FIRST QUARTER 2024

Plymouth REIT
Supplemental
Information

 

 

 

 

1Q 2024 Supplemental | 1

 

Table of Contents

 

 

 

Table of Contents   
Executive Summary 4
Company Overview, Management, Board of Directors, and Investor Relations 4
Portfolio Snapshot 5
Total Acquisition and Replacement Cost by Market 5
Acquisition Activity 6
Development Projects 7
Value Creation Examples 8
Guidance 9
Financial Information   
Consolidated Balance Sheets 11
Consolidated Statements of Operations 12
Non-GAAP Measurements 13
Same Store Net Operating Income (NOI) 14
Debt Summary 15
Capitalization and Capital Markets Activity 16
Net Asset Value Components 17
Rentable Square Feet and Annualized Base Rent by Market 18
Operational & Portfolio Information   
Leasing Activity: Lease Renewals and New Leases 20
Leasing Activity: Lease Expiration Schedule & % of Annual Base Rent Expiring 21
Leased Square Feet and Annualized Base Rent by Tenant Industry 22
Leased Square Feet and Annualized Base Rent by Type 23
Top 10 Tenants by Annualized Base Rent 24
Lease Segmentation by Size 25
Capital Expenditures 26
Appendix   
Glossary 28

 

1Q 2024 Supplemental | 2

 

Disclaimers

 

Forward-Looking Statements

This Supplemental Information contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this Supplemental Information do not constitute guarantees of future performance. Investors are cautioned that statements in this Supplemental Information, which are not strictly historical statements, including, without limitation, statements regarding management's plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statement, many of which may be beyond our control, including, without limitation, those factors described under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of this Supplemental Information, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

 

Definitions and Reconciliations

For definitions of certain terms used throughout this Supplemental Information, including certain non-GAAP financial measures, refer to the Glossary on pages 28-30. For reconciliations of the non-GAAP financial measures to the most directly comparable U.S. GAAP measures, refer to page 13.

 

 

1Q 2024 Supplemental | 3

 

Executive Summary

 

 

Company Overview 

Plymouth Industrial REIT, Inc. (NYSE: PLYM) is a full service, vertically integrated real estate investment company focused on the acquisition, ownership, and management of single and multi-tenant industrial properties. Our mission is to provide tenants with cost effective space that is functional, flexible and safe.

Management, Board of Directors, Investor Relations, and Equity RESEARCH Coverage

 

Corporate

20 Custom House Street
11th Floor

Boston, Massachusetts 02110

617.340.3814

www.plymouthreit.com

Investor Relations

Tripp Sullivan

SCR Partners

IR@plymouthreit.com

Continental Stock Transfer
& Trust Company

1 State Street, 30th Floor

New York, NY 10004

212.509.4000

 

Executive Management

Jeffrey E. Witherell

Chief Executive Officer
and Chairman

Anthony J. Saladino

Executive Vice President

and Chief Financial Officer

James M. Connolly

Executive Vice President

Asset Management

Lyndon J. Blakesley

Senior Vice President

and Chief Accounting Officer

 

 

Benjamin P. Coues

Senior Vice President

and Head of Acquisitions

Anne A. Hayward, ESQ.

Senior Vice President

and General Counsel

Daniel R. Heffernan

Senior Vice President

Asset Management

Scott L. Robinson

Senior Vice President

Corporate Development

 

Board of Directors

Phillip S. Cottone

Independent Director

Richard DeAgazio

Independent Director

David G. Gaw

Lead Independent Director

John W. Guinee

Independent Director

 

 

Caitlin Murphy

Independent Director

Pendleton P. White, Jr.

Director

Jeffrey E. Witherell

Chief Executive Officer
and Chairman

 

Equity Research Coverage1

Baird

Nicholas Thillman

414.298.5053

Barclays

Brendan Lynch

212.526.9428

BMO Capital Markets

John Kim

212.885.4115

BNP Paribas Exane

Nate Crossett

646.725.3716

B Riley Securities

Bryan Maher

646.885.5423

 

 

Colliers Securities

Barry Oxford

203.961.6573

JMP Securities

Mitch Germain

212.906.3537

J.P. Morgan

Mike Mueller

212.622.6689

KeyBanc Capital Markets

Todd Thomas

917.368.2375

Truist Securities

Anthony Hau

212.303.4176

 

Investor Conference Call and Webcast

The Company will host a conference call and live audio webcast, both open for the general public to hear, on May 2, 2024 at 9:00 a.m. Eastern Time. The number to call for this interactive teleconference is (844) 784-1727 (international callers: (412) 717-9587). A replay of the call will be available through May 9, 2024 by dialing (877) 344-7529 and entering the replay access code, 6841649.

 

1 The analysts listed provide research coverage on the Company. Any opinions, estimates or forecasts regarding the Company's performance made by these analysts are theirs alone and do not represent opinions, estimates or forecasts by the Company or its management. The Company does not by reference above imply its endorsement of or concurrence with such information, conclusions or recommendations.

 

1Q 2024 Supplemental | 4

 

Highlights

For Three Months Ended March 31, 2024

 

Portfolio Snapshot

Number of Properties 156
Number of Buildings 211
Square Footage 34,025,101
Portfolio Occupancy 96.9%
Same-Store Occupancy 98.3%
WA Lease Term
Remaining (yrs.)1
3.2
Multi-Tenant as
% of ABR
54.3%
Single Tenant as
% of ABR
45.7%
WA Annual Rent Escalators ~3.0%
Triple Net Leases as
 % of ABR
80.5%
Net Debt to Annualized Adjusted EBITDA 6.7x
 
1   The average contractual lease term remaining as of the close of the reporting period (in years) weighted by square footage.

Total Acquisition and Replacement Cost by Market

($ in Thousands)

Market State  # of
Buildings
Rentable Square Feet Total
Acquisition Cost1
Replacement
Cost2
Atlanta GA   13   2,086,835 $ 111,988 $  154,583
Chicago IL, IN, WI   40   6,624,335   279,750   710,499
Boston ME     2      268,713   19,023   40,729
Charlotte NC     1      155,220   20,400   20,821
Cincinnati OH, KY   12   2,710,964   106,705   190,851
Cleveland OH   19   3,979,209   201,550   362,436
Columbus OH   15   3,757,614   157,624   293,943
Indianapolis IN   17   4,085,169   149,251   356,416
Jacksonville FL, GA   28   2,132,396   159,621   219,679
Kansas City MO     1      221,911   8,600   20,451
Memphis MS, TN   49   4,783,046   185,407   349,852
St. Louis IL, MO   14   3,219,689   213,787   325,818
Total 12  211 34,025,101        $ 1,613,706 $ 3,046,078

 

1Represents total direct consideration paid prior to the allocations per U.S. GAAP and the allocated costs in accordance to GAAP of development properties placed in-service.
2Replacement cost is based on the Marshall & Swift valuation methodology for the determination of building costs. Replacement cost includes land reflected at the allocated cost in accordance with GAAP.

 

1Q 2024 Supplemental | 5

 

Acquisition Activity

As of March 31, 2024

 

Acquisitions ($ in Thousands)

Location Acquisition Date # of
Buildings
Purchase Price1 Square Footage Projected
Initial Yield2
Cost per
Square Foot3
Multiple Full Year 2022   44 $ 253,655 4,164,864 6.1%  $71.54
Multiple Full Year 2021   24 $  370,977 6,380,302 6.7%  $63.15
Multiple Full Year 2020   27 $  243,568 5,473,596 7.8%  $46.99
Multiple Full Year 2019   32 $  220,115 5,776,928 8.4%  $42.21
Multiple Full Year 2018   24 $ 164,575 2,903,699 8.2%  $70.54
Multiple 2017 (since IPO)   36 $ 173,325 5,195,563 8.4%  $33.81
Total Acquisitions Post-IPO   187 $ 1,426,215 29,894,952 7.4%  $55.94

 

Note: Portfolio statistics and acquisitions include wholly owned industrial properties only; excludes our property management office located in Columbus, Ohio.

1Represents total direct consideration paid rather than GAAP cost basis.
2Weighted based on Purchase Price.
3Calculated as Purchase Price divided by square footage.

 

1Q 2024 Supplemental | 6

 

Development Projects

As of March 31, 2024

 

The total investment in completed developments is approximately $61.1 million. The proforma stabilized cash NOI yields on development projects under construction and completed range between 7.0% - 9.0%.

Plymouth is partnering with the Green Building Initiative to align our environmental objectives with the execution of all new development and portfolio enhancement activities. Thus far, Plymouth has achieved a Three Green Globe certification on our Cincinnati development and a Two Green Globe certification on our completed developments in Boston, Jacksonville (2) and Atlanta (2) 1.

 

Under Construction1 # of
Buildings
Total Rentable
Square Feet (RSF)
% Leased

Investment

($ in millions)

% Funded Estimated
Completion
Jacksonville - Liberty II 1   52,920 100% $   4.0 54%  Q4 2024
Total 1   52,920   $   4.0    
               
Completed 2 # of
Buildings
Total Rentable
Square Feet (RSF)
% Leased

Investment

($ in millions)

% Funded Completed
Boston - Milliken Road 1   68,088 100% $   9.3 100%  Q4 2022
Atlanta - New Calhoun I 1 236,600 100% $ 13.8 100%  Q1 2023
Cincinnati - Fisher Park I 1 154,692 66% $ 14.0 100%  Q1 2023
Atlanta - New Calhoun II 1 180,000 100% $ 12.1 100%  Q3 2023
Jacksonville – Salisbury 1   40,572 100% $   6.2 100%  Q3 2023
Jacksonville – Liberty I 1   39,750 100% $   5.7 100%  Q4 2023
Total 6 719,702   93% $ 61.1 100%  

 

1The Company is a member organization of the Green Building Initiative (GBI), a nonprofit organization and American National Standards Institute (ANSI) Accredited Standards Developer dedicated to reducing climate impacts by improving the built environment. Founded in 2004, the organization is the global provider of the Green Globes and federal Guiding Principles Compliance certification and assessment programs.
2Under construction represents projects for which vertical construction has commenced. Refer to the Developable Land section of the Net Asset Components on page 17 of this Supplemental Information for additional details on the Company's development activities.
3Completed buildings are included within portfolio occupancy and square footage metrics as of March 31, 2024.

 

1Q 2024 Supplemental | 7

 

Value Creation Examples

 

 

 

INDIANAPOLIS: Lease-up / Building Refurbishment   JACKSONVILLE: New Industrial Development   CHICAGO: Disposition / Value Realized
         
An aerial view of a factory

Description automatically generated   A building with a parking lot and grass

Description automatically generated  

Expanded existing tenant in the building by an additional 42,910 square feet and extended term for 15 years at a rental rate increase of 18% over expiring rents.

Expanded other existing tenant by an additional 147,310 square feet for 4 years without any downtime.

The property was acquired at a going-in yield of 6.9%. Stabilized yield is now 8.0% with annual lease escalations averaging 3.75%.

 

Delivered two buildings in 2023 totaling 80,322 square feet, both of which are fully leased.

Commenced construction on a third, 100% pre-leased building at Liberty Business Park which will comprise 52,920 square feet. The anticipated delivery is Q4 2024.

Marketing an additional fully designed and permit-ready site at Liberty Business Park that can provide 41,958 square feet.

 

Sold a 306,552 square-foot industrial building at 6510 West 73rd Street in Chicago.

Net proceeds after the payoff of a $6.7 million mortgage, return of lender escrow reserves, and other adjustments were $14.0 million.

The disposition yielded a 4.9% cap rate on in-place NOI and an IRR of 31.1% over a six-year hold period.

 

1Q 2024 Supplemental | 8

 

Guidance

As of March 31, 2024

Unaudited (in thousands, except per-share amounts)

 

PLYM affirmed its full year 2024 guidance range for Core FFO per weighted average common share and units previously issued on February 21, 2024, and updated its range for net income per weighted average common share and units and accompanying assumptions.

 

  Full Year 2024 Range1
  Low   High
Core FFO attributable to common stockholders and unit holders per share  $1.88   $1.92
Same Store Portfolio NOI growth - cash basis2 7.00%   7.50%
Average Same Store Portfolio occupancy - full year 97.5%   98.5%
General and administrative expenses3  $15,650   $15,150
Interest expense, net  $37,650   $37,150
Weighted average common shares and units outstanding4 45,880   45,880
       
Reconciliation of net loss attributable to common stockholders and unit holders per share to Core FFO guidance:      
  Full Year 2024 Range1
  Low   High
Net income/(loss) $ 0.08    $  0.12
Gain on sale of real estate (0.18)   (0.18)
Depreciation and amortization 1.98   1.98
  $1.88   $1.92

 

1Our 2024 guidance refers to the Company's in-place portfolio as of April 29, 2024, the $21.5 million disposition scheduled to close in August 2024 and does not include the impact from prospective acquisitions, dispositions, or capitalization activities.
2The Same Store Portfolio consists of 200 buildings aggregating 31,245,756 rentable square feet, representing approximately 92% of total in-place portfolio square footage. The Same Store projected performance reflects an annual NOI on a cash basis, excluding termination income.
3Includes non-cash stock compensation of $4.3 million for 2024.
4As of April 29, 2024, the Company has 45,872,375 common shares and units outstanding.

 

1Q 2024 Supplemental | 9

 
 

 

 

 

 

 

 

 

 

 

Financial
Information

 

 

 

1Q 2024 Supplemental | 10

 

Consolidated Balance Sheets

Unaudited ($ in thousands)

  March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
ASSETS                    
Real estate properties:                    
Land $  224,532 $  226,020 $  227,599 $  231,829 $  231,829
Building and improvements   1,326,722   1,341,846   1,343,025   1,339,505   1,331,664
Net investment in sales-type lease1   21,459   -      -   -      -   
Less accumulated depreciation   (277,253)   (268,046)   (254,402)   (239,306)   (222,418)
Total real estate properties, net $ 1,295,460 $ 1,299,820 $ 1,316,222 $ 1,332,028 $ 1,341,075
Cash, cash held in escrow and restricted cash 27,237   26,204   30,272   38,517   38,432
Deferred lease intangibles, net   46,396   51,474   56,316   60,304   66,109
Interest rate swaps2   26,382   21,667   34,115   31,180   23,045
Other assets   39,670   42,734   39,585   38,631   37,798
Total assets $ 1,435,145 $ 1,441,899 $ 1,476,510 $ 1,500,660 $ 1,506,459
LIABILITIES, PREFERRED STOCK AND EQUITY                    
Secured debt, net $ 265,619 $ 266,887 $ 377,714 $ 386,191 $ 387,942
Unsecured debt, net3   603,558   603,390   512,823   535,155   534,994
Interest rate swaps2   189   1,161   -   -   -
Accounts payable, accrued expenses and other liabilities   68,049   73,904   75,112   70,492   70,739
Deferred lease intangibles, net   5,590   6,044   6,604   7,179   8,014
Financing lease liability4   2,278   2,271   2,265   2,260   2,254
Total liabilities $ 945,283 $ 953,657 $ 974,518 $ 1,001,277 $ 1,003,943
Preferred stock - Series A $ - $ - $ - $ 46,803 $ 46,803
Equity:                    
Common stock $ 453 $ 452 $ 452 $ 431 $ 430
Additional paid in capital   634,651   644,938   654,346   616,414   624,942
Accumulated deficit   (176,388)   (182,606)   (191,882)   (200,147)   (197,543)
Accumulated other comprehensive income   25,859   20,233   33,695   30,792   22,750
Total stockholders' equity   484,575   483,017   496,611   447,490   450,579
Non-controlling interest   5,287   5,225   5,381   5,090   5,134
Total equity $ 489,862 $ 488,242 $ 501,992 $ 452,580 $ 455,713
Total liabilities, preferred stock and equity $ 1,435,145 $ 1,441,899 $ 1,476,510 $ 1,500,660 $ 1,506,459

 

1During the three months ended March 31, 2024, the tenant occupying a single tenant industrial property located in Columbus, Ohio, provided notice of its intention to exercise its option to purchase the property at a fixed price of $21,480. We believe the exercise of the purchase option is reasonably probable and therefore, in accordance with ASC 842, Leases, there is a lease modification. As a result, we reclassified the respective real estate property to net investment in sales-type lease totaling $21,480 on our condensed consolidated balance sheets, effective as of the date of tenant notice, in the following amounts: (i) $19,605 from Real estate properties, (ii) $8,094 from Accumulated depreciation, (iii) $877 from net Deferred lease intangible assets, and (iv) $1,062 from Other assets. Further, we recognized a Gain on sale of real estate of $8,030 during the three months ended March 31, 2024 related to this transaction.
2Represents the fair value of the Company's interest rate swaps. We minimize the credit risk in our derivative financial instruments by entering into transactions with various high-quality counterparties. Our exposure to credit risk at any point is generally limited to amounts recorded as assets on the accompanying consolidated balance sheets. A summary of the Company's interest rate swaps and accounting are detailed in Note 6 of our most recent Quarterly Report on Form 10-Q for expanded disclosure.
3Includes borrowings under line of credit and term loans. Refer to Debt Summary in this Supplemental Information for additional details.
4As of March 31, 2024, we have a single finance lease in which we are the sublessee for a ground lease with a remaining lease term of approximately 32 years. Refer to our most recent Quarterly Report on Form 10-Q for expanded disclosure.

 

1Q 2024 Supplemental | 11

 

Consolidated Statements of Operations

Unaudited ($ in thousands, except per-share amounts)

 

  March 31, 2024 December 31, 2023  September 30, 2023 June 30, 2023 March 31, 2023
Revenues:                     
Rental revenue $ 37,331 $ 38,642 $ 37,416 $ 37,814 $ 37,586
Tenant recoveries   12,859   12,112   12,320   12,085   11,785
Management fee revenue and other income   38   30   29   -   29
Total revenues $  50,228 $ 50,784 $ 49,765 $ 49,899 $ 49,400
Operating expenses:                    
Property   16,642   15,144   15,754   15,690   15,954
Depreciation and amortization   22,368   22,793   22,881   23,417   23,800
General and administrative   3,364   4,318   3,297   3,842   3,447
Total operating expenses $  42,374 $ 42,255 $ 41,932 $ 42,949 $ 43,201
Other income (expense):                    
Interest expense   (9,598)   (9,686)   (9,473)      (9,584)      (9,535)
Loss on extinguishment of debt   -   -   (72)   -   -
Gain on sale of real estate1   8,030   10,534   12,112   -   -
Total other income (expense) $ (1,568) $ 848 $ 2,567 $ (9,584) $ (9,535)
Net income (loss) $ 6,286 $ 9,377 $ 10,400 $ (2,634) $ (3,336)
Less: Net income (loss) attributable to non-controlling interest   68   101   114   (30)   (38)
Net income (loss) attributable to Plymouth Industrial REIT, Inc. $ 6,218 $  9,276 $ 10,286 $ (2,604) $ (3,298)
Less: Preferred Stock dividends   -   -   677   916   916
Less: Loss on extinguishment/redemption of Series A Preferred Stock   -   -   2,021   -   2
Less: Amount allocated to participating securities   94   84   83   82   88
Net income (loss) attributable to common stockholders $ 6,124 $ 9,192 $ 7,505 $ (3,602) $ (4,304)
Net income (loss) per share attributable to common stockholders – basic2 $ 0.14 $ 0.20 $ 0.17 $ (0.08) $ (0.10)
Net income (loss) per share attributable to common stockholders – diluted2 $ 0.14 $ 0.20 $ 0.17 $ (0.08) $ (0.10)
Weighted-average common shares outstanding - basic   44,937   44,879   44,057   42,647   42,605
Weighted-average common shares outstanding - diluted   44,971   44,992   44,140   42,647   42,605

 

1During the three months ended March 31, 2024, the tenant occupying an industrial property located in Columbus, Ohio, provided notice of its intention to exercise its option to purchase the property. We re-evaluated the lease classification of the lease in accordance to ASC 842, Leases, concluding that the lease had transitioned to a sales-type lease, thereby recognizing a $8 million gain on sale of real estate during Q1 2024. The sale is expected to close in Q3 2024.
2Refer to the Q1 2024 Quarterly Report on Form 10-Q for additional information.

 

1Q 2024 Supplemental | 12

 

Non-GAAP Measurements

Unaudited ($ in thousands, except per-share amounts)

  March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
Consolidated NOI                    
Net income (loss) $ 6,286 $ 9,377 $ 10,400 $ (2,634) $ (3,336)
General and administrative   3,364   4,318   3,297   3,842   3,447
Depreciation and amortization   22,368   22,793   22,881   23,417   23,800
Interest expense   9,598   9,686   9,473   9,584   9,535
Loss on extinguishment of debt   -   -   72   -   -
Gain on sale of real estate1   (8,030)   (10,534)   (12,112)   -   -
Management fee revenue and other income   (38)   (30)   (29)    -   (29)
Net Operating Income $ 33,548 $ 35,610 $ 33,982 $ 34,209 $ 33,417
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre                    
Net income (loss) $ 6,286 $ 9,377 $ 10,400 $ (2,634) $ (3,336)
Depreciation and amortization   22,368   22,793   22,881   23,417   23,800
Interest expense   9,598   9,686   9,473   9,584   9,535
Loss on extinguishment of debt   -   -   72   -   -
Gain on sale of real estate   (8,030)   (10,534)   (12,112)   -   -
EBITDAre $ 30,222 $ 31,322 $ 30,714 $ 30,367 $ 29,999
Stock compensation   914   838   827   716   585
Acquisition expenses   -   -   -   4   81
Pro forma effect of acquisitions/developments2   216   432   542   308   453
Adjusted EBITDA $ 31,352 $ 32,592 $ 32,083 $ 31,395 $ 31,118
Funds from Operations (FFO), Core FFO & Adjusted Funds from Operations (AFFO)                     
Net income (loss) $ 6,286 $ 9,377 $ 10,400 $ (2,634) $ (3,336)
Gain on sale of real estate1   (8,030)   (10,534)   (12,112)   -   -
Depreciation and amortization   22,368   22,793   22,881   23,417   23,800
FFO $ 20,624 $ 21,636 $ 21,169 $ 20,783 $ 20,464
Preferred stock dividends   -   -   (677)   (916)   (916)
Acquisition expenses   -   -   -   4   81
Loss on extinguishment of debt   -   -   72   -   -
Core FFO $ 20,624 $ 21,636 $ 20,564 $ 19,871 $ 19,629
Amortization of debt related costs   438   476   570   570   568
Non-cash interest expense   (102)   582   (50)   158   294
Stock compensation   914   838   827   716   585
Capitalized interest   (75)   (134)   (282)   (351)   (335)
Straight line rent   (15)   (111)   (216)   (705)   (912)
Above/below market lease rents   (318)   (401)   (417)   (669)   (734)
Recurring capital expenditures3   (994)   (880)   (1,965)   (1,092)   (1,806)
AFFO $ 20,472 $ 22,006 $ 19,031 $ 18,498 $ 17,289
Weighted-average common shares and units outstanding4   45,809   45,740   44,922   43,526   43,432
Core FFO attributable to common stockholders and unit holders per share $ 0.45 $ 0.47 $ 0.46 $ 0.46 $ 0.45
AFFO attributable to common stockholders and unit holders per share $ 0.45 $ 0.48 $ 0.42 $ 0.42 $ 0.40

 

1During the three months ended March 31, 2024, the tenant occupying an industrial property located in Columbus, Ohio, provided notice of its intention to exercise its option to purchase the property. We re-evaluated the lease classification of the lease in accordance to ASC 842, Leases, concluding that the lease had transitioned to a sales-type lease, thereby recognizing a $8 million gain on sale of real estate during Q1 2024. The sale is expected to close in Q3 2024.
2Represents the estimated impact of wholly owned acquisitions and development properties as if they had been acquired or stabilized on the first day of each respective quarter in which the acquisitions occurred or developments were placed in-service. We have made a number of assumptions in such estimates and there can be no assurance that we would have generated the projected levels of EBITDA had we owned the acquired properties and/or placed the development properties in-service as of the beginning of the respective periods.
3Excludes non-recurring capital expenditures of $3,000 and $8,413 for the three months ended March 31, 2024 and 2023, respectively.
4Weighted-average common shares and units outstanding includes common stock, OP units, and restricted stock units as of March 31, 2024 and excludes 51,410 performance stock units as they are deemed to be non-participatory.

 

1Q 2024 Supplemental | 13

 

Same Store Net Operating Income (NOI)

Unaudited ($ and SF in thousands)

 

Same Store Portfolio Statistics
Square footage 31,246

Includes: wholly owned properties as of December 31, 2022; determined and set once per year for the following twelve months (refer to Glossary for Same Store definition)

Excludes: wholly owned properties classified as repositioning, lease-up during 2023 or 2024 (6 buildings representing approximately 1,755,000 of rentable square feet), placed into service 2023 and 2024, and under contract for sale.

Number of properties 146
Number of buildings 200
Percentage of total portfolio square footage 91.8%
Occupancy at period end 98.3%
           
Same Store NOI - GAAP Basis  
    March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
Same Store NOI - GAAP Basis                    
Rental revenue $   46,930 $ 46,072 $  45,609 $  45,715 $  45,342
Property expenses   15,213   13,296   14,343   14,392   14,371
Same Store NOI - GAAP Basis $  31,717 $   32,776 $  31,266 $  31,323 $  30,971
Early termination revenue                  23                        6                    75   124   160
Same Store NOI - GAAP Basis excluding early termination revenue $  31,694 $  32,770 $  31,191 $  31,199 $  30,811
Same Store NOI - Cash Basis                    
Same Store Adjustments:                    
Straight line rent and above (below) market lease   136   411   550   1,184   1,314
Same Store NOI - Cash Basis $  31,581 $   32,365 $  30,716 $  30,139 $  29,657
Early termination revenue                    23                        6   75   124   160
Same Store NOI - Cash Basis excluding early termination revenue $  31,558 $  32,359 $  30,641 $  30,015 $  29,497
Same store occupancy at period end   98.3%   98.1%   97.7%   98.2%   98.3%
Percentage of total portfolio square footage   91.8%   91.8%   91.5%   91.3%   91.3%
Same Store NOI - GAAP Basis percent change1   2.9%              
Same Store NOI - Cash Basis percent change1   7.0%              

 

1Represents the year-over-year change between the three months ended March 31, 2024 and three months ended March 31, 2023.

 

1Q 2024 Supplemental | 14

 

Debt Summary

As of March 31, 2024

Unaudited ($ in thousands, except per-share amounts)

 

  Maturity Date Interest Rate Commitment Principal Balance
Unsecured Debt:        
KeyBank Line of Credit August-25 6.51%1,2  $ 350,000  $ 155,400
$100m KeyBank Term Loan  August-26 3.00%1,2 100,000 100,000
$200m KeyBank Term Loan February-27 3.03%1,2 200,000 200,000
$150m KeyBank Term Loan May-27 4.40%1,2 150,000 150,000
Total / Weighted Average Unsecured Debt   4.26%  `  $  800,000  $ 605,400
         
  Maturity Date Interest Rate # of Buildings Principal Balance
Secured Debt:         
Ohio National Life Mortgage3  August-24 4.14% 6  $ 18,245
Allianz Loan April-26 4.07% 22 60,971
Nationwide Loan  October-27 2.97% 2 14,870
Lincoln Life Gateway Mortgage3 January-28 3.43% 2 28,800
Minnesota Life Memphis Industrial Loan3 January-28 3.15% 28 54,666
Midland National Life Insurance Mortgage3 March-28 3.50% 1 10,612
Minnesota Life Loan  May-28 3.78% 7 19,454
Transamerica Loan August-28 4.35% 15 59,041
Total / Weighted Average Secured Debt   3.77% 83  $ 266,659
Total / Weighted Average Debt   4.11%    $ 872,059

 

1For the month of March 2024, the one-month term SOFR for our unsecured debt was 5.323% and the one-month term SOFR for our borrowings under line of credit was at a weighted average of 5.327%. The spread over the applicable rate for the $100m, $150m, and $200m KeyBank Term Loans and KeyBank unsecured line of credit is based on the Company’s total leverage ratio plus the 0.1% SOFR index adjustment.
2The one-month term SOFR for the $100m, $150m and $200m KeyBank Term Loans was swapped to a fixed rate of 1.504%, 2.904%, and 1.527%, respectively. The $100 million of the outstanding borrowings under the KeyBank unsecured line of credit was swapped to a fixed USD-SOFR rate at a weighted average of 4.754%.
3Debt assumed at acquisition.

 

1Q 2024 Supplemental | 15

 

Capitalization

As of March 31, 2024

Unaudited ($ in thousands, except per-share amounts)

 

Net Debt: March 31,2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
                 
Total Debt1 $   872,059 $  873,364 $ 893,877 $  925,033 $  926,959
Less: Cash   27,237   26,204   30,272   38,517   38,432
Net Debt $  844,822 $  847,160 $ 863,605 $  886,516 $  888,527
Common Shares and Units Outstanding2   45,872   45,740   45,740   43,591   43,521
Closing Price (as of period end) $  22.50 $  24.07 $   20.95 $   23.02 $  21.01
Market Value of Common Shares3 $  1,032,120 $  1,100,962 $ 958,253 $ 1,003,465 $  914,376
Preferred Stock - Series A (at liquidation preference)4    -   -    -   48,845   48,845
Total Market Capitalization3,5 $   1,904,179 $  1,974,326 $  1,852,130 $ 1,977,343 $  1,890,180
Dividend / Share (annualized) $  0.96 $   0.90 $  0.90 $  0.90 $  0.90
Dividend Yield (annualized)   4.3%   3.7%   4.3%   3.9%   4.3%
Total Debt-to-Total Market Capitalization   45.8%   44.2%   48.3%   46.8%   49.0%
Secured Debt as a % of Total Debt   30.6%   30.7%   42.4%   41.9%   42.0%
Unsecured Debt as a % of Total Debt   69.4%   69.3%   57.6%   58.1%   58.0%
Net Debt-to-Annualized Adjusted EBITDA (quarter annualized)   6.7x   6.5x   6.7x   7.1x   7.1x
Net Debt plus Preferred-to-Annualized Adjusted EBITDA (quarter annualized)   6.7x   6.5x   6.7x   7.4x   7.5x
Weighted Average Maturity of Total Debt (years)   2.7   3.0   3.0   3.2   3.4

 

Capital Markets Activity
Common Shares Avg. Price Offering Period Net Proceeds
 -  $  -    N/A Q1 2024  $  -   

 

1Total Debt is not adjusted for the amortization of debt issuance costs or fair market premiums or discounts.
2Common shares and units outstanding include 490 units outstanding at the end of each of the quarters presented.
3Based on closing price as of last trading day of the quarter and common shares and units as of the period ended.
4On September 6, 2023 ("Redemption Date"), the Company redeemed all outstanding Series A Preferred Stock in cash at a redemption price equal to $25.00 per share. As of the Redemption Date and through March 31, 2024, the shares of Series A Preferred Stock were no longer outstanding.
5Market value of shares and units plus total debt and preferred stock as of period end.

 

1Q 2024 Supplemental | 16

 

Net Asset Value Components

As of March 31, 2024

Unaudited ($ in thousands)

 

Net Operating Income 
   Three Months Ended March 31, 2024
Pro Forma Net Operating Income (NOI)    
Total Operating NOI $   33,548
Pro Forma Effect of New Lease Activity1   690
Pro Forma Effect of Acquisitions2   -
Pro Forma Effect of Repositioning / Development3   1,586
Pro Forma NOI $  35,824
Amortization of above / below market lease intangibles, net   (318)
Straight-line rental revenue adjustment   (15)
Pro Forma Cash NOI $ 35,491

 

Developable Land  
Market Owned
Land
(acres)4
Developable
GLA
 (SF)4
Under  Construction
(SF)5
Est. Investment /
Est. Completion
Under  Development (SF)5
Atlanta     9 200,000      
Chicago   11 220,000      
Cincinnati   18 285,308     285,308
Jacksonville   12 95,587 52,920 $7.4M/Q4-’24 42,667
Memphis   23 475,000      
St. Louis   31 300,000      
Charlotte     6 100,000      
  110 1,675,895 52,920   327,975

 

Other Assets and Liabilities
Three Months Ended March 31, 2024
Cash, cash held in escrow and restricted cash $  27,237
Other assets $ 39,670
CIP $  7,630
Accounts payable, accrued expenses and other liabilities $  68,049

 

Debt and Common Stock 
Three Months Ended March 31, 2024
     
Secured Debt $  266,659
Unsecured Debt $  605,400
Common shares and units outstanding6   45,872

 

Note: We have made a number of assumptions with respect to the pro forma effects and there can be no assurance that we would have generated the projected levels of NOI had we actually owned the acquired properties and / or fully stabilized the repositioning / development properties as of the beginning of the period. Refer to Glossary in this Supplemental Information for a definition and discussion of non-GAAP financial measures.

1Represents the estimated incremental base rents from uncommenced new leases as if rent commencement had occurred as of the beginning of the period.
2Represents the estimated impact of acquisitions as if they had been acquired at the beginning of the period.
3Represents the estimated impact of properties that are undergoing repositioning or lease-up and development properties placed in-service as if the properties were stabilized and rents had commenced as of the beginning of the period.
4Developable land represents acreage currently owned by us and identified for potential development. The developable gross leasable area (GLA) is based on the developable land area and a land to building ratio. Developable land and GLA are estimated and can change periodically due to changes in site design, road and storm water requirements, parking requirements and other factors. We have made a number of assumptions in such estimates and there can be no assurance that we will develop land that we own.
5Under construction represents projects for which vertical construction has commenced. Under development represents projects in the pre-construction phase.
6Common shares and units outstanding were 45,382 and 490 as of March 31, 2024 respectively.

 

1Q 2024 Supplemental | 17

 

Rentable Square Feet and Annualized Base Rent by Market

As of March 31, 2024

Unaudited ($ in thousands)

 

  # of
Properties
# of
Buildings
Occupancy Total Rentable
Square Feet
% Rentable
Square Feet
ABR2 % ABR
Primary Markets1                  
Atlanta   11   13   99.9%   2,086,835     6.1% $ 9,833 6.5%
Chicago   39   40   94.8%   6,624,335   19.4%   29,277 19.4%
    Primary Markets Total   50   53   96.1%   8,711,170   25.5% $ 39,110 25.9%
Secondary  Markets1                  
Boston     1     2 100.0%      268,713     0.8% $   2,146 1.4%
Charlotte     1     1 100.0%      155,220     0.5%   1,229 0.8%
Cincinnati   10   12   94.9%   2,710,964     8.0%   11,077 7.3%
Cleveland   16   19   98.5%   3,979,209   11.7%   18,628 12.3%
Columbus   15   15 100.0%   3,757,614   11.0%   13,737 9.1%
Indianapolis   17   17   95.6%   4,085,169   12.0%   15,228 10.1%
Jacksonville     8   28   99.6%   2,132,396     6.3%   16,227 10.7%
Kansas City     1     1   69.1%      221,911     0.7%   558 0.4%
Memphis   25   49   97.9%   4,783,046   14.0%   18,645 12.3%
St. Louis   12   14   95.0%   3,219,689     9.5%   14,639 9.7%
    Secondary Markets Total 106 158   97.2% 25,313,931   75.5% $  112,114 74.1%
Total 156 211   96.9% 34,025,101 100.0% $ 151,224 100.0%

 

1Primary markets means the following two metropolitan areas in the U.S., each generally consisting of more than 300 million square feet of industrial space: Chicago and Atlanta. Secondary markets means non-primary markets, each generally consisting of between 100 million and 300 million square feet of industrial space, including the following metropolitan areas in the U.S.: Boston, Charlotte, Cincinnati, Cleveland, Columbus, Indianapolis, Jacksonville, Kansas City, Memphis, Milwaukee, South Florida, and St. Louis. Our definitions of primary and secondary markets may vary from the definitions of these terms used by investors, analysts, or other industrial REITs.
2Annualized base rent is calculated as monthly contracted base rent as of March 31, 2024, multiplied by 12. Excludes rent abatements.

 

1Q 2024 Supplemental | 18

 

 

 

 

 

 

 

 

 

 

 

 

Operational &
Portfolio
Information

 

 

 

1Q 2024 Supplemental | 19

 

Leasing Activity

As of March 31, 2024

Unaudited

 

Lease Renewals and New Leases 
Year Type Square Footage Percent  Expiring Rent New Rent % Change Tenant
Improvements1 
 Lease
Commissions1
2020 Renewals 1,881,346   71.1%  $ 3.75 $ 3.93   4.8% $ 0.13 $ 0.08
  New Leases 764,314   28.9% $  4.31 $  5.07 17.6% $ 0.24 $  0.19
  Total 2,645,660 100.0% $  3.92 $  4.26   8.7% $ 0.16 $ 0.11
2021 Renewals 2,487,589   49.3% $ 4.25 $  4.50   5.9% $ 0.19 $  0.10
  New Leases 2,557,312   50.7% $ 3.76 $ 4.40 17.0% $  0.23 $ 0.22
  Total 5,044,901 100.0% $ 4.00 $  4.45 11.1% $ 0.21 $  0.16
2022 Renewals 4,602,355   60.2% $  4.31 $  4.87 13.1% $ 0.15 $  0.16
  New Leases 3,041,526   39.8% $  3.51 $ 4.51 28.6% $ 0.40 $  0.23
  Total 7,643,881 100.0% $  3.99 $ 4.73 18.5% $  0.25 $  0.19
2023 Renewals 3,945,024   70.4% $  3.75 $  4.36 16.3% $  0.14 $  0.15
  New Leases 1,654,919   29.6% $  3.82 $  5.03 31.7% $ 0.35 $  0.35
  Total 5,599,943 100.0% $  3.77 $  4.56 21.0% $  0.21 $  0.21
Q1 2024 Renewals 928,217   66.9% $ 4.71 $ 4.99   5.9% $  0.17 $ 0.12
  New Leases 459,760   33.1% $ 3.41 $ 5.06 48.4% $ 0.12 $ 0.20
  Total 1,387,977 100.0% $ 4.28 $  5.01 17.1% $ 0.15 $ 0.14

 

Note: Lease renewals and new lease activity excludes leases with terms less than six months, and leases associated with construction.

1Shown as per dollar, per square foot, per year.

 

1Q 2024 Supplemental | 20

 

Leasing Activity (continued)

As of March 31, 2024

Unaudited

 

Lease Expiration Schedule
Year Square  
Footage
ABR1 % of ABR
Expiring2
Available 1,061,525 $ -   -
2024 2,643,167   12,101,668     8.0%
2025 7,766,714   33,999,980   22.5%
2026 5,927,934   28,203,681   18.7%
2027 4,493,284   21,396,180   14.1%
2028 4,150,735   19,319,026   12.8%
Thereafter 7,981,742   36,203,077   23.9%
Total 34,025,101 $  151,223,612 100.0%

 

% of Annual Base Rent Expiring2

 

 

1Annualized base rent is calculated as monthly contracted base rent as of March 31, 2024, multiplied by 12. Excludes rent abatements.
2Calculated as annualized base rent set forth in this table divided by total annualized base rent as of March 31, 2024.

 

 

1Q 2024 Supplemental | 21

 

Leased Square Feet and Annualized Base Rent by Tenant Industry

As of March 31, 2024

Unaudited

 

Industry Total Leased  
Square Feet
# of
Leases
% Rentable  
Square Feet
ABR1 % ABR ABR Per
Square Foot
Logistics & Transportation             9,780,990   84   29.7% $  40,761,535   27.0% $  $ 4.17
Wholesale/Retail             2,397,143   28     7.3%   11,939,672     7.9%   4.98
Automotive             2,258,860   26     6.9%   10,573,834     7.0%   4.68
Printing & Paper             1,942,978   16     5.9%   7,436,389     4.9%   3.83
Home & Garden             1,914,586   18     5.8%   6,585,525     4.4%   3.44
Construction             1,527,936   41     4.6%   7,293,813     4.8%   4.77
Cardboard and Packaging             1,294,442   17     3.9%   5,689,437     3.8%   4.40
Food & Beverage             1,663,050   24     5.0%   8,675,750     5.7%   5.22
Light Manufacturing             1,227,572   11    3.7%   4,445,727     2.9%   3.62
Healthcare             1,024,416   39     3.1%   6,234,416     4.1%   6.09
Plastics                955,728   13     2.9%   4,578,064     3.0%   4.79
Education                925,840     8     2.8%   4,515,840     3.0%   4.88
Industrial Equipment Components                852,039   24     2.6%   4,140,649     2.7%   4.86
Other Industries2             5,197,996 154   15.8%   28,352,961   18.8%   5.45
 Total           32,963,576 503 100.0% $ 151,223,612 100.0% $  4.59

 

1Annualized base rent is calculated as monthly contracted base rent as of March 31, 2024, multiplied by 12. Excludes rent abatements.
2Includes over 20 tenant industries for which the total leased square feet aggregates to less than 250,000 square feet or 3% of ABR.

 

1Q 2024 Supplemental | 22

 

Leased Square Feet and Annualized Base Rent by Type

As of March 31, 2024

Unaudited

 

Leased Square Feet and Annualized Base Rent by Lease Type
Lease Type   Total Leased
Square Feet
# of
Leases
% Leased
Square Feet
Annualized Base Rent1 % ABR ABR Per
Square Foot
 Triple Net 27,247,340 397   82.7% $ 121,805,248   80.5% $ 4.47
 Modified Net 3,694,231   62   11.2%   19,017,017   12.6%     5.15
 Gross 2,022,005   44     6.1%   10,401,347     6.9%      5.14
 Total 32,963,576 503 100.0% $ 151,223,612 100.0% $ 4.59
Leased Square Feet and Annualized Base Rent by Tenant Type 
Tenant Type   Total Leased
Square Feet
# of
Leases
% Leased
Square Feet
Annualized Base Rent1 % ABR ABR Per
Square Foot
 Multi-Tenant 16,426,039 398   49.8% $ 82,047,826   54.3% $ 4.99
 Single-Tenant 16,537,537 105   50.2%   69,175,786   45.7%   4.18
 Total 32,963,576 503 100.0% $ 151,223,612 100.0% $ 4.59
Leased Square Feet and Annualized Base Rent by Building Type  
Building Type Total Leased
Square Feet
# of
Buildings
% Leased
Square Feet
Annualized Base Rent1 % ABR ABR Per
Square Foot
 Warehouse/Distribution 21,228,496 118   64.4% $ 85,703,511   56.7% $ 4.04
 Warehouse/Light Manufacturing 8,349,976   41   25.3%   39,190,300   25.9%   4.69
 Small Bay Industrial2 3,385,104   52   10.3%   26,329,801   17.4%   7.78
 Total 32,963,576 211 100.0% $ 151,223,612 100.0%   4.59

 

1Annualized base rent is calculated as monthly contracted base rent as of March 31, 2024, multiplied by 12. Excludes rent abatements.
2Small bay industrial is inclusive of flex space totaling 606,799 leased square feet and annualized base rent of $6,988,186. Small bay industrial is multipurpose space; flex space includes office space that accounts for greater than 50% of the total rentable area.

 

1Q 2024 Supplemental | 23

 

Top 10 Tenants by Annualized Base Rent

As of March 31, 2024

Unaudited

 

Tenant Market Industry # of Leases Total Leased Square Feet Expiration ABR Per
Square Foot
Annualized Base Rent1 % Total
ABR
 FedEx Supply Chain, Inc. St. Louis Logistics & Transportation     1 769,500 7/31/24 $  4.60 $  3,539,875     2.3%
 Geodis Logistics, LLC St. Louis Logistics & Transportation     1 624,159 8/31/25   4.36   2,718,993     1.8%
 Royal Canin U.S.A, Inc. St. Louis Wholesale/Retail     1 521,171 12/31/25   4.89   2,549,829     1.7%
 Houghton Mifflin Harcourt Company Chicago Education     1 513,512 3/31/26   4.56   2,341,615     1.5%
 ODW Logistics, Inc. Columbus Logistics & Transportation     1 772,450 6/30/25   2.99   2,312,163     1.5%
 Archway Marketing Holdings, Inc. Chicago Logistics & Transportation     3 503,000 3/31/26   4.51   2,268,180     1.5%
 ASW Supply Chain Services, LLC Cleveland Logistics & Transportation     5 577,237 11/30/27   3.65   2,104,932     1.4%
 Balta US, Inc. Jacksonville Home & Garden     2 629,084 10/31/29   3.16   1,988,036     1.3%
 Communications Test Design, Inc. Memphis Logistics & Transportation     2 566,281 12/31/24   3.41   1,930,826     1.3%
 Winston Products, LLC Cleveland Wholesale/Retail     2 266,803 4/30/32   6.94   1,852,295    1.2%
 Total Largest Tenants by Annualized Rent   19 5,743,197   $ 4.11 $ 23,606,744  15.5%
All Other Tenants 484 27,220,379   $  4.69 $ 127,616,868  84.5%
Total Company Portfolio 503 32,963,576   $ 4.59 $ 151,223,612 100.0%

 

1Annualized base rent is calculated as monthly contracted base rent as of March 31, 2024, multiplied by 12. Excludes rent abatements.

 

1Q 2024 Supplemental | 24

 

Lease Segmentation by Size

As of March 31, 2024

Unaudited

 

Square Feet # of Leases Total Leased
Square Feet
Total Rentable Square Feet Total
Leased %
Total Leased % Excluding Repositioning1 Annualized Base Rent2 In-Place + Uncommenced
ABR3
% of Total
In-Place + Uncommenced
ABR
In-Place + Uncommenced
ABR Per SF4
 < 4,999   60 171,905 234,511 73.3%   75.2% $  1,701,656 $  1,701,656     1.1%  $ 9.90
 5,000 - 9,999   71 500,626 592,362 84.5%   85.3%   4,451,389   4,591,349     3.0% 8.92
 10,000 - 24,999 111 1,891,624 1,942,255 97.4%   97.4%   14,185,137   14,185,137     9.3% 7.50
 25,000 - 49,999   90 3,192,194 3,301,311 96.7%   96.7%   18,829,017   18,829,017   12.4% 5.90
 50,000 - 99,999   79 5,535,583 5,711,472 96.9%   98.0%   25,669,202   26,039,650   17.2% 4.66
 100,000 - 249,999   63 10,268,208 10,525,772 97.6%   98.9%   44,633,924   44,633,924   29.4% 4.35
 > 250,000   29 11,403,436 11,717,418 97.3% 100.0%   41,753,287   41,753,287   27.6% 3.66
 Total/Weighted Avg. 503 32,963,576 34,025,101 96.9%   98.4% $  151,223,612 $ 151,734,020 100.0%  $ 4.59

 

1Total Leased % Excluding Repositioning excludes vacant square footage being refurbished or repositioned.
2Annualized base rent is calculated as monthly contracted base rent as of March 31, 2024, multiplied by 12. Excludes rent abatements.
3In-Place + Uncommenced ABR calculated as in-place current annualized base rent as of March 31, 2024 plus annualized base rent for leases signed but not commenced as of March 31, 2024.
4In-Place + Uncommenced ABR per SF is calculated as in-place current rent annualized base rent as of March 31, 2024 plus annualized base rent for leases signed but not commenced as of March 31, 2024, divided by leased square feet plus uncommenced leased square feet.

 

1Q 2024 Supplemental | 25

 

Capital Expenditures

Unaudited ($ in thousands)

 

  March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
Tenant improvements $ 320 $ 375 $ 290 $ 361 $ 425
Lease commissions $  674 $  505 $  1,675 $  731 $  1,381
Total Recurring Capital Expenditures $  994 $  880 $  1,965 $  1,092 $  1,806
Capital expenditures $ 664 $  5,074 $  5,638 $  4,217 $  2,593
Development $ 2,336 $ 1,107 $ 2,494 $ 3,423 $ 5,820
Total Non-recurring Capital Expenditures $  3,000 $  6,181 $  8,132 $  7,640 $  8,413
Total Capital Expenditures $  3,994 $  7,061 $  10,097 $  8,732 $  10,219

 

1Q 2024 Supplemental | 26

 

 

 

 

 

 

 

 

 

 

 

 

Appendix

 

 

 

1Q 2024 Supplemental | 27

 

Glossary

 

This glossary contains additional details for sections throughout this Supplemental Information, including explanations and reconciliations of certain non-GAAP financial measures, and the reasons why we use these supplemental measures of performance and believe they provide useful information to investors. Additional detail can be found in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, as well as other documents filed with or furnished to the SEC from time to time.

Non-GAAP Financial Measures Definitions:

Net Operating Income (NOI): We consider net operating income, or NOI, to be an appropriate supplemental measure to net income in that it helps both investors and management understand the core operations of our properties. We define NOI as total revenue (including rental revenue and tenant reimbursements) less property-level operating expenses. NOI excludes depreciation and amortization, general and administrative expenses, impairments, gain/loss on sale of real estate, interest expense, and other non-operating items.

Cash Net Operating Income - (Cash NOI): We define Cash NOI as NOI excluding straight-line rent adjustments and amortization of above and below market leases.

EBITDAre and Adjusted EBITDA: We define earnings before interest, taxes, depreciation and amortization for real estate in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). EBITDAre represents net income (loss), computed in accordance with GAAP, before interest expense, tax, depreciation and amortization, gains or losses on the sale of rental property, appreciation/(depreciation) of warrants, loss on impairments, and loss on extinguishment of debt. We calculate Adjusted EBITDA by adding or subtracting from EBITDAre the following items: (i) non-cash stock compensation, (ii) loss on extinguishment of debt, (iii) acquisition expenses (iv) the proforma impacts of acquisition, dispositions and developments and (v) non-cash impairments on real estate lease. We believe that EBITDAre and Adjusted EBITDA are helpful to investors as supplemental measures of our operating performance as a real estate company as they are direct measures of the actual operating results of our industrial properties. EBITDAre and Adjusted EBITDA should not be used as measures of our liquidity and may not be comparable to how other REITs' calculate EBITDAre and Adjusted EBITDA.

Funds From Operations ("FFO"): Funds from operations, or FFO, is a non-GAAP financial measure that is widely recognized as a measure of an REIT’s operating performance, thereby, providing investors the potential to compare our operating performance with that of other REITs. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. In December 2018, NAREIT issued a white paper restating the definition of FFO. The purpose of the restatement was not to change the fundamental definition of FFO, but to clarify existing NAREIT guidance. The restated definition of FFO is as follows: Net Income (calculated in accordance with GAAP), excluding: (i) Depreciation and amortization related to real estate, (ii) Gains and losses from the sale of certain real estate assets, (iii) Gain and losses from change in control, and (iv) Impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We define FFO, consistent with the NAREIT definition. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. Other equity REITs may not calculate FFO as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity and is not indicative of funds available for our cash needs, including our ability to pay dividends.

 

1Q 2024 Supplemental | 28

 

Glossary (continued)

 

Non-GAAP Financial Measures Definitions (continued):

Core Funds from Operations (“Core FFO”): We calculate Core FFO by adjusting FFO for non-comparable items such as dividends paid (or declared) to holders of our preferred stock, acquisition and transaction related expenses for transactions not completed, and certain non-cash operating expenses such as impairment on real estate lease, appreciation/(depreciation) of warrants and loss on extinguishment of debt. We believe that Core FFO is a useful supplemental measure in addition to FFO by adjusting for items that are not considered by us to be part of the period over period operating performance of our property portfolio, thereby, providing a more meaningful and consistent comparison of our operating and financial performance during the periods presented. As with FFO, our reported Core FFO may not be comparable to other REITs’ Core FFO, should not be used as a measure of our liquidity, and is not indicative of our funds available for our cash needs, including our ability to pay dividends.

Adjusted Funds from Operations attributable to common stockholders (“AFFO”): Adjusted funds from operations, or AFFO, is presented in addition to Core FFO. AFFO is defined as Core FFO, excluding certain non-cash operating revenues and expenses, capitalized interest and recurring capitalized expenditures. Recurring capitalized expenditures include expenditures required to maintain and re-tenant our properties, tenant improvements and leasing commissions. AFFO further adjusts Core FFOfor certain other non-cash items, including the amortization or accretion of above or below market rents included in revenues, straight line rent adjustments, non-cash equity compensation and non-cash interest expense.

We believe AFFO provides a useful supplemental measure of our operating performance because it provides a consistent comparison of our operating performance across time periods that is comparable for each type of real estate investment and is consistent with management's analysis of the operating performance of our properties. As a result, we believe that the use of AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance.

As with Core FFO, our reported AFFO may not be comparable to other REITs’ AFFO, should not be used as a measure of our liquidity, and is not indicative of our funds available for our cash needs, including our ability to pay dividends.

Net Debt and Preferred Stock to Adjusted EBITDA: Net debt and preferred stock to Adjusted EBITDA is a non-GAAP financial measure that we believe is useful to investors as a supplemental measure in evaluating balance sheet leverage. Net debt and preferred stock is equal to the sum of total consolidated and our pro rata share of unconsolidated joint venture debt less cash, cash equivalents, and restricted cash, plus preferred stock calculated at its liquidation preference as of the end of the period.

 

1Q 2024 Supplemental | 29

 

Glossary (continued)

 

Other Definitions:

GAAP: U.S. generally accepted accounting principles.

Lease Type: We define our triple net leases in that the tenant is responsible for all aspects of and costs related to the property and its operation during the lease term. We define our modified net leases in that the landlord is responsible for some property related expenses during the lease term, but the cost of most of the expenses is passed through to the tenant. We define our gross leases in that the landlord is responsible for all aspects of and costs related to the property and its operation during the lease term.

Non-Recurring Capital Expenditures: Non-recurring capital expenditures include capital expenditures of long-lived improvements required to upgrade/replace existing systems or items that previously did not exist. Non-recurring capital expenditures also include costs associated with repositioning a property, redevelopment/development and capital improvements known at the time of acquisition.

Occupancy: We define occupancy as the percentage of total leasable square footage as the earlier of lease term commencement or revenue recognition in accordance to GAAP as of the close of the reporting period.

Recurring Capital Expenditures: Recurring capitalized expenditures includes capital expenditures required to maintain and re-tenant our buildings, tenant improvements and leasing commissions.

Replacement Cost: is based on the Marshall & Swift valuation methodology for the determination of building costs. The Marshall & Swift building cost data and analysis is widely recognized within the U.S. legal system and has been written into in law in over 30 U.S. states and recognized in the U.S. Treasury Department Internal Revenue Service Publication. Replacement cost includes land reflected at the allocated cost in accordance with Financial Accounting Standards Board ("FASB") ASC 805.

Same Store Portfolio: The Same Store Portfolio is a subset of the consolidated portfolio and includes properties that are wholly owned by the Company as of December 31, 2022. The Same Store Portfolio is evaluated and defined on an annual basis based on the growth and size of the consolidated portfolio. The Same Store Portfolio excludes properties that are classified as repositioning, lease-up during 2023 or 2024 (6 buildings representing approximately 1,755,000 of rentable square feet placed into service during 2023 or 2024) or under contract for sale. For 2024, the Same Store Portfolio consists of 146 properties aggregating 31.2 million rentable square feet. Properties that are being repositioned generally are defined as those properties where a significant amount of space is held vacant in order to implement capital improvements that enhance the functionality, rental cash flows, and value of that property. We define a significant amount of space at a property using both the size of the space and its proportion to the properties total square footage as a determinate. Our computation of same store NOI may not be comparable to other REITs.

Weighted Average Lease Term Remaining: The average contractual lease term remaining as of the close of the reporting period (in years) weighted by square footage.

 

1Q 2024 Supplemental | 30