Plymouth Industrial REIT(US:PLYM)2023-11-02 16:23Financial Data and Key Metrics Changes - The company reported a core FFO of $0.46 per share for Q3 2023, driven by improved leasing spreads and contributions from developments [43] - Net debt to adjusted EBITDA was 6.7 times, marking the sixth consecutive quarter of deleveraging [44] - The total weighted average cost of debt was 4.01%, with 58% of total debt on an unsecured basis [44] Business Line Data and Key Metrics Changes - The company experienced a 24.1% increase in rents on a cash basis for Q3 2023, with new leases seeing a 25.9% increase and renewal leases a 23.6% increase [19] - Same-store cash NOI growth was 5.4% for the quarter and 6.8% year-to-date [46] Market Data and Key Metrics Changes - Total portfolio occupancy was 97.6%, with same-store occupancy at 98.6%, slightly down from Q2 but rebounding to 98% in October [23] - The company has addressed over 93.5% of the total square footage scheduled to expire in 2023, with an aggregate increase of 20.1% on a cash basis for leases commencing in 2023 [22] Company Strategy and Development Direction - The company is focused on leasing remaining spaces in its development program and evaluating proceeds from dispositions for debt repayment and acquisitions [17] - The company plans to avoid speculative development and will focus on build-to-suit projects moving forward [49] Management's Comments on Operating Environment and Future Outlook - Management noted that tenants are taking longer to make decisions on new spaces, but they remain optimistic about leasing activity and market demand [86] - The company anticipates strong market rent growth for 2024, similar to 2023, with a focus on maintaining a leverage target between 5 to 7 times [51] Other Important Information - The company eliminated its Series A preferred stock and executed an ATM program to improve its capital structure [13] - A significant debt maturity was addressed with the payoff of the AIG loan, which represented approximately 12% of total debt outstanding [45] Q&A Session Summary Question: Can you provide more detail on tenant demand and leasing timelines? - Management indicated they are close to finalizing leases in Cincinnati and Georgia, with expectations for movement in the coming weeks [48] Question: What are the return requirements for build-to-suit projects? - The company aims for high-single-digit returns, around 8% to 9%, for build-to-suit developments [104] Question: Are you seeing any slowdown in construction activity due to higher interest rates? - Management acknowledged a slowdown in construction activity, particularly in larger buildings, due to the current economic environment [63] Question: What is the strategy for future acquisitions? - The company will not increase leverage for acquisitions and is focused on capital recycling rather than dilutive equity issuance [64] Question: How is the company managing its debt and interest rate exposure? - The company plans to execute interest rate swaps to mitigate exposure and maintain flexibility in its debt structure [92]