NYSE:PLYM Plymouth Industrial REIT Q1 2024 Earnings Report $14.89 +0.27 (+1.85%) Closing price 04/28/2025 03:59 PM EasternExtended Trading$14.88 -0.02 (-0.10%) As of 04/28/2025 05:44 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Plymouth Industrial REIT EPS ResultsActual EPS$0.14Consensus EPS $0.47Beat/MissMissed by -$0.33One Year Ago EPS$0.45Plymouth Industrial REIT Revenue ResultsActual Revenue$50.23 millionExpected Revenue$50.73 millionBeat/MissMissed by -$500.00 thousandYoY Revenue GrowthN/APlymouth Industrial REIT Announcement DetailsQuarterQ1 2024Date5/1/2024TimeAfter Market ClosesConference Call DateThursday, May 2, 2024Conference Call Time9:00AM ETUpcoming EarningsPlymouth Industrial REIT's Q1 2025 earnings is scheduled for Tuesday, April 29, 2025, with a conference call scheduled on Friday, May 2, 2025 at 9:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Plymouth Industrial REIT Q1 2024 Earnings Call TranscriptProvided by QuartrMay 2, 2024 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:00Note this event is being recorded. I would now like to turn the conference over to Trip Sullivan. Please go ahead. Speaker 100:00:07Thank you. Good morning. Welcome to the Plymouth Industrial REIT conference call to review the company's results for the Q1 of 2024. Last night, we issued our earnings release and posted a copy of our prepared commentary and a supplemental deck on the quarterly results section of our Investor Relations page. In addition to these earnings documents, a copy of our 10 Q can be found on the SEC filings page of the IR site. Speaker 100:00:35Our supplemental deck includes our full year 2024 guidance assumptions, detailed information on our operations, portfolio and balance sheet and definitions of non GAAP measures and reconciliations to the most comparable GAAP measures. We will reference this information in our remarks. With me today is Jeff Witherell, Chairman and Chief Executive Officer Anthony Saladino, Executive Vice President and Chief Financial Officer Jim Conley, Executive Vice President of Asset Management and Ann Hayward, General Counsel. I'd like to point everyone to our forward looking statements on Page 1 of our supplemental presentation and encourage you to read them carefully. They apply to statements made in this call, our press release, our prepared commentary and in our supplemental financial information. Speaker 100:01:27I'll now turn the call over to Jeff Wizzarell. Speaker 200:01:30Thanks, Tripp. Good morning and thank you for joining us today. I hope that everyone had a chance to review the commentary and supplemental information we posted last night. There are a few points that I'd like to make about the results and then we'll get right to Q and A. First, we continue to see several announcements made for new investments that companies are making in the Golden Triangle. Speaker 200:01:54We've highlighted a couple of substantial ones from Toyota and Honda just last month. I'm also pleased to see that our friend Harry Moser from the reshoring initiative is becoming more of a household name in our industry. He was highlighted in a recent Stifel report and will be speaking at the BMO conference next week along with Anthony. He has been leading this charge long before any of us and I strongly encourage you to follow him. 2nd, our balance sheet and liquidity remains strong. Speaker 200:02:27We fixed rates for well over 90% of our debt and we're on track to operate in the 6 times range during 2024. Lastly, we are seeing the transaction market unlock a little earlier than we had anticipated, but I'll reiterate what I said last quarter. We're focused on accretive growth in 2024 that translates into FFO growth. We intend to fund any potential new growth opportunities with a combination of asset sales and use of the credit facility. I would now like to turn it over to the operator for questions. Operator00:03:17Our first question will come from Todd Thomas with KeyBanc Capital Markets. You may now go ahead. Speaker 300:03:24Hi, thanks. Good morning. First question, I just wanted to stick with investments, which you just touched on. It sounds like you're starting to see more and more opportunities. Can you just elaborate a little bit on the pipeline today? Speaker 300:03:38And then based on the commentary, Operator00:03:48Is there a way to kind of Speaker 300:03:48bookend the cap rates or the is there a way to kind of bookend the cap rates or the IRRs that you're looking to achieve? Speaker 200:03:58Hey, Todd, it's Jeff. Thanks for the question. So the basis for all of our investments, they need to be accretive, right, going in. So we are looking for cash flow starting on day 1. But the product that we continue to look at and have has been kind of the shorter waltz where we're going to realize some significant growth in cash flow over the next 1, 2, 3 years. Speaker 200:04:25There's some value add components to some of the stuff we're looking at, but we really don't underwrite to IRRs necessarily. I think if you have that growing cash flow and you start at the right basis, the IRR takes care of itself. I mean, we are looking at assets like we always are, both for the REIT, also for JV, Really can't give you much more than that, but we are active in the market. To answer the first part of your question, there are several portfolios in the market and there also are several single asset deals that are popping up. So we are seeing much more activity on the for sale side. Speaker 300:05:09Okay. And in terms of pricing, have you seen seller expectations adjust or change at all in recent months just given the higher rate environment? Speaker 200:05:21It depends on where you are. So I would say yes to some of that. But in some markets, we're still seeing negative leverage deals get done. So somebody is counting on some significant rent growth, the mark to market to get their hurdles. But in our markets, I think the way we buy and the things that we buy, we're able to get some pretty attractive cap rates. Speaker 200:05:44So it's accretive going in for us. Speaker 300:05:48Okay. And then I wanted to ask about the 769,000 square foot facility in the St. Louis market. It sounds like there's some interest there. You've been active marketing that. Speaker 300:06:02Two questions. Has FedEx officially provided notice that they are moving out? And then the second question is, to the extent that they do, how should we think about the timeline to get a tenant in the door and for rent to commence for a facility like this? It sounds like you're talking to some manufacturer groups. I'm just curious if there could be some additional time required for them to sort of fit out their space and maybe also in terms of concessions. Speaker 300:06:33Just curious what we should be thinking about there. Speaker 400:06:37Yes. This is Jeff. So as far as FedEx is concerned, they're moving out. They wanted to keep a small group back in the space, but it just wouldn't work for us because we would given them the office and we would have to build out a second office. So it really didn't work. Speaker 400:06:58The building is a very good building, as you can see if you watch the video. It's a large building. There's only really 2 buildings of that size available in the market right now, which is creating some of the interest that we're getting. The video is also generating a lot of phone calls. As far as your point about the what to expect, yes, some of the manufacturing would have a bit of a time to get their space set up. Speaker 400:07:29We've cash rent starting next year. That's been a proposal. Cash rents starting next year, that's been a proposal. There's also logistics companies that are interested that would be quicker. They would get in right away and cash would start faster. Speaker 300:07:53Okay. All right. Thank you. Speaker 500:07:56Thanks, Todd. Operator00:07:59Our next question will come from Nick Thalmann with Baird. You may now go ahead. Speaker 600:08:05Hey, good morning guys. We've heard commentary from some of your peers on just tenants being a little bit more deliberate to commit to new space. So as we kind of look through like 2025 and you guys do have some like larger expirations, I guess remind us what the rent differential is between like the Class A new product that's being delivered and kind of the rents that you're at? And then as we're looking at just like fixed rate renewals, I know that's weighed on the first half, Your lease terms are around 3 to 4 years. So are we going to start to see that come down as we go into 'twenty five? Speaker 200:08:35Sure. Speaker 400:08:38The differential between Class A and B in some cases is at least $1 a square foot, maybe more, especially if it whether it includes the payments or not. As far as our tenants are concerned, we've recently just in these last few weeks, we're working with about 2,000,000 square feet of renewals on 25 expirations with some large tenants. And as far as the fixed rate renewals are concerned, I mean, mostly that limits our growth side. We do have a bid in 'twenty five. However, in one case, one of our larger tenants has 1 and it's probably good assurance that they're going to renew. Speaker 400:09:26So it's not always a bad thing, but they start really to burn off next year. Speaker 600:09:32Okay. And then maybe just a general commentary on leasing. Have you noticed any shift in kind of tenant behavior, maybe they're delaying kind of renewal discussions or are they a little bit more reluctant to kind of engage in conversation? Any commentary there would be helpful. Speaker 200:09:50Hey, Nick, this is Jeff. I think we talked about this last year as well, where what we were seeing were tenants, yes, taking their time on actually signing the lease, right. So they negotiate the terms and then it's out for signature and they're sitting on it for 30, 45 days. And what we believe that to be is once they have that negotiated, they go out into the marketplace and try to find a better deal, let's say, or see or test the market to see where things are. And so when you're talking about our size space, if you need 50,000 square feet in one of our markets, there's probably not 10 availabilities for that. Speaker 200:10:32And so what we've just seen is people taking their time on that. I don't know if Jim can add to that. Speaker 400:10:38Yes, that's been a trend that's been going on for the past year. Another thing that's going on is the larger logistics companies are all doing studies on where they want to be in the future. And it's across the board. Like for instance, Maersk won't sign leases longer than 4 months right now, but we got to sign a 9 month lease, which is great. And it's just because they're trying to gauge what their business is going to be like in the future. Speaker 400:11:05So it's not just that it's efficient for better deals, they're also trying to maximize and get in the right spot. Speaker 600:11:17Very helpful. That's it for me. Thanks. Speaker 200:11:19Thanks. Operator00:11:22Our next question will come from Mitch Germain with Citizens JMP. You may now go ahead. Pardon me, Mitch, your line may be muted. Speaker 500:11:39Sorry about that. Jeff, I know you talked about match funding or at least match only a portion of potential acquisitions. But I'm curious if you talked about some sellers or some buyers emerging and some activity in the investment sales market. Is there potential for you to do some just opportunistic dispositions, assets that may not fit the long term growth profile or may have some sort of leasing issue to address in the future? Speaker 200:12:10Yes, Mitch. I think we've kind of covered some of these things in the past. We have 2 or 3 buildings right now that are ready for sale. I think we've mentioned we want to exit the Kansas City market. I don't want to talk about our 50,000 square foot building in Milwaukee anymore. Speaker 200:12:29So we're selling that as well. And I think you see the sale that's being put to us by the tenant is going to bring in some proceeds. So on top of that, we're always evaluating buildings that don't quite fit. I hate to say too much on an open line about it because buyers are listening potentially, but we're always looking to prune assets that don't fit kind of around building. When the markets are hot, you want to sell a round building and keep the rectangles. Speaker 500:13:10Got you. That's helpful. Are there any other purchase options in the portfolio or is this kind of like a one off item? Speaker 700:13:20We would consider this a one off item. There are a diminutive amount of purchase options in place leases that based on our valuation are unlikely to be exercised. Speaker 500:13:42Okay. That's super helpful. Last for me. I'm curious about lease structure. I know you've talked a little bit about a little bit longer to execute, but I'm curious about structure. Speaker 500:13:55Are you getting any pushback on term or escalators kind of in this new environment? Or are you still kind of able to push some of the kind of wants when you're discussing leases with tenants? Speaker 400:14:14So the start of the year, it seemed like it was going to go that way, that there was going to be a lot of pushback, but it seems to have changed over the last month and a half, where we're seeing significant rent increases, term 5 plus years and a lot of people want to renew really. It's just changed over the last month. Speaker 500:14:42Great. Thank you so much. Speaker 200:14:44Thanks, Mitch. Operator00:14:48Our next question will come from Bryan Maher with B. Riley FBR. You may now go ahead. Speaker 800:14:54Great. Thank you and good morning. Speaker 500:14:56I was wondering if you Speaker 800:14:57could comment a little bit more on your thoughts on the Golden Triangle. And you put front and center on your prepared comments how you think that and maybe other opportunities over the next year or 2 are going to impact the Golden Triangle and kind of more specifically you? Speaker 200:15:28Hey, Brian. We put so much detail out there on the Golden Triangle and we try to add a lot more to it. I mean, those are the markets that we're primarily in. That's the markets we're going to continue to focus on. And based on all the data that we put out there, we believe this phenomenon is here to stay. Speaker 200:15:53Basically every week there's new announcements. There's been some fantastic information put out from Harry Mosher as we referenced in the prepared documentation. So how we benefit is being in markets like Memphis, St. Louis, I mean, Chicago. I mean, I think one of the big things we pointed out was Honda in Canada, really getting set up for setting up in Canada and being able to bring their product down into the United States. Speaker 200:16:24So if they're to come down into the United States, they're probably going to come right down into Chicago and distribute. And a big part of Memphis is bringing the product up from Texas into places like St. Louis and getting it distributed. You need infrastructure for that. So how we benefit is being in places like Chicago, where you have the lowest transportation costs in the country because you have the infrastructure and you have the employment base. Speaker 200:16:49So all of these things are really what is going to drive the future of on shoring and reshoring is going to be the infrastructure. I mean, I think we talked about it last time, in order to secure a fairly significant lease in our new building in Georgia, we needed to negotiate a contract with Georgia Power, which we did. We're also negotiating power in places like St. Louis and other markets. But that's going to be one of the prohibiting factors of reshoring is going to be infrastructure and then obviously labor. Speaker 200:17:21If you can get those things figured out, this phenomenon is not going to stop. So I think we benefit by being in these markets that have the infrastructure. Speaker 800:17:31And is it too early that I mean, look, we're analysts, right? And we like to quantify everything. Is there is it too early to kind of really put pen to paper and quantify the impact on demand for the warehousing space in these markets? And this is just a bigger picture shot across the bow, hey, it's coming, we're going to have demand, but we don't exactly know what that demand level is going to be? Speaker 200:17:56Yes, I mean, I think if you look at just investment in manufacturing, and I'll get these numbers wrong, but between 20 19, 2020 2023, I mean, you had an increase of about 180 $1,000,000,000 of investment, right, in new manufacturing. And they think that level of investment is going to carry for the next 10 years. So this is these are all data points. And so again, where are you going to build, where are you going to put this new manufacturing that's coming in. I think, I don't know if we'll get to this, but this building in City, Ohio that we're selling, I mean, this has been really the what we've been talking about, I think, 1 on 1 for 2 years now is that building is occupied by American Nitrile, which is the 1st manufacturer of Nitrile gloves. Speaker 200:18:51It's basically gloves for medical use and so on and so forth. They're the 1st manufacturing in the United States in 50 years and they're in that building. So they came in and put in $15,000,000 to $20,000,000 of improvements in the building. And in order to do that, we need to give them a purchase option, right? And so that's why that was done. Speaker 200:19:10And now they're going to take that building and they're going to expand. So this is happening on the ground and it's pretty exciting to see. Operator00:19:25Our next question will come from Anthony Howe with SunTrust. You may now go ahead. Speaker 900:19:31Good morning, guys. Thanks for taking my question. Just curious, were you guys able to extend the lease at 3,650 this triplets in Memphis? Speaker 400:19:42Yes. That's the most lease that we extended. Speaker 100:19:48Okay. Speaker 700:19:48Yes. So that's the lease that Jim mentioned extended for 9 months. Maersk is exploring the option to extend beyond that in the event that they don't. We have another prospect already lined up interested to start in January 2025. Speaker 900:20:11Got you. And I know it might be too early, but have you guys have any conversation with Geotis and Royal Canin about renewal? Speaker 400:20:21Yes. Royal Canin contacted us about extending at least another year. And then Geotis, we've talked to them. They were one of the first tenants last year, the last time that they renewed that they held on to the lease to the last minute. So I expect they're going to take us to the last date, but the building is full and we're positive they're going to renew. Speaker 100:20:53Got you. Speaker 900:20:53And then just one last question. I know you guys are currently in negotiation with that communication test design to extend the lease. Would this be like a 1 year extension or the multiyear renewal? Speaker 400:21:06They asked for several different options. They look for 5 year option, 7 year option. Speaker 100:21:13Okay. Got you. Thanks. Speaker 900:21:15Thank you. Operator00:21:22Our next question will come from Brendan Lynch with Barclays. You may now go ahead. Speaker 1000:21:28Great. Thanks for taking my questions. You have a little less than a quarter of leases expiring in 2025. How soon can you start addressing those? And where might that come down to as a percentage of leases to address by year end? Speaker 400:21:48Yes, I would estimate that that number is going to be around 50%. Have got several large tenants that have already approached us about renewing. So I think it's going to come down quite a bit. Speaker 1000:22:05Okay. That's helpful. And then on development, maybe you could give a little bit of color on the prospect of leasing up the one facility in Cincinnati and also your interest in commencing the next phase of development at some point in the near future? Speaker 400:22:24I'll take the first part. The current space, the 53,000 square feet that's available at Fisher Park, Fisher Industrial Park, both tenants that are in the building now are asking about it, whether to take some of that space, plus another tenant that's over in the main building, Christian Industrial Park, is looking to expand in that as well. Plus, we have a few other prospects that are there. So we think it's going to lease up very soon. Speaker 200:22:57Yes. I mean as far as new development is concerned, I mean we do outline in the supplement the available land that we have another 1,500,000 square feet plus or minus to build. We have identified several parcels there where the buildings are designed and we could pull permits momentarily. But we're not going to do it on a spec basis like we did in the past. So we're going to wait until the build to soup shows up before we break ground. Speaker 200:23:28We think that's prudent. Speaker 1000:23:31Great. Thanks for the color. Speaker 200:23:33Thank you. Operator00:23:36It appears there are no further questions. This concludes our question and answer session as well as the conference. Thank you for attending today's presentation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallPlymouth Industrial REIT Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Plymouth Industrial REIT Earnings HeadlinesAnalysts Offer Insights on Real Estate Companies: Prologis (PLD) and LXP Industrial Trust (LXP)April 23, 2025 | markets.businessinsider.comShort Interest Down For U.S. REITs In March, Up For Advertising REITsApril 18, 2025 | seekingalpha.comTrump’s treachery Trump’s Final Reset Inside the shocking plot to re-engineer America’s financial system…and why you need to move your money now.April 29, 2025 | Porter & Company (Ad)Plymouth Industrial REIT closes $41M in Cincinnati acquisitions to start 2025April 14, 2025 | bizjournals.comPlymouth Industrial REIT Inc.: Plymouth Industrial REIT Provides Activity Update for First Quarter 2025April 9, 2025 | finanznachrichten.dePlymouth Industrial Reit (PLYM) Gets a Buy from KeyBancApril 9, 2025 | markets.businessinsider.comSee More Plymouth Industrial REIT Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Plymouth Industrial REIT? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Plymouth Industrial REIT and other key companies, straight to your email. Email Address About Plymouth Industrial REITPlymouth Industrial REIT (NYSE:PLYM) (NYSE: PLYM) is a full service, vertically integrated real estate investment company focused on the acquisition, ownership and management of single and multi-tenant industrial properties. Our mission is to provide tenants with cost effective space that is functional, flexible and safe.View Plymouth Industrial REIT ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Alphabet Rebounds After Strong Earnings and Buyback AnnouncementMarkets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Texas Instruments: Earnings Beat, Upbeat Guidance Fuel RecoveryMarket Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial Earnings Upcoming Earnings AstraZeneca (4/29/2025)Booking (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Regeneron Pharmaceuticals (4/29/2025)Starbucks (4/29/2025)American Tower (4/29/2025)América Móvil (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 11 speakers on the call. Operator00:00:00Note this event is being recorded. I would now like to turn the conference over to Trip Sullivan. Please go ahead. Speaker 100:00:07Thank you. Good morning. Welcome to the Plymouth Industrial REIT conference call to review the company's results for the Q1 of 2024. Last night, we issued our earnings release and posted a copy of our prepared commentary and a supplemental deck on the quarterly results section of our Investor Relations page. In addition to these earnings documents, a copy of our 10 Q can be found on the SEC filings page of the IR site. Speaker 100:00:35Our supplemental deck includes our full year 2024 guidance assumptions, detailed information on our operations, portfolio and balance sheet and definitions of non GAAP measures and reconciliations to the most comparable GAAP measures. We will reference this information in our remarks. With me today is Jeff Witherell, Chairman and Chief Executive Officer Anthony Saladino, Executive Vice President and Chief Financial Officer Jim Conley, Executive Vice President of Asset Management and Ann Hayward, General Counsel. I'd like to point everyone to our forward looking statements on Page 1 of our supplemental presentation and encourage you to read them carefully. They apply to statements made in this call, our press release, our prepared commentary and in our supplemental financial information. Speaker 100:01:27I'll now turn the call over to Jeff Wizzarell. Speaker 200:01:30Thanks, Tripp. Good morning and thank you for joining us today. I hope that everyone had a chance to review the commentary and supplemental information we posted last night. There are a few points that I'd like to make about the results and then we'll get right to Q and A. First, we continue to see several announcements made for new investments that companies are making in the Golden Triangle. Speaker 200:01:54We've highlighted a couple of substantial ones from Toyota and Honda just last month. I'm also pleased to see that our friend Harry Moser from the reshoring initiative is becoming more of a household name in our industry. He was highlighted in a recent Stifel report and will be speaking at the BMO conference next week along with Anthony. He has been leading this charge long before any of us and I strongly encourage you to follow him. 2nd, our balance sheet and liquidity remains strong. Speaker 200:02:27We fixed rates for well over 90% of our debt and we're on track to operate in the 6 times range during 2024. Lastly, we are seeing the transaction market unlock a little earlier than we had anticipated, but I'll reiterate what I said last quarter. We're focused on accretive growth in 2024 that translates into FFO growth. We intend to fund any potential new growth opportunities with a combination of asset sales and use of the credit facility. I would now like to turn it over to the operator for questions. Operator00:03:17Our first question will come from Todd Thomas with KeyBanc Capital Markets. You may now go ahead. Speaker 300:03:24Hi, thanks. Good morning. First question, I just wanted to stick with investments, which you just touched on. It sounds like you're starting to see more and more opportunities. Can you just elaborate a little bit on the pipeline today? Speaker 300:03:38And then based on the commentary, Operator00:03:48Is there a way to kind of Speaker 300:03:48bookend the cap rates or the is there a way to kind of bookend the cap rates or the IRRs that you're looking to achieve? Speaker 200:03:58Hey, Todd, it's Jeff. Thanks for the question. So the basis for all of our investments, they need to be accretive, right, going in. So we are looking for cash flow starting on day 1. But the product that we continue to look at and have has been kind of the shorter waltz where we're going to realize some significant growth in cash flow over the next 1, 2, 3 years. Speaker 200:04:25There's some value add components to some of the stuff we're looking at, but we really don't underwrite to IRRs necessarily. I think if you have that growing cash flow and you start at the right basis, the IRR takes care of itself. I mean, we are looking at assets like we always are, both for the REIT, also for JV, Really can't give you much more than that, but we are active in the market. To answer the first part of your question, there are several portfolios in the market and there also are several single asset deals that are popping up. So we are seeing much more activity on the for sale side. Speaker 300:05:09Okay. And in terms of pricing, have you seen seller expectations adjust or change at all in recent months just given the higher rate environment? Speaker 200:05:21It depends on where you are. So I would say yes to some of that. But in some markets, we're still seeing negative leverage deals get done. So somebody is counting on some significant rent growth, the mark to market to get their hurdles. But in our markets, I think the way we buy and the things that we buy, we're able to get some pretty attractive cap rates. Speaker 200:05:44So it's accretive going in for us. Speaker 300:05:48Okay. And then I wanted to ask about the 769,000 square foot facility in the St. Louis market. It sounds like there's some interest there. You've been active marketing that. Speaker 300:06:02Two questions. Has FedEx officially provided notice that they are moving out? And then the second question is, to the extent that they do, how should we think about the timeline to get a tenant in the door and for rent to commence for a facility like this? It sounds like you're talking to some manufacturer groups. I'm just curious if there could be some additional time required for them to sort of fit out their space and maybe also in terms of concessions. Speaker 300:06:33Just curious what we should be thinking about there. Speaker 400:06:37Yes. This is Jeff. So as far as FedEx is concerned, they're moving out. They wanted to keep a small group back in the space, but it just wouldn't work for us because we would given them the office and we would have to build out a second office. So it really didn't work. Speaker 400:06:58The building is a very good building, as you can see if you watch the video. It's a large building. There's only really 2 buildings of that size available in the market right now, which is creating some of the interest that we're getting. The video is also generating a lot of phone calls. As far as your point about the what to expect, yes, some of the manufacturing would have a bit of a time to get their space set up. Speaker 400:07:29We've cash rent starting next year. That's been a proposal. Cash rents starting next year, that's been a proposal. There's also logistics companies that are interested that would be quicker. They would get in right away and cash would start faster. Speaker 300:07:53Okay. All right. Thank you. Speaker 500:07:56Thanks, Todd. Operator00:07:59Our next question will come from Nick Thalmann with Baird. You may now go ahead. Speaker 600:08:05Hey, good morning guys. We've heard commentary from some of your peers on just tenants being a little bit more deliberate to commit to new space. So as we kind of look through like 2025 and you guys do have some like larger expirations, I guess remind us what the rent differential is between like the Class A new product that's being delivered and kind of the rents that you're at? And then as we're looking at just like fixed rate renewals, I know that's weighed on the first half, Your lease terms are around 3 to 4 years. So are we going to start to see that come down as we go into 'twenty five? Speaker 200:08:35Sure. Speaker 400:08:38The differential between Class A and B in some cases is at least $1 a square foot, maybe more, especially if it whether it includes the payments or not. As far as our tenants are concerned, we've recently just in these last few weeks, we're working with about 2,000,000 square feet of renewals on 25 expirations with some large tenants. And as far as the fixed rate renewals are concerned, I mean, mostly that limits our growth side. We do have a bid in 'twenty five. However, in one case, one of our larger tenants has 1 and it's probably good assurance that they're going to renew. Speaker 400:09:26So it's not always a bad thing, but they start really to burn off next year. Speaker 600:09:32Okay. And then maybe just a general commentary on leasing. Have you noticed any shift in kind of tenant behavior, maybe they're delaying kind of renewal discussions or are they a little bit more reluctant to kind of engage in conversation? Any commentary there would be helpful. Speaker 200:09:50Hey, Nick, this is Jeff. I think we talked about this last year as well, where what we were seeing were tenants, yes, taking their time on actually signing the lease, right. So they negotiate the terms and then it's out for signature and they're sitting on it for 30, 45 days. And what we believe that to be is once they have that negotiated, they go out into the marketplace and try to find a better deal, let's say, or see or test the market to see where things are. And so when you're talking about our size space, if you need 50,000 square feet in one of our markets, there's probably not 10 availabilities for that. Speaker 200:10:32And so what we've just seen is people taking their time on that. I don't know if Jim can add to that. Speaker 400:10:38Yes, that's been a trend that's been going on for the past year. Another thing that's going on is the larger logistics companies are all doing studies on where they want to be in the future. And it's across the board. Like for instance, Maersk won't sign leases longer than 4 months right now, but we got to sign a 9 month lease, which is great. And it's just because they're trying to gauge what their business is going to be like in the future. Speaker 400:11:05So it's not just that it's efficient for better deals, they're also trying to maximize and get in the right spot. Speaker 600:11:17Very helpful. That's it for me. Thanks. Speaker 200:11:19Thanks. Operator00:11:22Our next question will come from Mitch Germain with Citizens JMP. You may now go ahead. Pardon me, Mitch, your line may be muted. Speaker 500:11:39Sorry about that. Jeff, I know you talked about match funding or at least match only a portion of potential acquisitions. But I'm curious if you talked about some sellers or some buyers emerging and some activity in the investment sales market. Is there potential for you to do some just opportunistic dispositions, assets that may not fit the long term growth profile or may have some sort of leasing issue to address in the future? Speaker 200:12:10Yes, Mitch. I think we've kind of covered some of these things in the past. We have 2 or 3 buildings right now that are ready for sale. I think we've mentioned we want to exit the Kansas City market. I don't want to talk about our 50,000 square foot building in Milwaukee anymore. Speaker 200:12:29So we're selling that as well. And I think you see the sale that's being put to us by the tenant is going to bring in some proceeds. So on top of that, we're always evaluating buildings that don't quite fit. I hate to say too much on an open line about it because buyers are listening potentially, but we're always looking to prune assets that don't fit kind of around building. When the markets are hot, you want to sell a round building and keep the rectangles. Speaker 500:13:10Got you. That's helpful. Are there any other purchase options in the portfolio or is this kind of like a one off item? Speaker 700:13:20We would consider this a one off item. There are a diminutive amount of purchase options in place leases that based on our valuation are unlikely to be exercised. Speaker 500:13:42Okay. That's super helpful. Last for me. I'm curious about lease structure. I know you've talked a little bit about a little bit longer to execute, but I'm curious about structure. Speaker 500:13:55Are you getting any pushback on term or escalators kind of in this new environment? Or are you still kind of able to push some of the kind of wants when you're discussing leases with tenants? Speaker 400:14:14So the start of the year, it seemed like it was going to go that way, that there was going to be a lot of pushback, but it seems to have changed over the last month and a half, where we're seeing significant rent increases, term 5 plus years and a lot of people want to renew really. It's just changed over the last month. Speaker 500:14:42Great. Thank you so much. Speaker 200:14:44Thanks, Mitch. Operator00:14:48Our next question will come from Bryan Maher with B. Riley FBR. You may now go ahead. Speaker 800:14:54Great. Thank you and good morning. Speaker 500:14:56I was wondering if you Speaker 800:14:57could comment a little bit more on your thoughts on the Golden Triangle. And you put front and center on your prepared comments how you think that and maybe other opportunities over the next year or 2 are going to impact the Golden Triangle and kind of more specifically you? Speaker 200:15:28Hey, Brian. We put so much detail out there on the Golden Triangle and we try to add a lot more to it. I mean, those are the markets that we're primarily in. That's the markets we're going to continue to focus on. And based on all the data that we put out there, we believe this phenomenon is here to stay. Speaker 200:15:53Basically every week there's new announcements. There's been some fantastic information put out from Harry Mosher as we referenced in the prepared documentation. So how we benefit is being in markets like Memphis, St. Louis, I mean, Chicago. I mean, I think one of the big things we pointed out was Honda in Canada, really getting set up for setting up in Canada and being able to bring their product down into the United States. Speaker 200:16:24So if they're to come down into the United States, they're probably going to come right down into Chicago and distribute. And a big part of Memphis is bringing the product up from Texas into places like St. Louis and getting it distributed. You need infrastructure for that. So how we benefit is being in places like Chicago, where you have the lowest transportation costs in the country because you have the infrastructure and you have the employment base. Speaker 200:16:49So all of these things are really what is going to drive the future of on shoring and reshoring is going to be the infrastructure. I mean, I think we talked about it last time, in order to secure a fairly significant lease in our new building in Georgia, we needed to negotiate a contract with Georgia Power, which we did. We're also negotiating power in places like St. Louis and other markets. But that's going to be one of the prohibiting factors of reshoring is going to be infrastructure and then obviously labor. Speaker 200:17:21If you can get those things figured out, this phenomenon is not going to stop. So I think we benefit by being in these markets that have the infrastructure. Speaker 800:17:31And is it too early that I mean, look, we're analysts, right? And we like to quantify everything. Is there is it too early to kind of really put pen to paper and quantify the impact on demand for the warehousing space in these markets? And this is just a bigger picture shot across the bow, hey, it's coming, we're going to have demand, but we don't exactly know what that demand level is going to be? Speaker 200:17:56Yes, I mean, I think if you look at just investment in manufacturing, and I'll get these numbers wrong, but between 20 19, 2020 2023, I mean, you had an increase of about 180 $1,000,000,000 of investment, right, in new manufacturing. And they think that level of investment is going to carry for the next 10 years. So this is these are all data points. And so again, where are you going to build, where are you going to put this new manufacturing that's coming in. I think, I don't know if we'll get to this, but this building in City, Ohio that we're selling, I mean, this has been really the what we've been talking about, I think, 1 on 1 for 2 years now is that building is occupied by American Nitrile, which is the 1st manufacturer of Nitrile gloves. Speaker 200:18:51It's basically gloves for medical use and so on and so forth. They're the 1st manufacturing in the United States in 50 years and they're in that building. So they came in and put in $15,000,000 to $20,000,000 of improvements in the building. And in order to do that, we need to give them a purchase option, right? And so that's why that was done. Speaker 200:19:10And now they're going to take that building and they're going to expand. So this is happening on the ground and it's pretty exciting to see. Operator00:19:25Our next question will come from Anthony Howe with SunTrust. You may now go ahead. Speaker 900:19:31Good morning, guys. Thanks for taking my question. Just curious, were you guys able to extend the lease at 3,650 this triplets in Memphis? Speaker 400:19:42Yes. That's the most lease that we extended. Speaker 100:19:48Okay. Speaker 700:19:48Yes. So that's the lease that Jim mentioned extended for 9 months. Maersk is exploring the option to extend beyond that in the event that they don't. We have another prospect already lined up interested to start in January 2025. Speaker 900:20:11Got you. And I know it might be too early, but have you guys have any conversation with Geotis and Royal Canin about renewal? Speaker 400:20:21Yes. Royal Canin contacted us about extending at least another year. And then Geotis, we've talked to them. They were one of the first tenants last year, the last time that they renewed that they held on to the lease to the last minute. So I expect they're going to take us to the last date, but the building is full and we're positive they're going to renew. Speaker 100:20:53Got you. Speaker 900:20:53And then just one last question. I know you guys are currently in negotiation with that communication test design to extend the lease. Would this be like a 1 year extension or the multiyear renewal? Speaker 400:21:06They asked for several different options. They look for 5 year option, 7 year option. Speaker 100:21:13Okay. Got you. Thanks. Speaker 900:21:15Thank you. Operator00:21:22Our next question will come from Brendan Lynch with Barclays. You may now go ahead. Speaker 1000:21:28Great. Thanks for taking my questions. You have a little less than a quarter of leases expiring in 2025. How soon can you start addressing those? And where might that come down to as a percentage of leases to address by year end? Speaker 400:21:48Yes, I would estimate that that number is going to be around 50%. Have got several large tenants that have already approached us about renewing. So I think it's going to come down quite a bit. Speaker 1000:22:05Okay. That's helpful. And then on development, maybe you could give a little bit of color on the prospect of leasing up the one facility in Cincinnati and also your interest in commencing the next phase of development at some point in the near future? Speaker 400:22:24I'll take the first part. The current space, the 53,000 square feet that's available at Fisher Park, Fisher Industrial Park, both tenants that are in the building now are asking about it, whether to take some of that space, plus another tenant that's over in the main building, Christian Industrial Park, is looking to expand in that as well. Plus, we have a few other prospects that are there. So we think it's going to lease up very soon. Speaker 200:22:57Yes. I mean as far as new development is concerned, I mean we do outline in the supplement the available land that we have another 1,500,000 square feet plus or minus to build. We have identified several parcels there where the buildings are designed and we could pull permits momentarily. But we're not going to do it on a spec basis like we did in the past. So we're going to wait until the build to soup shows up before we break ground. Speaker 200:23:28We think that's prudent. Speaker 1000:23:31Great. Thanks for the color. Speaker 200:23:33Thank you. Operator00:23:36It appears there are no further questions. This concludes our question and answer session as well as the conference. Thank you for attending today's presentation. You may now disconnect.Read morePowered by