GRIF - Earnings call transcript Q3 2020

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Operator

Good morning and welcome to Griffin Industrial Realty’s Third 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 Ashley Pizzo, Director of Investor Relations and Capital Markets at Griffin.

Ashley Pizzo

Thank you and good morning, everyone. Welcome to our third quarter 2020 Earnings Webcast.

the available presentation Griffin available this website griffinindustrial.com regularly a also on to at supplemental new quarter, under addition earnings has materials, published our In tab. Investors which is forward-looking XXXX, of like Private also Securities and including this will Securities mention I XXXX. Exchange statements Act Act would Federal of to under Securities the Act Securities conference Litigation that call Reform contain the the XXXX Laws of and market industry These management's and based projections Griffin statements as in on estimates operates, the are which expectations, beliefs current about and the well as assumptions.

and around These land Forward-looking of statements factors performance levels the affected may value guarantees and may of factors. developments, expectations value and include those statements expectations of actual not market a acquisition holdings. expectations growth of plans, external plans, operating with and impact results by and be dispositions, shareholder timing our are respect business of and variety occupancy business our on creation, to

For a in XX-Q please the list filings. XX-K to factors, most recent our of and those risks listed refer

which that development With pipeline. will third we'll also who from turn please cover conditions will to Galici, results will cover Anthony and Michael. real supplemental and item quarter core to Regulation from call XX-E cash and as we've over Investor market a from I'll measures website press SK, FFO, release provided leasing the who additional and non-GAAP are Michael, FFO, This reconciliation and and you available those in contain We'll measures in our quarter third accordance our CFO, Gamzon, Michael recent page of EBITDA recent measures Additionally, CEO, NOI, detail. the our financial the EBITDA results, are FFO, adjusted from begin? materials, financial G, presentation core griffinindustrial.com. such the that, estate published with hear hear our of Regulation at on in activity, morning updates

Michael Gamzon

Ashley. you Griffin. all for continued your you, interest morning Thank Good and thank in

XX recognize pandemic that your remain of that As the we tenants and from We close far and United its hope sensitive on families still investors, in the and and impacts to in of the on are remain well. over safe the effects colleagues. States, COVID pandemic the we eighth our month you

industrial the push have our business and While from and we plan. strong period, industrial collection vigilant our the remained which in resilient this tenants, especially on remain forward we sectors to with thus respect we far operate. rent with virus's Through to continued experienced impact markets we've the occupancy

company Property earnings year, the we including to in prepared and former intention Over to CEO the appointment have Gordon Trust yesterday of the supplemental including disclosures materials financial increased last the the status Chairman, of Gramercy released the XXXX announced role for of elect evening. REIT the future beginning growth DuGan,

or these discuss Ashley contact and into track events with participate. and Additionally, taken to host XX how Conference accelerate feel end, Day that and participate Investor in dive to value. to the planned further for events to as free any Griffin increase well and about strategy questions record to growth on to more Please shareholder details to steps upcoming Virtual we plan increase We on through we'll to intend on to XX XX. a our plan November outreach use Nareit the November the and the investor virtual

that equity of supply Now Griffin equity It logistics for a external of to become Management, August, and levels, was our history quarter event partner, value support can the delivery portfolio provides step are and Griffin population placement accessed of plans our of and as most on The common first close national to distribution. equity private raising at We'll and million raising represents leading land path in we for the the has designed closed at that feet. this uses Cambiar recently. issue at XX,XXX the newsworthy way what real buildings grow will the also between majority Perhaps and centers We'll premium all a a XXX,XXX then on estate proceeds. flexibly a growing continue with important allowed end properties. new that total for end focus help we've of the select for that as XX-year to issuance modern, to equity trading additional significant logistics public service our that the raise square up economies company. and transaction buildings the on to to equity intend road. capital up We the price vision local see constrained $XX.X to possibility shares to the company. a with shareholder in This another our warrant We been transaction creation. time a us us growth down of target who proceeds development use acquisitions markets from the to

pipeline that. development current just Our reflects

the add complete the in third is We've calendar market. just that which XXX% our are next leased begun construction to in the quarter Lehigh of by in Valley, essentially we square expect we existing building a year. holdings Our Lehigh portfolio foot on and Valley to eager XXX,XXX to

versus on tier it update with familiar discussed with but support combined industrial Lehigh will We we of warehouse The an a the process, process original plan since there with in We've remains Valley quarter. square an which provide adjacent are last original XXXX. foot entitlement difficult a of pleased the the when we the developing for development top history under our are constrained is parcel XXX,XXX feet. parcel to square market our land XXX,XXX to Lehigh placed Valley approximately agreement land also an supply a

well-located excited are the pipeline. property this Valley Lehigh in our We core within area have to

with of sites. Charlotte, the which of limited submarket square region We is ready north industrial also submarkets strongest are development XXX,XXX the for building park one available three of development in that foot in

to alternative one including potential continue than market buildings. market on current and that on two very We're slightly we while dynamic would demand, remained evaluate bullish region. include we plans rather we construction growth. the commence population logistics the strong site with three changes in larger are Charlotte economic long-term in smaller buildings this land, and As a reviewing trends the

over past development of submarkets is submarket, located that in active of we Our leasing in Charlotte mentioned existing increase have in local in XX but of XX We one the you and up project over months. Charlotte as believe months that Charlotte for the activity the the in last virus up buildings recently acquisition lease pandemic strong the land know several have Sunbelt and the COVID region, of past terms remain most the picked which development completed of progression market. been quarter investment vacant and absorption, in remaining space the for Concorde

us. development up buildings, are first We another Orlando development potential the feet in past we year also last XXX,XXX totaling our of located excited This for time around to We July, support site just under of is land land the project ahead but toured Airport. tied International this placed West Orlando. the developer square the two that expected agreement of

reengage over of the buyer is and The acted capital pandemic, the during subject million of change issue, with for the COVID in the in the agreement. as our described, will reached source result and from this required to current totals Upon XX other we today. diversify up that approximately $X.XX Valley, where the Lehigh diligence the The Given concentrations. The X an a quickly for million increase development purchase projects XX% land market stands learning footage completed, or seller our further dried portfolio of conditions $XX Charlotte geographic spring. completion pipeline price our development I total Orlando in and budget approvals. one these just in development square feet and the is million square

acquisitions seek our existing development of both markets. We for target continue in buildings land and to

or Given put an we to than to kept during past under around strong on example XX for the Last of are us to These for it significant am I'll Crossing, we completed add markets remains back seek before where intention properties, and large opportunities larger to now period to report March, multiple leases. X efforts office square the The with last to those very pre-pandemic relates for The deal announced find offerings that we assets and sell the immediately our and for across long-term as million industrial the higher to but activity of is our spring to those and to fit sales we the than portfolios, update agreement recent levels. tied dispositions. hold or Orlando Anthony multiregional our pricing two is we our uncertainty then land competitive. pandemic. of creatively million. of many up a at which over amount touch opportunities. sector X almost had buildings passing Waterside $X.XX facilities two ear X value. Market We've to have continue COVID recently because in execute equal to talents, I pleased specialized markets we investment feet sale relate multi-story on will for can moment, e-commerce not ground demand this

have we Griffin in XX sell place agreement another addition, In to Rd.

closing to portfolio to these completion feet XXX,XXX XX% the his Anthony customary remaining sector. fully the of the some other well-positioned be price subject closing diligence. will approximately or square flex Griffin's only sales we currently of to three leased. After square are benefit conclusion, vacant and will a contain flex of XX% footage In is property a office office in XXX,XXX activity million. total disposition approximately three Griffin's be feet on sold from touch in and successful of office represent Both tailwinds logistics at Griffin believe $X.X remarks. building South, XX.X% are dispositions, The the that due satisfactory will conditions square approximately leased.

portfolio located performing a of have strongly in relatively markets. modern young buildings We and

we and release along the disclosures we shown, evening. With turn As on our you our earnings a to Anthony. has I it on and supplement tenancy overall data information to our I'll additional rent encourage the yesterday that, company, tenant stable have review collection base. issued with over the

Anthony Galici

tenant of at payments collected provide That Thanks on XX's end, rent will through to adjoining now has deferral challenges, paid to that rent Michael. the all rent into August and new a of it industrial under in the tenant related and The this will Subsequent lease. our are previously of an lease have the in feet be operating agreement of rent tied quarter collection; Starting tenants logistics building levels calendar rent Connecticut. relief not of at feet the I is requested leases entered strong. into with relief December with COVID and after lease square despite a warehouse expires quarter, financial determined same XX,XXX XX.X% inclusive in not to year. rent space for end tenant results. These more in tenant all detail renewed third the Griffin building Griffin square expiring tenant September. piece our remained rent that bit that relief this of each request normal its expand essentially will XX, tenant the that XXXX. adjoining any quarter Griffin agreements. has under grant only XX,XXX will to July news this whereby collection as June, one

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

that Both in the prior Michael the touched portfolio, Orlando acquisition in market Our remained feet mention in excludes on two square XX,XXX significant parted buildings the unchanged measures North spec other only Charlotte I'll second from we which vacant leased. the recently space exists. industrial leasing our quarter. March and Carolina renovating completed environments, was in already where XX.X% stabilized We building our Orlando the the so quarter. vacancy

pandemic, our Orlando the is While are solid been tourism which been has recent interest tenant has in on encouraged by XX and market available absorption impacted space. the by hospitality and there we economy, reliant COVID

XX.X% approximately renewals In and trends and positive square terms at X.X% feet cash of line leasing lease a totaling with signed straight three both respectively. on we past XX,XXX quarter, activity this basis

calls, leasing either Of stage XXX,XXX renewal or lease expires role. lease we scheduled is on to to previous feet, feet XXXX, but XXXX square in pending square one renewals in progress that XXX,XXX expire November our late of mentioned XX, which discussion. are XXXX, we on have are in As make continuing under the all leases

has our supplement on disclosures tenancy. additional Our

up buildings up of quarter Our year's industrial million $X.X in NOI cash X.X% up building NOI completed third cash cash portfolio, occupancy from with leasing lease in Griffin's of renewed warehouse acquisitions impacted the to was the spec improved third leasing lease in the Industrial increases which this warehouse new extent existing and recently the of last rates. the from Florida three were rental the earlier a from Valley lesser one for North in Orlando benefits the and benefited about market, quarter. addition most and periods three by partially the These offset Lehigh in completed leasing of $XXX,XXX. NOI rent the year, notably Carolina leases

Our and up square X% portfolio total make office our XXX,XXX properties by square flex footage. feet approximately of

feet of that Michael in successful remaining the to will earlier, pipeline of With represent will square close the be half dispositions X% current and approximately cut footprint the our in office XXX,XXX square almost mentioned our down footage.

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

would for long-term have portfolio strategic plan, third higher nine-month in sale, quarter. efforts quarter growth associated The increases to expenses flex the increase and in their the to be The on option and companies Griffin's of of other in especially of the leased. to compensation a our million million initiatives. reflects $XXX,XXX in remain where and of increase through office of supplement were of to up size deferred the general approximately continue its also details as approximately we REIT Directors. to delay stock G&A challenged, the Our but Year-to-date a nonqualified $X.X in leased the needs the and including period, expenses with legal expense. company the from We making August, XXXX XXXX a the I for principally our agreement from nine-month that conversion provided properties anticipate excluding $X.X you up XX.X% additional $XXX,XXX flex and We quarter, higher as rethink $X.X increase REIT the and any related third have XXXX corporate consulting growth expenses office was Board our expenses under expenses administrative period. reported occupancy the to G&A will initiatives, of related pandemic. third for office and conversion of in incurred we refer million matters properties pursue XX portfolio in commitments Griffin's end to administrative space result XX.X% our expansion related to the fees costs as public page our various strategic general

for As elect intention remains our previously XXXX. announced, to it status REIT

new the of and warrant fair period. $XXX,XXX although instruments now amount settled August. with income would being Our was be statement value of associated right to warrant maximum value to sheet warrant fair the third is warrant is that placement XXXX and liability It's on cash There million the contingent required the the and million. the XXXX, value expense, in in are classified this instruments of completed also as rights $X reflects private at liabilities recorded period if change value issued This the for balance Griffin quarter XX, financial of of of also as contingent in as financial the were nine-month expense were in XXX-XX. as reflects changes derivative noting reported the under be worth that they pay August fair ASC $X.X value the that part

of related appropriate focus we The add have was in to of value million prior slides $X.X we debt, million in Adjusting FFO As reflect higher XXXX of nine-month calculated to to increase with The both these NOI. cash versus value the the as metrics to of supplemental reconciliations core expense efforts start reconversion for typically essentially defined taxes, section presentation, change nine-month XXXX definition report. non-cash well EBITDA leasing estate, in our toward third nonrecurring I in more which supplemental expenses, which of compensation back of for for we such for of and adjusted than as the the FFO consistent nine-month at was with which and our for core impact quarter our to million I and fair $X and and wanted increase metrics the as an period. the that seven like as change FFO. our supplement. growth non-GAAP million EBITDA, year intend point interest mostly the FFO to mortgage approximately are fair and the $XXX,XXX in transition on the decreases instruments, financial pursue GAAP the and related FFO, warrants would I related XXXX additional offset found the FFO the real period income for In impacted FFO, appendix $X.X of of million well G&A and the be Nareit discussed the a previously you plus XXXX our periods. XXXX core core the million expenses G&A become presentation our FFO $X.X and of the as G&A FFO. expense and core flat to $X.X initiatives, quarter to XXXX, metrics strategic REIT noted. amounts to that to high previously measures metrics higher Similar third to up REITs effective at we our expense nine versus interest these to period respective $X FFO, on through US was

and then $X.X and and construction infrastructure and Our capital industrial million new expenditures $X.X building industrial development related in improvements million leasing for totaled in for the for $X.X them million and tenant tenant leasing. $X.X an consisted building improvements of to million cost, to third quarter of building first-generation second-generation

and Valley XXX tenant Dr. building recent International the at by Dr. leasing were improvements first-generation driven and Charlotte. in Lehigh in The Ambassador XXXX

third the leasing $XX.X in which end million of At our revolving approximately newly of to placement were improvements by $XX.X the of driven private building signed quarter, we third two comprised a over credit trade. and on cash $XX.X quarter spent from related tenant available the and million had $X hand closed million principally in on liquidity, logically Second-generation on million XXth transaction, XX-year August our facilities.

near-term very debt have We limited maturities.

want have an agreement our Our consists overall and we million our under are revolvers to debt option to $X.X previously of additional mentioned. September them discuss XXXX also extend office The as maturity of other two mortgage multi-story year. the expire on of in an XXXX which prior sale metrics. only leverage to I for buildings, for approximate each

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

also earnings. We our little that more on of have this page value holdings. land book believe undeveloped holdings I are to than supplemental we significantly refer for you land generate and details worth XX quarter's

that factors which we size, believe our We metrics. much a expenses peers. book comprise metric larger our to usual recognized is our than our these Additionally, impact combination due leverage. current debt-to-enterprise leverage leasing that XX% currently to of approximately and income-based at the value stands The G&A of our evaluate NOI a percentage value,

For to portfolio schedule complete a growth summary, of the you expenses believe our place expect point our to most going and this presentation. to In support quarter's as have their we I leverage these debt, future in additional to XX of well supplemental forward. leverage infrastructure we metrics as of in XX slides

expected conservation in progress to a the various approvals The to our touch second and of close Meadowood Lastly, land to dispositions. land update organization half sale XXXX. regarding to on some continues land is I'll local

additional acres notable under a listed subject $X.X We million, QX sites supplement, developer agreement have out the also Page contingencies. to solar are our of of under price consists for XX to for sale option minimum purchase of XXX which of that on most a land a an agreement few

We XX. the you and the having Given process to on site development, transaction for Thank concludes third Day November ready not for qualification earnings virtual look until Investor would you solar we call. interest. lengthy XXXX. expect our join close forward This this to our your approvals to quarter

INDUS Realty Trust (INDT) 9 Oct 202020 Q3 Earnings call transcript