Plymouth Industrial REIT(US:PLYM)2023-05-06 21:30Financial Data and Key Metrics Changes - Same-store NOI growth was reported at 9.1% on a cash basis, with occupancy in the same-store pool at 99.1%, exceeding the full-year guidance [6][45] - The company ended Q1 with a net debt to adjusted EBITDA ratio of 7.14 times, showing improvement over the past four quarters [28] - The weighted average cost of debt was reported at 3.96%, with 90% of total debt carrying a fixed rate or being fixed through interest rate swaps [48] Business Line Data and Key Metrics Changes - The development program represents a total investment of $61 million, with expected initial returns in the range of 7% to 9% [21] - For signed leases commencing in Q2 through Q4, an aggregate increase of 20.5% on a cash basis is expected, with new leases increasing by 31.2% and renewal leases by 16.3% [10][20] - The company experienced a 56% renewal rate during the quarter, with 21% of renewals associated with contractual rent bumps [22] Market Data and Key Metrics Changes - The Golden Triangle region is seeing significant reshoring and nearshoring initiatives, with over 90% of the company's portfolio located in this area [8] - The company anticipates continued benefits from favorable supply and demand dynamics projected over the next five to ten years [8] Company Strategy and Development Direction - Leasing remains a top priority, with a strong start on 2024 expirations and a focus on maintaining high occupancy rates [20] - The company is currently holding off on acquisitions until there is more clarity in the capital markets [31] - The company plans to selectively pursue additional development projects if returns meet their threshold [21] Management's Comments on Operating Environment and Future Outlook - Management expects same-store NOI to be below the full-year trend line in Q2 due to timing of scheduled repairs and maintenance [26] - The company affirmed its 2023 guidance, indicating confidence in continued rent increases and occupancy maintenance [49] - Management noted that the composition of watchlist tenants has shrunk, indicating strong rent collection expectations for the remainder of the year [52] Other Important Information - The company has collected over 99% of rents billed during Q1, with no active rent deferral agreements [12] - The liquidity position remains strong, with $10.2 million in cash on hand and $262.5 million of capacity on the revolving line of credit [29] Q&A Session Summary Question: What are the favorable options for capital deployment going forward? - Management indicated that acquisitions are on hold until clarity in the capital markets is achieved [31] Question: What percentage of leases have embedded renewal options? - Approximately 10% of leases have embedded options [51] Question: Are there any known moveouts affecting occupancy? - Management stated that anticipated moveouts are assumptions, expecting high occupancy levels to be maintained [54] Question: What is the timing for rent commencements in Jacksonville and Atlanta? - Rent in Atlanta Phase 1 started in February with a four-month free rent period, while Jacksonville leases are expected to commence in the third and fourth quarters [55] Question: Is the company considering recycling some assets? - Management confirmed that they are considering selling a handful of properties opportunistically as the market stabilizes [64]