collection of scheduled rent and operating expenses, insurance and real estate taxes as noted above.

As of September 30, 2022, INDUS owned 42 industrial/logistics properties aggregating approximately 6.1 million square feet located in Connecticut, Pennsylvania, North Carolina, South Carolina, and Florida. The Company seeks to add to its property portfolio through the acquisition and development of land or the acquisition of modern, market-appropriate logistics buildings in the regions it targets, all of which can serve multiple drivers of demand in the modern supply chain. As of September 30, 2022, all properties are wholly-owned, however, INDUS may in the future, selectively acquire, own and/or develop properties through other ownership structures such as joint ventures with other persons or entities when such transactions are warranted by the circumstances. INDUS also owns undeveloped land parcels, much of which is not consistent with the Company’s core industrial and logistics strategy, and, as such, the Company sells certain properties periodically over time. As of September 30, 2022, the Company has entered into several agreements to sell an aggregate of approximately 411 acres of undeveloped land for an aggregate sales price of approximately $24.9 million. The land sales are expected to close during the year ending December 31, 2023.

In March 2022, the Company announced its intention to sell its legacy investment in its remaining office/flex properties (“Office/Flex Portfolio”). The Office/Flex Portfolio is comprised of seven buildings totaling approximately 175,000 square feet located in Bloomfield, Connecticut. Additionally, INDUS intends to sell an approximately 18,000 square foot storage building which had been used in the operations of the Office/Flex Portfolio and is located within the same business park. Also, in March 2022, the Company closed its Landscaping Division which primarily served the Office/Flex Portfolio and recorded a gain on sale of $0.2 million for the nine months ended September 30, 2022. The disposition of the Office/Flex Portfolio represents a strategic shift for the Company and, as such, is being treated as a discontinued operation as of September 30, 2022. In September 2022, the Company signed a definitive agreement for the sale of the Office/Flex Portfolio at a gross purchase price of $11,000 and expects to complete the transaction in the fourth quarter of 2022.

The significant accounting policies and methods used in the preparation of INDUS’ unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q are consistent with those used in the preparation of INDUS’ audited consolidated financial statements for its year ended December 31, 2021 included in INDUS’ Annual Report on Form 10-K (“Form 10-K”) as filed with the SEC on March 11, 2022.

Results of Operations

The Company’s net income was approximately $1.1 million for the three months ended September 30, 2022, as compared to a net loss of approximately $3.5 million for the three months ended September 30, 2021. The Company’s rental revenue increased approximately 27% compared to the same quarter of the prior year primarily due to the significant development and acquisition

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activity aggregating to a net addition of approximately 1.2 million square feet subsequent to September 30, 2021. The net loss for the three months ended September 30, 2021, reflected a $3.0 million impairment charge on two office buildings that were subsequently sold and a $2.0 million change in fair value related to a contingent value rights agreement, which expired pursuant to its terms with no payment, and the cash settlement option of a warrant which also expired. Upon expiration of the cash settlement option, the warrant was reclassified into equity.

The Company’s net income was approximately $4.2 million for the nine months ended September 30, 2022, as compared to a net loss of $5.5 million for the nine months ended September 30, 2021. The Company’s rental revenue increased approximately 25% compared to the same nine month period of the prior year. The Company’s in-service occupancy was 97.6% and 95.4% as of September 30, 2022 and 2021, respectively. At September 30, 2022, the Company owned 42 industrial/logistics buildings aggregating approximately 6.1 million square feet as compared to 33 industrial/logistics buildings aggregating approximately 4.9 million square feet as of September 30, 2021.

Net income from discontinued operations was approximately $0.3 million and $0.1 million for the three months ended September 30, 2022 and 2021, respectively. Net income from discontinued operations was approximately $0.7 million and $0.1 million for the nine months ended September 30, 2022 and 2021, respectively. Included in net income from discontinued operations for the nine months ended September 30, 2022, was a gain on the sale of equipment of $0.2 million related to the closure of the Company’s Landscaping Division which primarily served the Office/Flex Portfolio. 

Comparison of the Three Months Ended September 30, 2022 to the Three Months Ended September 30, 2021

Rental Revenues

Total rental revenue was $13.0 million and $10.2 million for the third quarter of 2022 and 2021, respectively. The 27% increase in rental revenue was primarily due to significant development and acquisition activity and increases in overall total portfolio occupancy that occurred subsequent to September 30, 2021 as detailed in the chart below.

	Total	Leased
	Square	Square	Percentage
	Footage	Footage	Leased
As of September 30, 2021	4,868,000	4,644,000	95.4%
Buildings acquired	746,000	662,000
Buildings constructed	673,000	525,000
Building sold	(165,000)	(165,000)
Leasing of first generation space (1)	—	307,000
Leasing of second generation space (2)	—	279,000
Leases expired	—	(278,000)
Reclassified to discontinued operations	(18,000)	(18,000)
Remeasurements	(2,000)	(2,000)
As of September 30, 2022	6,102,000	5,954,000	97.6%

(1) INDUS defines first generation space as newly constructed space that has not previously been leased and unleased space in acquired buildings that is subsequently refurbished prior to leasing.

(2) INDUS defines second generation space as previously leased space.

Expenses

(dollars in thousands)	Three months ended September 30,
	2022		2021		Change
Operating expenses of rental properties	$	1,194	$	1,040	$	154
Real estate taxes		1,659		1,601		58
Depreciation and amortization expense		4,823		3,739		1,084
General and administrative expenses		2,906		2,283		623

Operating expenses of rental properties were slightly higher at approximately $1.2 million for the three months ended September 30, 2022 as compared to $1.0 million for the three months ended September 30, 2021. An increase in operating

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expenses due to the buildings acquired and developed in 2022 was offset by a reduction of operating expenses for properties sold, primarily in the second half of 2021.

Real estate taxes increased to approximately $1.7 million for the three months ended September 30, 2022, as compared to $1.6 million for the three months ended September 30, 2021. The increase in real estate taxes principally reflected the buildings acquired and developed in 2022, partially offset by reductions related to property sales in 2021.

The increase in depreciation and amortization expense for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021 primarily reflects depreciation expense recorded on new properties acquired while reductions in depreciation related to properties sold were minimal as 2021 sales were comprised of low-basis assets and non-core land parcels.

General and administrative expenses of approximately $2.9 million for the three months ended September 30, 2022 increased as compared to $2.3 million for the three months ended September 30, 2021. The increase was primarily attributable to an increase of approximately $0.6 million in compensation costs due to higher employee headcount related to the Company’s growth.

Other Income (Expense)

(dollars in thousands)	Three months ended September 30,
	2022		2021		Change
Interest expense	$	(1,507)	$	(1,700)	$	193
Impairment of real estate assets		-		(3,000)		3,000
Change in fair value of financial instruments		-		(2,027)		2,027
Loss on early extinguishment of debt		(189)		-		(189)
Gain on sales of real estate assets		-		1,450		(1,450)
Investment and other income		64		119		(55)
Total other expense	$	(1,632)	$	(5,158)	$	3,526
Income tax (provision) benefit	$	-	$	(24)	$	24

Interest expense was $1.5 million and $1.7 million for the three months ended September 30, 2022 and 2021, respectively. The decrease in interest expense primarily reflects the reduction in the aggregate debt balance, net of issuance costs to $138.8 million as of September 30, 2022 from $166.5 million as of September 30, 2021. Interest expense is net of capitalized interest related to the Company’s development activities. Capitalized interest was $0.4 million and $0.5 million for the three months ended September 30, 2022 and 2021, respectively.

The impairment of real estate assets of $3.0 million recorded for the three months ended September 30, 2021 related to two office/flex properties that were subsequently sold in November 2021.

The change in fair value of financial instruments of $2.0 million recorded in the three months ended September 30, 2021 reflected a non-cash mark to market charge related to the fair value of a warrant issued on August 24, 2020 with a cash settlement provision which was reflected as a liability at its fair value on the Company’s consolidated balance sheet. On August 24, 2021, the warrant’s cash settlement provision expired and the fair value of the warrant as of that date was reclassified into stockholders’ equity.

The loss on early extinguishment of debt of $0.2 million in the three months ended September 30, 2022 related to the write off of unamortized debt issuance costs related to a construction loan repaid on August 25, 2022.

The gain on sales of real estate assets of $1.5 million in the three months ended September 30, 2021 represented the sale of non-core assets including undeveloped land and $1.0 million of gain from a sixty-five year ground lease for a parcel used as a cell tower site. Under the terms of that agreement, the proceeds of approximately $1.0 million for the entire term were received at the inception of the lease, resulting in the transaction being recorded as a sales-type lease.

Investment and other income is primarily comprised of net interest income earned on cash balances held by the Company in interest-bearing accounts.

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For the three months ended September 30, 2022, the Company had no income tax expense. For the three months ended September 30, 2021, the Company recorded a provision for taxes of less than $0.1 million. The Company has elected to be treated as a REIT for federal tax purposes, however, the Company does conduct business in a taxable REIT subsidiary (“TRS”) which is subject to federal, state and local income tax for income received in the TRS.

The Company’s total net operating income (“NOI”) from continuing operations and NOI on a cash basis (“Cash NOI”)¹ from continuing operations for the three months ended September 30, 2022 and 2021 were as follows:

(dollars in thousands)	Three months ended September 30,
	2022		2021 (a)
Rental revenue	$	13,044	$	10,243
Operating expenses of rental properties		(1,194)		(1,040)
Real estate taxes		(1,659)		(1,601)
NOI from continuing operations		10,191		7,602
Noncash rental revenue including straight-line rents		(1,259)		(726)
Cash NOI from continuing operations	$	8,932	$	6,876

(a) The three months ended September 30, 2021 include the results of three office/flex properties that were sold in 2021 and were not part of discontinued operations.

The increases in NOI from continuing operations and Cash NOI from continuing operations principally reflected the increase in rental revenue primarily derived from the acquisition and development of additional properties after September 30, 2021. In addition, during the three months ended September 30, 2022, the Company recorded a termination fee in the amount of $0.4 million related to an early termination of a tenant lease in August. The vacated space was immediately released to a new tenant. See below under “non-GAAP reconciliations” for information regarding why the Company believes NOI from continuing operations and Cash NOI from continuing operations are meaningful supplemental measures of its performance and reconciliations of these measures from net income (loss), presented in accordance with U.S. GAAP.

Comparison of the Nine Months Ended September 30, 2022 to the Nine Months Ended September 30, 2021

Rental Revenues

Total rental revenue was $36.3 million and $29.1 million for the nine months ended September 30, 2022 and 2021, respectively. The 25% increase in rental revenue was primarily due to significant development and acquisition activity and increases in overall total portfolio occupancy, as detailed in the below chart.

¹ INDUS defines “Cash NOI from continuing operations” as rental revenue less operating expenses of rental properties, real estate taxes and non-cash rental revenue, including straight-line rents. Cash NOI from continuing operations is not a financial measure in conformity with U.S. GAAP. See below under “Non-GAAP Reconciliations” for information regarding why the Company believes this is a meaningful supplemental measure of its performance and a reconciliation of this measure from net income (loss), presented in accordance with U.S. GAAP.

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Changes in the Company’s total square footage and leased square footage of its industrial/logistics properties from December 31, 2021 through September 30, 2022 were as follows:

	Total	Leased
	Square	Square	Percentage
	Footage	Footage	Leased
As of December 31, 2021	5,167,000	5,082,000	98.4%
Buildings acquired	422,000	422,000
Buildings constructed	532,000	384,000
Leasing of first generation space (1)	—	84,000
Leasing of second generation space (2)	—	279,000
Leases expired	—	(278,000)
Reclassified to discontinued operations	(18,000)	(18,000)
Remeasurements	(1,000)	(1,000)
As of September 30, 2022	6,102,000	5,954,000	97.6%

(1) INDUS defines first generation space as newly constructed space that has not previously been leased and unleased space in acquired buildings that is subsequently refurbished prior to leasing.

(2) INDUS defines second generation space as previously leased space.

Expenses

(dollars in thousands)	Nine months ended September 30,
	2022		2021		Change
Operating expenses of rental properties	$	3,533	$	3,409	$	124
Real estate taxes		4,643		4,341		302
Depreciation and amortization expense		13,301		10,048		3,253
General and administrative expenses		8,238		7,977		261

Operating expenses of rental properties were essentially unchanged for the nine months ended September 30, 2022 and September 30, 2021. An increase in operating expenses due to the buildings acquired and developed in 2022 was offset by a reduction of operating expenses for properties sold, primarily in the second half of 2021.

Real estate taxes increased to approximately $4.6 million for the nine months ended September 30, 2022, as compared to approximately $4.3 million for the nine months ended September 30, 2021. The increase in real estate taxes principally reflected the buildings acquired and developed in 2022, partially offset by property sales in 2021.

The increase in depreciation and amortization expense for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 primarily reflects depreciation expense recorded on new properties acquired while reductions in depreciation related to properties sold were minimal as 2021 sales were comprised of low-basis assets and non-core land parcels.

General and administrative expenses increased to approximately $8.2 million for the nine months ended September 30, 2022 as compared to $8.0 million for the nine months ended September 30, 2021. The increase was primarily attributable to an increase of approximately $2.0 million in compensation costs due to higher employee headcount related to the Company’s growth, offset by a decrease of approximately $1.2 million in expenses related to the Company’s non-qualified deferred compensation plan due to the effect of the lower stock market performance in the 2022 nine month period as compared to the 2021 nine month period. Additionally, there was a reduction of $0.4 million in real estate taxes and maintenances costs on undeveloped land in the 2022 nine month period due to land sales that occurred in the 2021 nine month period.

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Other Income (Expense)

(dollars in thousands)	Nine months ended September 30,
	2022		2021		Change
Interest expense	$	(3,178)	$	(5,160)	$	1,982
Impairment of real estate assets		-		(3,000)		3,000
Change in fair value of financial instruments		-		(2,746)		2,746
Losses on early extinguishment of debt		(653)		-		(653)
Gain on sales of real estate assets		-		1,792		(1,792)
Investment and other income		163		241		(78)
Total other expense	$	(3,668)	$	(8,873)	$	5,205
Income tax benefit (provision)	$	585	$	(24)	$	609

Interest expense was $3.2 million and $5.2 million for the nine months ended September 30, 2022 and 2021, respectively. The decrease in interest expense for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 primarily reflects a gain of $1.2 million from the termination of several interest rate hedges in connection with the repayment of mortgage debt as well as an increase in capitalized interest of approximately $0.4 million relating to the increase in the Company’s properties under development. The remainder of the decrease in interest expense primarily reflects the reduction in the aggregate debt balance, net of issuance costs, to $138.8 million as of September 30, 2022 from $166.5 million as of September 30, 2021. Interest expense is net of capitalized interest related to the Company’s development activities. Capitalized interest was $1.3 million and $0.8 million for the nine months ended September 30, 2022 and 2021, respectively.

The impairment of real estate assets of $3.0 million recorded for the nine months ended September 30, 2021 related to two office/flex properties that were subsequently sold in November 2021.

The change in fair value of financial instruments of $2.7 million recorded in the nine months ended September 30, 2021 reflected a non-cash mark to market charge related to the fair value of a warrant with a cash settlement provision which was reflected as a liability at its fair value on the Company’s consolidated balance sheet. On August 24, 2021, the warrant’s cash settlement provision expired and the fair value of the warrant as of that date was reclassified into stockholders’ equity.

The loss on early extinguishment of debt of $0.7 million in the nine months ended September 30, 2022 related to the repayment of four nonrecourse mortgage loans during the second quarter of 2022 and unamortized debt issuance costs related to a construction loan repaid on August 25, 2022.

The gain on sales of real estate assets of $1.8 million in the nine months ended September 30, 2021 represented the sale of non-core assets including undeveloped land and $1.0 million of gain from a sixty-five year ground lease for a parcel used as a cell tower site. Under the terms of that agreement, the proceeds of approximately $1.0 million for the entire term were received at the inception of the lease, resulting in the transaction being recorded as a sales-type lease.

Investment and other income is primarily comprised of net interest income earned on cash balances held by the Company in interest-bearing accounts.

For the nine months ended September 30, 2022 and 2021, the Company recorded an income tax benefit (provision) of $0.6 million and less than $(0.1) million, respectively. The Company has elected to be treated as a REIT for federal tax purposes, however, the Company does conduct business in a TRS which is subject to federal, state and local income tax for income received in the TRS. In addition, during the nine months ended September 30, 2022, the Company recognized an income tax benefit of $0.6 million related to the reclassification of gains included in other comprehensive income related to the termination of several interest rate hedges.

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The Company’s NOI from continuing operations and Cash NOI from continuing operations for the nine months ended September 30, 2022 and 2021 were as follows:

(dollars in thousands)	Nine months ended September 30,
	2022		2021 (a)
Rental revenue	$	36,291	$	29,076
Operating expenses of rental properties		(3,533)		(3,409)
Real estate taxes		(4,643)		(4,341)
NOI from continuing operations		28,115		21,326
Noncash rental revenue including straight-line rents		(3,056)		(1,481)
Cash NOI from continuing operations	$	25,059	$	19,845

(a) The nine months ended September 30, 2021 include the results of four office/flex properties that were sold in 2021 and were not part of discontinued operations.

The increases in NOI from continuing operations and Cash NOI from continuing operations principally reflected the increase in rental revenue primarily derived from the acquisition and development of additional properties after September 30, 2021. In addition, during the three months ended September 30, 2022, the Company recorded a termination fee in the amount of $0.4 million related to an early termination of a tenant lease in August. The vacated space was immediately released to a new tenant. See below under “non-GAAP reconciliations” for information regarding why the Company believes NOI from continuing operations and Cash NOI from continuing operations are meaningful supplemental measures of its performance and reconciliations of these measures from net income (loss), presented in accordance with U.S. GAAP.

Non-GAAP Reconciliations

The Company uses NOI from continuing operations, Cash NOI from continuing operations, Funds from continuing operations (“FFO”), Core funds from continuing operations (“Core FFO”), Adjusted funds from continuing operations (“Adjusted FFO”), Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA as supplemental non-GAAP performance measures. Management believes that the use of these measures combined with net income (loss), which remains the Company’s primary measure of performance, improves the understanding of the Company’s operating results among the investing public and makes comparisons of operating results to other REITs more meaningful. The most comparable U.S. GAAP measure to NOI from continuing operations, Cash NOI from continuing operations, FFO, Core FFO, Adjusted FFO, EBITDA and Adjusted EBITDA is net income (loss).

These measures exclude expenses that materially impact the Company’s overall results of operations and, therefore, should not be considered as substitute measures derived in accordance with U.S. GAAP. Furthermore, these metrics may not be comparable to other similarly titled measures of other companies.

Certain of these measures may be calculated based on or substantially in accordance with definitions set forth by The National Association of Real Estate Investment Trusts (“Nareit”). Nareit is widely recognized as a representative organization for REITs and real estate companies with an interest in U.S. real estate. Nareit’s members are REITs and other real estate companies throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses.

NOI from Continuing Operations and Cash NOI from Continuing Operations

NOI from continuing operations is a non-GAAP measure that includes the rental revenue and operating expenses and real estate taxes directly attributable to the Company’s real estate properties. The Company uses NOI from continuing operations as a supplemental performance measure because, in excluding real estate depreciation and amortization expense, general and administrative expenses, interest expense, impairment loss, change in fair value of financial instruments, gains (or losses) on early extinguishment of debt, gains (or losses) on the sale of real estate assets, investment income and other non-operating items, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. The Company also believes that NOI from continuing operations will be useful to investors as a basis to compare its operating performance with that of other REITs. However, because NOI from continuing operations excludes depreciation and amortization expense and captures neither the changes in the value of the Company’s properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of its properties (all of which have real economic effect and could materially impact the Company’s results from operations), the utility

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of NOI from continuing operations as a measure of the Company’s performance is limited. Other equity REITs may not calculate NOI from continuing operations in a similar manner and, as such, the Company’s NOI from continuing operations may not be comparable to such other REITs’ NOI from continuing operations. Accordingly, NOI from continuing operations should be considered only as a supplement to net income (loss) as a measure of the Company’s performance. NOI from continuing operations should not be used as a measure of the Company’s liquidity, nor is it indicative of funds available to fund the Company’s cash needs. NOI from continuing operations should not be used as a substitute for cash flow from operating activities in accordance with U.S. GAAP.

Cash NOI from continuing operations is a non-GAAP measure that the Company calculates by adding or subtracting non-cash rental revenue, including straight-line rental revenue, from NOI from continuing operations. The Company uses Cash NOI from continuing operations, together with NOI from continuing operations, as supplemental performance measures. Cash NOI from continuing operations should not be used as a measure of the Company’s liquidity, nor is it indicative of funds available to fund the Company’s cash needs. Cash NOI from continuing operations should not be used as a substitute for cash flow from operating activities computed in accordance with U.S. GAAP.

Below is a reconciliation of NOI from continuing operations and Cash NOI from continuing operations to net income (loss) as reported in the Company’s consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q:

(dollars in thousands)	Three months ended September 30,				Nine months ended September 30,
	2022		2021 (a)		2022		2021 (a)
Net income (loss)	$	1,116	$	(3,547)	$	4,207	$	(5,466)
Income from discontinued operations		(286)		(55)		(714)		(130)
Income tax provision (benefit)		-		24		(585)		24
Pretax income (loss) from continuing operations		830		(3,578)		2,908		(5,572)
Exclude:
Depreciation and amortization expense		4,823		3,739		13,301		10,048
General and administrative expenses		2,906		2,283		8,238		7,977
Interest expense		1,507		1,700		3,178		5,160
Losses on early extinguishment of debt		189		-		653		-
Investment and other income		(90)		(119)		(195)		(241)
Impairment loss		-		3,000		-		3,000
Change in fair value of financial instruments		-		2,027		-		2,746
Gain on sales of real estate assets		-		(1,450)		-		(1,792)
Other expense		26		-		32		-
NOI from continuing operations		10,191		7,602		28,115		21,326
Noncash rental revenue including straight-line rents		(1,259)		(726)		(3,056)		(1,481)
Cash NOI from continuing operations	$	8,932	$	6,876	$	25,059	$	19,845

(a) The three months and nine months ended September 30, 2021 include the results of three and four office/flex properties, respectively, that were sold in 2021 and were not part of discontinued operations during the periods presented.

In an effort to improve the understanding of the Company’s operating results as compared to its operating results in a prior period and that of other REITs, the Company presents a funds from continuing operations metric substantially similar to funds from operations as calculated in accordance with standards established by Nareit (“Nareit FFO”).

Nareit FFO is calculated as net income (calculated in accordance with U.S. GAAP), excluding: (a) depreciation and amortization related to real estate, (b) gains and losses from the sale of certain real estate assets, (c) gains and losses from change in control and (d) 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.

Core Funds from Continuing Operations

The Company defines Core FFO from continuing operations as FFO excluding (a) discontinued operations, (b) the write-off of non-recurring items, (c) expense related to the performance of the non-qualified deferred compensation plan, (d) gains or losses on insurance recoveries and/or extinguishment of debt or derivative instruments, (e) change in fair value of financial instruments, and (f) costs related to conversion to a REIT.

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Adjusted Funds from Continuing Operations

The Company defines Adjusted FFO from continuing operations as Core FFO from continuing operations less (a) noncash rental revenue including straight-line rents, (b) amortization of debt issuance costs, (c) noncash compensation expenses, (d) non-real estate depreciation and amortization expense, (e) tenant improvements and leasing commissions of second generation space and (f) maintenance capital expenditures needed to maintain the Company’s existing buildings. Below is a reconciliation of FFO, Core FFO from continuing operations and Adjusted FFO from continuing operations to net income (loss) as reported in the Company’s consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q:

(dollars in thousands)	Three months ended September 30,				Nine months ended September 30,
	2022		2021 (a)		2022		2021 (a)
Net income (loss)	$	1,116	$	(3,547)	$	4,207	$	(5,466)
Exclude:
Depreciation and amortization expense		4,823		3,739		13,301		10,048
FFO adjustments related to discontinued operations		-		196		236		654
Non-real estate depreciation and amortization expense		(17)		(25)		(63)		(63)
Gain on sales of real estate assets		-		(1,450)		-		(1,792)
Impairment loss		-		3,000		-		3,000
FFO		5,922		1,913		17,681		6,381
Exclude:
Core FFO adjustments related to discontinued operations		(286)		(251)		(950)		(784)
Amortization of terminated swap agreement		-		-		(1,812)		-
General and administrative expenses related to non-qualified deferred compensation plan performance		(113)		(69)		(888)		351
Losses on early extinguishment of debt		189		-		653		-
Change in fair value of financial instruments		-		2,027		-		2,746
General and administrative expenses related to REIT conversion		-		144		-		407
Core FFO from continuing operations		5,712		3,764		14,684		9,101
Exclude:
Noncash rental revenue including straight-line rents		(1,259)		(726)		(3,056)		(1,481)
Amortization of debt issuance costs		227		412		719		819
Noncash compensation expenses		404		305		1,085		810
Non-real estate depreciation and amortization expense		17		25		63		63
Tenant improvements and leasing commissions (2nd generation space)		(513)		(524)		(915)		(1,226)
Maintenance capital expenditures		(810)		(224)		(1,305)		(520)
Adjusted FFO from continuing operations	$	3,778	$	3,032	$	11,275	$	7,566

(a) The three months and nine months ended September 30, 2021 include the results of three and four office/flex properties, respectively, that were sold in 2021 and were not part of discontinued operations during the periods presented.

Earnings Before Interest, Taxes, Depreciation and Amortization

The Company defines EBITDA as income (loss) from continuing operations (computed in accordance with U.S. GAAP) excluding (a) interest expense, (b) income tax provision (benefit), (c) depreciation and amortization expense, (d) gains and losses on the disposition of real estate assets (including gains or losses on change of control), (e) impairment write-downs of depreciated property, and (f) adjustments to reflect the entity’s share of EBITDA of unconsolidated affiliates. INDUS does not currently have any unconsolidated properties or joint ventures.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization

The Company defines Adjusted EBITDA as EBITDA adjusted for (a) general and administrative expenses related to the REIT conversion, (b) noncash stock-based compensation expense and expenses or credits related to the Company’s non-qualified deferred compensation plan that are included in general and administrative expenses, (c) change in fair value of financial instruments, and (d) gains or losses on the extinguishment of debt or derivative instruments.

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A reconciliation of net loss to EBITDA and Adjusted EBITDA is as follows:

(dollars in thousands)	Three months ended September 30,				Nine months ended September 30,
	2022		2021 (a)		2022		2021 (a)
Income (loss) from continuing operations	$	830	$	(3,602)	$	3,493	$	(5,596)
Interest expense		1,507		1,700		3,178		5,160
Depreciation and amortization expense		4,823		3,739		13,301		10,048
Gain on sales of real estate assets		-		(1,450)		-		(1,792)
Impairment loss		-		3,000		-		3,000
Income tax provision (benefit)		-		24		(585)		24
EBITDA		7,160		3,411		19,387		10,844
General and administrative expenses related to REIT conversion		-		144		-		407
Noncash compensation expenses		291		236		197		1,161
Change in fair value of financial instruments		-		2,027		-		2,746
Losses on early extinguishment of debt		189				653		-
Amortization of terminated swap agreement		-		-		(1,227)
Adjusted EBITDA	$	7,640	$	5,818	$	19,010	$	15,158

(a) The three months and nine months ended September 30, 2021 include the results of three and four office/flex properties, respectively, that were sold in 2021 and were not part of discontinued operations during the periods presented.

Cash Flows

Net cash provided by operating activities was approximately $14.0 million for the nine months ended September 30, 2022, as compared to approximately $5.7 million in the 2021 nine month period. The increase in net cash provided by operating activities was principally due to the increase in Cash NOI from continuing operations and the change in other assets due to the timing of the payment of real estate taxes.

Net cash used in investing activities was approximately $113.3 million for the nine months ended September 30, 2022, as compared to approximately $110.6 million in the 2021 nine month period. The net cash used in investing activities in the 2022 period primarily reflected: (i) the purchase of an approximately 205,000 square foot, fully leased portfolio in the Palm Beach and Orlando markets in Florida in June 2022 for $31.7 million; (ii) the purchase of an approximately 217,000 square foot, fully leased building in the Charlotte, North Carolina market in January 2022 for $24.0 million; (iii) cash payments of $51.0 million related to investments in real estate assets and industrial and logistics properties under development; and (iv) deposits of approximately $5.3 million on building and land acquisitions. The net cash used in investing activities for the nine months ended September 30, 2021 primarily reflected the purchase of three industrial/logistics buildings for $78.0 million, $33.7 million for investments in real estate assets and $6.5 million for deposits on building acquisitions and purchases partially offset by approximately $10.0 million related to sales of non-core real estate assets.

Net cash used in financing activities was approximately $35.7 million for the nine months ended September 30, 2022, as compared to $112.3 million of cash provided by financing activities in the 2021 nine month period. The net cash used in financing activities for the nine months ended September 30, 2022 primarily reflected $61.8 million for the prepayment of four nonrecourse mortgage loans, $26.3 million related to the repayment of a construction loan, $2.6 million of recurring principal payments on mortgage loans and $4.9 million of dividend payments to stockholders, partially offset by proceeds of $60.0 million related to the first draw under the Company’s delayed draw term loan facility (the “DDTL Facility”) (see Liquidity below). The net cash provided by financing activities for the nine months ended September 30, 2021 principally reflected approximately $108.7 million from the sale of the Company’s common stock (the “Common Stock”) and $14.7 million of proceeds from borrowing on the construction loan, partially offset by $3.8 million in principal payments on mortgage loans and approximately $5.7 million of dividend payments, including the Company’s special dividend made in connection with its REIT election.

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Liquidity and Capital Resources

In the near-term, the Company plans to continue to invest in its real estate business, including the potential acquisition of additional properties and/or undeveloped land parcels, which, under certain circumstances, the Company may consider owning through other ownership structures such as joint ventures. As of September 30, 2022, the Company had five buildings under contract for purchase comprising approximately 1.0 million square feet at an estimated purchase price of approximately $109.2 million, of which $16.1 was spent as of September 30, 2022. In addition, the Company has land under development for one additional building comprising 0.2 million square feet for an estimated investment of $28.3 million, of which $6.9 million was spent as of September 30, 2022. The company also has approximately 250 acres of land owned or under contract with an estimated purchase price of $13.6 million for potential future development of six additional buildings for approximately 0.8 million square feet.

Real estate acquisitions may or may not occur based on many contingencies and other factors, including real estate pricing and there can be no guarantee that acquisitions in the Company’s pipeline will be completed under their current terms, anticipated timelines, or at all. The Company may commence speculative construction projects on its undeveloped land that is either currently owned or acquired in the future if it believes market conditions are favorable for such development. The Company may also construct build-to-suit facilities on its undeveloped land if lease terms are favorable. Real estate acquisitions and planned construction projects may or may not occur or reach completion based on many factors, including, without limitation, real estate pricing and the availability and cost of construction inputs.

In March 2022, the Company announced its intention to sell its Office/Flex Portfolio. The Office/Flex Portfolio is comprised of seven buildings totaling approximately 175,000 square feet located in Bloomfield, Connecticut. Additionally, INDUS intends to sell an approximately 18,000 square foot storage building which had been used in the operations of the Office/Flex Portfolio and is located within the same business park. In September 2022, the Company signed a definitive agreement for the sale of the Office/Flex Portfolio at a gross purchase price of $11,000 and expects to complete the transaction in the fourth quarter of 2022.

INDUS also owns undeveloped land parcels, much of which is not consistent with the Company’s core industrial and logistics strategy, and, therefore, the Company sells certain properties periodically over time. As of September 30, 2022, the Company has entered into several agreements to sell an aggregate of approximately 411 acres of undeveloped land for an aggregate sales price of approximately $24.9 million. The land sales are expected to close during the year ending December 31, 2023.

On April 21, 2022, INDUS amended its $100 million credit facility executed on August 5, 2021, to add the DDTL Facility of $150 million for a term of five years (as amended the “Credit Facility”), pursuant to which up to three separate draws may be made prior to April 21, 2023 (the first two of which must each be in a minimum amount of $25 million). As of September 30, 2022, the Company had drawn $60 million under the DDTL Facility. The Credit Facility continues to include a $100 million revolving credit facility (the “Revolving Credit Facility”), however, the maturity of the Revolving Credit Facility has been extended to April 21, 2025. The two one-year extensions at the Company’s option under the Credit Facility remain in place. The amendment to the Credit Facility also increases the uncommitted incremental facility, which, as amended, would enable the Company to increase the Credit Facility by up to an additional $250 million for an aggregate total of $500 million, subject to satisfaction of certain financial covenants including limitations on a minimum tangible net worth, fixed charge coverage ratios, total leverage and secured indebtedness. The Company currently has no borrowings outstanding under its Revolving Credit Facility.

As of September 30, 2022, the Company had cash and cash equivalents and restricted cash of approximately $26.0 million. Management believes that its cash and cash equivalents as of September 30, 2022, cash generated from leasing operations, sale of the Office/Flex Portfolio, sales of non-core undeveloped land parcels and borrowing capacity under the Revolving Credit Facility and DDTL Facility, will be sufficient to meet its working capital requirements, fund planned acquisitions and developments of industrial/logistics buildings, and pay regular dividends on its Common Stock, when and if declared by the Board of Directors, for at least the next twelve months. Other than the foregoing, there have been no material changes to our capital requirements and resources described in Part II, Item 7 of our 2021 Form 10-K.

Supplemental Guarantor Information

In March 2020, the SEC adopted amendments to Rule 3-10 of Regulation S-X and created Rule 13-01 to simplify disclosure requirements related to certain registered securities. The rule became effective January 4, 2021. In July 2021, the

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Company and INDUS RT, LP filed the Updated Universal Shelf with the SEC registering, among other securities, debt securities of INDUS RT, LP, which will be fully and unconditionally guaranteed by the Company.

As a result of the amendments to Rule 3-10 of Regulation S-X, subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated into the parent company’s consolidated financial statements, the parent guarantee is “full and unconditional” and, subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information. Accordingly, separate consolidated financial statements of INDUS RT, LP have not been presented. Furthermore, as permitted under Rule 13-01(a)(4)(vi), the Company has excluded the summarized financial information for INDUS RT, LP as the assets, liabilities and results of operations of the Company and INDUS RT, LP are not materially different than the corresponding amounts presented in the consolidated financial statements of the Company, and management believes such summarized financial information would be repetitive and not provide incremental value to investors.

Forward-Looking Information

The above information in Management’s Discussion and Analysis of Financial Condition and Results of Operations includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include, but are not limited to the possibility of sales of real estate assets pursuant to certain option agreements; completion of sales of real estate assets under agreement, including the sale of the Office/Flex Portfolio and undeveloped land parcels; anticipated closing dates of such sales and the Company’s plans with regard to the foregoing properties; potential vacancies in the Company’s buildings; the acquisition and development of additional properties and/or undeveloped land parcels, including, without limitation in connection with potential joint ventures; construction of additional buildings, estimated construction costs and completion dates of buildings under construction and expected to be built; tenant improvements and infrastructure improvements; expectations regarding any potential issuance of securities under the Updated Universal Shelf; the Company’s anticipated future liquidity and capital expenditures; expectations regarding the Company’s REIT tax status; and expectations regarding the payment of dividends on Common Stock and other statements with the words “believes,” “anticipates,” “plans,” “expects” or similar expressions. Although the Company believes that its plans, intentions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such plans, intentions or expectations will be achieved. The forward-looking statements made herein are based on assumptions and estimates that, while considered reasonable by the Company as of the date hereof, are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, many of which are beyond the control of the Company. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various important factors, including those set forth in Part I, Item 1A “Risk Factors” in the Company’s Form 10-K for 2021.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4.  CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

INDUS maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to INDUS’ management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), INDUS carried out an evaluation, under the supervision and with the participation of INDUS’ management, including INDUS’ Chief Executive Officer and Chief Financial Officer, of the effectiveness of INDUS’ disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, INDUS’ Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

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Changes in Internal Control over Financial Reporting

There has been no change in INDUS’ internal control over financial reporting during INDUS’ most recent quarter that has materially affected, or is reasonably likely to materially affect, INDUS’ internal control over financial reporting.

PART II    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.

From time to time, INDUS is involved in various litigation matters arising in the ordinary course of business. In the opinion of management, based on the advice of legal counsel, the ultimate liability, if any, with respect to these matters is not expected to be material to INDUS’ financial position, results of operations or cash flows.

ITEM 1A.   RISK FACTORS.

There have been no material changes in the Company’s risk factors from those disclosed in Part I, Item 1A, of the Company’s Form 10-K.

ITEM 6.     EXHIBITS.

EXHIBIT INDEX

		Incorporated by Reference				Filed/
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Furnished Herewith
2.1	Asset Purchase Agreement, dated January 6, 2014, effective January 8, 2014, among Monrovia Connecticut LLC as Buyer, Monrovia Nursery Company as Guarantor, Imperial Nurseries, Inc. as Seller and INDUS Realty Trust, Inc. (f/k/a Griffin Industrial Realty, Inc. and Griffin Land & Nurseries, Inc.) as Owner	8-K	001-12879	2.1	1/14/14
2.2	Letter Agreement, dated January 6, 2014, among Imperial Nurseries, Inc., River Bend Holdings, LLC, Monrovia Connecticut LLC and Monrovia Nursery Company	8-K	001-12879	2.2	1/14/14
2.3	Agreement and Plan of Merger, dated as of October 16, 2020, by and among INDUS Realty Trust, Inc., Griffin Industrial Realty, Inc. and Griffin Industrial Maryland, LLC	8-K12G3	001-12879	2.1	1/4/21
3.1	Articles of Amendment and Restatement of INDUS Realty Trust, Inc., as amended	S-3POS	333-224229	3.1	1/4/21
3.2	Articles of Amendment of INDUS dated February 26, 2021	8-K	001-12879	3.1	3/1/21
3.3	Amended and Restated By-laws of INDUS Realty Trust, Inc.	8-K12G3	001-12879	3.4	1/4/21
3.4	Agreement of Limited Partnership of INDUS RT, LP dated as of June 28, 2021	8-K	001-12879	99.1	6/30/21
4.1	Warrant to Purchase Common Stock, dated August 24, 2020	8-K	001-12879	4.1	8/28/20
4.2	Description of Common Stock	S-8	333-170857	4.4	12/30/20
10.1†	INDUS Realty Trust, Inc. 2009 Stock Option Plan	10-K	001-12879	10.2	2/13/14
10.2†	Form of Stock Option Agreement under INDUS Realty Trust, Inc.) 2009 Stock Option Plan	10-K	001-12879	10.3	2/13/14

34

		Incorporated by Reference				Filed/
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Furnished Herewith
10.3	Mortgage Deed, Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents dated July 6, 2005 by Tradeport Development II, LLC in favor of First Sunamerica Life Insurance Company	10-Q	001-12879	10.29	11/3/05
10.4	Promissory Note dated July 6, 2005	10-Q	001-12879	10.30	11/3/05
10.5	Guaranty Agreement as of July 6, 2005 by INDUS Realty Trust, Inc. in favor of First Sunamerica Life Insurance Company	10-Q	001-12879	10.31	11/3/05
10.6	Amended and Restated Mortgage Deed, Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents dated November 15, 2006 by Tradeport Development II, LLC in favor of First Sunamerica Life Insurance Company	10-K	001-12879	10.32	2/15/07
10.7	Amended and Restated Promissory Note dated November 15, 2006	10-K	001-12879	10.33	2/15/07
10.8	Guaranty Agreement as of November 15, 2006 by INDUS Realty Trust, Inc. in favor of First Sunamerica Life Insurance Company	10-K	001-12879	10.34	2/15/07
10.9	Loan and Security Agreement dated July 9, 2009 between INDUS Realty Trust, Inc. and People’s United Bank, N.A.	10-Q	001-12879	10.40	10/8/09
10.10	$10,500,000 Promissory Note dated July 9, 2009	10-Q	001-12879	10.41	10/8/09
10.11	Mortgage, Assignment of Rents and Security Agreement dated July 29, 2015 between Tradeport Development II, LLC and 40|86 Mortgage Capital, Inc.	10-Q	001-12879	10.38	10/9/15
10.12	$18,000,000 Promissory Note dated July 29, 2015	10-Q	001-12879	10.39	10/9/15
10.13†	Letter Agreement by and between INDUS Realty Trust, Inc. and David M. Danziger dated March 8, 2016	10-Q	001-12879	10.42	4/8/16
10.14†	INDUS Realty Trust, Inc. Deferred Compensation and Supplemental Retirement Plan as amended and restated effective January 1, 2017	10-Q	001-12879	10.52	4/7/17
10.15	Loan and Security Agreement between Tradeport Development V, LLC and People’s United Bank N.A. dated March 15, 2017	10-Q	001-12879	10.53	4/7/17
10.16	$12,000,000 Promissory Note dated March 15, 2017	10-Q	001-12879	10.54	4/7/17
10.17	$12,150,000 Promissory Note dated August 30, 2017	10-Q	001-12879	10.58	10/10/17
10.18	Deed of Trust, Assignment of Rents and Security Agreement dated August 30, 2017 from Riverbend Concord Properties, LLC for the benefit of 40|86 Mortgage Capital, Inc.	10-Q	001-12879	10.59	10/10/17
10.19	Fourth Modification Agreement between INDUS Development IV, LLC (f/k/a Griffin Center Development IV, LLC), INDUS Development V, LLC (f/k/a Griffin Center Development V, LLC), INDUS Realty Trust, Inc. and Webster Bank, N.A. dated September 22, 2017	10-K	001-12879	10.60	2/8/18
10.20	Amended and Restated Open-End Mortgage Deed and Security Agreement dated January 30, 2018 between Tradeport Development V, LLC and People’s United Bank, N.A.	10-K	001-12879	10.61	2/8/18
10.21	$14,287,500 Promissory Note dated March 29, 2018	10-Q	001-12879	10.62	7/10/18

35

		Incorporated by Reference				Filed/
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Furnished Herewith
10.22	Open-End Construction Mortgage Deed and Security Agreement by Tradeport Development VI, LLC in favor of and for the benefit of State Farm Life Insurance Company dated March 29, 2018	10-Q	001-12879	10.63	7/10/18
10.23	Construction Loan Agreement by and between State Farm Life Insurance Company and Tradeport Development VI, LLC dated March 29, 2018	10-Q	001-12879	10.64	7/10/18
10.24	Sales Agreement dated May 10, 2018 by and between INDUS Realty Trust, Inc. and Robert W. Baird & Co. Incorporated	8-K	001-12879	1.1	5/10/18
10.25†	First Amendment to INDUS Realty Trust, Inc. 2009 Stock Option Plan	8-K	001-12879	10.1	5/17/19
10.26†	Letter Agreement by and between INDUS Realty Trust, Inc. and Frederick M. Danziger dated June 7, 2019	10-Q	001-12879	10.67	7/9/19
10.27	Mortgage, Security Agreement and Fixture Filing (Securing Present and Future Advances) from Riverbend Orlando Holdings I LLC and Riverbend Orlando Holdings II LLC to Webster Bank, N.A., dated December 20, 2019	8-K	001-12879	10.1	12/23/19
10.28	$6,500,000 Promissory Note by Riverbend Orlando Holdings I, LLC and Riverbend Orlando Holdings II, LLC, to Webster Bank, N.A., dated December 20, 2019	8-K	001-12879	10.2	12/23/19
10.29	Open-End Mortgage and Security Agreement by Riverbend Upper Macungie Properties I LLC in favor of and for the benefit of State Farm Life Insurance Company dated January 17, 2020 and effective January 23, 2020	8-K	001-12879	10.1	1/28/20
10.30	Open-End Mortgage and Security Agreement by Riverbend Crossings III Holdings LLC in favor of and for the benefit of State Farm Life Insurance Company dated January 17, 2020 and effective January 23, 2020	8-K	001-12879	10.2	1/28/20
10.31	$15,000,000 Promissory Note by Riverbend Upper Macungie Properties I LLC and Riverbend Crossings III Holdings LLC to State Farm Life Insurance Company, dated January 23, 2020	8-K	001-12879	10.3	1/28/20
10.32†	Chairmanship and Advisory Agreement between INDUS Realty Trust, Inc. and Gordon DuGan dated as of March 3, 2020	8-K	001-12879	10.1	3/4/20
10.33†	Stock Purchase Agreement between INDUS Realty Trust, Inc. and Gordon DuGan dated as of March 5, 2020	10-Q	001-12879	10.76	4/9/20
10.34†	INDUS Realty Trust, Inc. and INDUS Realty Trust, LLC (f/k/a Griffin Industrial, LLC) 2020 Incentive Award Plan	8-K	001-12879	10.1	5/12/20
10.35	Mortgage, Security Agreement and Fixture Filing (Securing Present and Future Advances) from Riverbend Orlando Holdings III LLC to Webster Bank, N.A., dated June 30, 2020	8-K	001-12879	10.1	7/6/20
10.36	$5,100,000 Promissory Note by Riverbend Orlando Holdings III LLC to Webster Bank, N.A., dated June 30, 2020	8-K	001-12879	10.2	7/6/20
10.37	Letter Agreement between Webster Bank, N.A. and INDUS Realty Trust, Inc. dated June 30, 2020	8-K	001-12879	10.3	7/6/20

36

		Incorporated by Reference				Filed/
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Furnished Herewith
10.38	Securities Purchase Agreement by and between INDUS Realty Trust, Inc. and CM Change Industrial LP, dated August 24, 2020	8-K	001-12879	10.1	8/28/20
10.39	Registration Rights Agreement by and between INDUS Realty Trust, Inc. and CM Change Industrial LP, dated August 24, 2020	8-K	001-12879	10.2	8/28/20
10.40†	Form of Indemnification Agreement	8-K12G3	001-12879	10.1	1/4/21
10.41	Construction Loan Agreement dated May 7, 2021 by and among Riverbend Old Statesville, LLC as Borrower and JPMorgan Chase Bank, N.A. as lender	8-K	001-12879	10.1	5/10/21
10.42†	Amended and Restated Chairmanship and Advisory Agreement between INDUS Realty Trust, Inc. and Gordon DuGan dated as of May 18, 2021	10-Q	001-12879	10.77	8/9/21
10.43†	INDUS Realty Trust, Inc. Director Deferred Compensation Plan effective June 3, 2021	10-Q	001-12879	10.78	8/9/21
10.44†	Form of Agreement for grant of Restricted Stock Units (Time-Based Vesting) under the 2020 Incentive Award Plan	10-Q	001-12879	10.79	8/9/21
10.45†	Form of Agreement for grant of Restricted Stock Units (Performance-Based Vesting) under the 2020 Incentive Award Plan	10-Q	001-12879	10.80	8/9/21
10.46	Credit Agreement dated as of August 5, 2021, among INDUS RT, LP, as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Joint Lead Arranger and Joint Bookrunner, Citibank, N.A., as Joint Lead Arranger, Joint Bookrunner and Syndication Agent, and the Lenders Party Hereto	10-Q	001-12879	10.81	8/9/21
10.47	Sales Agreement, dated September 2, 2021, by and among INDUS Realty Trust, Inc., INDUS RT, LP, Robert W. Baird & Co. Incorporated, BMO Capital Markets Corp., BTIG, LLC, Citigroup Global Markets Inc., JMP Securities LLC, KeyBanc Capital Markets Inc. and Morgan Stanley & Co. LLC	8-K	001-12879	1.1	9/3/21
10.48	Amended and Restated Credit Agreement dated as of April 21, 2022, among INDUS RT, LP, as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Joint Lead Arranger and Joint Bookrunner, Citibank, N.A., as Joint Lead Arranger, Joint Bookrunner and Syndication Agent, and the Lenders Party Hereto	8-K	001-12879	10.1	4/26/22
31.1	Certifications of Chief Executive Officer Pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended					*
31.2	Certifications of Chief Financial Officer Pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended					*
32.1	Certifications of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350					**
32.2	Certifications of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350					**
101.INS	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					*
101.SCH	Inline XBRL Taxonomy Extension Schema Document					*

37

		Incorporated by Reference				Filed/
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Furnished Herewith
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document					*
101.LAB	Inline XBRL Taxonomy Label Linkbase Document					*
101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document					*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document					*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					*

†	A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 6 of Form 10-Q.
*	Filed herewith.
**	Furnished herewith.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	INDUS REALTY TRUST, INC.
	BY:	/s/ MICHAEL S. GAMZON
DATE: November 8, 2022	Michael S. Gamzon
	President and Chief Executive Officer
	BY:	/s/ JON W. CLARK
DATE: November 8, 2022	Jon W. Clark
	Executive Vice President and Chief Financial Officer
	Principal Accounting Officer

39