Plymouth Industrial REIT(US:PLYM)2022-08-03 11:05Portfolio and Occupancy - As of June 30, 2022, the company owned 156 industrial properties comprising 206 buildings with an aggregate of approximately 33.6 million square feet [122]. - The company's portfolio was approximately 97.3% occupied as of June 30, 2022, indicating strong demand for its properties [128]. - An aggregate of 36.0% of the annualized base rent leases in the company's portfolio are scheduled to expire between July 1, 2022, and December 31, 2024, providing an opportunity to adjust below market rates [129]. Revenue and Financial Performance - Rental revenue from renewed leases increased by 10.0% to $5.17 per square foot per year, while new leases increased by 31.9% to $4.88 per square foot per year [132]. - Rental revenue increased by $12,854 to $45,612 for the three months ended June 30, 2022, compared to $32,758 for the same period in 2021, representing a 39.2% increase [143]. - Total revenues for the three months ended June 30, 2022, were $45,614, up $12,759 or 38.8% from $32,855 in the same period of 2021 [142]. - Rental revenue for the six months ended June 30, 2022, increased by $23,741 to $88,332 compared to $64,591 for the same period in 2021, a 36.8% increase [152]. - Total revenues for the six months ended June 30, 2022, were $88,420, up $23,649 or 36.5% from $64,771 in the same period of 2021 [152]. Expenses and Losses - Property expenses rose by $2,859 to $13,799 for the three months ended June 30, 2022, compared to $10,940 for the same period in 2021, a 26.1% increase [145]. - Depreciation and amortization expense increased by $7,306 to $24,208 for the three months ended June 30, 2022, compared to $16,902 in 2021, a 43.2% increase [146]. - Interest expense increased by approximately $3,100 to $7,925 for the three months ended June 30, 2022, compared to $4,825 in 2021, a 64.2% increase [148]. - Property expenses increased by $5,508 to $27,874 for the six months ended June 30, 2022, compared to $22,366 for the same period in 2021, a 24.6% increase [154]. - Depreciation and amortization expense increased by $14,220 to $46,899 for the six months ended June 30, 2022, compared to $32,679 in 2021, a 43.5% increase [155]. - Net loss for the six months ended June 30, 2022, was $8,934, an increase of $1,969 or 28.3% from a net loss of $6,965 in the same period of 2021 [152]. - General and administrative expenses increased by approximately $1,380 to $7,698 for the six months ended June 30, 2022, compared to $6,318 for the same period in 2021 [156]. - Interest expense rose by approximately $4,737 to $14,320 for the six months ended June 30, 2022, compared to $9,583 for the same period in 2021, primarily due to additional borrowings related to acquisition activities [157]. Operational Metrics - Net operating income (NOI) for the six months ended June 30, 2022, was $60,458, an increase from $42,225 for the same period in 2021 [163]. - Earnings before interest, taxes, depreciation, and amortization for real estate (EBITDAre) for the six months ended June 30, 2022, was $52,701, compared to $35,590 for the same period in 2021 [164]. - Funds from operations (FFO) for the six months ended June 30, 2022, was $38,233, up from $25,925 for the same period in 2021 [168]. - Core funds from operations (Core FFO) for the six months ended June 30, 2022, was $35,780, compared to $23,504 for the same period in 2021 [168]. - Adjusted funds from operations (AFFO) is presented in addition to Core FFO, providing a consistent comparison of operating performance across time periods [169][170]. Cash Flow and Liquidity - Net cash provided by operating activities increased by approximately $9,042 to $35,659 for the six months ended June 30, 2022, compared to $26,617 in 2021 [173]. - Net cash used in investing activities rose by approximately $115,980 to $197,517 for the six months ended June 30, 2022, primarily due to property acquisitions totaling $180,275 [174]. - Net cash provided by financing activities increased by $102,370 to $154,550 for the six months ended June 30, 2022, driven by an increase of $159,094 in net proceeds from secured and unsecured debt [175]. - As of June 30, 2022, the company had available liquidity of approximately $339.3 million, consisting of $29.8 million in cash and cash equivalents and $309.5 million of borrowing capacity [179]. - The company anticipates sufficient liquidity and access to capital resources to meet its current obligations and scheduled debt maturities [179]. Debt and Interest Rate Management - Total secured debt as of June 30, 2022, amounted to $394,341, with an average interest rate of approximately 3.73% [181]. - The company has entered into two interest rate swap agreements to manage interest rate risk, with all outstanding variable rate debt fixed through maturity, except for the KeyBank unsecured line of credit [191]. - The company has $600,536 available for issuance under the 2021 $750 Million S-3 Filing as of June 30, 2022 [184]. - As of June 30, 2022, the company had $490,500 in outstanding variable rate debt, with $150,000 from a KeyBank Term Loan and $40,500 from a KeyBank unsecured line of credit [197]. - The weighted average interest rate for the KeyBank Term Loan and unsecured line of credit was 2.85% during the six months ended June 30, 2022 [197]. - The company estimates that an additional $4,528 will be reclassified as a decrease to interest expense over the next twelve months [196]. - All interest rate swaps were in an asset position as of June 30, 2022 [194]. - The company’s interest rate swaps are indexed to LIBOR, which is expected to be available until June 30, 2023 [198]. - If the average interest rate on borrowings increased by 25 basis points, the interest expense for the quarter would have increased by approximately $109 [197]. - The company has determined that credit valuation adjustments are not significant to the overall valuation of its derivatives [195]. - The primary market risk the company is exposed to is interest rate risk, managed through derivative financial instruments [200]. - The company’s fixed rate debt is not significantly impacted by changes in interest rates until refinancing is required [199]. - The company has assessed that the majority of inputs used to value its derivatives fall within Level 2 of the fair value hierarchy [195]. Strategic Initiatives - The company plans to diversify its portfolio by including the origination or acquisition of mortgage, bridge, or mezzanine loans, which will be collateralized by properties meeting investment criteria similar to its existing assets [123]. - The company aims to generate attractive risk-adjusted returns for stockholders through a combination of dividends and capital appreciation [124]. - The company is pursuing joint venture arrangements with institutional partners to invest in opportunistic or value-add industrial assets, which may involve significant up-front capital expenditures [127]. Risks and Accounting Policies - The company’s financial results may be impacted by various risks, including economic conditions, tenant defaults, and changes in real estate laws [121]. - The company’s critical accounting policies involve significant estimates regarding asset allocation, impairments, and derivative instruments, which could materially affect reported financial results [136].