INDT - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to INDUS Realty Trust's 2021 Second Quarter Earnings Conference Call. [Operator Instructions] Please note also that today's event is being recorded. It is now my pleasure to turn the program over to Ashley Pizzo, Vice President of Capital Markets and Investor Relations at INDUS.

Ashley Pizzo

Thank you, and good morning, everyone. Welcome to our second quarter 2021 earnings call.

available which INDUS website is under Investors regularly a also at to the presentation, supplemental available tab. addition earnings has materials, published www.indusrt.com In on our will mention laws. this to federal like also statements under would conference I call contain forward-looking securities that based expectations, estimates are as as and current assumptions. and beliefs on statements projections well These management's

Forward-looking may a by factors. be not variety of and performance, guarantees are affected statements actual results operating of

XX-K of those in factors, please for the ending to year listed recent list refer our risks November most a filing XXXX. fiscal the For XX,

XXe we presentation our additional FFO provided have unless activity, when and to occupancy call, results Additionally, and who estate financial G only, portfolio same this recent note This quarter press to of Gamzon, will from second our cover reconciliation updates NOI CEO, for a conditions Michael square Item accordance EBITDA measures release that NOI our metrics, measures. property NOI, on Regulation refer pipeline. and please as SK, In refer morning, we'll our Also, supplemental all please non-GAAP otherwise footage Regulation measures. logistics contain we and in such are hear those real market to that financial with specified. and and industrial statistics,

hear I'll that, Michael. prepared we'll With begin? be remarks, call CFO, also who up results their After your will will the from questions. Michael, our will Anthony Galici, please over quarter opening We detail. cover the you in second turn to to it

Michael Gamzon

quarter. maintained for industrial accelerated demand additional exceptionally strong growth supply X%, for and INDUS. our and capital indicate to this at industrial major Good operating our we environment, exceeding values continued growth Ashley. new vacancy all sector well logistics increased performance, access properties. Reports interest national our Within and record and absorption, initiatives. to and brokerage the The morning, rent firms you, continued Thank from strong perform your during the you in thank

testament the stabilized quality of properties, our a our currently tenant As to demand and portfolio in-service leased. XX.X% is

portfolio, of leased, we speak in-service see Charlotte, our all rental foot, For more addition which are and the XX% reflects markets. the bit demand which across tenant a increasing square We XX.X% later. about entire of rates strong leased acquisition I'll in XXX,XXX

scheduled making that We a roll square remaining existing in rents XXX,XXX There our are upcoming options progress foot of are available good lease square X spaces in tenants and are a to go and this as begun to very expirations to November and in a tenants on rent XXXX expirations. are continue negotiations we've in with there in space no Charlotte few year. only realize up. XXXX, expirations December and lease XX,XXX extensions We Connecticut for our both regarding currently those foot address space with

the future. to sheet for appreciate and in support and next and transitioning lenders, our materially from We our as step new important revolving balance recently entered group capital, new a BMO, a of lenders In doubles an we facility terms agreement new and of availability new facility JPMorgan financial this debt adding future lower see for $XXX cost who commitment had a Stanley. to by the into the are credit up Citigroup, to This previously joined we an Morgan of and KeyBank flexibility growth. by our for provides and we with million led support

Since Nashville and call, a that portfolio our project our efforts a new announcing X-property the pleased X earnings properties call. execute We and added to have added in last Lehigh on to land below agreement far under in including value our strategy acquisitions one in in last closed our year, night supply-constrained properties square rent the remains the we closed markets. we portfolio, on to in which fully the addition Tier week last industrial Valley, potential have Lehigh XXX,XXX The last targeted in on are investment the finding described a on value by property, we first. current with completed we So Valley we Lehigh our has foot building creation high-growth I our development Touching on to this very create pipeline. excess believe market Valley leased X from the and this top-performing well market, site. significant long-term and our high-quality

there the leased off which submarket square This and the absorption market XX% essentially airport Our traffic major recently free the Airport. are of as inside XXX,XXX Charlotte an location to And in value sourced few is located second strong very we this the will quarter valuable this for Charlotte. site its believe good we opportunities due development through poised is acquisition, opportunity to in around is growth lease-up and interchange the beltway believe rent key delivered, a to the increasingly highway create of very at closed adjacent vacancy. building foot of Charlotte. end warehouse a a future experiencing We the market access

years location for believe tenant were cheap and along tenant vacant pleased located on is closed for Tampa fit deals, X existing largest to This are space tenant in this the take of as to size executed we Lakeland, Central tenants, and I-X a the the our Florida demographic in trends grows with executed, believe space. we leased the fully agreement market we the Florida. activity our Orlando. an balance this on the connects the remain important improvements square with Under exceed corridor acquisition demand. would We struck if leases building's ago, the was modern far, of by week with presence our on Florida no and economic bullish terms very initial that and the close XXX,XXX is We and well deal, the last fairly lease So landlord. as which both of foot in building funded The gets are Central underwriting. and

rents. tenants market below current a paying As the result, are

there X.X upon We rent mark-to-market adjustments weighted term expirations, lease significant which will a expect have years. both tenants of average lease be about

very than property's in of the their XX% use more the tenant investment Additionally, in sticky, and large mission-critical building is customers. the for the its space given

acquisitions to by market regional developed good expected which on We are connectivity spec we future be completed excited feet. Lastly, XXX,XXX interstates. that to enter we're construction national with buildings the fits the growth totaling squarely barriers million major regional we few the to with excellent all, experienced. buildings and within recently and about in major a opportunities are very in Nashville great very and utilize close markets distribution and downtown can of square great these FedEx will serve is lease under growth proximity the capital feel to purchase new year-end. The rent as The market located to facilities strategy Nashville needs. multi-market has that of strong to into long-term high what it fundamentals. markets strong and them, in X close is forward locations In local, market of the sourced the with economic Nashville with located absorption and to one off $XXX believe facilities development of UPS infill noting significant are very demographic new being development buildings our of and

will parcel close one of square a Lehigh This marketed, our in an Valley was building of also have under the similarly XX,XXX we construction. that the which We land Chapmans new foot a the support sized is to project development with land pipeline site, not agreement added located development XX.X-acre widely building. to Road purchase to

us receive we entitlements. completion, from months X success complete seen and due in about confidence our project, further increases we necessary of meaningful and remains new rents, Chapmans giving tenant asking this diligence have assuming While the interest the in strong satisfactorily market

of which by continues prospect We in be the growing excited to high-performing Valley, presence logistics are market. our very a Lehigh

key add to to showcase the months the I normal think remains in components with forward steel balance remain traditional inputs, lead are certain acquisitions, development months elevated. value availability on has land, of to pipeline, X our pipeline to these challenges ability of keep across value-add spectrum development raw I'll along certain brief. conditions. purchases, and of XX our of where been the construction, core there stabilized X other joist, widely terms times as during up my also now notably remarks of and the reported, Pricing acquisitions, X buildings. properties But with versus construction continued bar invest

table However, these impacts. our in in have updated rates and pipeline continued cap supplement estimated the development increase estimates our stable and results market relatively best rents materially, is to reflect increasing. of to have development The which remaining development margins yields compressed

deliver third projects, terms Amazon In on quarter. the Charlotte track in for by build-to-suit to remains of end of the specific our

initial our the rate place at in end We this have we the a a subsequent construction project, second for and began interest favorable of to quarter. loan drawdown

million our at dispositions. a site we in are our near X X.X $XX to nearly spec will but assets as pre-leased to take and All feet, warehouse by closed Landstar the the have over quarter development our we now of footage. and XXXX. which and ago in June the buildable million XXX,XXX mentioned building to XX% efforts are that where we a project, our XX% that noncore has permit would monetize Chapmans acquisition a I square which from square X.X known in construction XX future for foot the fiscal what reported our forward agreement pleased project in land which pipeline, than foot We million add mentioned a XXXX. will square tied We of portfolio formerly is recently to our end brokers rate the we strong past remain projects ago for development and over XX% Switching just to under under other dispositions for expected the in per portfolio Landstar price Nashville by of The the on developer year Jetport, in I the advantage are square Lakeland for to Connecticut, growth existing a note ended land demand we second in, which currently This higher feet I our called Road have market. this to on up Logistics that it a closed paid moment in put bring to focused is today. of quarter. foot, waiting XXX,XXX deliver under commence nearby hope agreement square earlier, Orlando Orlando, the square been Center, X-building

our can diligence, deals couple happen disposition of due off a list. As dropped during

of a As added an to of to farm by expected nursery is our which the leased to million operator sale proceeds generate currently nursery pipeline. is This year-end. disposition $XX.X offset, we Connecticut our

Lastly, I initiatives include front. of we've policies our website updated the on section wanted to Governance and Corporate have new mention that the implemented to we several ESG

we and turn for our works, forward the in you. it With to projects over to with additional that, sharing of review. look financial I'll number a have We progress Anthony the

Anthony Galici

Thanks, Michael.

from over this was NOI space, NOI the million Cash quarter. second rates buildings quarter, from a increases the year second past acquired up cash to the of extent, $X.X XX.X% first last generation and rental for Our and in benefited year's lesser lease-up second quarter.

the this closed we our space for commence have and will benefits Amazon signed late already next the more significant expect from quarters NOI and number We year. as year. half year, leases this this a on last receive Charlotte acquisitions NOI the and second year full in and X first-generation the of of built-to-suit early over will new cash growth of of quarters, that

and NOI. same-property XX.X% X-month X-month Now second NOI turning cash respectively, to fiscal to The period, versus XXXX quarter the growth XX.X%, same-property XXXX was period. in and quarter same and second cash --

rent Our at previously first-generation benefited delivered cash XXXX for activity the quarter on from and Lehigh leasing the the and the pool same-property off second burn this Charlotte spec entered that space in same-store buildings free period. of most NOI Valley

first and rent that to rent from burn in would in some in space between the in have and from free in growth provided international. quarter the annual incremental -- assets also we XXXX during were periods as to We lesser pool reporting extent also the not benefit changed second benefited leasing the as QX note escalations XXXX, well the quarter's second generation have percentages. and quarter's same pool QX of included These XXX include a this same-store I off property and NOI portfolio. XXX

properties. X.X% June purposes, X for -- our quarter those growth XX.X% would comparability strip ending with over been as in of XXXX the June XX, we NOI with QX months XXXX, reported and XX.X% the were the our X out cash For inclusion these XXXX, to the compared assets over June compared period, same-property X.X% to inclusion these of to as months XXXX for June properties, and XX, XX if XX, ending QX have

comparisons we our we strong lumpiness the Looking occupancy for the quarters potential this past tough metrics NOI will year for and in the few levels note next. lead later quarterly same-property forward, reported to and

FFO, Next, growth in FFO, a Cash $XXX,XXX noncash which up noncash million $X.X items in G&A the I to such removes the period by want mention the of impact I'll XXXX as million core of partially more in was quarter XXXX in rents noncash as expenses, offset was which which minute. compared core a of in at XXXX. compensation bit increases million XXXX over same second $X.X the in second NOI as to in quarter describe the $X was and

is the which the our that AFFO, acquisitions, there portfolio NOI. and few to have somewhat maintenance combination back-end year, of expenditures in our as nearly time, number existing weighted the second-generation fully remained As warehouses. for and expect quarters. averages costs we first-generation our have our increase recent of due be CapEx excluding in capital been new the X of this CapEx leases Maintenance or projects, leasing as including space quarter, XX% relates in space it million at and leasing undertake maintenance for fact Over $X.X we replacements low costs Green of to second-generation occupied a roof $XXX,XXX were certain approximately this is we Street few a with line to expect to

million. by certain since cost fiscal and public decrease increases falls third-party that which General will described was reflected described outside hiring declined this I noting XXXX versus compensation lower tied previously QX, compensation increases decrease expenses other up classes G&A biggest was public the costs REIT leasing These cash for QX $XXX,XXX non in were versus company the timing this additional cash of believe quarter this quarter, due a G&A. legal from quarter. million, audit cost. approximately expense, company second conversion fees increase the in $X.X in were preparation -- General Partially expenses compensation and $X.X offsetting holding QX of QX driven legal non-qualified QX in for that quarter, April, quarter Now in of from Adjustment when cash as and was a land. bonds compared new cash to related using The last first Counsel expense land, we the majority which $X.X a tax million capitalize offset firms, second to to sequential approximately comp increase I After lower the undeveloped on million expense of adjusting which, we versus which deferred approximately headcount XXXX and on on adjusted expenses $X.X last G&A. the last to conversion charges expense to of relates G&A a to increased to which year, could onetime This tied in in costs quarter. under by rule in those year, lower the our administrative expenses of partially additional REIT our in costs. on plan, to and adding call

quarter that mentioned cost on one this land I before. time we Additionally, the incurred the undeveloped

technology our prepare as systems for undertaking upgrade ahead, in we us the growth future. are to an and last I of Looking accounting mentioned quarter better

our implementation just approximately the spread of quarters. cost few begun have We work next expect over the be $XXX,XXX to the and

some of be line. flow We significant will costs portion expect to these our the through capitalized, a of costs though G&A

balance Though in expect next these to junior to be more level. couple G&A quarters and few a above first the over acquisitions adjusted likely expense finance expect we XXXX XXXX hires recent at of we G&A Overall, will the the the slightly cash level end hire the hires. employees a more than areas. half Additionally, and our of for

stock plan forecast. tied difficult market As is deferred we comp nonqualified quarter, described to and is performance the last to

Moving on dispositions. to

sales combined GAAP Nursery Blue previously industrial mentioned, a over XXXX Nursery due This $X.X NOI industrial This is annual at with property if place by and Farm building in other sale have completed. earlier. mentioned NOI logistics Connecticut a this announced in Hills $XXX,XXX of $XX.X million, cash approximately sale, NOI, the included the operator. on has Farm in nursery will touched our I respectively. which our land GAAP agreement generate Connecticut remains As are in we with will that generates million. cash million approximately and Unlike lease the under Avenue, million sales, and $X These in lease which Michael $XX most both for diligence, reduce proceeds not

As million will interest rate building has a at Avenue Hills repaid that a get at $X a Blue approximately the mortgage reminder, of closing. X.XX%

buyer not of under a X potential Lastly, that had subsequent to we office properties the to second quarter, the end decided of agreement proceed.

these sell to to We or continuing balance seek portion are a assets. now turn our all sheet. to I'll of

second will a be on a credit on our to Michael agreement our new facilities. would LIBOR facility availability facilities. $XXX basis X our extensions week, cheaper under the The grid, mature into the revolving has the at million had new second later which revolving the facility of using pricing As We the we up $XX in new needed. of based which, to the basis out accordion support up completion end XXX XXX that The if increase subsequent to current JPMorgan points, the allow of Charlotte. utilized to doubles drawdown last year. points into X earlier, development leverage, decrease quarter, we XXXX, for a entered quarter which Amazon previous we build-to-suit capacity with fully to will feature, entered previous is is began could the credit with facility $XXX from of plus option The touched for an expect take priced million, facility in this us X-year through project's credit at August on a facility which borrowing to loan be the our million, upon and it to In an also August XXXX. loan also construction the the

leverage. of by of touching million. $XX briefly on Lastly, our net wrap up I end will debt our the the quarter, cash approximately was just second At

of market plus as capitalization total debt to quarter. debt net XX% to Our the value approximately total is XX% end and equity was of enterprise debt the

in into developments to to and we to time. acquisitions EBITDA past, cash to and continue grow pool to deploy As asset the leverage we target closer our unencumbered metrics levels expect get over mentioned our peer help our traditional and

the XXXX, new would terms XX, from will million the offset acquisitions. full described, spec fund of With credit agreement. the we excluding amount Nashville liquidity, and cash the had have now amount loan, future that, our the acquisition In this by proceeds build-to-suit, Lakeland on turn projects our used of I Difficulty] acquisition approximately liquidity Michael. Michael June available back development balance [Technical of nearly we of spent to Top $XXX fund to $XX.X under of on assuming million the ongoing are over Amazon which and the liquidity. dispositions our of Portions we as borrowing the will construction facility, it

Michael Gamzon

half. start in you, a Thank of have for I'm accomplished by the this year, we and first great off we second half to are already Anthony. the excited what

we performing our a portfolio believe asset with stock high-quality and ensure We and well to to located industry we below and that shareholders. current we to work strong gap markets have is tailwinds. committed close deliver continue price our Despite strongly net that return a secular in value, to are this, long-term

Trust, success. for CFO want contributions questions, him their I one our I take want to particular. team our has to on efforts spin-off employee about since and a his also be speak September for want thank transition thank moving of we to his and I in INDUS Anthony CFO to this the INDUS's our exceptional our to leadership continued moment to CFO as and of in Jon year, Before at company to been the XXXX, Property Anthony joining announced CFO during January to in Clark, the tenure. the at Gramercy be end assist that retiring will before dedication the recently will with the in former team assuming role and of XXXX.

take our that While and the no to brings and experience Jon executive that, look him Anthony his back your one team are contributions turn can to join leadership financial a company, we us. confident I'll over our to forward operational replace of wealth having questions. to and With REIT to it operator

Operator

with First Instructions] comes Korchman question Manny [Operator from Citi.

Manny Korchman

obviously, did seems you deals you like competitive. acquisition of cap paid a about How as what in markets and that Michael, new market you entered pretty the lot rate the did? a full are think

Michael Gamzon

Yes.

strategy. where and and we population economic with I good we a I that, are tying We limited And think think to very And seek think see about But supply focused for and locations strategy, averages. be we're be are good question. And markets upside. to then selective. within new competitive. seek Nashville, like to this buildings going think potential we clearly, very it's national markets are our as where above we expected it growth our

what we on think or For core site kind with think of a years. of expect flexible create factors the rate. yields opportunities and talked initial of just longer-term Lakeland, returns can of XX the like easy value. see assets cap these the over, value variety time, returns, when executed and include and plans one and below a over about Valley over did better over in a the portfolio at owning quick We of out say, really can our to rents But horizon we value-add you market the yields improvements returns we've we a in calculation. That's look help market to lead focus add more look can or strategy we And that's than expansions we development where acquisition. and also we've it's which I in Lehigh where example, acquisitions strategy as time.

do and locations higher so rent specialized that, to and competition, to there's to going better And meaningful returns we new creating be secondly, that's we in-place think limited rates, where value. for, growth lead their more cap at with know, And look going warehouse a money of own tenants where footprints, you as we for lot of look the cetera. at not traditional invested et But look we have buildings, same good time, kind space. quality opportunities in

irreplaceable with their it sticky or you buy future a customers. to becomes them of improvements And tenant that, to the so into And that likelihood we get how buildings. downtime, for really and reduces cost tenant we and factor which

And attractive doing, above market we're -- so creating development of we're typically yields buying rates. we above rates are. that, we all growth, these those margins which margins are of are throw where significant above cap And think is buildings at kind good our a and are in and and cap the what we think that the part we with

Manny Korchman

you for like like to to And a how those we maybe vein, target us, you'd guys? in just in markets market and remind expect be markets Nashville could can what get many how you big same that And are?

Michael Gamzon

Yes.

Florida is our in I in think what we've kind lumped past as X, is we've in X one said Central be and of the goal market. we're will together we now,

assets of goal square enter Does buildings. it a to market to when our we that square to next least want, a and that XXX,XXX grow the really goal which is look foot of are little a years. X feet, at then a good think the we little And think I XX,XXX market, types grow X can less? at saying more? to buying million is the over we Is it that's We a couple number. be

that that for million us, So and we acquisitions the X has was square other as both at hopefully at minimum. feet in one acquisition opportunities, with land lead over looked to we as thinking development past can done grow for a and Nashville, to start the

Manny Korchman

assume, one issue how but to to maybe the your to filed one equity would file going point. mentioned shelf I one a someone to likely some You for I ATM, of which that does me. big last decision forward? an And remember make influence NAV, discount at can't you, or

-- trading you the you're Or on a in discount, that are if issuing at fund see you interested how the So equity big horizon? you if still this growth do not, here?

Michael Gamzon

Yes.

excess today, what's for in have to our capital significant powder in we think pipeline dry I fund So future or acquisitions.

Anthony think of out that liquidity. called million I availability in $XXX

don't industry given the and why strategy the determined We in we And trading should this highly create do long-term to for have and we also returns we're scale investment doing, mentioned, close really cost that assets, we're provide noncore investors. have are which cheap not valued gap execute the this us that same assets to good on and that we we for our to this significantly continue assets provides lot we across a see acquisitions, I'd And persist shareholders over valued on aligned is in. And any of we're that what and gained very have NAV. and we're properties are. outlined our our of focused then outsized in, look who through markets in is things sell other if this fairly We trades look, opportunity of that going a is, going major you value. to quality on typically redeploy you think we're reasons stakeholders, below management when today's for to say for line the creating are going stock credit markets we recognize gap rates debt, assets our the think a do of way cap capital and close. and As at that to the stock value and number I time. significant believe we're those, and We increase the nonindustrial shareholder industrial development including discount are

Operator

from with BTIG. Catherwood next The Tom comes question

Tom Catherwood

the providing But building when buy to in back merchant go we build. about you always project. to And case, guys builder you wanted it's a a wouldn't say just I some Mike, details it. acquisition. for you wouldn't on think spec it, Nashville that this Thanks

could you are really how any square comfortable is rents that get So $XXX indices quality and that did with unique price building drive physicality for the roughly the requirements, there the of features matching kind you? a given foot, and lease-up of

Michael Gamzon

answer Yes. the this That has obviously that's builder for that just of that. merchant high-quality one, reputation the building we Happy sizable don't terrific fairly said, diligence is a a to industrial properties. reputation a One, builders. really

So as we feel ourselves. we is you would have noted, anything built something is we something buy

site think, we site team are location the the into. plan, building go the importantly, finishes and using plan are building, this development And and type so they within the for of we construction And built combing great the they how is market. a Nashville floor are specs, our through ratings, caulking the the details

So quality we're confident want. as going going buy very that's wouldn't that do we're type and it's if own building would just to we that we office building to the of Otherwise, it. a be

of think what located the market. is to in is Stepping In really the a this, second think, positioned building I asset this back and we've uniquely releases, for terms a express tried Nashville we Nashville. on price, this within and the

and downtown, former which reports office a into is city I noted well. isn't think of It's industrial. that Nashville, nonexistent. and is close keeps Nashville residential the a really usurping supply broker actually market rent And where growth number industrial anything new infill is to develop. doing Nashville creeping have XX% a just over of past There experienced almost the year. growth close as in outside therefore, both supply

an the Oracle, northern company the example, side on a Nashville. campus big building of downtown is As big tech very

industrial square they we seeking there's X we're that. is of get that's where building miles what located of feet is of land, bought actually -- going doing to Beside, to buy the demolished. they're north infill As part XXX,XXX

and developed So very to are to very else There's it's hard moment nothing at being there. close area, in very the get infill. close entitlements that Nashville,

barrier in is as going an infill-type a location, hard -- to high and right great this think and off location also to So to above ring the again. is think, rates location unique, facility, growth to big rent highways, the main has it's it's think mentioned, going rental that's get generate be road X with X Nashville, well market to right And a miles rent growth downtown. location. and but FedEx this The around to rents. for strong another next we location we anyone be We are goes UPS going just the access to that I quite to it's

Tom Catherwood

Appreciate that.

of left mentioned X and also you're top the it expirations, sounds like the You on XXXX, those. in

As rolling general nearly know of of look average look on it's side, I XXXX early, renewals that kind it on the industrial move-outs general is you're rent above of? kind though or mark-to-market any year? a large do And expectations year the some industrial average but you next AVR already year are market. does have kind there aware into it's like next XX% below or we sense of of

Michael Gamzon

bit bit of combination sticker are a post markets. of have a all a of kind in and plans year, rents influx. lot little of And tenants up they Yes. the comments, generally shock think get a for company's because obviously of in lots is COVID And still little think I'll mentioned up of I I'll I about comment But then and the talk in my come as specifics. I renewal. interesting what's market, moved last And too

Some they need they space a than more thought lot did.

need of decision a less the what's with coming needed. for very it out this might space exactly one And frankly, at or end because they year, of a supply. they is number the tight locations happened they're the adding up renewal market of that's delayed initially tenants couldn't elsewhere, combined ones figure Some and what

minimal the here just if TI, we could a company asked increase that's place space, to no their downtime, space deal, around sort deal deal came And tenant. up and they in We what I they a should and wanted came a us that back back initially, rent. at they effectively have country not case out were is lots this tabled to they year, fairly And in -- global went a And frankly, whatever renewal add out large actually right big contractual short-term with we they go they they no we rent wanted for tenant had. deal sort and wanted of example, the and basically so not therefore, the of around of market. so of And they pay the of frankly, higher shrink market, rent, in world, one of and the industrial ended the search to small tenants think do. for free today. And with the a

to as of helpful actually delay up. tenants given frankly, the against the as worked of continued rents it's their market been kind but it's So strength renewals a to have landlord, go

square I'd year, XXXX at chunky one to the year. sort look renewals. different building bought Valley. we plan. next comes As one, of of couple That the the last there's we That to Lehigh announced a start in with feet probably the of end added almost up is which XXX,XXX we that

renewal so in we have significant paying as a rent. we bought the kind investment the space, I of tenant think extremely and set Yes building, the market below when schedule. expressed and they're has -- they

because going likely, sticky So it's it's example, very very we a for renew they're tenant. that to think

One speed. tenant quite up to in doing pre-leasing space while They're Connecticut need the of going a to other the mean overlap renewals bring other building is as that build-to-suit, for we're they the the the to I for.

out out a availability we longer, will and shorter-term that do a We of potentially rent renewal. larger but went the a of beginning, pushing that do letting It's strong little sort Again, the to other we options, potentially one because growth looking of Lehigh one So in market is towards favor. again, renewal. leave, of think That our end one, similar in year. the in they're have and we're that at described Valley. frankly, turn out for lack absorption think probably the the I going play to of the the tenant, that

they've first one renewal, They feet also And hasn't have historical in then a in next they're to a the renewals. we year, covers X the renewal. kind And XXX,XXX kind renewal that several We time. kind year. are give a in tenant set deal -- indications have months quite do long of to out comes of that that on going we of for one a happened up has couple us a that had of is so X-year been for part a for years yet. XX,XXX-foot signature Early right renewal based building the ago, notice think next kind of the spectrum of

its very markets next and we small tenants as early than of good nothing of we're out in other to roll. we X possibly seeing year's year. rent X part in the going - expressed, know that tight a move feel very the but of growth good demand yet, move so So we small But pretty in markets, all optimistic about next out rent

Operator

question Dave with Instructions] [Operator Rodgers comes from Baird. Next

Dave Rodgers

built deals since more pipeline or that you've about announced? how to nicely Is to the of of the what on us wanted color recapitalization. a give continue beyond I ask guess, build looks clearly activity, acquisition I you've there that seeing But maybe like? pipeline large that you're backlog some number what today And the strength. and

Michael Gamzon

Yes.

we're we in, We're So in do always or the looking at bolstering team our that. in to market opportunities. the we're -- markets in to markets be want

We haven't really given pipeline out numbers se. specific per

of what opportunities if when a our good to again, about think talked we they certain want sellers something just we're unique And said, and with of and our is company goal we at it as and win a opportunities active. goal through But have focused. start a certain mature certain some is We it's And to grow, seek as to kind I or we're we don't a but own process. I kind as remain we'll is go seeing off-market are blend relationships of it produce very where off-market. is something, that process it look

in for seeing and so we're there. for markets, a Both our current land. buildings of number And opportunities

to looking done I the typically off where other existing will bit continue or a getting a who the little capital there's sellers, past, development, forward at. going than resources one well. or Nashville front. entitlement purchases at think the and over to are little us, out an for good market. they're we are an markets than highest in on We're not and opportunity utilizing where buying price just There's opposed yields as both given X we the we that's higher new really selling look think often dribbling a on be time bit as land more our we're the the like described properties on We process, but X we've to focused building, typically and to lower be development think

So a we range and in new markets. of both buildings, in market off-market existing purchases think development, and opportunities, couple a both current, of there's forward opportunities

about real have more it lead future acquisitions. development in, do in we're would itself as market powder, again, pipeline dry we to want a out I giving give the to So nothing it's opportunities. specific, report. fund to the additional here But we're I each start of until sort talked in think We we available And we -- seems to active.

these us. are own take and we're these time And of together, good just leads years side outcomes on internal particularly markets the where to doing the over some decision-making several built through for land hopefully come their ones owners relationships that working to through we've in and

Dave Rodgers

that added spaces. Nashville additional the talk color, a I lease questions. you well wanted the lease to bit I about as maybe the Michael. X appreciate up timing that little as Charlotte given Maybe yourself to

we pro forma perspective? terms yourself in prepared what have a How Nashville about Charlotte, timing modeling on close And should something. of you and given or your said again, you in comments, in from think you think a timing I that? were that like then

Michael Gamzon

Sure.

again, company. happens, with team very feel So very with on dialogue assuming we're we that. design with the tenant. Charlotte our they're that, we discussions And both the large our think keen leasing It's good on active in team lease and and a space,

rent, with in be Typically, of company just peers, same large like would tenant So and think commencement permitting on pro their In we space. in month I built materials that we like of lease in typically we Again, end It X free it's pushes Charlotte negotiations ago, years. the think, most hope. and -- soon. buildings a a the out a delays we sort But it's for year. our mentioned, great will and a of out in we fairly place And have lease to getting a it'll the then we we everything a to location, as in bit will Nashville, build lease-up X the are think takes in think a little little end building. given commence I likely forma a credit. a has ongoing. buildings. it's And bit X and lease would we of this months. X but of rental push while it's the sign And year it of lease out little probably [Indiscernible] think longer-term XX-month spec of just great to rate We this the a had lease is XX that way. basically above did building, little for be goal when given bit The likely I gets kind up towards to a towards the the of

that. I we're hoping think we'll market do better The really than seems activity strong.

of As positioned. are it like location There's developed this else how that. I really of nothing mentioned, uniquely -- sort location near new think these find buildings anywhere hard we a because is getting to

mile delivery getting of to kind we combined So the think due as kind of to of that close fits infill growth. the mentioned, theme losing with it that Nashville's last I customer, location property,

months to conservatively up lease that buildings. of we've assumed So timing-wise, kind we're both better about does but hoping XX

Dave Rodgers

for yield the added given there. on The pipeline overall, development And me. I then appreciate the that color last you've

overall return you it, that expectation move build-to-suit, the pipeline? If Amazon does I know had land development which on a exclude materially larger component the to that

Michael Gamzon

Not really.

line is I of is pretty average the developments. of much building these right we Amazon with other the said think what kind in

up much one take other And a then So in rents. it pre-lease, or I'd the view where pre-leased. conservative build-to-suit obviously change things somewhat And mostly way than the there. a doesn't generally other right It's or comment, building we other. on the say it's line Amazon,

to things talked we the development costs the upped about. we think I reflect

keep of obviously, view of view, think high conservative these for what kind of think of some a typically some but that out start we're we almost XX% national growth or conservative fairly year. and over is already come these some digits, we couple took of at aren't we And CB work I looking a and themselves single conservative they're for a nationally year. costs this on was hoping line delivering rent market delays in the rents, costs, buildings next the think recognizing view to commenting I back a on think, of I months,

think again, those and kind in line and -- conservative just the reasonably say we're of we right is margins which being range. more that's right fixed, Amazon with on that So in

Operator

enjoy questions, Realty Trust's more joining XXXX us INDUS and Earnings week. no this With Call. for your Second concludes Quarter you Thank

disconnect. now may You

INDUS Realty Trust (INDT) 10 Aug 212021 Q2 Earnings call transcript