INDT - Earnings call transcript Q4 2021

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Operator

Good morning, and welcome to INDUS Realty Trust’s 2021 Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions] 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 2021 fourth quarter and full year earnings call.

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

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

the Form filing For by as to please our a XX-Q our in quarterly factors, those listed list on in updated quarters. subsequent most of report refer risks recent XX-K

presentation non-GAAP refer unless and who Michael, remarks, otherwise will market Clark, year hear you CFO, hear detail. results Jon Michael. fourth to quarter have contain and measures. please full results NOI, our footage to those activity, from be with After we quarter their the square press provided property that and begin? And opening questions. that, Also, cover cover pipeline. XXe recent will supplemental This Item NOI such real we and release in CEO, on portfolio metrics, fourth conditions of will Gamzon, call I from our Michael in and financial our logistics as additional and reconciliation in to to occupancy when we referring the will who our FFO estate to our these And Additionally, over measures are same statistics, note prepared that financial With will also your SK, accordance for morning, EBITDA up G Regulation we it only, NOI will are industrial Regulation all please will this turn measures. call, updates specified. we

Michael Gamzon

interest through include disclosed exceeded our as which square acquisitions, Good XXXX for Amazon, your achieved pipeline, number if you, fourth increased you in the be XX%. or of a to Southeast footage the our expanding from development, company This major development achieved year growth service as market high-quality our be what Build-to-Suit morning, you many X X. of great a properties acquisition initiatives. growth the sourced region industrial thank off and in start We by our new with we everyone XX%. will and Ashley. And in our for INDUS. These our placed goals Thank increase we as the of XXXX during we was Yes. was dynamic our and continued geographic will logistics presence quarter. most notable at for being markets well the footprint over

over portfolio the with year. to XXX% ended We stabilized a and in acquired Our well property November. only our we portfolio Charleston in-service relates leased, XXXX in performed our value-added that and vacancy with

significant Connecticut, majority divested specialized our announced remaining of assets, portfolio. the office/flex our assets. non-core We morning this parcels, several office/flex We property and including large also land a in intention industrial some our of dispose to

While in very industrial part we be XXXX. these sale, portfolio, intended play remaining our assets a pure a with the truly logistics small of will company are

also We our increased capitalization. greatly

place took two of the proceeds. generated offerings, completion most which October of million in net in the With equity and recent $XXX

place in with scale facility growth. our We also $XXX put along up million the with ability to credit

placed XX% well January XXXX, acquisition our well set new to Lehigh and market of under and geographic and at Nashville Valley. market in already up be Lastly, for completed be of in pre-leased forward closed as strengthen soon a as great to a we which delivered development soon our purchase building the XX% a we've us an in-house X, start. our Since contract, us the build These to continue Charlotte team. to for off results is out

NOI, shareholder in We $XX market under square this industrial logistics cap the and are $XX representing value the yields power out the X% to cash add $XXX a million in high stabilized and opportunities. cash and advantage will and tailwinds feet last REITs. significantly that demonstrates to meaningfully grow rates. properties on majority focused our to acquisition initial in expect of of And throughout locations the XXXX take substantial the this off well-positioned look XX% of low public remain of The nimble additional to to performing returning development current our long-term. growing as and $XX over of investments marketed this is quality very where in our current and pipeline XXXX, we in growth value pipeline Heading currently Completion under strategic pipeline efforts mid noted year-end. market of are or the earnings This on industrial sharpshooters, our NOI just in investment. have of we of future of developments through higher to range, And our million broad-based focused supplement. pipelines core over one on vast million into development the and and into dates remain from estimate a million. contract We external XXXX, high above with closed of potential we we remain properties the the most with As to company market we pursuit versus fastest X annualized believe many occur quarter we the sector, which come stabilized XX% to or lightly acquisitions. be selective opportunities, continue in includes million of our represent be XXXX,

we acquisition the warehouse Charleston compete we movement. is market. global investment the rate in current to leased is tenant January, attracted a a were and market. procuring, development and property opportunity this the especially challenges warehouse the permitting XX% existing this lease of that certain foot tenant construction In that delay grade activity, the had we in equipment industrial availability manufacturer. a we and expires below of to continue We can sourced closed There XXX,XXX on terms to in the which because year November, short-term In building inputs and this recent of on Charlotte in XXX,XXX square middle to market, note limited off at closed foot that square a with acquisition in

As ready an is property and certainty a we significantly which this market. result, date moving in on current believe is availability having valuable the

which XX% yard, up its pleased at Greenville/Spartanburg This after the makes bullish the or within are the Chicago rail in Charlotte very population a of region's also growing and the inland third is forward regional very drive. national market. U.S represents and to entered for the square is from of XX% Georgia one-day Boston-Washington runs a average. and The shipments region Greenville/Spartanburg largest XXX,XXX population the which the into corridor I-XX approximate the from distribution success We intermodal Atlanta part have foot in overnight in economic through We're port an area. with Xx Charleston. sits the located U.S the is warehouse Greater of Carolinas on which corridor, the key market country's of well of gets this between purchase Port

feet, Aerospace size, Orlando market BMW, the and is the strong is a manufacturing over million absorption which year. line the major of last Pennsylvania, square region has port is extremely GE plan in Central and Michelin including has Nashville, others. to to experienced close industrial I-XX. acquire in manufacturing with amongst to located it feet terms The In over its property and square very and The inland base, XXX facility well of in XX great we BMWs access addition, million

second XXXX. market A to is add in to a pleased infill expect of This second expect property XX,XXX pre-leased, building location, with close our later in this very square that building. good feet on and up are isn't tenant in finish we're foot the square two this true acquisition building deliver to We the quarter project property in portfolio first noting of we Nashville interest and seeing XXX,XXX being the to quarter. first the the

in rent and We in benefit oil of the and approach. of choosy remain strong events yields to inputs, tenants on to earlier, or of on challenges permits. even of continue availability in the current I continue supply development, geopolitical stabilize And aware this are as also from to the Switching and getting growth price we mentioned chains. construction be giving selecting impact

as earliest and making projects, to pre-ordering strong margins. by development possible items we've updated this We address upon shows delivery. our our certain ready that key as spec of pre-purchasing the dates, excess In and the across that our development proactively which delivery possible at supplement our moving there's and continue yields reflects can a use schedule we maintained yields costs, components construction dates, estimates

a at rate strong more to that above complete the remaining Valley the in the Lehigh We market space the pre-leased of building XX% asking foot expect above our project rate and XXX,XXX second initial Lehigh our The quarter. now very pre-leased. the square Valley is tight. and remains We underwriting XX% on than on rate

Given strength announced this of land closed building. a to square market, we're have previously on XXX,XXX excited support the to the foot

We project shortly. on expect to construction commence that

and groups, over time. provide land also And holdings holdings Switching progress cheap made These this source which ready to to fourth actively fund of continue no to sell we expect office/flex XXX,XXX pleased help remaining in a and intend our generate as of to productive in very the earlier, non-core some income market development building been development two capital to occupancy our year. good that remaining development. we third I'm also foot of agricultural preservation have the to well sometime for quarter acquisitions and Orlando, for We as dispositions square as be conservation solar in farms. that undeveloped I We our dispositions. land Connecticut past recent well as quarter. to a portfolio. of land as note sell had have have the to mentioned large-scale do of We intend in several

square on only in leasing. significant XXX,XXX the is have Lehigh most which XXX,XXX leases foot We the in a feet Moving lease of of XXXX, Valley. to expiring square

our a couple term fixed lease but acquired that tied building that sometimes of we our schedule to period. inherit rollover to fixed We renewal of an that we'll leases, acquisition. for fourth most with in market rate. out the renewal I part XXXX the Charlotte a quarter of to a are renewals with addition tenants point most lease reporting renewals a in as add next had in our completed January, we of In

that rent, fixed than of have forward. In three terms going of only our less rates we renewal have representing leases X% portfolio,

our significant to we lease While years. capture modest, next our portfolio is the embedded several rollover near-term over have in internal we growth that expect schedule

just environment, under annual averaged premium in-place in get a at pushing lease X%. above to in escalations escalations standard the current this Our previously X%. rent And are negotiations we

on even leases, we new our of the a with our growth cash been with rent rents lots our relatively strong all XX% portfolio conservatively has excess Additionally, in of basis. markets. in is young an estimate of portfolio And mark-to-market

we For and exclude our the rents portfolio. growth stat this industrial of we grow continue Build-to-Suit. for the expect strength our mark-to-market of given Overall, to Amazon markets any mark-to-market to our quality

I turnover. which We great just as past finance, in year, appreciate and wanted and our their extremely this team very we performed well experience continue low legal well to year. operations. acquisitions their to as Lastly, I discuss loyalty INDUS past as including in to efforts made additions this

in well the it system property smoothly. I'll over which REIT Speaking that, at of With with for Jon for we've role our turn benefited managing and to conversion, efforts his X months, of accounting finance, Jon been gone us working has year. experience financial deep Clark his as over has CFO as review. the from this Jon recent the and officially assumed start

Jon Clark

INDUS FFO Thanks, fourth quarter increase and with new quarter to was our happy quick for start year. the Michael. analysts familiar stakeholders. engaging XX% with review the both and prior $X.X to Core part a comparable million of some just team I'll the financial results. of of the be I'm over and

roof for the FFO respectfully. X.X core the core difference was For million, over the million, for and warehouse projects space, is costs $X.X which expenditures XX% generation of $X.X was and $XXX,XXX. million FFO and year, includes with the fourth in quarter increase million our between and The leasing was the and maintenance a a about for full second repair quarter capital that cost year $XX.X fourth prior and an aggregate replacement two and year. AFFO

for For second $X.X the million. and year, costs leasing was space maintenance generation CapEx

Core as growth October difference other adjustments, the the which metrics $X rental was driver non-cash the is such large year. in up most to $X.X Contributing to space. quarter for -- FFO Charlotte the which in two The in of was acquired QX increase first- from and placed rent, and million quarter in in NOI, rental of and the XXXX a revenue revenue million lease last was million full past the and course of million over was QX QX X build-to-suit benefited $XX is of for full the over year second-generation XX% Amazon to over XX% service up up full the properties which in straight-line XXXX year. for $X.X XXXX; between from both in NOI the year that year earlier this

logistics turning Now to NOI property for same properties. the cash industrial

quarter was respectively property cash versus NOI and fourth growth and in same XXXX the For XXXX X.X%, year full the X.X% comparable periods. periods,

our statement. our and property new in quarter our larger an this is same pool. development expect a renewal, same activities I'd property portfolio the burn time, same at This about quarter by XXXX. pool and in related total for the million Offsetting loan spec in the in development were most from represented the NOI on year. million in General up, to larger have pool foot first property quarter NOI of properties to total which Charlotte activity. in that of cash make capitalized At year our comparisons to on for which just generation X% interest was free construction expense Our property off for point build-to-suit. benefited rent some and for few rent space not this to captured this correspond the decreased cash previously the the we very percentage of fourth of and a most expenses interest, full fourth of fourth from increase the about slightly a quarter pool few acquisitions that XXXX this year. free leased, same buildings, XXXX is up going represented SPNOI industrial same Wrapping square on logistics going the out delivered increase tough new from XX% an XXX% $XX.X XXX,XXX part leases total reflecting offset slightly, the for things the the XXXX $X.X XXXX is administrative be metric. to ramps and Interest income the as

growth fourth company's recruitment the G&A this incentive expenses mark-to-market non-qualified compensation increase were the to than first non-cash for as to charge deferred the compensation three The the as bonuses to well related fourth related talent XXXX quarter impact strong million were of quarter from contributed reflecting compensation in and quarter. for The increased in performance. was $XX.X the the added higher new $X.X expenses Excluding numbers recorded year. year-end headcount the and and the plan, million in also in the it to fourth the team the increase primarily quarters,

and a a that the and year of to In legal the addition, prior myself the overlap partially between our to course in company's reduction increase. the Anthony, increases These related incurred conversion of CFO in contributed offset by retiring million REIT. $X.X to accounting were about costs was

properties, industrial in proceeds logistics $XX.X about generated we and of majority of from quarter, and recent million that dispositions the to fourth acquisitions the applied During properties. of non-core

X.XX QX. issuance we year million fund significant in We net provides public of equity $XXX stock growth a paid the North an generated sold were $X.X off $XX.X balance the million X%. with Road X Crossing shares sheet debt an average million of our million XXXX October, strong interest that which We rate sale, approximately lease of undeveloped Prior all mortgage and to This as Waterside of Hills common in offering. properties proceeds operator, XX In land with to X disposition also farm as Blue raised a Griffin underwritten to Avenue, finished included weighted well NOI from initiatives. from about in the was the flexibility annually. and in

the reflecting facility. Our was credit liquidity $XXX.X million million of in cash, at year-end $XXX.X plus capacity undrawn the

January balance excluding addition, purchase it Charlotte building used square in mentioned. balance, restricted in sheet the and the XX%. XXXX have The cash ended in XXX,XXX with $XX.X on balance total we essentially current million our that debt. is was year-end. of exchange, mortgage cash, majority was had the construction enterprise value our cash XXXX In debt foot debt our held and for And of we Net $XXX cash which at our the connection with on of approximately like-kind very We loan of in Michael approximately year had sheet. little million to

our earlier, group on as mentioned XX,XXX the ultimately will the well of operations to announced -- exit that Michael storage management QX sell square building XXX,XXX recorded our we our As this and feet intention as sale expect foot operations morning to sheet, square comprise discontinued the assets sale in office XXXX, with the be for of those and remaining approximately we ultimate business X this office/flex serves the which statement. balance Beginning held primarily as as classify about and properties. income properties

cash year As measures financial to of significant without of report remember, the a we some disposed of. were will XXXX. actually million But generated building full the NOI result, AFFO, $X approximately other quarter. for office/flex properties, NOI the core sold we business be which The fourth most these FFO, sold assets the and in of any

office/flex industrial book disposition value of sold as $X.X year, during disposition is XX. assets of storage properties square was on facility, NOI. would of foot the portfolio from XX,XXX including our what be million million $X.X December currently has The the the the supplemental, approximately classified Excluding in a NOI which portfolio net

research any these to teams Looking identified of new and any Please include help than what's other not or a quarters financial first operations orient our note assumptions a of either few do beginning already the acquisitions that'll around assume capital not exclude the forward developments on assets we equity our raises wanted treated the or on with and to some office/flex also investors items. reporting. They results been XXXX, discontinued and line be as debt. do material scheduled financial pipelines, of

between and you I the XXXX, removal we of would the that and remind $XX For we million. this $XX expected the fourth quarter, range from NOI NOI remaining estimate to reflects completed from NOI the the assets. sale of in million removal range the office/flex dispositions

several deliveries XXXX. new back end Additionally, weighted will building and be leases in

the potential in particularly the budget have among that occur generally downtime offset, the did downside some -- few As we an renewals for in of removal quarter. half which this second year, we the fourth -- year,

NOI compensation, planned then our the half little X-year the and $XX and result, out I team With began a and million this new million. a plan $X.X million note compensation $X.X full noted. of QX QX. leasing sequential reflects changes increase excluding with approximately a to between reflect year for assumptions And we This compensation to range talent estimate and just bit flattening As staff. in growth including forecast the added grants non-cash through range XXXX, on XXXX stock quarter period. part is we stock-based incentive to issuing year, G&A each We $XX.X due acquisition amount, deferred mark-to-market Last of additional the plan. and stock comp with non-qualified estimate the in compensation this vesting as between million to million of a of the

increases moderate. compensation after year, increasing one have non-cash and for to accordingly we'll that So, more costs stock are expected then

expected system, budgeting some G&A year costs this the half this consulting ongoing and expense including first in the fees. quarter. our Additionally, $XXX,XXX be related to incurred implementation $XXX,XXX new tied accounting, approximately and management of to is our project is of second of

Finally, our note currently forwards pipeline into will as properties bleed that not as have I Note just cash just XXXX for which and liquidity that is walked sufficient our in hand. in the well fund on developments XXXX, existing existing through. some assumptions in of spending I the required to investments all nearly to the with addressed just our we like

low As on debt the Michael. in raised. believe developments, we current ratio, back we addition turn debt had potential acquisitions a stated With to in have additional future capacity it value the levels we I'll asset conservative that, and over utilizing to equity past, our to any of for debt we

Michael Gamzon

you, Jon. Thank

to cash future. turn concludes business shareholder in momentum on I'm I'm importantly, accomplished prepared flow, great focused very asset for take by what INDUS's remarks. We excited have most in And your encouraged our operator questions. remain That back and it the I'll growing we and the net value, over to our about XXXX strategy value. and

Operator

Connor Berenberg. [Operator first Siversky with Instructions] Our from question comes

may ahead. go You now

Connor Siversky

taking Good questions. morning, Thank the you everybody. for

we're Just color in if the competition wondering acquisition perspective current the consistent end? to provide you end the kind changing to movement. whether somewhat on seeing into are -- environment, in like the on you're start, markets, I'm you extraordinary And this your relatively emerging are cap as appreciate any pipeline. since of rate of what time can real looking year? any that is expectations Or these you things for

Michael Gamzon

you. to at haven't hear from the We this in we're seem Yes, markets they've rates seen been. about thanks, point, looking be they to major Connor. Good Yes, really -- where cap changes at.

to I have in properties and that really of think continue remain underlying gone growth a low settled the properties XX-year located to a uncertainty asset on are rent hard it's demand to really that do we the expectations. It's kind the obviously, so quite really front. up predict class and good rate attractive cap think strong The obviously for lot continue But had look strong, be high-quality remains future. geopolitical remains now. while -- of well. industrial And there's back well forward, as I

are it's they're where of we I where rates and cap the think, So, and status sort think quo for going. moment

Connor Siversky

the clarify Thanks funding $XX the pipeline, then me supplemental? Can you it. all on has million how to out development that the just second Got that the projects five been at color. already And the for between and for spread seeing spent.

Michael Gamzon

you the several the look end to chunk last between get if to and and the kind you projects where months I back that, think, that, biggest at back fairly The bills. that's typically paying to get a just effectively the usually dates waited the of have project. delivering, is time of spend construction I with of If to are vertical

the if you. dates each project it's can of towards back think delivery I the probably going best about when kind wait give it's to, end approximation are, So, you

Connor Siversky

sense makes it. you aggregate, of And That looking like? square the per a can what cost sense. Got get foot then is an just

Michael Gamzon

don't seeing is building we're the of top shell have kind in I that What my of off general costs. head.

that The biggest amongst change the different and costs biggest During land driven the range. -- up variable have is our a to $XX of projects foot site bit about really costs little on on depending across situation. it back fairly We been average can calculation thus, Building with the have costs that foot consistent and get per fairly, handy. have that. Ashley or Jon,

Connor Siversky

color Got but well. any last timing it. remarks, And Appreciate thing, this missed sale in those the prepared office/flex of I idea the apologize on just I as dispositions? the if of the on portfolio,

Michael Gamzon

but timing, then of to any give goes. year. minute And we'll that process process be able the and marketing be several the months launching before quickly didn't and have as to due in of done But takes. marketing, as diligence to have hopefully, the those sell going end any we'll it's We the see in our the by any But is respect. -- to how goal we're

Ashley Pizzo

square in costs this we've around buildings for Ashley, supplement Connor. pipeline, that is the The roughly foot. XXX that Hey, is in is the disclosed that development XX.X the per

Connor Siversky

I appreciate okay. Okay, it.

Michael Gamzon

into follow-up we split other at intention the only indicated the operations. are, those of that Jon one as on And -- least discontinued office,

So, won't quarters really the next going four for be the results financial reported forward.

will a P&L numbers. 'XX So, be industrial clean

Connor Siversky

the for on me call. end of year. the for having Okay. Thanks Good luck the

Michael Gamzon

Thank you.

Operator

from next Baird. Dave Our with Rodgers comes question

now You ahead. go may

Dave Rodgers

that, of I lease fixed you're us the continued I I've what for the maybe disclosures and talk of spreads. quarter, Maybe understood the that the helpful. downtime the commentary, out improvement providing. downtime come guidance after and so to in if everybody. kind the right. you'd correctly. about And morning, year. the where then wanted is tell two expect expect the Michael, Good to that like Yes. you're rate down and information on in It's expirations maybe on Thanks where hear for kind got some if to start very the fourth you all It renewals did four in sounds that

Michael Gamzon

the questions. Dave, Sure, for Yes. and thanks

mentioned, seen Valley. scheduled building biggest really that's you strong As of Lehigh growth. of renewal that's at rent a the kind a is market kind That's

So, potential in think Lehigh expectation good we in would mark-to-market have our is our the on has portfolio. general, rents, about -- if spread a the that think we about I mean, and we'll that. leasing Valley different our mark-to-market highest markets,

So, opportunities about there. good the we feel

of roll roles that in building in kind in that other of the of that tenants actually Connecticut, taking moving two-thirds The one into the is they're building Connecticut.

a the year. of the through there's potentially chance, that of end Given timing they in stayed probably overlap building the that actually

new not the up being that year. that Charlotte So the might mentioned in not end other that but a roll, lease is rent this queue we And lease was one comes building a we that for bought, in over up summer.

with a see a that in it value we And so expect add. good that's one bought to growth we also

just of always tenants renew. terms not going to we the downtime, assumed every In

mentioned, have Lehigh We I Valley Charlotte building the building. that

we not may So, some leave a tenant or belief our It's just estimate that based downtime. take on into leave. our not

Charlotte, downtime the up market. or but interest someone really stay there's which, in stay. summer, But that coming again, that might feel extremely the In, we in if if good tenant and some the the demand in of with good leave we've that Some tenant some assumed could assumption Lehigh lots really strong, same the their releasing Valley we possibly current in markets really there's space doesn't about that tenant feel at that good point. stay doesn't lease

Dave Rodgers

I expectation. provided for second the And them acquisitions. paid the see derivative with an pipeline acquisitions stabilized missed Maybe supplement. acquisition if that's that. up for the you've I average know you weighted the didn't a comments, I the helpful. I the the kind number maybe developments, of front? that that, Appreciate upside related pipeline? on Do beyond a share in a yield you to seller in you what And any question apologize, have just the do to rate updated cap gave you

Michael Gamzon

we on acquisition to typically not we disclose the for And with it. we've don't since said typically acquisitions, ask sellers it out myth wanting part Yes, us a have you think acquisitions our fascia, the One, kind pipeline, end. the of closed it's number of a I the is combine the development reason longer the we think back you to not tail acquisitions, even to the bring the just five, give handy. we it's of at a is what I load most on So, into of typically, until development, it,

a In work, generally way terms the they're fixed price. of the forwards

a up So, if rates lot, to our go going lease that's to benefit. be

or are yield else a the written. isn't that way premium in anything really there So fillers

price So, we that is rents There's overruns, if these markets most at yield X nicely, which of us. developer dollars. that's those. And -- end. expected goes the grow upside what to our to incurs the And again it's, continue we cost pay

Dave Rodgers

you. it. can very Thank math. the do helpful, if I Got That's

Ashley Pizzo

want So, and the did week, a of city on happy conference we just kind the a well. this this as and call. this deck detail morning NOI to point it's connect and is after Dave, bit in the Ashley. new deck helpful more bridge And published I that too, investor acquisitions out that yield, there's given if little to

Dave Rodgers

$XXX create ties the development a position, take to on your cash it'll pipeline. at me, for that equally sheet the Thanks. and sure the a that. roughly at helpful. million liquidity We'll of acquisition you of Last I'm question balance look pretty be your year, end out good

you pre-fund I announcements you around as think new program? use go aggressively more we a financing strategy So, announcements? continuing How combination. about the of think, Will an anticipate forward, Yes, do these should to there's you know, investments? ATM you

-- even we as or he therefore using we can we needs, right still And fund to comments, again leverage that And think which, advantage all cash we're equity for with have we way a and the position, think, funding the incrementally. grow using forward to as easily and our the at flexibility what up right we've growth. doing match to use and I ideally, of more up the agree to as equity draw balance in ATM additional have, which we in is well need, thing. time use the do once John's larger efficient with cash side, been deals right very additional down going go on mentioned, an low the closely the match I fund we debt a and revolver

can to needs but open sense, better those, better. the our we the match agree against we're near-term So, obviously financial it's all fund makes

Dave Rodgers

All right. you. Thank

Michael Gamzon

Dave. Thanks,

Operator

Our question comes from BTIG. Catherwood with Tom next

may now go You ahead.

Tom Catherwood

everyone. morning, Good Thanks.

for following question on reinvestment? construction debt this there, and that or Statesville that Just year. your what up excess proceeds are Jon in But mention on Dave's you've last doing delivered you loan old now equity accessing thoughts terming obviously, not future incremental potentially Charlotte, out some would

Michael Gamzon

I for or to know raise use mean, some wanted to to as where as construction debt that any wouldn't financing, are favorable position this we far equity on Michael would as pretty we're actually I And doing I unrestricted. mentioned, Yes, particularly, we in the liquidity. say say terms we year, fund. wouldn't match just reiterate, and also, revolver need would that I pretty don't our

revolver, Yes, our into I in basically more just tapped tap think generally we So, -- unutilized now. would right which time. is likely

I other right we is it said, as obviously revolver we and are a can hat It's funding, discuss do think where secure Amazon different interest great to and things announced a provides what a and lot there's one cash I But we time, flow. it we've seek obviously to look do options about think here. construction could that. over to of can some rates with your longer-term nothing Jon for great deal or the tat or have a asset, but at just how good on question switch

evaluate the finance of it's something way will continue business. to to kind the best that So,

Tom Catherwood

there for implies you'll you the months. tenant Makes Timeline lot leased space a the of that up road space? Are of stabilization. to have an did to go kind pre-lease the [indiscernible] asset Does that of within next Switching the your the all balance sense, XX% development option of lease free as balance you and on the fit? a have over lot see out flexibility. provides few

Michael Gamzon

free And the lease the it two-thirds, remaining, need. space call square tenant the that's to that's feet. the we're think in I they Yes, XX,XXX

space out in should building that of So, next we're months. marketing The couple now. complete the

tight So, market we're pretty strong. that will remains you and hoping

to So, that right tenant the space. for find we're hoping

to be expecting in that we can. a him tenant mentioned, find at to And we're hoping did what premium to I as we're lease As we adjacent soon add. the put rents as

Tom Catherwood

it's type there. the up on there a Chapman's finally And Appreciate shaping compared is another XX% also XXX of to road that, Tradeport, demand Michael. then How kind especially asset?

Michael Gamzon

Yes, I That space. think good, little the got that man has been is a bit later. We’ve there for also a of series delivery Enquiries

his sort typical, and for a that always anything they're lot What tenants isn't is getting more of looking are immediate. so, space finding markets So part maybe it of as immediately. even there of is,

little to they time. But a starting and deliveries, bit their materials recognize getting to they even put also space into So, take longer their own are ahead. look

of next seen it and discussions that as interest really more and increase. moving panels where go in we even the get but always with couple is There's number things So, we've those up ongoing, their construction, a expect in building, months

Tom Catherwood

mistaken. XXX not than given have to space starting, is substantial think good starting to point on something a tenants be a the do at has entitlements just meet later that Or pre-lease where looking market? ahead, any just sooner to looking Raises able you Any I find that? start maybe to with thoughts port, that rather you don’t trade that not you'd to if thoughts

Michael Gamzon

ensure again, we're think either completed that piece for leaning Port Yes, the interest. I waiting XXX think I at back the seeing moment to built-to-suit, or waiting good get at previous and lease really we Trade moment, we're towards we're

number other going be that, that have projects Connecticut up So the to been of seems well. and there's And that leased markets. a around in

tenant growth interest in market. about that good really in rent really, that demand, feel we market, tenant So,

consider, to something nothing announced definitely it's but yet. we've So,

Unidentified Company Representative

Thanks, the Appreciate it. Got call. everyone.

Operator

Hollenden from with [Operator Brian next comes Aegis Capital. Instructions] Our question

go You ahead. may now

Brian Hollenden

for questions. Yes, taking guys. good morning, Thanks my

Michael Gamzon

Sure. Good Brian. morning,

Brian Hollenden

Can about third for if of And inflation, quarter? Maybe you labor talk bit inflation macro quarters? current levels you on the next little the these continuing a and seeing few see do viewed side. materials from the you're versus what

Michael Gamzon

as piece so are component. I say went the of cost Yes, XX. -- mid-single-digits something was the from think call, think talked increase And a the used construction, and now in the So the biggest you that of steel the the sort of building, construction of I think XXXX per on we've a costs others kind in XXs that in if said, vertical square almost I'd cost a little that to that warehouse about vertical to is, of tripling what building for foot the structural the earlier I mid-teens, about steel. work XXs, kind be in And

piece clearly big a that. of was that So

of sort leveled for structural steel. growth so had fairly off recently it of As that that much

biggest be I else, think, are related huge materials impacts based a Again, the for on Asphalt believe of [indiscernible]. everything go number. an current geopolitical petroleum construction oil not clearly Asphalt that prices, paving probably to factor will we going to is up,

So even bucks of a is a kind foot cost it's increase. of a or couple that of $XX foot, not a doubling $XX

that's biggest roofing in the So cause we comment again, steel. magnitude materials where see along. not of of order There's private other of but sort also in PVC things, pipe increased they're the

this little sort manageable year. going up So fairly of recent of kind as a but costs been have of information,

it's reopen step inflation. huge that in all Northeast think I we out. we'll the have But Asphalt read where a change is and not all Overall, going pricing, with news. to we to Asphalt, exactly about north -- the see in something shakes mid-Atlantic, think the We there's plans new be again, -- see particularly costs. when same

some but costs. continue so across far. our drive a from on lot Labor, pressure up So to again, that's been not we've developments some going what labor to, costs, seen there's

Brian Hollenden

demand Thanks. And do see tenants? slowing switching a maybe then down to interest from or cycle the That's up environment, you rising helpful. rates, interest just rate build

Michael Gamzon

of Obviously, mean, to or ties say to may somewhat this interest I where may not hard all thought we up, go. we're rates down. kind trade again, inflation it's think Yes, going I exactly. rates interest it back

not tenant think in it about. of think drivers from that of lot our several have think they're their levels their disassociate remain a that deeds. customers. just It's We talks BXB day rates. are just but have strong. little shorter is engine that because parts, interest footprint, that going customers. are X-day -- everyone We all demand there's ecommerce or demand, their growing not several for ecommerce, times a I deliveries, parts tenants view, Amazon to and make to replacement maybe just delivery delivery We of its one bit well just as they It's

costs. for In addition, inflation companies reduce save rates, labor think and interest with money to higher frankly, I ways is,

One that to drivers more warehouses and hard have get, way space do distribution costs you to are to to for increase to where So, drivers expensive fuel are is up. be. trucks, closer need going are your

driver. a definitely is going if strong, the also stays that's economy growth. support that think we So, to relatively And

they feel of where quality remains people people really land nearby. to are, to to warehouses there. a It's going been with along in beyond rents we it. closer are, challenge good buildings So, that challenge have get to get demand good really locations, it near-term really delivered. don't really want where want still but And of where good the the is challenge, people and kind that have kind a But warehouses

drive to we and So, through when for good to There about of -- underlying to just not the opportunities growing demand kind and going developments sites underlying tailwind benefits, feel short, cyclical buildings, find and here some tailwind to with up may long-term slowdowns and additional there's that, growth, put medium good an get but business. a the rent really be well-located those can there, there's you it's nice to it's business. so that and really development say just

Brian Hollenden

All right, you. thank

Michael Gamzon

Thank you.

Operator

no concludes enjoy joining fourth for year If this and more us and earnings week. XXXX your Industrial you questions, quarter Thank Trust Realty full call.

INDUS Realty Trust (INDT) 7 Mar 222021 Q4 Earnings call transcript