PLYM - Earnings call transcript Q3 2018 | Plymouth Industrial REIT, Inc.

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Operator

Good afternoon. And welcome to the Plymouth Industrial REIT Third Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode [Operator Instructions]. After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. to Relations. conference like Sullivan to now Investor of would turn over the Tripp I ahead. go Please

Tripp Sullivan

Thank you. third the the Welcome to company’s to conference results review call for the quarter XXXX. Plymouth of Industrial REIT

call Officer. Officer; White, Dan Executive Wright, the and Officer; President Vice Chief Pen today Witherell, President Jeff On Chairman be and Chief Executive Investment and and will Chief Financial

along be section morning were our earnings website, can released of which Relations Investor this the in our and found results XX-Q the Our release, on with Form supplemental with our press available replay after through A of numbers are SEC. this XXXX. press call the XX, conclusion call to will be release. the in the replay provided shortly of access The the November filed earnings

to you replay we call. to are listen call and XX, herein made subsequent the that remarks of not this remind today, as November this will XXXX, of For those updated the be who

certain to the risk statements pipeline as to and including dividends company’s the SEC. review of represent to call company, performance can urged information activities. this acquisitions statements risk financing cause expectations. various comments related with date differ current the are actual disclosures other our may the we by meaning the make materially this the carefully investments, other conference and disclosed of are filings call judgment Investors and statements results securities potential including to All and the made our subject uncertainties that and from in portfolio, the Plymouth’s During by of within forward-looking deemed laws, statements forward-looking of future and future be prescribed our

of in over Please to, to including, included measures, filings We call measures, and EBITDA. with go will comparable SEC. and reconciliations limited to certain measures adjusted non-GAAP turn Jeff our now not the ahead. also FFO, are these GAAP discuss AFFO the I’ll the most but non-GAAP Definitions Witherell.

Jeff Witherell

afternoon, Good Tripp. Thanks, everyone.

Asset of a Jim we Management, our Dan, here the up in had Connolly, in Counsel, and milestones are often us The across third objectives and who our and in in with number to our many continue ways. our Hayward, meet General and in the key heads quarter We particular expectations Pen to our indicative throughout we of addition In exceeds Anne opportunities markets room. the the industrial see established marketplace year.

partners have value will remain on selecting driving We the team. and cash we've we increasing the as through outsourcing capital opportunities as and revenues, in management, NOIs committed realize a very our created in leasing right And to talented flows asset platform. and well best the focused

today, of areas. XX our properties I As see we year I'm for going having to on a operating this own down that signs of balance the square any and XXXX slowing containing space. or of of We're don't record touch operate leasing year in million XX and feet key next.

start Asset order. first close Columbus one fully we in at more already next I'm confident occupancy. be leased underway, a we'll With this likely of that be half already head anticipated would XX% year's it's that we quarter's sitting XX% next on up year now we the to to in property big think this short being in move quarter leasing

flow here results. overall placed a noting revenues, internally We emphasis NOI portfolio. implies. shows growth our what in increased and from this it cash worth it's think that and Now embedded the I Increased increasing coming within big all on

through Cincinnati the the how OP recent feed our transactions create right with targeted on growth great markets to growth. So the acquisition the in higher-yielding Fisher units acquisitions long-term give and generated example. two existing demonstrate find continue to that by scale Using these our spread able we’re substantial in will most right each and assuming us that choose they debt in a cover and opportunities properties. both is we our Industrial Pen but moment, Park deals a short

do We staying the more while will look of disciplined pricing. those to with OP unit

We who opposed our in interested growing of we’re the ventures. underwriting our ability also see of will space they to through platforms, take They one we opportunities some invest used to the last and eliminate lose debt. really care explore to much the with the over criteria I our have continue this are B do value of discussions Give that joint balance institutional was two but the to no we’re more in JVs. to investors have work should shortage on successfully industrial those strict We as to Class our our meet term done work do years portfolio mezzanine the sheet don't loan. sleep over loan financing to we’ve down not ability

with are which number to achieve more flexibility provide and would a exploring overall for offering, July capital capability; a of We later actively comes of to care bring take this place that flexibility us into program raises. eligibility that We capital. put ATM debt, and options the us our completed an a shelf down leverage common that of enabled our source we future give consistent month

and not since the to be the be others where ATM stock trading. believe there used to putting have been a significant between it as disconnect We what and our place in continues has we NAV

of in and stock reluctant to some to at We’re level activities? you that through don’t price us be disciplined we equity regard. With continue the why that leasing will walk these issue Pen

Pen White

everybody. Jeff. Thanks, morning Good

we the evenly improvements square provide with between we decrease were aggregate and the new increases kick lease foot which our store the start expect our not narrowed that’s leasing these recent heavily leasing with or If on fairly the the off, we split increase feet; back was be in Overall we this of occupancy tenant vacancies. a for XX.X%, cases then Business commentary a had tenant expect that Airport of year Year-to-date increase any exists couple for Administration quarter X.X% Memphis had that Federal same to leases a and commencing basis basis we significant and TI third as over lease by mark-to as portfolio. leases. take had on lease additional in we that color prior with acquisitions. expect on renewal our off to to down had the half we we September XXX,XXX the to dollars, us basis Let’s most quarter the on square backfill that a X% amortized XX.X% we At of X.X in to an we’ve square high one improve basis; vacancy period cash signed most line next commence. XXs rents I’ll would've a our on We’ve leases contractual for we on some X.X% both did in X% there. By on XXth. trade approximately end influenced of million the Aviation will lease as market time. one out cash commissions cash given was rent is believe Park as but our in the in year-to-date new at percentage the The incur XXX,XXX combined continue foot other now first to leases of as that

tenant XXXX already bringing to XXXX. expire square retention XXX,XXX to scheduled signed in committed thus feet for square the have ratio or For X.X we our foot XX% million far,

tenant the expecting to up our we're For range. XX% XX% ratio retention will in end XXXX,

Class viewed expanded after pricing an for as multi-tenant with alluded foot of that X.X%. footprint completed acquired property the at assumed essentially Regarding and this Southeast that million most priced $XX.X square units B future purchase X.X%. with available storage the is translating building of secure ingoing Cleveland's in about of acquisition the feet that B We so unique Also for in were of $XX acquisitions, we square our a million located earlier. per of with a this in of issued X.X submarket. multi-tenant doing portfolio and in of quarter, REIT to sought OPE the existing just in about of along after Cincinnati Cleveland XXX,XXX about of and in Class rate industrial with about space. foot included to property one rail million This for square Class service and share. another and and note, acquisition a crane-served yield A $XX more We XX We our tightest outside of an we XXX,XXX ingoing $XX industrial cap land a development million Jeff million, $XX.X we to building able properties as Ohio up debt structured close acres

Louis in and long already well that Memphis as cases, the markets standpoint. tenancy transactions, two sense adjusted that added markets very We're In pricing Ohio are of and new comprised pipeline and such term have in near still a tracking stable as the addition as nature. properties we're with when flex value Pittsburgh, distribution properties in robust properties times A well or type In B such light term as more make St. roll properties as warehouse, Class to most we both as prioritizing a at manufacturing Class lease we're from Chicago, risk Atlanta, as remains Indianapolis are properties and Jacksonville. these

to So results. going discuss at this Dan point over to turn I'm financial our

Dan Wright

Pen. you Thank

in outlook us seem occurs move see Though third the is than comes up small have NOI, higher and our revenues while two Based AFFO that naturally trend a also next. in on relatively trend variability our us outlook. more in expenses quarterly the of but can and quarter company can that fluctuation in the and our of or but on quarter year the the benefiting metrics the clear major numbers track when volatile on to really for our full see it acceleration FFO of The making small one is. on fourth quarter results this right definitely implied you from size you quarterly lower

a continue a net share $X.XX our debt of average that quarter net in year prior the common from loss way generated namely, to quarter, predominantly at of track an our increase activity. per depreciation acquisition of the basis acquisition I higher The $X.XX This $X.XX note and weighted related loss increase in full a weighted believe was on average share year-over-year best progress earnings to is from to expenses loan. and property the growth in the the our release, due We second is extinguishment amortization the MWG reasons by higher In our year. in would per and we the to offset payout substantial segment. to portfolio was the activity, loss revenues third the with stage this primarily compared that noted

$XXX,XXX of of the sequential expense one the the in second second of $X.X loss due property year. on a operating activity the and NOI offset X.X on to the the predominantly decreased in with added adjustments as the in debt to compared to property decrease an of the and the quarter increase at some are increase was Net decreased from X.X of from a Looking $XXX,XXX, second acquisition revenues tax recorded some basis increased items results result quarter, expenses decreased Columbus vacancies. income million prior X.X million a $XXX,XXX interest the million in extinguishment million, the vacancy. for major declining by quarter Year-over-year $X.X off million, due

public in compared sequential the one-time at and that NOI with QX. adjustment change basis discussed the quarter, the in the mentioned and million EBITDA approximately and professional the item tax for result compliance. increase from I a million recorded quarter prior of impacting same net $XXX,XXX with estate incurred is X.X in fees period reasons second year on Looking primary second an as income, was the was company results real just in the of $X.X along in operating $XXX,XXX a to million for X.X reporting related G&A the

pieces for sequential per reasons results prior the $X.XX common in FFO from same and I NOI. with for $X.XX OP quarter the was unitholders in just $X.XX the moving stock Looking at quarter, period. mentioned second the the basis quarter second year and on attributable the to share largest a for compared

QX, share from was AFFO previously, per attributable $X.XX prior share a Looking interest at expense. to in first offset the with $X.XX items per basis mentioned $X.XX share decline in year. substantially compared results on the the in the per quarter sequential by and

decrease to as by capital on amortization and basis basis with previously, associated is mentioned and on at the net a deferred the MWG recurring in expenditures attributable Looking incurred in This third activities refinancing. result from results leasing a offset sequential loan the a non-cash increased quarter a and mezzanine of QX. portfolio amounts financing

range Industrial acquisitions, other quarterly XX.X in XXXX X.X quoted rate our modeling. and with close for million Park and total initial yields that large guidance we it million. range be is million NOI NOI. in be run for a acquisitions; that will based XX.X addition the million XX.X transactions. is Turning expected any of up on on a two Recall with upwards Parkway million to NOI to of for million for somewhere compared to X.XX to our outlook to compared the in acquisition when revising XX.X be revenues million these year G&A XX.X and factoring XX.X X.X before would million Diamond an these we’re with estimated expect million of effectively are future have to is the that Fisher proxy in for Hopefully to estimated help the the -- revenues previously, with projected $XX.X $X.X XX.X to million million our estimated XXXX; range moved million of NOI Both previously. to of to

year-end professionals Continued including XXXX to G&A partnership the $X.X mid and at fees the million has heading XXXX; currently UPREIT increase increased since transaction There and and amortization mid-October. the acquisitions, of rate quarter We outstanding up as common by for price is adjusting from addition transactions kept of for works these our so operating per the and we’ve this ATM number; Fisher issuance that to for in SEC completed million use that million completed year. recent expected approximately stock been most stock other acquisitions. on of to entirely X.X to approximately hasn't have units which would expect million audit related We asset was a expense no depreciation running into stock consistent and run of of $X.X $XXX for quarterly compliance related Park the that’s due due utilized been in after the Industrial common far net has support a will it to level in value. disconnect

through on We March from walk expect fourth more the to XXXX year FFO provide increase our substantially and will our results quarter detailed expectations we'll fourth report quarterly in we for and guidance a quarter and hope full QX when reviews.

in in in $X.XX of differences timing impact QX factor a respective the can leasing is by $X.XX recurring quarters to on rents, in straight recurring biggest and For CapEx AFFO, driven the commissions line see non-cash We quarterly in $X.XX is variability. single are QX, the The capital variability and the expenditures distinct commissions. QX. leasing

meaningful. stage first we of that property. the of a million capital $X.XX the incurred in is this with regards Illinois way, We are roughly these or to fact the three expenditures at AMTEK Elgin per growth for the are for timing recurring quarters, and of term $X the XXX,XXX debate the at it but merits to feet These the can accounting matter renewal their ten company size with cycle, as and such our expenditures early in related square for opportunities share. So nearly expenditures year

actual from not the expenditures realize therefore quarter. the increased will to for allow back solely AFFO to hold of us We releasing of specific enhance the a that and property value company on

just the comes that XXXX. on pay The of floating million for due to of place well before or We progress interest the on term rates August in of now on balance up rate options XX% balance a Park in want a to including with of on number Fisher to have at acquisition. one sheet debt off five have loan loan of made it working over we and Industrial of years debt We refinance sheet the item fixed lot XX our our the assumption next we're the X.X%. clean is $XX

are able we We so. be confident will do to

the both balance We questions. now commentary our answer continue higher we're question-and-answer. access take during leases. this drive happy our FFO the to efforts to sheet, both and on acquisitions and improve additional Operator, any to improve new questions capital ready AFFO and to Be to

Operator

Oxford [Operator now question first begin Davidson. The comes go question-and-answer will Please the ahead. session. with from We Instructions] D.A. Barry

Barry Oxford

underwriting were type barrage your characteristics some might standards. capital kind you about you have? of just those capital partners us thanks what partners, are underwriting of of Jeff, if then broad Great when gives could talking guys. And

Jeff Witherell

mean I underwriting from we make I -- are Barry. And us REIT make know have it for characteristics the simple perspective, to Sure money. but that's the want to money. sounds we

which acquisitions drive REIT So couple the in again want if we a term the to doing of points. we're doing space. fee One, joint this capital them not outside doing purpose the a venture of partners that we is REIT should in there’re with be of long inside many revenue,

I could it and we’ve don’t to think little seen value an want we’re partners want in back just gravy, that some but so you not have we what is bought be can't but improvements from would that short-term; of more it it’s so of it’s -- spend the I that firm capital get end, two drive would cases, foreign than to the equity something I time as that, basically could add on then the it we I value be want a want the capital. money, was it buy domestic much improvements larger might mean there; where call be we leasing to more would obviously that probably at type product capital, referring minor and So extra, the longer-term I make the promote let’s whatever private improvement last in is the in it well of floor with point industry-standard is that you call sort we like couple am property management this to our to it time on derive equity also but reluctant we know -- call There properties $XX,XXX think REIT, we guess needs real say, be than as that or inefficient. it we conversations just done, -- type across all it a longer-term just that some would management product to some that analyst as of as take to fee income, it those year at capital and are vacancies see be is were private to internally you were repairing in because the

Barry Oxford

when Jeff something think the marketplace share, at the of would when these deals going forward set OP you use that you this do units special? bar be in So accepted good you be pretty the you’ve and a $XX to pricing that’s kind of is going kind that or $XX do

Jeff Witherell

in but Well everything the income seller reason XXX,XXX maybe can we examples let’s turns stock help a to money is it I seller $X.X to federal timing when what about price mean that I with you substantial would XXX,XXX spread stock we if X X it lot mean the government. out can because our in year for $XX I think million sent be is transaction earn doing the am the I this this that, that $X looking that million federal to not a -- between million is taxes, higher they I initiated that sorry are million of into the today was on discussions is dividend price otherwise on a would've to tax, yield dividend one-way -- than at to $XXX,XXX it our will you one is Barry give they’re not you -- if you seller and sellers deferring saving is deferring street, benefits doing the think a was this, say there’re

money, side; clearly a a transaction state planning put it’s up things tool. bases can like into units tax great unit tool, I efficient It's very that, their So, on so it’s in selfish that those that great federal basis make and mean they with also never trust areas estate on stepped planning a the up their it’s never. state seller from once just the us it’s OP they planning state, get paid and very

not why to took leasing they you if OP it, see do unit it them an do would So $XX why you do it. would would incentive a for XX there’s stock and it, the well is

the get As not games, far we’re is to to far the bar right XX. to spread as going now setting mean too back play I

research that type value So, transaction. until any market of concur we’ve embedded until all gets to reports an we the for the your in closed, that’s unit the the know realizes we it us numbers OP very stock all difficult do be will gap and seen and

Barry Oxford

for far What great. going major are moves. for are to you of Right be a kind activity Columbus you you as take where of and do tenant tenant close asset Question space And as are Pen, type better have a TIs for in get a the come fairly the to to able in seeing? rehab lack or the to as going to is to word.

Pen White

much to get condition. We're spend good to represents don't that answer first now. going upgrading moving overall of the do in doing the dollars seeing building. which of done to for the have it we We're activity location. your tenants plans pretty light great much It's their getting in space X% office on question, property. looking ready at quarter to We're that some really to of minimal moving activity But it's are a in lots of are

that we're in I get short of property So terms able target going leased think being to order. to be on the in

Barry Oxford

least in dividend in analysis covering model. with XQ. be a great. guys an could acquisitions the mean I'm at you give color. you're you boost you to the FFO looking all that's for standpoint. into the my quarter that Maybe from my at guess for going Okay, two do you covering It up agree closing Thanks I nice did. Dan. dividend question the When A fourth the does

Dan Wright

for apologize I me Excuse cold --. the

I think we're going to to be close very that. very

very the on analysis your ballpark. is I that within think much

Operator

Coffey Henry ahead. go question with Securities. Wedbush Please next comes The from

Henry Coffey

know for you're taking I you there. I sorry, be going snowing it's but my out call. but thank understand and cold, afternoon to And I'm good Yes

trying were of. was was out So we what while in volumes in figure here not and internally the talking down falling investor's stock to or

And is a so general question. this very

With about -- the is is industrial able of worried you or of market, So are find opportunity. the what bankruptcy on, investment your tone full about vacancies worried or perspective, view everything series tone full it being angst the full just to you going from point are and Or else what of of of great the the opportunities? of your is overall market? or from

Jeff Witherell

That's quite a question we'll let Pen handle that….

Pen White

Thanks. angst, in that on rate anytime and most we're see be We in. see we every our see No We solid We do back. improvements of a soon. the it on market potential. kind on situation. it's not yes, of question. see continued an growth at all any wind unfair ground. don't really And the series levels not But rental all that the to in a we seeing a still And lot good is one-off we're is want some abating

with talked optimistic see we guardedly prospects we So it to we're we and tenants the with the to. that talked

So we're right good think I a position. in now

Henry Coffey

space? down saying what industrial the they driving market and other the you slow One from, REITs, mentioned would where of be in to thought of is they couple asking we lot your whereas of they activity of of industrial cited mind to REIT were are estate when where do were going transactional commercial our think in different them a volumes areas lots companies the get said, a there pockets real transactional volume

Jeff Witherell

days, evidence of really to diversified is other helping in we onshoring seeing years it's not factors, you’re really to five, and -- level macro number if we papers, we to the that you potential have think is read direction. there’s to then a as all which real economy I it’s the in think or overall I more whether I think four, so right economy reports the industry the right there per we’re solid and -- so are six on read I where research it’s -- know all so reports sectors but a a the were activity or very be can’t research almost be same the ago; arrows have what's seeing of of yes, by by of types going se, from lot e-commerce the a and industrial all company pointed kind comment I talk seeing every that any think driven the going Board diversified cold. most that set hot fairly now we tenants, terms in acquisitions, seemed estate follow what offshoring Well you across there of what’s opposed it’s what's space same the But on these you

Operator

our would concludes Witherell This the question-and-answer session; to I remarks. to Jeff conference over turn back closing now like any for

Jeff Witherell

you so as follow-up Thank for next Great. this you. available Thank thanks to afternoon, everyone we joining always us you, talking we’re for questions and look year. to forward

Operator

attending for is now Thank presentation. conference you today's concluded. The

disconnect. now may You

Plymouth Industrial REIT (PLYM) 14 Nov 182018 Q3 Earnings call transcript