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Modiv(MDV) - 2024 Q3 - Quarterly Report
MDVModiv(MDV)2024-11-05 23:56
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Real Estate Investments - As of September 30, 2024, the net book value of the company's real estate investments was 477,691,631[151].−Therealestateportfolioconsistsof43properties,with39industrialpropertiesrepresentingapproximately77477,691,631[151]. - The real estate portfolio consists of 43 properties, with 39 industrial properties representing approximately 77% of the portfolio by annualized base rent (ABR) of 40,205,913[152]. - The occupancy rate of the portfolio is 98%, with a weighted average remaining lease term of approximately 13.8 years[152]. - The company sold one industrial property and one office property in early 2024 for a total of 15,265,000,resultinginnetgainsof15,265,000, resulting in net gains of 3,359,807[153]. - The company acquired an industrial manufacturing property for 5,125,000onJuly15,2024,withaninitialcaprateof8.005,125,000 on July 15, 2024, with an initial cap rate of 8.00% and a weighted average cap rate of 10.59%[172]. - During the nine months ended September 30, 2023, the company acquired 12 industrial properties for a total of 129,753,499[173]. - The company transformed its portfolio, with industrial properties comprising 77% of Annual Base Rent (ABR) as of September 30, 2024, up from 76% in December 2023[191]. - The total rental income for the nine months ended September 30, 2024, was 34,833,458,with34,833,458, with 26,326,958 from industrial core properties and 8,506,500fromnon−coreproperties[194].−Thecompanyacquired12industrialmanufacturingpropertiesin2023andoneadditionalpropertyinJuly2024,continuingitsstrategicfocusonindustrialassets[192].−Thecompanysold16non−corepropertiesin2023andearly2024,furtherreducingitsexposuretonon−coreassets[203].FinancialPerformance−FortheninemonthsendedSeptember30,2024,thecompanyreportedanetincomeattributabletocommonstockholdersof8,506,500 from non-core properties[194]. - The company acquired 12 industrial manufacturing properties in 2023 and one additional property in July 2024, continuing its strategic focus on industrial assets[192]. - The company sold 16 non-core properties in 2023 and early 2024, further reducing its exposure to non-core assets[203]. Financial Performance - For the nine months ended September 30, 2024, the company reported a net income attributable to common stockholders of 2,085,698, compared to a net loss of 9,619,835forthesameperiodin2023[188].−Thecompany′sFundsFromOperations(FFO)attributabletocommonstockholderswas9,619,835 for the same period in 2023[188]. - The company's Funds From Operations (FFO) attributable to common stockholders was 11,728,308 for the nine months ended September 30, 2024, up from 7,777,265intheprioryear,reflectingasignificantincrease[188].−TheAdjustedFundsFromOperations(AFFO)attributabletocommonstockholderswas7,777,265 in the prior year, reflecting a significant increase[188]. - The Adjusted Funds From Operations (AFFO) attributable to common stockholders was 10,919,370 for the nine months ended September 30, 2024, compared to 10,160,506forthesameperiodin2023[188].−Netcashprovidedbyoperatingactivitiesincreasedto10,160,506 for the same period in 2023[188]. - Net cash provided by operating activities increased to 12,835,060 for the nine months ended September 30, 2024, up from 11,210,166inthesameperiodof2023[178].−Thenetcashprovidedbyinvestingactivitiesinthefirstninemonthsof2024was11,210,166 in the same period of 2023[178]. - The net cash provided by investing activities in the first nine months of 2024 was 9,881,100, contrasting with a net cash used of (90,995,924)inthesameperiodof2023[178].−RentalincomefortheninemonthsendedSeptember30,2024increasedby(90,995,924) in the same period of 2023[178]. - Rental income for the nine months ended September 30, 2024 increased by 185,375, or 1%, to 34,833,458comparedto34,833,458 compared to 34,648,083 in the same period of 2023, driven by new property acquisitions[214]. Debt and Financing - As of September 30, 2024, 100% of the company's 281,011,068outstandingdebtisatfixedrateswithaweightedaveragerateof4.52281,011,068 outstanding debt is at fixed rates with a weighted average rate of 4.52%[156]. - The company has 150 million of borrowing capacity available under its Credit Facility, which may be utilized for future investments[163]. - The company anticipates potential challenges in refinancing debt obligations due to elevated interest rates and market conditions[157]. - As of September 30, 2024, the outstanding principal balance of mortgage notes payable was 31,011,068,comparedto31,011,068, compared to 31,200,000 as of December 31, 2023[171]. - Interest expense for the nine months ended September 30, 2024 rose by 5,752,388,or855,752,388, or 85%, to 12,514,167 compared to 6,761,779in2023,primarilyduetounrealizedlossesoninterestrateswaps[226].OperationalEfficiency−Thecompanysuccessfullynegotiatedleaseextensionsforfourpropertiesin2023andonepropertyinQ32024[160].−GeneralandadministrativeexpensesforQ32024were6,761,779 in 2023, primarily due to unrealized losses on interest rate swaps[226]. Operational Efficiency - The company successfully negotiated lease extensions for four properties in 2023 and one property in Q3 2024[160]. - General and administrative expenses for Q3 2024 were 1,660,520, a decrease of 74,584,or474,584, or 4%, from 1,735,104 in Q3 2023, reflecting reduced consulting expenses[205]. - General and administrative expenses for the nine months ended September 30, 2024 decreased by 162,121,or3162,121, or 3%, to 5,078,814 from 5,240,935in2023[215].−Propertyexpensesdecreasedby5,240,935 in 2023[215]. - Property expenses decreased by 170,173, or 14%, to 1,025,051inQ32024from1,025,051 in Q3 2024 from 1,195,224 in Q3 2023, primarily due to lower property taxes and maintenance costs[208]. - Stock compensation expense significantly decreased by 8,394,867to8,394,867 to 75,000 in Q3 2024 from 8,469,867inQ32023,duetothefinalamortizationofClassPandClassROPUnits[206].−Depreciationandamortizationexpenseremainedrelativelyflatat8,469,867 in Q3 2023, due to the final amortization of Class P and Class R OP Units[206]. - Depreciation and amortization expense remained relatively flat at 4,166,992 in Q3 2024 compared to 4,175,209inQ32023,reflectingnewpropertyacquisitionsoffsetbydisposals[207].ComplianceandRegulations−ThecompanywasincompliancewithallfinancialloancovenantsasofSeptember30,2024[172].−TomaintainREITstatus,thecompanymustdistributeatleast904,175,209 in Q3 2023, reflecting new property acquisitions offset by disposals[207]. Compliance and Regulations - The company was in compliance with all financial loan covenants as of September 30, 2024[172]. - To maintain REIT status, the company must distribute at least 90% of its annual taxable income[231]. - Failure to maintain REIT qualification could result in taxation at corporate rates and affect net income and cash available for distribution[232]. - The company intends to continue qualifying as a REIT under U.S. federal income tax purposes[231]. - There were no legal proceedings reported as of the filing date[240]. - No significant changes to accounting policies were reported during the nine months ended September 30, 2024[234]. - No changes in internal control over financial reporting were identified that materially affected the reporting[239]. Future Outlook - The company expects an increase in rental income, depreciation expense, and interest expense for the full year of 2024 compared to 2023, driven by recent acquisitions[203]. - The company has not established a minimum distribution level for stockholders[229]. - Distributions are declared one to two months prior to the beginning of a quarter[230]. - Monthly distribution rate for Class C Common Stock is set at 0.09583300 per share from January 2024 to March 2025[230].