Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $11.8 million, a 4% increase from $11.4 million in the prior year period, primarily due to two industrial manufacturing property acquisitions [4] - Adjusted funds from operations (AFFO) increased by 22% to $4.8 million compared to $3.9 million in the same quarter last year [4] - AFFO per share rose 12% from $0.34 to $0.38, despite a $1.2 million increase in diluted shares outstanding [5] - Cash interest expense decreased by $255,000 compared to the same period in 2024, reflecting a reduction in the weighted average fixed rate from 4.53% to 4.25% [5] Business Line Data and Key Metrics Changes - The portfolio consists of 43 properties with an annualized base rent of $39 million as of June 30, 2025, with 39 industrial properties representing 81% of this amount [6] - The weighted average lease term for the portfolio is 14.4 years, with approximately 29% of tenants having an investment-grade credit rating [6] Market Data and Key Metrics Changes - Total cash and cash equivalents were $5.8 million as of June 30, 2025, with $30 million available to draw on a revolver [6] - The company has $280 million of debt outstanding, with no debt maturities until January 2027 [6] Company Strategy and Development Direction - The company is focusing on asset recycling, planning to sell legacy assets to reinvest in more accretive properties [18][22] - Management is exploring various financing options, indicating a positive lending environment for new term loans or credit facilities [31][34] - The company aims to maintain a disciplined approach to acquisitions, prioritizing smart decisions over rapid growth [10][70] Management's Comments on Operating Environment and Future Outlook - Management expressed frustration with the current market volatility but remains confident in the long-term strategy and the potential for future growth [8][12] - The company is optimistic about the potential for asset recycling to improve financial performance and shareholder value [26][72] - Management noted that while there are challenges in the current environment, they believe the company is well-positioned to navigate these issues [34][70] Other Important Information - The Board of Directors declared a cash dividend of $9.75 for common shares for July, August, and September 2025, representing an annualized dividend rate of $1.17 per share [7] - The company is actively working on lease extensions and has ongoing discussions regarding property sales [50][52] Q&A Session Summary Question: Can you provide more details on asset recycling and the $150 million asset mentioned? - Management indicated that the assets for sale would largely be legacy properties, with some being core and non-core, and emphasized the importance of timing in the sales process [18][19][22] Question: What are the current lending market conditions? - Management noted that the lending environment is favorable, with terms and rates expected to be the same or better than previous loans, and they are exploring various financing options [31][34] Question: Can you explain the increase in income recognized from the joint venture? - The increase reflects the impact of extending a lease, which involves recognizing rent that will be received in the future [40] Question: What is the status of the Calera equipment? - Management stated that the equipment is on the market, and they prefer to sell it rather than lease it, taking an impairment charge to reflect its current value [44][46] Question: How are tariffs impacting tenant discussions? - Management indicated that while there is some delay in capital decisions among tenants, they do not foresee significant negative impacts from tariffs [48][49] Question: Are transformative transactions still being considered? - Management confirmed that transformative transactions are still on the table but emphasized the need for the right environment to pursue such opportunities [54][56] Question: Is there a risk regarding the zoning for the KB Homes property? - Management believes the delay is due to bureaucratic processes and does not foresee significant risks regarding zoning approvals [74][76]

Financial Performance - Modiv Industrial, Inc. reported quarterly funds from operations (FFO) of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.36 per share, and up from $0.34 per share a year ago, representing an FFO surprise of +5.56% [1] - The company posted revenues of $11.77 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.06%, compared to year-ago revenues of $11.34 million [2] - Over the last four quarters, Modiv Industrial has surpassed consensus FFO estimates three times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Modiv Industrial shares have declined approximately 3% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The future stock price movement will largely depend on management's commentary during the earnings call and the company's FFO outlook [3][4] - The current consensus FFO estimate for the upcoming quarter is $0.33 on revenues of $11.33 million, and for the current fiscal year, it is $1.37 on revenues of $46.06 million [7] Industry Context - The REIT and Equity Trust - Residential industry, to which Modiv Industrial belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in estimate revisions, which can impact investor sentiment and stock performance [5]

[Company Overview](index=4&type=section&id=Company%20Overview) Modiv Industrial is a REIT focused on single-tenant net-lease industrial manufacturing properties [Company Overview](index=4&type=section&id=Company%20Overview) Modiv Industrial is a REIT focused on single-tenant net-lease industrial manufacturing properties with long-term leases - Modiv Industrial's core business is owning and managing single-tenant net-lease real estate, with a strategic focus on critical industrial manufacturing properties[9](index=9&type=chunk) Leadership Team | Role | Name | | :--- | :--- | | **Management Team** | | | Chief Executive Officer and Director | Aaron S. Halfacre | | Chief Financial Officer and Secretary | Raymond J. Pacini | | Chief Operating Officer and General Counsel | John C. Raney | | **Independent Directors** | | | Chairman of the Board | Thomas H. Nolan, Jr. | | Director | Christopher R. Gingras | | Director | Kimberly Smith | | Director | Connie Tirondola | [Financial Results](index=5&type=section&id=Financial%20Results) This section details Modiv Industrial's financial performance, including earnings, FFO, AFFO, and leverage ratios [Earnings Release](index=5&type=section&id=Earnings%20Release) Q2 2025: $11.8 million revenue, $(2.8) million net loss, and **22% YoY AFFO per diluted share growth to $0.38** Q2 2025 Financial Highlights | Metric | Value | Note | | :--- | :--- | :--- | | Revenue | $11.8 million | - | | Net Loss Attributable to Common Stockholders | $(2.8) million | - | | AFFO | $4.8 million | - | | AFFO per Diluted Share | $0.38 | 22% year-over-year increase | - A 5-year lease was renewed with Northrop Grumman for the property in Melbourne, Florida, featuring **2% annual rent escalations**[18](index=18&type=chunk) - Management observes early signs of a thaw in the lending market, making refinancing and acquisition financing more available[19](index=19&type=chunk) - The company is considering an asset recycling program involving approximately **$150 million** of properties, which could potentially produce over **100 basis points of AFFO growth** within 12+ months[23](index=23&type=chunk) [Consolidated Statements of Operations - Last Five Quarters](index=8&type=section&id=Consolidated%20Statements%20of%20Operations%20-%20Last%20Five%20Quarters) Q2 2025 total income was $11.8 million, but a $4.0 million impairment led to a $(2.6) million net loss, contrasting Q2 2024 Q2 2025 vs Q2 2024 Statement of Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Income | $11,833 | $11,410 | +3.7% | | Total Expenses | $10,668 | $6,317 | +68.9% | | Net (Loss) Income | $(2,633) | $1,262 | N/A | | Net (Loss) Income Attributable to Common Stockholders | $(2,818) | $403 | N/A | - A **$4.0 million impairment charge** was recorded in Q2 2025 related to a property in Saint Paul, Minnesota, due to current market conditions[32](index=32&type=chunk) - Interest expense in Q2 2025 was **$(4.0) million**, slightly lower than the **$(4.1) million** in Q2 2024, influenced by changes in interest rate swap valuations and settlements[30](index=30&type=chunk) [Consolidated Statements of Comprehensive Income (Loss) - Last Five Quarters](index=10&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20-%20Last%20Five%20Quarters) Q2 2025 comprehensive loss was $(2.7) million, driven by net loss and cash flow hedge adjustments Comprehensive Income (Loss) (in thousands) | Period | Net (Loss) Income | Other Comprehensive (Loss) Income | Comprehensive (Loss) Income | | :--- | :--- | :--- | :--- | | Q2 2025 | $(2,633) | $(59) | $(2,692) | | Q2 2024 | $1,262 | $(253) | $1,009 | [Earnings (Loss) Per Share - Last Five Quarters](index=11&type=section&id=Earnings%20(Loss)%20Per%20Share%20-%20Last%20Five%20Quarters) Q2 2025 basic and diluted loss per share was $(0.32), a significant drop from $0.03 in Q2 2024 Earnings (Loss) Per Share Comparison | Period | Basic EPS | Diluted EPS | | :--- | :--- | :--- | | Q2 2025 | $(0.32) | $(0.32) | | Q1 2025 | $(0.01) | $(0.01) | | Q4 2024 | $0.07 | $0.07 | | Q3 2024 | $(0.18) | $(0.18) | | Q2 2024 | $0.03 | $0.03 | [FFO and AFFO - Last Five Quarters](index=12&type=section&id=FFO%20and%20AFFO%20-%20Last%20Five%20Quarters) Q2 2025 FFO was $0.36 per share, AFFO $0.38 per share, with AFFO up **11.8% YoY** despite GAAP net loss FFO and AFFO Per Share/Unit (Fully Diluted) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | FFO Per Share/Unit | $0.36 | $0.41 | -12.2% | | AFFO Per Share/Unit | $0.38 | $0.34 | +11.8% | - AFFO adjustments in Q2 2025 included adding back **$0.8 million** in stock compensation and adjusting for amortization of deferred rents, interest rate derivatives, and lease intangibles[38](index=38&type=chunk) [Adjusted EBITDA - Last Five Quarters](index=13&type=section&id=Adjusted%20EBITDA%20-%20Last%20Five%20Quarters) Q2 2025 Adjusted EBITDA rose to $10.3 million, maintaining a Net Debt to Adjusted EBITDA ratio of **6.9x** Adjusted EBITDA and Leverage | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $10,302 thousand | $9,856 thousand | | Net Debt | $283,114 thousand | $271,053 thousand | | Net Debt / Adjusted EBITDA | 6.9x | 6.9x | [Leverage Ratio](index=14&type=section&id=Leverage%20Ratio) Modiv's leverage ratio was **48.0%** as of June 30, 2025, well below the **60%** covenant limit Leverage Ratio Calculation (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Asset Value | $602,992 | $609,741 | | Total Indebtedness | $289,535 | $289,935 | | **Leverage Ratio** | **48.0%** | **47.6%** | [Balance Sheets and Capitalization](index=15&type=section&id=Balance%20Sheets%20and%20Capitalization) This section outlines Modiv's capital structure, balance sheet, debt composition, and covenant compliance [Capitalization](index=15&type=section&id=Capitalization) As of June 30, 2025, total capitalization was $501.7 million, comprising **56% fixed-rate debt**, **35% common equity** Capital Structure as of June 30, 2025 (in thousands) | Category | Value | % of Total Capitalization | | :--- | :--- | :--- | | Preferred Equity | $43,125 | 9% | | Common Equity | $177,903 | 35% | | Total Debt | $280,642 | 56% | | **Total Capitalization** | **$501,670** | **100%** | - The company fixed the rate on its **$250 million term loan** at **4.25%** for the year 2025 through swap agreements, resulting in **100% of its total debt being fixed-rate**[45](index=45&type=chunk)[47](index=47&type=chunk) [Consolidated Balance Sheets](index=16&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to $498.9 million by June 30, 2025, with total equity declining to $206.2 million Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Real Estate Investments, Net | $466,398 | $473,906 | | Total Assets | $498,852 | $507,829 | | Total Liabilities | $292,637 | $293,779 | | Total Equity | $206,215 | $214,050 | [Debt Overview](index=17&type=section&id=Debt%20Overview) Total debt was $280.6 million with a **4.27%** weighted average interest rate, **100% fixed** via swaps Debt Composition as of June 30, 2025 (in thousands) | Debt Instrument | Outstanding Balance | Interest Rate | Maturity | | :--- | :--- | :--- | :--- | | Mortgage Notes | $30,642 | 3.85% - 4.85% | 2029 - 2030 | | Term Loan | $250,000 | 4.25% (fixed via swap) | 01/18/2027 | | Revolver | $0 | 6.16% (variable) | 01/18/2027 | - Through interest rate swaps effective Dec 31, 2024, the company fixed the rate on its **$250 million term loan** at **4.25%** for the year ending Dec 31, 2025[50](index=50&type=chunk) [Credit Facility and Mortgage Notes Covenants](index=18&type=section&id=Credit%20Facility%20and%20Mortgage%20Notes%20Covenants) Modiv fully complied with all covenants, maintaining **48.0% leverage** and **1.89x fixed charge coverage** Unsecured Credit Facility Covenant Compliance | Covenant | Requirement | Actual (June 30, 2025) | Status | | :--- | :--- | :--- | :--- | | Maximum Leverage Ratio | < 60% | 48.0% | Compliant | | Minimum Fixed Charge Coverage Ratio | > 1.50x | 1.89x | Compliant | | Maximum Secured Indebtedness Ratio | < 40% | 7% | Compliant | | Minimum Consolidated Tangible Net Worth | > $223,986k | $280,370k | Compliant | [Real Estate Portfolio](index=19&type=section&id=Real%20Estate) This section details Modiv's real estate activities, including acquisitions, dispositions, and portfolio diversification [Real Estate Acquisitions](index=19&type=section&id=Real%20Estate%20Acquisitions) Modiv acquired two industrial properties for $11.2 million, adding 78,288 sq. ft. at an **8.0% initial cap rate** Acquisition Summary (Apr 2024 - Jun 2025) | Metric | Value | | :--- | :--- | | Number of Properties | 2 | | Total Leasable Area | 78,288 sq. ft. | | Total Acquisition Price | $11,225 thousand | | Weighted Average Initial Cap Rate | 8.0% | [Real Estate Dispositions](index=20&type=section&id=Real%20Estate%20Dispositions) Modiv disposed of two properties for $2.6 million, including an industrial property at a **7.4% cap rate** Disposition Summary (Apr 2024 - Jun 2025) | Property | Disposition Price | Cap Rate | | :--- | :--- | :--- | | Producto, Endicott, NY | $2,362 thousand | 7.4% | | Land parcel, Canal Fulton, OH | $240 thousand | N/A | | **Total** | **$2,602 thousand** | | [Top 20 Tenants](index=21&type=section&id=Top%2020%20Tenants) The top 20 tenants contribute **90% of total ABR**, with Lindsay (14%) and KIA of Carson (11%) as largest - The top 20 tenants contribute **90% of total ABR** and occupy **86% of the total portfolio square footage**, indicating a high level of tenant concentration[58](index=58&type=chunk) Top 5 Tenants by ABR Percentage | Tenant | ABR as a % of Total Portfolio | | :--- | :--- | | Lindsay | 14% | | KIA of Carson | 11% | | State of CA OES | 7% | | AvAir | 6% | | FUJIFILM Dimatix (72.71% TIC) | 6% | [Property Type](index=22&type=section&id=Property%20Type) The portfolio comprises 39 industrial core properties (**81% of ABR**) and four non-core properties for potential sale Portfolio Breakdown by Property Type | Property Type | Number of Properties | % of Total ABR | % of Total Square Feet | | :--- | :--- | :--- | :--- | | Industrial core | 39 | 81% | 93% | | Non-core | 4 | 19% | 7% | | **Total** | **43** | **100%** | **100%** | - The company has a purchase and sale agreement with homebuilder KB Home for its non-core Costco property in Issaquah, WA, with **$1.7 million in non-refundable deposits** made as of June 30, 2025[60](index=60&type=chunk) [Tenant Industry Diversification](index=23&type=section&id=Tenant%20Industry%20Diversification) Portfolio diversified across 13 industries; top sectors: Infrastructure (**24%**), Automotive (**16%**), Industrial Products (**15%**) Top 5 Industries by ABR Percentage | Industry | ABR as a % of Total Portfolio | | :--- | :--- | | Infrastructure | 24% | | Automotive | 16% | | Industrial Products | 15% | | Aerospace/Defense | 13% | | Government | 7% | [Tenant Geographic Diversification](index=24&type=section&id=Tenant%20Geographic%20Diversification) Portfolio spans 15 states, with California (**30% of ABR**), Ohio (**13%**), Arizona (**12%**) as key concentrations Top 5 States by ABR Percentage | State | ABR as a % of Total Portfolio | | :--- | :--- | | California | 30% | | Ohio | 13% | | Arizona | 12% | | Illinois | 9% | | Florida | 7% | [Lease Expirations](index=25&type=section&id=Lease%20Expirations) Long weighted-average lease term, with only **1% of ABR expiring in 2025** and **60% expiring after 2034** - The portfolio has a long weighted-average lease term, with **60% of ABR expiring after 2034**[63](index=63&type=chunk) - Near-term lease expirations are minimal, with only **1% of ABR expiring in 2025** and **0% in 2026**[63](index=63&type=chunk) [Appendix](index=26&type=section&id=Appendix) This section provides definitions and explanations for non-GAAP financial measures and other key metrics [Disclosures Regarding Non-GAAP and Other Metrics](index=26&type=section&id=Disclosures%20Regarding%20Non-GAAP%20and%20Other%20Metrics) This section defines non-GAAP measures like FFO, AFFO, and Adjusted EBITDA, explaining their calculation and utility - FFO is defined per Nareit guidelines, excluding gains on sale of property and adding back real estate depreciation to net income[66](index=66&type=chunk) - AFFO further adjusts FFO to exclude non-routine and certain non-cash items like stock-based compensation, amortization of deferred rent, and unrealized gains/losses on derivatives to better represent sustainable operating performance[67](index=67&type=chunk) - Adjusted EBITDA is defined as GAAP net income adjusted for depreciation, amortization, interest expense, gains/losses on sales, impairments, and non-cash compensation[70](index=70&type=chunk)

```markdown PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements) Modiv Industrial reported a $1.8 million net loss for H1 2025, a decline from $5.9 million net income in H1 2024, with total assets at $498.9 million [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $498.9 million as of June 30, 2025, from $507.8 million, primarily due to reduced cash and a decline in total equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate investments, net | $466,398 | $473,906 | | Cash and cash equivalents | $5,814 | $11,530 | | **Total assets** | **$498,852** | **$507,829** | | Total liabilities | $292,637 | $293,779 | | Total equity | $206,215 | $214,050 | | **Total liabilities and equity** | **$498,852** | **$507,829** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) H1 2025 saw a $1.8 million net loss, a shift from $5.9 million net income in H1 2024, mainly due to a $4.0 million impairment charge Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $11,833 | $11,410 | $23,626 | $23,376 | | Impairment of real estate | $4,000 | $— | $4,000 | $— | | Gain on sale of real estate | $— | $— | $84 | $3,188 | | Net (loss) income | $(2,633) | $1,262 | $(1,804) | $5,899 | | Net (loss) income attributable to common stockholders | $(2,818) | $403 | $(2,816) | $3,205 | | Basic (Loss) earnings per share | $(0.32) | $0.03 | $(0.33) | $0.36 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash decreased by $5.7 million in H1 2025, driven by $13.0 million used in financing activities and lower investing cash flows Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,988 | $7,697 | | Net cash provided by investing activities | $288 | $14,221 | | Net cash used in financing activities | $(12,992) | $(6,177) | | **Net (decrease) increase in cash** | **$(5,716)** | **$15,741** | - Key noncash activities in H1 2025 included the issuance of **$5.85 million** in Class C OP Units for a real estate acquisition[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the 43-property portfolio, a $6.1 million acquisition, a $4.0 million impairment, and $6.5 million in preferred stock repurchases - As of June 30, 2025, the company's portfolio consisted of **43** real estate properties, with industrial properties making up approximately **81%** of the portfolio's annual base rent (ABR)[31](index=31&type=chunk) - On March 7, 2025, the company acquired an industrial property in Florida for **$6.1 million**, paid with **$0.3 million** in cash and **$5.9 million** in Class C OP Units[47](index=47&type=chunk) - A **$4.0 million impairment charge** was recorded in Q2 2025 for a property in Saint Paul, Minnesota, due to current market conditions[60](index=60&type=chunk) - In January 2025, the company entered into two swap agreements to fix the SOFR rate at **2.45%** on its **$250 million term loan** for the year ending December 31, 2025, paying a **$4.2 million premium** to buy down the rate[78](index=78&type=chunk) - A preferred stock repurchase program was authorized on March 4, 2025. Through June 30, 2025, the company repurchased **275,000 shares** of Series A Preferred Stock for **$6.5 million**[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift to industrial properties, H1 2025 revenue increase, net income decline due to impairment, and liquidity, with FFO at $0.70 and AFFO at $0.71 [Overview and Recent Events](index=33&type=section&id=Overview%20and%20Recent%20Events) The REIT focuses on 43 industrial properties with a 14.4-year WALT, mitigating interest rate risk with new swaps on its $250 million term loan - The company's portfolio consists of **43 properties**, with **39** being industrial, representing **81%** of the portfolio's Annual Base Rent (ABR). The weighted average remaining lease term (WALT) is **14.4 years**[132](index=132&type=chunk) - In January 2025, the company executed two new swap agreements to fix the interest rate on its **$250 million term loan** at **4.25%** for the year ending December 31, 2025, by paying a **$4.2 million premium**[131](index=131&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by a $280 million credit facility, property sales, and an ATM offering that raised $2.1 million in H1 2025 - The company has a **$280 million credit facility**, comprising a **$30 million revolver** and a **$250 million term loan**. As of June 30, 2025, the term loan was fully drawn, and the revolver was undrawn[141](index=141&type=chunk)[146](index=146&type=chunk) - In H1 2025, the company sold **133,376 shares** of Class C Common Stock through its ATM offering, raising net proceeds of **$2.1 million**. **$38.1 million** remains available under the program[140](index=140&type=chunk) [Acquisitions and Dispositions](index=37&type=section&id=Acquisitions%20and%20Dispositions) H1 2025 saw the acquisition of a $6.1 million industrial property in Florida and the sale of a $2.4 million property in New York - Acquired an industrial property in Florida for **$6.1 million** on March 7, 2025, consisting of **$0.3 million cash** and **$5.9 million** in Class C OP Units[152](index=152&type=chunk) - Sold an industrial property in New York for **$2.4 million** on February 26, 2025[154](index=154&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) H1 2025 rental revenue increased by 1% to $23.5 million, but a $4.0 million impairment charge led to an operating loss Comparison of Results (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Rental Revenue | $23.5 | $23.2 | +1% | Property acquisitions | | General & Administrative | $3.2 | $3.4 | -7% | Reduced headcount | | Impairment Charge | $4.0 | $0.0 | +$4.0M | Impairment on MN property | | Gain on Sale of Real Estate | $0.1 | $3.2 | -$3.1M | Fewer property sales | | Other Expense | $7.7 | $5.9 | +$1.8M | Increased interest expense | [Funds from Operations and Adjusted Funds from Operations](index=38&type=section&id=Funds%20from%20Operations%20and%20Adjusted%20Funds%20from%20Operations) H1 2025 FFO was $0.70 per share/unit and AFFO was $0.71 per share/unit, with FFO decreasing due to lower property sales gains FFO and AFFO per Share/Unit (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | FFO per Share/Unit | $0.70 | $0.84 | | AFFO per Share/Unit | $0.71 | $0.63 | FFO and AFFO Reconciliation (in thousands, Six Months Ended June 30, 2025) | Metric | Amount | | :--- | :--- | | Net (loss) income attributable to common stockholders and OP Unit holders | $(3,427) | | FFO adjustments (Depreciation, Impairment, etc.) | $11,940 | | **FFO attributable to common stockholders and OP Unit holders** | **$8,513** | | AFFO adjustments (Stock comp, Amortization, etc.) | $177 | | **AFFO attributable to common stockholders and OP Unit holders** | **$8,690** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required as the company qualifies as a smaller reporting company - The company, as a smaller reporting company, is not required to provide this **disclosure**[200](index=200&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective**[202](index=202&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[203](index=203&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not a party to any **material legal proceedings**[204](index=204&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors have been reported since the Annual Report filing - No **material changes** to the risk factors from the Annual Report filed on March 4, 2025, have been reported[205](index=205&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 70,000 shares of Series A Preferred Stock in Q2 2025 at an average price of $23.986 per share Issuer Purchases of Series A Preferred Stock (Q2 2025) | Period | Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1-30, 2025 | 70,000 | $23.986 | | May 1-31, 2025 | — | — | | June 1-30, 2025 | — | — | | **Total** | **70,000** | **$23.986** | [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading arrangements were adopted or terminated, and federal income tax considerations were updated via Exhibit 99.1 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[207](index=207&type=chunk) - The company also provided an update to its discussion of federal income tax considerations via Exhibit **99.1**, which addresses recently enacted tax law changes[208](index=208&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including CEO/CFO certifications, tax consideration updates, and XBRL data files - The report includes a list of exhibits filed, such as Sarbanes-Oxley certifications (**Exhibits 31.1, 31.2, 32.1**) and updates to tax considerations (**Exhibit 99.1**)[209](index=209&type=chunk)[212](index=212&type=chunk) ```

Core Insights - Modiv Industrial (NYSE: MDV) is positioned in a unique and attractive niche within the REIT sector, often overlooked by investors [1] - The company initially launched as Rich Uncles with a diversified real estate strategy [1] Company Overview - Modiv Industrial focuses on a specific segment of the real estate market, which may present potential investment opportunities [1] - The company has evolved its strategy over time, indicating adaptability in its approach to real estate investment [1]

Group 1 - The article provides a detailed analysis of Modiv Industrial, Inc.'s financial position and evaluates the advantages and risks of its preferred stock [1] - Modiv Industrial, Inc. is traded on the NYSE under the symbol MDV, while its preferred stock is traded as MDV.PR.A [1]

Group 1 - The preferred stock of Modiv Industrial (MDV.PR.A) was recommended for holding due to its above-average dividend yield of 7.5% and a margin of safety [1] - Since the recommendation, the stock has outperformed the market [1] Group 2 - The author has a background in chemical engineering and economics, and has written multiple books on investing and mathematics [1] - The author emphasizes the use of fundamental and technical analysis in investment decisions, primarily utilizing options for both investing and trading [1]

Financial Data and Key Metrics Changes - Rental income for Q1 2025 was $11.7 million, a 2% decrease from $11.9 million in the prior year period, attributed to the disposition of two properties with expiring leases [14] - Adjusted funds from operations (AFFO) increased by 18% to $3.9 million compared to $3.3 million in the year-ago quarter, primarily due to a $195,000 increase in cash rental income and a $200,000 decrease in cash interest expense [14][15] - AFFO per diluted share rose to $0.33, up from $0.29 in the previous year, reflecting an increase in the weighted average number of fully diluted common shares outstanding [15] Business Line Data and Key Metrics Changes - The portfolio consists of 43 properties with an attractive weighted average lease term of 14.2 years, with 39 industrial properties representing 80% of annualized base rent (ABR) [16][17] - Annualized base rent totals $39.4 million as of March 31, 2025, with approximately 30% of tenants having an investment-grade credit rating [17] Market Data and Key Metrics Changes - Total cash and cash equivalents were $6.2 million, with $280 million of debt outstanding, consisting of $31 million in mortgages and $250 million in borrowings on a credit facility [17] - The company has no debt maturities until January 2027, and 100% of its indebtedness held a fixed interest rate with a weighted average of 4.27% [17] Company Strategy and Development Direction - The company is focused on maintaining a stable portfolio and is cautious about acquisitions in a volatile market, preferring to wait for compelling opportunities [20][24] - Management emphasizes risk management and discipline in investment decisions, indicating a narrow focus on specific manufacturing assets [24][25] - The company is exploring capital recycling opportunities rather than increasing leverage, indicating a preference for stability in its financial profile [100] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current market volatility and uncertainty, expressing confidence in the stability of their asset class and tenant performance [7][36] - Conversations with tenants indicate a cautious approach to capital placement due to market conditions, with potential opportunities for consolidation and expansion in the future [92][95] - The company remains committed to its long-term strategy, focusing on maintaining strong margins and effective expense controls [43][100] Other Important Information - The Board of Directors declared a cash dividend of $0.09 per share for April, May, and June 2025, representing an annualized yield of 8% based on the recent closing price [18] - Management has reduced headcount from 12 to 9 employees, which is expected to lower general and administrative expenses in future quarters [16] Q&A Session Summary Question: Can you talk about the cap rates that you're seeing on deals? - Cap rates are currently tighter than in previous quarters, with a sweet spot of 7.5% to 8.25%, but many assets are not compelling enough to justify purchases [47][48] Question: Were you considering doing deals under the ATM when shares were in the $16 range? - The company was in a blackout period and missed opportunities, but is constantly evaluating the market for potential equity issuance [54][56] Question: Any update on the sale of the Costco property? - The sale process is moving forward, with regular updates from the buyer, and the timeline remains on track [76][78] Question: Is there an expectation for more preferred share repurchases? - Future repurchases will depend on market conditions, but the company is open to opportunities if they arise [83][86] Question: What is the view on transaction activity among mid-market tenants? - Tenants are cautious due to macro uncertainty but are looking for opportunities, indicating potential future deal flow [92][95]

Financial Data and Key Metrics Changes - Rental income for Q1 2025 was $11.7 million, a 2% decrease from $11.9 million in the prior year period, attributed to the disposition of two properties with expiring leases [14] - Adjusted funds from operations (AFFO) increased by 18% to $3.9 million compared to $3.3 million in the year-ago quarter, primarily due to a $195,000 increase in cash rental income and a $200,000 decrease in cash interest expense [15] - AFFO per diluted share rose to $0.33, up from $0.29 in the previous year, reflecting an increase in the weighted average number of fully diluted common shares outstanding [15] Business Line Data and Key Metrics Changes - The portfolio consists of 43 properties with an attractive weighted average lease term of 14.2 years, with 39 industrial properties representing 80% of annualized base rent (ABR) [16][17] - Annualized base rent totals $39.4 million as of March 31, 2025, with approximately 30% of tenants or their parent companies having an investment-grade credit rating [17] Market Data and Key Metrics Changes - Total cash and cash equivalents were $6.2 million, with $280 million of debt outstanding, consisting of $31 million in mortgages and $250 million in borrowings on a credit facility [17] - The company has no debt maturities until January 2027, and 100% of its indebtedness as of March 31, 2025, is held at a fixed interest rate of 4.27% [17] Company Strategy and Development Direction - The company is focused on risk management and is being highly disciplined in its acquisition strategy, indicating a preference for compelling opportunities rather than pursuing growth for growth's sake [20][24] - Management is exploring equity deals and is open to capital recycling opportunities, particularly for non-core properties [99] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the portfolio and the performance of tenants, despite market volatility and uncertainty [10][35] - The company is monitoring geopolitical risks and interest rate fluctuations, indicating a cautious but optimistic outlook for the future [37][38] Other Important Information - The Board of Directors declared a cash dividend of $0.09 per share for April, May, and June 2025, representing an annualized dividend rate of $1.17 per share, yielding 8% based on the closing price of $14.58 [18] - The company has reduced its headcount from 12 to 9 employees, which is expected to lower general and administrative expenses in future quarters [16] Q&A Session Summary Question: Can you talk about the cap rates that you're seeing on deals? - Management noted that cap rates are currently tighter than in previous quarters, with a sweet spot between 7.5% to 8.25%, and emphasized the importance of compelling assets rather than marginal ones [47][49] Question: Were you considering doing deals under the ATM when shares were in the $16 range? - Management indicated that they were in a blackout period and missed opportunities but are constantly evaluating the market for potential equity issuance [54][56] Question: Any update on the sale of the Costco property? - Management confirmed ongoing discussions with the buyer, KB Home, and indicated that the process is moving forward as planned [75][77] Question: What is the trend for stock compensation expense? - Management projected a run rate of about $800,000 per quarter for stock compensation, indicating stability in this line item moving forward [69][71] Question: Any expectations for the sale of the solar turbine property? - Management is optimistic about the timeline for the solar property, expecting to market it to an owner-user once the tenant vacates [80]

分组1 - Modiv Industrial, Inc. reported quarterly funds from operations (FFO) of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and up from $0.29 per share a year ago, representing an FFO surprise of 6.45% [1] - The company achieved revenues of $11.73 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.49%, although this is a slight decrease from $11.9 million in the same quarter last year [2] - Over the last four quarters, Modiv Industrial has surpassed consensus FFO estimates three times, while it has only topped consensus revenue estimates once [2] 分组2 - The stock has lost about 2% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The current consensus FFO estimate for the upcoming quarter is $0.37 on revenues of $11.76 million, and for the current fiscal year, it is $1.39 on revenues of $46.06 million [7] - The Zacks Industry Rank for REIT and Equity Trust - Residential is currently in the bottom 39% of over 250 Zacks industries, indicating potential challenges for the sector [8]