MDV - Earnings call 4 2023

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Operator

Good day, and welcome to Modiv Industrial, Inc. Fourth Quarter 2023 Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Rainey, Chief Operating Officer and General Counsel. Please go ahead, sir.

John Raney

Thank you, operator, and thank you, everyone, for joining us for Modiv's Industrial's Fourth Quarter 2023 Earnings Call. release our opened website earnings it's morning, our on available at issued before this market and We modiv.com. Officer. I'm Chief here Financial Executive Halfacre, Officer; and today Ray Pacini, with Aaron Chief remarks, today's and the On for questions. your will management provide call then will open call, we up prepared

will Laws. begin, like comments we statements under you that to Before forward-looking remind the I today's would include Federal Securities

anticipate phases. words are as will, expect, identified believe, and words by such or statements comparable Forward-looking intend, other be,

as such statements our that are facts, Statements also historical or acquisitions statements. are about dispositions not expected forward-looking

vary our that the mic actual from statements. and and reports Our that on contained to condition results financial the are Aaron, to from statements Form said, to turn would of contemplated of including could forward-looking XX-Q. With like operations call now over such yours. materially may our results the forward-looking Aaron. in differ materially by cause our is factors filings, those these I Discussion XX-K SEC

Aaron Halfacre

Thank you, call. for fourth John. our Thanks Hello, everybody. quarter conference joining

be X For John, myself Board named with results, to Ray he's and and Counsel these General of Directors. means release of [ alongside and the formally know who which he'll officer, make Form him we'll don't executive ] our a filings COO those our subject and financial

and jump since Ray? back Speaking come questions. we more press to right earnings to financial I'll about of end I how hear results Ray, on said a our ton before release, in take details the our

Raymond Pacini

million advance period, from early a $XX.X in signing with fee overview Cordova for million Sutter Thank was for of our fourth new lease fourth quarter our with you, our Rancho termination Health property operating million of $XX.X Revenue an year the $X.X which a in Aaron. prior state the begin results. of California. quarter the included with I'll compared

XX% per manufacturing August. X common is increased diluted this quarter, reflecting reflects in average termination the ago from million and AFFO, quarter property funds $X.XX even of Excluding the impact property the of of fee, which decrease accrued the the XXXX, months a X shares ago expenses of by XXXX. Fourth industrial The lease compared was AFFO the after straight-line in interest dispositions increase in in in million of offset revenue revenue reflects quarter revenue noncore XX the fee. decreases year by XXXX August first partially period. termination expenses, X XX or excluding offset XX% per The along the $X.X with in to and lease acquisitions operations, compared XXXX the by prior when and increase increases the adjusted during a year G&A quarter, were with ago which number year with million, up $X.XX and property and expense. On a year differences rents compared partially due lower ago for decreased the of decreased after leases outstanding. G&A fully gross absence properties in in relocation with compared the diluted an basis, the the AFFO year insurance. Property net $XXX,XXX for share was modified increase with quarter, of shares fees $XXX,XXX $X.XX average the disposition primarily double reflecting above our quarter, share analyst leases timing professional reserve weighted estimates, to accounting D&O increase,

prior the $XX million reflecting discuss facility. I'll an full million, was full on the had only interest now fee with compared ago compared termination in with year quarter, that XXXX excluding the share per year an cash was $XX.X year our after valuations, compared swap fee. of year the million, in prior $X.X the impact the expense for for lease diluted excluding of greater up $XXX excluding for AFFO XX%. $XX.X of given XXXX by in full the fee, during when increase borrowings million operating the $X.XX $X.XX prior XXXX fully million during lease termination diluted results. year. Revenue our XX% year, outstanding year AFFO credit increased million fully was million termination the early Excluding approximately the average to after per $X.X $XX.X the outstanding share we

consideration operating the for in received Generation GIPR in The GIPR common Income X% immediately number $X.X The to due AFFO common The increase weighted absence G&A, increase to The percentage August. than diluted decrease increase the distributed of of lower the decrease of majority of XX modified reserve, for property relates stock by in professional to our $X.X offset during expense, the the relocation of contributed that million the reflects in per holders variances in on as in stock in investment compared and shares XXXX we in in with AFFO. The increase increase primarily increase again the partial stock reflects in revenue increase and last borrowings in property which decrease by dividend cash and XXXX, income These reflects costs, fully $XXX,XXX partially expenses count. in by Property, properties the head common disposition straight-line C interest a in earned million decreases XX, services. $X.X offset less XXX,XXX of of million positive by disposition XXXX and decrease or $X.X August. insurance rents. A partnership. average leases AFFO technology share D&O January in properties a preferred preferred increase offset an diluted partially lease AFFO, net the in XXXX. The and in double stockholders our dividend a outstanding we $X were of units to income average increase the also redeemed of an the expenses G&A shares Inc gross common stock is to Class million outstanding. was a million $XXX,XXX in increase

turning our Now portfolio. to

BBB an our February of and companies the Following a term attractive investment-grade assets or minus base weighted of rating for properties properties X from representing of of credit or XX, with property sale, has an tenants ABR, XX% portfolio lease XX% credit of as of XX% December average approximately years industrial of held representing and from agency January rating XX% Annualized their XXXX, of representing rent dispositions totals and properties office retail XX X XX-property of these recognized million parent our $XX XX XX X ABR ABR. better.

balance our liquidity. sheet Now turning to and

Sacramento cash December December. million, mortgage in the we As XXXX, million remaining of XX, of repaying $X property our $XXX the of million were and equivalents after had debt balance outstanding $X.X total on

mortgages during $XX of facility. and $XXX properties of ratio year-end. Based on million indebtedness X outstanding consists X.XX% held of agreements on XX, rate borrowings on XXXX of million rate at interest our $XXX we debt our into on Our swap entered of our XXXX, million a average fixed as December XX% interest based a with leverage a of XXX% rate of interest weighted credit

call and over of of cash a previously of of of share Directors This approximately on of declared of $XX.XX per the the a As back share per rate March an stock months represents $X.XX from Board common March closing to now the as turn announced, price stock. yield annualized January, common [indiscernible] based dividend of Aaron. XXXX, X.X% on XXXX. I'll and dividend our representing our X, February common

Aaron Halfacre

Ray. Thanks,

rather much As open know, prefer all I dynamic you dialogue.

can dive about response, Q&A. providing instead any how So of we Operator? more into

Operator

[Operator will Rob Instructions] coming And Janney. be our from of first the Stevenson question today line with

Robert Stevenson

models we our when do the 'XX? for NOI we're projecting out $XX much backing [indiscernible] incoming How be thinking need about sales to for million of

Aaron Halfacre

Yes. That was the... -- Ray, have you

Raymond Pacini

million $XX Well, in I ABR to [indiscernible]. say was that's going the factored of already excludes in,

Robert Stevenson

helpful. for closing closing. most close? issues other assume be single before That's family that get before likely then any deal Okay. major Costco that the contingent rezoned what I wanted needs could on they is that to And that the to timing resolved sale

Aaron Halfacre

to we structured is good on X of through way they're sooner. right wanted now, question. they're to because But contingency later in doing going back for is of this that their we next approvals. done give And they $X we picked April plenty assuming And have put lease negotiated have of benefit ability come the feasibility. approach a here window should get The stuff if say, term year we're and then a sooner, money them out April lease rent. There date So we town as to contemplating they million they'll Costco process, X down. and hard is no comfortable, it they're is August a termination they the building we than that it's and -- and from of finish time then contemplated remaining can their this What series homes. deal their like, both close

bids from them a builders this there one and -- were -- and And X they bid. X builder so was And -- got they of actually. actually higher particular X

thought before Costco this because moved was property they more had had one this done property. ever solid into homework the we But on this

So they a been close this have for decade. studying property to

they're so dialed And pretty in.

optimistic, remain we're but rental scenario, April the the after in going milestone will next But and could we get stands than close sooner now that, X, we be then to either So XXXX. to Costco.

Robert Stevenson

-- guys still helpful. for talked GIPR here do about guess do much plans That's those? you you the are guys distributing have? what I shares. is, you another How Okay. one shares the And

Aaron Halfacre

in are you an second, in those just fashion. sell we get is going will number the a Ray plan here off orderly the to

stake the we got, what's We retained count? have the than like of running we Ray that share purposes. X% less for actual

Raymond Pacini

XXX,XXX shares.

Robert Stevenson

helpful. Okay. right. All That's

Aaron Halfacre

move those up. We'll

Robert Stevenson

after occupancy where [indiscernible] in vacancy? portfolio was taking And the the Okay. consideration

Raymond Pacini

XX%.

Robert Stevenson

being you the was release asset on stuff do that to That's be? back you helpful. would get when that when control going then And that for release I expected there. that in asset Aaron, full the about talked talk timing and about of -- still the some that, think, Can you able there

Aaron Halfacre

the it's get in waiting it yet. now daily been on basis finalized to sort X a for keep courts and saying for hasn't going the We've weeks. of courts, in They about finalized

don't them. keep know an we We okay any is. with exactly negotiated we So It's But day. what the process. thinking hangup

underwriting, rents so one higher. that negotiating not soon said, to [indiscernible], I've we're we're already that. But We did heard they want we're don't guess. not -- for it, to think a that say is for were and my And indicate fully will. prepared anyone of us substantially probably signs That's released. LOI property now back until with the probability receive come we they reject and all we're but I at what may that it's and rule they that

in will As kind anyway. Paul soon hand, it you're in it's start right because do have which is it's -- we in season St. the dead process, now, we good then winter, as the of

be that's we opportune the into more as spring, So going roll to time.

Robert Stevenson

on when rent Okay. they paying that do stop And then, asset? Ray,

Raymond Pacini

February, credit paying to of a the but X stopped letter had They in then months. cover next we

Robert Stevenson

right. Okay. All

time. some as whatever quite just for numbers time wanted this things the along Appreciate make in went I been All hasn't wasn't right. there that anything. or morning. repayments to any that So sure the or sporadically

Operator

question B. [Operator is line next from Securities. Instructions] the Riley Maher Bryan with of The

Bryan Maher

a Aaron. there this bit investors, me ever on given looks this pipeline act And I happens. Just dialogue private in other coming morning. couple more sorry of put appreciated them, from to your likelihood what little any you like? of the with out upon fact, give your with can I'm one if prepared commentary kind that of us your before and maybe to some on terms actually comments, equity I a that and this missed your morning, you color But

Aaron Halfacre

Yes.

we're my with getting ready we'll like to something guess it of if a going -- it's is you you we're yet, something would strategic the a -- because the like going question. order probably announce then. DD do we're require going a not on lot time of right? spend docs going end And -- that, done time a it's that get anything by as you when wouldn't there to to isn't Because to talking spend before about we're would we and magnitude you good that but of of So lot is April, -- going the if proxy. about to the -- Look, partners, think

to want to come has [indiscernible] we'd have then proxy it that because proxy, in one a anyway. annual an requires do it if out And we

And so we're while of instead for on QX. paying proxies X

to going going if So going April. just we're sit term, done we're do If to not going to do on in before probably then, tight. it's we're something the near to something be

as of it's of time do But constructive. kind a these we been have to all Some very shady know, things. dialogues

goes. To your that view cash these then So we'll before how think useful see in deploy could will our buildup our we is one question, be transactions. I of

property we've property going, individual we're are And is. that. making where There were said, waiting following year like X.X so bidding ago, ago, been December see where a January like we're was it they're X.X last years of we really and on for that kind guess, year I years seeing of participating liked. around on deals. seeing A pricing mid-Xs, We of understanding sure it, to before. sort And in year, been we the We've certainly was we I and the

They they originally rounds they to January like And pulled. was stock market in [ back December, came price went the the down XX in -- ].

had But and it that got we the moved. were like final leverage at [ X.XX So it. not they when obviously on put round, to had then we they just ], the did like

don't hey, we need it. So said, we just look,

wait. Let's

see do So we lot. deals a

it's Now hard.

anyone seriously that You you're to not it the pulling don't too want much trigger. committed to engage with

is little I'd the always first rates quarter lighter a There's are bit pipeline jacking the now a still it's right there. we're people So pipeline. around. in that given say

would don't And a -- I event strategic that we we're do knowing that and AFFO. partner, something us we'll replace support we partner. deploy don't prior to strategic going cash quickly if to think deploy to do then So the with some

Bryan Maher

you also was a What of shares that? a quarter all that about? through noticed during Okay. Can you around few sold January. me on And kind the give November color little I

Aaron Halfacre

just the on to waters wanted turned was the We never had It ATM. a test bit. little We ATM.

some little peel more really the we're a volume having. curve did we grew that just So more off constrained surges We price bit try flow, sort and of to out a liquidity. little bit of

just really -- work worth to probably just waters. kind of the of just we -- test was maybe ATM and weeks' that X the So on

to but is goal about. and that Our with that, balance was equity liquidity like issuance was stuff that what

Operator

of reached and we management end question-and-answer I'll time, our for the session, to this remarks. At closing floor turn the over

Aaron Halfacre

more press taking communicative Rob. progressively in the release. Thank Thanks, you, a everyone. Obviously, approach

But we're it. -- think is quarter third it's increasingly it to more everyone's logic received we've was where Not that, the this we I that why out positive was going our helps. like is. earnings I It doing it. laid insight get that feedback think following

small moving a of not are There parts, right are We now. lot company. particularly a

people don't calls so can have point more phone I we're understand make so And more and the how that to here. thinking, is who XXXX

before We we're be something size. look, an going our a I on hope releasing welcome our And well, earnings. think always Could be your more you -- disclose next that like it. NAV duty to property. I partner feedback. Probably have think we're have could if we'll announcements non-contingent I strategic to we've gone Costco

as all the So rolls on. come us thank with more But and paying attention. to being spring for you following us

Operator

will conference. Thank today's you. conclude This

this You participation. you your disconnect may at time. your Thank for lines

Modiv (MDV) 4 Mar 242023 Q4 Earnings call transcript