PLYM - Earnings call transcript Q2 2019 | Plymouth Industrial REIT, Inc.

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Operator

Good day, and welcome to the Plymouth Industrial REIT Second Quarter 2019 Earnings Conference Call and Webcast. All participants will be in a 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.

I would now like to turn the conference call over to Mr. Relations. Investor of Sullivan Tripp Mr. Sullivan, the sir. is your floors

Tripp Sullivan

Thank Plymouth review Industrial Good afternoon, XXXX. the to the everyone. Welcome of REIT quarter results the you, for Mike. company's second conference call to

will the Wright, Jim Dan President Connolly, be On Vice Vice today Jeff Chairman of Executive Executive Officer; and Financial Chief President Witherell, and Senior Officer; Chief and Management. call Asset

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

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

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

measures including, our reconciliations the and most GAAP limited discuss are also the Definitions of FFO, measures comparable SEC. but filings AFFO, not and these to will measures with included non-GAAP We in certain adjusted EBITDA. to, non-GAAP

turn ahead. Please call to Witherell. over go I will Jeff the now

Jeff Witherell

us. joining Thanks Good Tripp. for Thanks, everyone. afternoon,

Dan with Officer to join Jim, our General is our won't here Chief addition Investment traveling us. In be to is Counsel and White, Pen and and us. today Hayward, Anne President able

outlook have we took Our quarter expectations. and the XXXX during solidified third so and the quarter in those positive far the very for second actions remains

as and well our acquisitions, leasing discuss in discuss a are will We I well. as Jim executing will on on moment, front as

true team within We capitalize and is our strategy on within have strong number opportunities by stayed markets. of to the helping targeted performance us our existing a our and portfolio our

XXX,XXX in the that's we in are We markets. on location longer were X.X% of had of months the or leases a strong rate, rental commenced quarter leases in the the our With square six benefiting that generating increase underlying an basis. leasing, from feet with fundamentals properties cash and and two,

Ohio space Columbus, in We our are forecast, the asset discuss of few Jim lease-up still Creekside in will including our this a but in not minutes.

us the we raising conclude net acquisitions. acquisitions. April. to of since follow-on the be very able through, it liquidity our funded Dan the how of the ahead We approximately some completed will common early XXXX We In the And with expirations in pursue in continue also to pay offering to proceeds well we during markets to million of we've May, proceeds, ATM how those program how active overnight and We XXXX. with quarter. $XX.X additional pleased $XXX then down million we an were with line and capital execute in used walk stock I'm and of proceeds. that balance gives were the

borrowing One we we line Barclays This facility relationships week, also our basis expanding with as costs maturity new $XXX existing an million. it KeyBanc. our million to points. a $XXX also placed accordion to feature, lowers It extends entered Capital expand we our facility and by up forward the them. where have well, XXXX, XX can led it we million This into our facility $XX to has credit by look credit and joined and

a Indianapolis, quarter, for Regarding XXX% square-foot $XX we two acquisitions, million tenants. in to XXX,XXX purchased leased property during the

the third quarter, completed in XXX,XXX million multitenant Louis of an St. Drive on acquisition square-foot Phantom building far yield for of So we X.X%. the $X.X cash and in in projected industrial initial

characteristics new we into St. market, labor and our supply, both was This properties market one-off for industrial opportunities has actively other working force. a portfolios. first specifically access to of in additional markets, a and entry to skilled a highly large lack are similar Louis, the of This to and our small inventory other acquire,

number are of we As today, of under a contract properties. on

first The a $XX.XX portfolio owned feet. this We one yield an over and is square well X-building of Chicago, a in million and It's great just X.XX%. million know been Chicago. projected one equity. in The by cash portfolio existing to initial presence it's private our in totaling addition

with property these and total Memphis in totaling million. with in The industrial XXX,XXX of buildings $XX two feet square The XXX% about property The extended to their is lease is consideration second is invested heavily buildings a recently leased. deal tenant XXXX.

this We the just cash over with million $XX assumption in of mortgage. a million and acquisition are $X.X funding

price properties purchase Columbus. a existing million. of are we Our third deal portfolio $XX.XX in square-foot $XX property The loan and Cincinnati in is in Hocking, XXX,XXX and is four about the million sixth assuming Ohio, two

pipeline on renewals new additional focus balance improvements and leases our new the We in to closing to to eliminate our sheet. continue and vacancies acquisitions making signing remaining

for enhanced we than XXXX we the of have our pleased hard projected. with the half position well how year first originally result better a we performed and even as work, I'm our an in have of

with that on to well our maintaining approach allocation. momentum We to as capital focus continue remain as will disciplined

you through walk us leasing? why don't -- Jim, the

Jim Connolly

second a afternoon. Good are quarter pace. Leasing in the activities strong at continuing

of lease from a During included property short-term our end the commenced square-foot leases the of July. XXX,XXX square April Creekside This in comprised feet. quarter, XXX,XXX XX at total Columbus through

square-feet of feet Significant leases. a new leases XXX,XXX lease and at commencing Winston was that X-year renewal feet Freeport, a Illinois a the on of our Diamond mass the products. renewal with and square prior Elk XXX,XXX the during included Cleveland, lease XXX,XXX lease previously quarter square-foot at new property of square included XXX,XXX owner, balance leases Road with our Ohio X-year under property with The

X.X% in leases. commencing leases. leases quarter, had rental cash have on we the commenced seen prior on increase rates we during Overall over increase Year-to-date in an over on leases a a XX.X% basis prior rent

as that quarter, to we will leaves a lease renewal associated XXX,XXX with a leases stay feet square publishing of During we subtenant later XXX was Also in for feet that executed three services in the XXX,XXX previously additional on announced, commence commence after with weighted will additional square-feet square years feet XXX,XXX which will square year Ingram this executed XXXX. on totaling during Volvo October. that renewals

As in I'd numerous Jeff, this been property. provide interested have mentioned like an to update by There parties our activity. on leasing Creekside

weeks, next further we deal been three be past couple over with two few a strongly strong of the we'll and multiple in prospect one the in the Over years. on that will have quarters of announcing leases We building wants potential details it short candidates is of believe weeks. negotiating that finalize order we logistics which that

up XX.X% X.X% June XX at was from Occupancy QX.

our guidance occupancy For will the XX% year, confident meet to the of are that balance expected of XX%. we

keep with As interests significant previously overall is year leases high. later to levels in we have expected Creekside occupancy mentioned, commencing the along that in

expire that XX.X% we square are to in the expire square of to June scheduled that already million with balance leases in leases. been XXX feet to X.X with Through XXXX, million feet tenants to -- of scheduled tenants renewing. X.X XX square feet the is long-term associated Included was month-to-month convert had in working addressed of this about

We active in close to expect in of negotiations and these remaining are deals on the QX. many

that scheduled and pace and square two feet prior feel NOI about to expire growth. the square already million our of we we of in able addition has renewed. XXXX XXX,XXX to expect in rates Based rental leasing was will confident results, the on drive feet In and that approximate been XXXX push be our XXXX,

to I At to over this will turn our financial point, it results. Dan discuss

Dan Wright

Jim. you, Thank

a we when and strength our were of raised basis anticipating The the second results up guidance we ahead on acquisitions, in of on across board the leveraging were We May. of metrics G&A. year-over-year quarter and operating leasing were all the on sequential what

coverage fully covered be quarter basis on AFFO the our and an dividend in year. the the stronger and dividend FFO full to both projects for was outlook Our for XXXX

and The what in second afternoon we release and results results I'd included provide time color earnings my details. additional quarter supplemental and have focus like guidance. outline those behind the updated our on our this to

For the a more have planned recent in acquisition significant been orderly should enhancing were and QX, progression the in EBITDA, results AFFO. month's in acquisition of and impact We drove that sequential quarter, driving and from July to primary our acquisitions further revenues the QX activity second further Indianapolis NOI, had all expecting less than factors the FFO, an contribution begin year. the August we've year-over-year and

in and G&A in of representing compensation stock that line to of with approximately AFFO. our quarter an guidance second is amortization includes previous was the non-cash expense $XXX,XXX adjustment

we and in early offering. the $X.XX with to first by year the in the count is XXX% and completed compared by expected we in per unit AFFO share share $X.XX count quarter. and per which follow-on in The the and our impact compared what unit was in ago increased May April with ATM FFO activity a That impact weighted quarter share line when offering average XX% with

have the current We higher factored into our share guidance. count

to XXXX, to than not and acquisitions reflect previously. our include the and adjustments EBITDA the outlook The Turning impact assumptions for year increase does to from full made underlying acquisitions to NOI, those their stated timing. we've guidance revenues, any other

the usual we assumptions complete we they not, include to additional acquisitions we expecting as clearly Although capital unless as future are second half under to do agreement. a work, in for acquisitions practice, are

and been at and fees administrative excludes same-store professional still have approximately any up for portfolio lease to in Columbus. remains General and expenses our unchanged higher Creekside increased account $XXX,XXX occupancy

QX. units capital acquisitions, the Our higher expected X.X and of activity now markets weighted any state half. is in assumes steady are second similar common current and in outstanding. to count in share shares estimated potential for Again, currently a all for the X.X to we unit million That forecast year with on be place average our don't count million share which to QX guidance, full and be the

share of unit in expecting and now in factoring $X.XX be and per increase and to unit. range of XX% unit in per share the assumptions AFFO the in are the range to $X.XX FFO to these we be $X.XX $X.XX count, in to After in share

that I a -- want how capital bit expect to more we've work. put raised and to the how to on elaborate we

we of to about XX% $XX leverage those pegged would've follow-on million sales Jeff in on million earlier, As of mentioned $XXX through assuming offering transactions. raised the roughly May acquisitions from

another potential use incremental by we'd million that end. AFFO the already committed would currently which we're would to end work, that equate to complete early depend $XX FFO The acquisitions in to upon impact our timing put quarter million of baked to $XX into if and closer mostly are and they done fourth or not approximately With year year guidance. the is

at balance lower XXXX. years of had sheet, in our reflecting in our place from the interest Regarding overall and to we half the five quarter increased line in of at also rates see second approximately year and fixed our for in X.XX%. credit our the results nine end, of borrowing with costs next flexibility XXX% debt should We

capital material million improvements The reduction extended $XXX the million, increased points $XX XX basis in are overall the maturity availability and LIBOR our to our from margin structure. to

goal level continue don't reasonable this and levered is is the on the points at acquisition XX.X% at the expect we ultimate were to down to timing proceeds. end time. a compared We bring of down our activity, offering expect time. a we it use Our a over with influenced with will asset quarter XX% but for it of which stay value is gross heavily by work additional At to QX few leverage to

annualized should allocation. first be our EBITDA of has quarter capital net quarter. to I'll All-in-all period. times support time times the X.XX on structure quarter happy our additional that very in questions translate to At commentary capital question-and-answer our disciplined X.XX this into period a any was of better debt for end, second short improved answer with and in compared the

to ready questions. now we're Operator, take

Operator

Thank you, sir.

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

Barry Oxford

a quarter. Thanks. Great. the function you so in the the Was acquisition gain more occupancy it guys of up was a that Jeff fully leased? lease nice of had or function being

Jeff Witherell

-- Barry, the thanks question. Jim for

Jim Connolly

Barry had that number by lease was driven at short-term we the Creekside.

that So a at was right working deal, it July, new of now. on lease we're four-month ended but -- the which the end

Barry Oxford

Right.

know maybe I can -- From rates? cap a you macro the with perfect. probably July help you perfect, don't August. from in Jeff, Okay, discuss detail us sense, want and great But to

Jeff Witherell

I earnings I of cap mean look us. well. Yes. are is some the through information release I for I you that that where think The as line right think in three acquisitions highlighted if rates they've in our been

-- of think a a can in millions of there's market somewhere of I there's hundreds are, where large whatever sizes -- that portfolios Somewhat the disconnect those dollars.

seems there's cap cap rates. that's amounts push these properties at rates, buying, It done that sure we're or the a But these And -- it that strategy. low not getting in those our function function out. is are it's estate like of to large a I'm real of cash obviously so portfolios

that good to find continue on. deals we execute can We

Barry Oxford

the model. people. about think here Perfect. Thanks. helps Florida, Go go definitely ahead the That to -- trying ahead Thanks. I’m when my

Jeff Witherell

Thanks, Barry.

Operator

Mehta will next have Gaurav National And Securities. from we

Gaurav Mehta

I pipeline is rest new your product on and year? which of guys. looking hoping the are could was you in you acquisition if how for looking, markets Thanks, comment for the

Jeff Witherell

Yes. the call. say We we to continue acquisitions same we probably call robust maintain a thing I pipeline. what mean every

We are to deals and on there have institutions there are them. -- of contract on sellers two around portfolios. seen We're we they under one-off of take always we small come and passed and some those. have a We've few a bouncing variety individuals

strong. So to product as pretty our can planning going right pipeline we're a is at But lot see. it. of you stay now We're through

Gaurav Mehta

if and you was hearing what quarter? comment your retention question, I how on you're customers tenant Okay. And your the second from for hoping was could

Jeff Witherell

the the didn't the understand quarter. last I for part question of

Gaurav Mehta

The retention around it was XQ customer I Yeah. rate, in think XX%?

Jeff Witherell

Would you have that?

Jim Connolly

are customers of done and landlord a our a We've positive from lot property enjoying Our We've skills. great management job. feedback leasing. gotten

quarter same, stand. For year, retention we the roughly so the that's at XX.X%. where the rate is is The

Gaurav Mehta

Okay. Thank you.

Jim Connolly

Thank you.

Operator

Sandler you, come O'Neill. of question from The sir. will next Thank Alexander Goldfarb

Alexander Goldfarb

afternoon. Good Hey.

few questions here. a Just

the guidance -- IPO by million doesn't as $XX you are stand First, quarter correct? remaining closing the with so Is clear correct? your part laid of that's It out was that just end. today plan the you that to be million $XXX that include acquisition

Dan Wright

correct. is That

Alexander Goldfarb

year? ATM ATM? you then of Okay. any And there Is back this in half are assumed the planning any

Dan Wright

don't The additional factor as change or guidance, stated in I ATM -- we any the an in the of offer. guidance, drawdown on

Alexander Goldfarb

acquisition you environment pretty -- but I -- clearly Okay, saying I healthy. mean mean I'm just but is the

held Your up. stock has

did like opportunity. reengaging the from So in what are your guys the thoughts in year? a on blessed standpoint, seems an Because you you ATM acquisition it as with earlier are of lot

Jeff Witherell

are Yes, time certainly had a market yesterday, and is the going the assess as for of We've forward. we if we people, well goes the we worked use lot out to a are. it and will ATMs mean board call right. I it

our right, issue. of You're That's plenty we not have acquisitions.

Alexander Goldfarb

commentary the on Okay. And see is the Creekside, question appreciate on then then to obviously next leasing progress the in some good that's now. and quarter right going

the market that leased of keep the you that assuming Just you'll by unique that do seek this it? you in in think Jeff seeing previous sell relative you to sort Or up competitive set, asset do think based market? you're of it have you year-end that the on to the as what description would given the

Jeff Witherell

it. It's we us tell sell want to We we'll to every or hard it everything for keep what whether quarter, evaluate do.

The what role I is It depend think tenant. be. will the to think. depend on it we will on going

and we like. particular those this tenants, From is role will long what how lease look the think

because right? two, And a fact, think going -- that too why we renew of buy acquisitions three If buy lot to we we years. way in think buy they're so that's in we them, we our -- are Alex, --

We going that, an win won renew. we've to probably always don't And of these have that they're majority the but of times educated lot market. that. a leases below We guess were

So, we plays one how this out. see

Alexander Goldfarb

Great. Okay. Thank you.

Jeff Witherell

Thank you.

Operator

of Wedbush. Next we Henry Coffey have

Henry Coffey

Yes.

Sorry everyone, and about my voice. hoarse great afternoon Good quarter.

million some to assumed kind equal contract sure value, got have make just of that of total which be three under summarize by The to you've acquisitions $XXX Just will right. I it in

Jeff Witherell

Correct.

Henry Coffey

by will right? of debt, financed ….some which be assumable

Dan Wright

plus the bought. -- asset, already The other we've

Jeff Witherell

Right.

we it's other total. So also is That assets -- million two have. the includes $XXX

Henry Coffey

right? three, It's Yeah.

Jeff Witherell

$XX new the were million. Well, acquisitions three about

Henry Coffey

$XX And the two… million, then okay. plus other

Jeff Witherell

yes, That's the but Louis other St. Indianapolis. and goal two, -- the

Henry Coffey

Right.

Okay.

those of books end by And so of the September? and should all on the be

Jeff Witherell

Definitely sometimes been pop all to right? those are closing up, matter but September these it like has -- end and by due those happy done, again subject so final the These a with of of -- and conditions, diligence just right. our of title we're that things it's things

Dan Wright

Right.

Jeff Witherell

think we we which been, have these be certainly X. will believe if done September they'll before they So all

Henry Coffey

debt -- assumable and of so total amount million? the And $XXX that with goes the

Dan Wright

million. $XX Approximately

Henry Coffey

down rate's just of you cap I sort it in total? couldn't Xs written you. get enough. the said fast in like the the Thank in And

Dan Wright

That is correct. Low Xs, yeah.

Henry Coffey

and then you've that's think this putting would borrow? the of much you it in or of October if you how on everybody thought be equity/cash? September, the during on would the would all process the your much assumable the to that that's And -- would you amount you of of how on money access either When either financing call debt terms And surprised $XXX it assets, own if more ATM, acquisitions debt how not about be assumable and added is much new issuance I be what now equity properties, it in of with guidance, the or period. you're you would comfortable debt? of of think have So putting to

Jeff Witherell

two-part Henry. I answer So, think of there's a kind

value I we as around market spoke is higher. the our want -- right? of value think debt-to-book mean, Just to model market leverage, we across XX% value, not to portfolio think our maintain I we were look the So we

lower but the So in about on real statements financial it's is XX%. world we obviously think the that number

overnight XX% we've that we maintain time. down the that that were -- sort it going of last over and told you that to then at bring offering So

deal, one XX%. particular is from XX%, the get the one is Dan? I model we your deal these deal just that, so other XX% is portfolio to right? XX%. leverage can So that if like each a depends, perspective, acquisitions -- on -- to the keep XX%, you -- each going And it to on answer, is I I at second mean, of of you're part the that's guess levered. the one say So,

Henry Coffey

was little have And that things? then, the question, that could property just first if and -- in understand, more bit. $X million you over quarter I how cost, a the second. right, of What and and help technical noticed, a million a I numbers in little my management taxes that works seasonality $X.X me Or is maybe

Dan Wright

some Generally, of that estate is adjustments part real couple into year. right. rates, locales, moving on you're adjusting and absolutely of it the their real beginning is tax fiscal be taxes, of seasonality. various June, a as -- It'll And again estate of of the

Henry Coffey

of year, two assume. rest higher. those with the should we the no sort then, obviously numbers, or And acquisitions, of be it'd for the a of assuming blend, well, It's news,

Dan Wright

yes. roughly, And I would say, Yeah.

Henry Coffey

quarter you raise And Okay. before a it's with of lots direction. the to things and increase to on have And want you to board? say, look-back what certainly, I prompt moved What number? think basis, numbers right you see, time the would down sit kind Great and of in do progress the dividend?

Jeff Witherell

going priority way it's thought to all be as first the way. product our through. of mean, share sure is Maybe probably well our of is, going debt, a the right We that, makes haven't Henry. price, I really

I think, that. one number our that's priority do is So to

Henry Coffey

sense it your... Well, makes given perfect

Jeff Witherell

dividend, the now, like respond accordingly. it mean, raise know because we now, don't marketplace XX%. We as the But I right I we market's raise major to And right? dividend if love the going us. to can shareholders, benefits the if Yeah. listen, – right

our I look what on. is look dividend yield we've at been at today. execute mean what able to And

we the So, need in market. probably a time, just little more

I last of kind is think, this -- information. the good

were But, new institutional in of I But successful major overnight about apologize for prepared major for XX% with XX them offering investors very orders. I should institutional not was putting deals, last -- I brought the was information. think the -- XX investors. the us. in We It this

the telltale and -- indicated believe They us we're And in with a sign, doing. they they're that I as So, think, be supporting the well. into that's company. what future want that, they'll they've to

Henry Coffey

so. estate subsector. the talk. I real brokers. how opportunity mean, they, was wonderful that's it's weren't No. real active they conversation the Great. When of And a a multi-family in a had huge switch bunch would industrial, about, call, could We talk to your space all, with how commercial I estate

Jeff Witherell

you go. benefit. so, blending that's There and industrials a Retail

Henry Coffey

thanks for remarks. Superb, oh, your

Jeff Witherell

Thank you, Henry.

Operator

showing I'm closing to our turn at time. back now the We'll questions, like conclude remarks, would and this session. any I Witherell further to, ahead conference question-and-answer over call Sir? go Jeff for Mr. no

Jeff Witherell

much. questions for all joining are Tripp you afterwards, Reach for Thank us. we Thanks available out usual. And Yeah. to as Sullivan. so

Operator

may you, the sir. also rest lines. day, everyone. a time we call conference care. for At now time, Take Thank team thank your management And today. concluded. has this have of The disconnect And great And your you the you.

Plymouth Industrial REIT (PLYM) 9 Aug 192019 Q2 Earnings call transcript