GRIF - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to Griffin Industrial Realty’s Second Quarter 2020 Earnings Webcast. This webcast is listen-only and there will be no question-and-answer session. It is now my pleasure to turn the program over to Michael Gamzon, President and CEO of Griffin.

Michael Gamzon

Good morning and thank you for logging in to our inaugural earnings webcast.

As always, we appreciate your interest in Griffin. a some and quarter details provide Galici CFO, numbers. will provide will on I general our overview Anthony Today, the second

release Markets. also information Mancuso of to As second investors. hired In is statistics Ashley expanded vein, our announce effort in I IR that same leasing have would an more with Director call to June, and as provide in to our the Capital this like the quarter our we

this later Capital month brings will Gramercy be team Ashley led acquisition and our experience relevant IR Property its previously XXXX. Markets and having Blackstone to joining very at in by Trust the prior team

looking out are continue to platform we business. as to our We build her and forward contributions IR grow the

into forward-looking performance be listen our that you will we statements the ask diving following making to since Now, disclaimer. we before

Anthony Galici

call some and plans of of statements Safe statements business rules and under this and Please impacts the within regarding of plans, of business XXXX, Exchange expected note of expected defined during market Securities the on Act are COVID-XX Reform those that our Act and Securities the Litigation our Act Harbor expectations. forward-looking Securities including statements timing as Private XXXX, XXXX,

leasing that our today expectations. and non-GAAP Form materially contained cash NOI and XX-K measures. future are indirectly unknown risk are known Please results to our as earnings recent differ those in related actual along involve press including information, statements and undertake leasing NOI Forward-looking the events and in will measures most of statements ongoing with note made our or uncertainties Such and may the today duty update or outbreak to actual release, coronavirus result factors other them pandemic new important a directly of such remarks to as financial call that cause of and otherwise. that no we contain and conference Form XX-Qs risks, from factors, the whether as our other

You our a are of the of GAAP our reconciliation page filed Form financial measures through available our release in statement in earnings we find our at results financial www.griffinindustrial.com. which investor that can and yesterday, on these non-GAAP website XX-Q

Michael Gamzon

Thank you, Anthony.

through that are and you all me well. has of sensitive The pandemic we safe environment. our country of We adaptability great hope Griffin ongoing our the shown challenges tenants I created our across your especially to has as team, impacts investors, and and colleagues. resilience, families this say remain COVID-XX would like operating to and this let which recent its First, since have worked March dedication year. to they our unprecedented thank

to Our levels. far. back company Throughout COVID-XX normal weathered be tenants essentially and have all remained of most our operation seem so current well to the fairly of logistics pandemic, continual challenges the in operating has relatively

remained busy We as have well.

impact tenants we current virus, the in business of have cognizant remain the its sunbelt, rents recent the most development provide an Pennsylvania. industrial quarter, our entered could especially essentially payments leasing cases and from industries. several to warehouses. due where for NOI the of in the operated square feet generally wide of a said, feet recent our That third-party These We land rebounding companies properties of operations. buildings critical into tenants with we tenants. and providers, growth environment, more into by all businesses. Charlotte portfolio have grew respective And normal. The and and global months. XXX,XXX entered has the tenancy, to collected their often flexibly Anthony we potential ranging but to few industries markets rent are including During purchase we largest several and customers, include XX,XXX and improved to returned of Orlando, the through chains or represented renewals, and Valley well our agreement overall details, will held somewhat our we believe new and our past Lehigh for stable logistics national global have large, light – have mission over modern facilities tenant range our customers in up pandemic leases the to underlying as in the cater are of supply their square are on to-date are over Many whose organizations of designed which

industrial Other to include automakers tires. We well parts sector, including distribution e-commerce for tenant a Each and Valley, provider automotive properties in building several as as leading local, Connecticut, including the Charlotte and exposure have regional demand, currently of tire industries have we firms, which products. general aftermarket including Orlando and Lehigh markets also uses major national of drivers four major multi-market distribution. of the have distribution the

to these located our quick to traditional distribution Our needs within markets meet turn light facilities to manufacturing. are well warehouse tenants’ local delivery varied from

our second excluding recently in As Orlando, Charlotte release, acquisition our portfolio warehouse two buildings XX.X% our in is spec leasing leased. noted industrial and quarter in March completed our

lease of tenants adjacent vacancy spaces the square are XXX,XXX feet of were of largest announced within XXXX in the our completed this relocation past from into material quarter balance expansions of portfolio. by previously expirations leases Valley. our expected no have We the Lehigh having for existing the Both leasing

establishing maintaining reward choose tenants on us. to high our grow to tenant strong is a our believe this a focus from and existing standard keen with We have relationships. that We the properties

quarter. in tenant the across leasing has year the current benefit, as the added spec largest past lower over transactions to while the in and space COVID-XX year’s active Concord recently, remaining square Charlotte in completion costs few XXX,XXX up completed two in one feet of after one activity activity the This And somewhat tenant. of during virus other. of those downtime future. two most XX,XXX feet terms for involving require most the leases leasing vacant an months. to and As The fourth square of compared absorption current in fairly of submarkets last no picked may transactions quickly typically Charlotte building the the buildings. halted the has submarket of our lease-up in vacant Concord the new surge been in and left respect has is completed further the we we region buildings a the these past vacancies, With slow pandemic

buildings result, have expectations pushed we a As out two when the our fully stabilized. become

in Greater buildings demand. Concord meet While fewer a believe there market, spec tenant are the has located number competitive and available direct we of to availabilities continue buildings our the to and are submarket well-designed Charlotte

square we acquired in that in the vacancy other in is feet March. building Our XX,XXX square XX,XXX foot Orlando

extensive as space a tenant prior the completing an renovation of We specialized used process. vacant that are manufacturing the for facility

seek very COVID-XX market. We lead the Florida Orlando further expect conventions XXX,XXX and region’s by for will market making opportunities We heavy recognize continue dependence in of to of and and positive square this to our After targets to recent tourism we long-term spread studying on Orlando’s a and August. completed we on the this the of in remain it one feet portfolio have will over fundamentals quickly expansion, have near-term. work in X-building amassed the that softness could

in and activity of has landlords the vacancy the regions, availability believe we rents expect monitor While any the continue currently After and market in material activity and have spring continued the at we pandemic those to absorption. not height pre-COVID Lehigh improved on Connecticut our market have do to we Valley limited law portfolios, during levels. and

population. by pleased absorption there an has credit we properties large especially uptick in delivery to believe in We are well other seeking when been We major to bodes in note in that similar service locations for have activity sizable availability Connecticut this to local market. that industrial the markets, our tenants

of a square of and leased intend north fully to market, pipeline, submarket a represents foot This the continued X-building which move building we portfolio site the our that in position Charlotte the XXX,XXX this so. note total the us commence preliminary we includes the that Next, than in as square to would site performance a the Valley project work building in building. XXX,XXX Lehigh the development less to I future. cost We current Lehigh manageable soon Valley. most like Lehigh on and construction of relative the foot date and development the XX% a commence work do the site Valley to near strong for to we typically our development, on in With With have Charlotte significant potential as is cause completed will deem respect prudent not delays initial work. a commencement it in expense delivering vertical to is work determined that yet

e-commerce, has a in of optimization and We sector long-term near-term Now, Griffin to impacts acquisitions there from growth buildings to increased will turning well believe overall benefit acquisitions, of need strong that may for medium in and place from the believe logistics in supply in and in the long-term. the to the pandemic. benefit We sector. both the redundancies. tailwinds platform for acceleration We the favorable the the warehouse headwinds will inventories current potential over in be logistics from active remain looking chains for and economy the of due sector buffer to some weakness land development. perform continue demand industrial

been land sector from are brokers focus various support number sector those we sites what and and actively competitors, for brokers in fundamentals strong are distribution well have thus few to how and sale. versus growth within pricing the months new last not pre-pandemic the far. for changed levels industrial We concentrate that as and regional development and has our and buildings, portfolios will of as on mile, seeing on development assets and From And the reports markets with acquisitions given properties regions fared well existing has continue past A we potential. will industrial over for completed multi-market really now select marketing markets.

XXXX. for tougher liquidity support to may [indiscernible] investors halted with an The For strong development, owners to of due market opportunities their look location site centers. sites purchase of not rebalance to industrial end XX:XX, square see subject capital tier a completion of XXX,XXX Posted the Valley its properties to may under to this portfolios contingencies, the from the as we agreement core remaining changed, the a Since warehouse to fundamentals real owned is our expected area. the within have few of site number industrial have expect Griffin, estate We their operating is major the Lehigh Valley near land believe including exposures continued advantageous in of to Lehigh This remains population anticipate on we the one we and pipeline environment. least our into top to quarter, industrial back perform reduce in their certain of expect we of Lehigh another And feet that occupiers take the pricing construction development industrial closing closing, continue to development diligence to a while is market of do we upon entitlements. due until Valley. X signed and that second will and at opportunity the geographical industrial a seek receipt half not strongly We allocations adds have in months. owner this future. expect have agreement

We to pipeline will a be beyond our are Anthony. will as by turn With we this will the described I then hopeful well in from I COVID-XX and it other delivered well as that, into over of benefiting the development impact that projects market project industrial be tailwind above. that the

Anthony Galici

of our Thanks, most COVID-XX the Michael. May rent. XX% of pandemic results noting the essentially detail on rent Starting more June bit rent of on with a and provide that the financial collection, quarter of and quarter. April the I economy general impact XXX% we will collected span second

anticipated were discussions where relief their rent. Griffin, current tenants outstanding. the first representing total we of relief COVID-XX As have either requests less the rent rent All of rent. the Based withdrew in onset granted by other in the of total disclosed, tenants for Griffin after XX% weeks not to tenants, amount the Griffin’s tenants rent several denied pandemic would previously finalized remain with relief March, requests of with agreements in three on monthly with requests. equate than total relief Griffin annual rent the X% from received the requests has these

any not received have relief end the requests We of new rent since April.

Southeast for to We potential strengthening that tenants its any these as the pandemic elsewhere resurgence changes future. of monitor could continue the in spread recent the create in pressure as markets our in two for and the our well

leased at was quarter. the of portfolio XX.X% industrial second the Our end

our and stabilized Orlando buildings which Our the March Carolina excludes spec portfolio, North two was leased. in acquisition in XX.X%

leasing park then the feet. During made in significant Tradeport company, in And in XPL square to our most of growth a the weighted provided X.X%. Connecticut, its of on our XX,XXX achieved basis second we that square the line the XXX,XXX an on a In square XXX,XXX XX.X% cash significant additional was space average Totally, square these transaction feet. a we quarter, a Valley Lehigh feet from a to from quarter has statistics of that total England of leases. feet expanded rent tenant straight on expansion and industrial New XXX,XXX release, a investment existing pharmaceutical basis

February renewal discussion signed leases the expansions, was in in far the leases, England Tradeport are for low the that XXXX. thus good leasing the per quarter year. expire cost per foot the for relatively major believe new Additionally, were New scheduled since recently progress were on XX,XXX that of at we lease our second square having XXXX $X.XX lease square to We originally in making extension feet new

few XXXX year a next have be until later likely or not also are to expired that end leases year. towards early which the this of large addressed We

lease the in rates. delay Valley Our industrial spec in the cash Industrial of the the in to March last of second of building of increases NOI the was cash Florida Industrial million by warehouse acquisitions due recently the portfolio impacted building up completed market, Valley existing in the $X.XX the and leasing three improved Lehigh on the footage. XX.X% in portfolio, during touch that briefly in leasing a quarter, up occupancy office/flex in warehouse our notably negatively second from year’s was make I properties lease stoppage cash NOI quarter. rent Lehigh and commencement the pandemic extent addition NOI leasing Office/flex Carolina lesser lease most state square April. of for a benefited one portfolio. related now warehouse in rental from work a and Griffin’s Orlando, will up up to our X% in the by North

grow expect warehouse that continue percentage We our to industrial as to we portfolio. decrease

have we initial footage. comprised marketing an previously which to In this sell square was on total X.X% buildings, addition, announced COVID-XX the put hold to multi-storey commencing pandemic. office due intention of our our effort, our After offering

of The that working into market. of the properties with G&A when expansion of first the at declined and England the buildings million, from back $XXX,XXX will to broker bring quarter. administrative end companies XXXX to are and the New expenses decline an percentage evaluate REIT-related these portfolio non-cash XX.X% intended quarter to as compensation remain our attributable as in warehouse the one leased G&A end XXXX buildings from challenged, increase were the for to expired of of our the We space of legal from renewed. to deferred of our pandemic. the to of $XXX,XXX their is as anticipate Part our approximately expenses business of in addition Tradeport attributed quarter balance a to associated our $X.X the the in of The divergence result general to and results of two higher XX.X% and costs options and reported office/flex can relocation that expenses office/flex needs rethink with up We especially office/flex Approximately tenant expenses a leases were not quarter. changes. second that consulting the plan. second stock We second the company’s of be

for million Valley. the It financing determine to have is and to buildings. we second performance We related million which approximately of of conditions incurred last one of REIT costs totaled expense revolvers portion market in year quarter. smaller in is the quarter [indiscernible] to two the in debt but $XXX,XXX expect due these previously repay in to plans. period. debt previously we $X.X continue we was million, approximately higher our maturing used buildings to alter as in and up Interest quarter The those which $X disclosed million second whether to second costs our remains our $XX net to increase the and mortgage $XXX,XXX the approximately these on a in balances from million. $XX.X a year’s these $X.X $X.X will million increase total that A on The X-month in of increase on intention to was mortgage financial of announced, evaluate and Lehigh mortgage

line drew do $XX placed our the $X.X before of the amount also paid acquired down with million a borrowed this to March of under We proceeds to fund paid purchase. Webster of caution we we building revolving million quarter. pandemic, $XX.X which acquisition We on an In the line that related these utilize available we million abundance that borrowed mortgage had our credit on credit million revolving the the first of any subsequently in second the and out of Orlando, we year, $X.X been COVID-XX end not of entire help Bank.

on $X.X portion February was acquisition the purchase We our of that used the quarter end second at also second a our had the Orlando of credit of price for million in building. line drawn

the X.XX% outstanding average to million financings, of of loan our X.X% our repaid second an XXXX on that acquisition our as second of a debt effective end we the flipping quarter, Including recent we cost with of of building. amount weighted interest Now Orlando mortgage of on revolver rate closed the $X.X end the on permanent quarter. when approximately was the

the million. for $X.X and building which quarter generation included of related expenditures was space. expenditures Capital intended of $X.X leasing, million totaled capital improvements Our million second to $X.X first leasing

payments for $X.X spent also on final construction spec the Charlotte buildings. two the cost million We

square foot XX,XXX Additionally, acquisition we building the million in spent quarter, second $X.X in the Orlando. approximately of the for

the national the land to Windsor net sponsor progress of contingencies, acres Meadowood sale this planned XXX continues $X.X group activity, we In and sale fund necessary to is through announced expect our various unlikely not raising commissions closing of at million in sometime if use state land This undeveloped process funding, subject until with approvals the all for slower and of proceeds the but terms The several XXXX land purchase. will a will Granby [indiscernible] Land including preservation disposition earliest. a agencies East XXXX. as in proceeds their the previously local to occur on of transaction to path that of

land of put an property plans the As XX we for sale hold. an as warehouse have the indicated, its tenant previously the terminated use acres of ultimate – for agreement in on was industrial

that we his industrial building square Lastly, expired in on have XXXX. to under the option the purchase Connecticut previously a disclosed The foot exercise lease building purchase which auction, lease an X the remains March of tenant not did under tenant June had XXX,XXX from the us. building through in and

As $XX $XX we had we repayment amount, Orlando that adjusted of the cash on $XX the in million for of revolver second comprised the over of million hand $X related acquisition. quarter, an of of have acquisition our million previously approximately our top on On revolver. our available on and available mentioned end to million liquidity additional

debt We limited have maturities. very near-term

million two expiring in to of other XXXX, prior $X.X September them debt also of extend overall I additional The of for an revolvers buildings. approximately only office However, our XXXX mortgage want they on to consists metrics. discuss to our year. multi-storey each leverage opted an maturity

significantly cumulative time depreciation is value market but book our which believe than value their on that reflects our we rather below aggregate substantial acquisitions, over develop we most the of As recent to an of portfolio basis. buildings,

value that than have earnings. generate little book land we and more holdings believe also also significantly were We

leverage. metric enterprise book most our to in event] stands support you of our our evaluate value currently session Thank larger a than XX%, our due expenses [No we future to these that going current our to We the metrics. for these to leverage of income forward. concludes the infrastructure comprised call. size, combination G&A portfolio of we to Q&A factors This based our impacts interest. quarter second expect your We our for place earnings this of and and that expenses at which Additionally, leverage recognized debt usual percentage The growth believe peers. have NOI leasing approximately believe much value,

Michael Gamzon	President and Chief Executive Officer
Anthony Galici	Chief Financial Officer

INDUS Realty Trust (INDT) 10 Jul 202020 Q2 Earnings call transcript