Plymouth Industrial REIT Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mitch Germain - JMP Securities - Analyst : Good morning. So, Jeff maybe just talks about some of the issues that arrived. I mean, I know you have them in you prepared comments. But I think last quarter, you mentioned an issue in Cleveland that was unanticipated, but it seems like, now you have some other vacancies that we realized that I guess where they unanticipated or the lease was delayed? Can you just maybe describe a little bit more detail about those different situations?

Question: Mitch Germain - JMP Securities - Analyst : Okay. Thanks for the clarification. Thinking about some of these tenant issues. I know that it appears that they were not exactly things that were on your watch list prior to identifying them, but are you spending a bit more time engaging with your clients to gain a better sense of their respective businesses to identify what other issues could arise?

Question: Mitch Germain - JMP Securities - Analyst : I was just saying is that going to close prior to year-end or you anticipate it like right around.

Question: Mitch Germain - JMP Securities - Analyst : Okay. And then maybe just provide some perspective on I think what you said about a billion-dollar pipeline 11 million square feet was that. Yeah. Can you anything there that, you know? I mean, is it one off, is it portfolios and, and then to the extent, I obviously you have got about if we net out the $40 million purchase, you have got about like 450 or so of dry powder from the recent transaction that is closing. So, I mean, kind of what is their potential to grow Sixth Street as well to maybe unlock some additional growth.

Question: Mitch Germain - JMP Securities - Analyst : Thank you.

Question: Rich Anderson - Wedbush Securities - Analyst : Hey, thanks. Good morning. Maybe, just to put a finer point on Mitch's question around Cleveland, you mentioned abruptly laid off employees in the case of 2,100 and business not viable in the case of 1,350 maybe, I don't know what those businesses were or maybe I don't want to know. But I am curious as to what the learning event is from this in terms of just sort of monitoring credit monitoring industries that you are exposed to. And if there is anything that you take from this, that you look throughout your portfolio and say, we have got to give something here or there, a second look and make sure that we are protected, Any kind of comment around that topic.

Question: Rich Anderson - Wedbush Securities - Analyst : Okay, I guess I never thought of sitting on a windmill. I guess, now I am thinking about. The second question is that the marker on the Chicago cap rate with Sixth Street of 6.2%. That would you agree not to be a cynic here? But would you agree that that number was influenced by the fact that there is also the preferred and there were also the warrants like in the absence of those other elements of the transaction, would that 6.2% really have been or 6.2% would have been something greater?

Question: Rich Anderson - Wedbush Securities - Analyst : Very good. Thanks for that. And then last question for me, you mentioned, next year, I don't think you are going to give guidance, but there is a lot of movement here, right? You have Chicago, you have Cleveland Memphis, the joint venture and Saint Louis, of course. When you net all that up, is there growth next year from the company or do you think that you got to work some things out and sort of TBD that maybe the real number to look at would be the year following when everything is sort of addressed.

Question: Rich Anderson - Wedbush Securities - Analyst : I agree. It is just a matter of timing, right? You get something leased up. It doesn't necessarily cash flow immediately is the main point that I am thinking about just in cadence between 2025 and 2026. That is all I got. Thanks.

Question: John Kim - BMO Capital Markets - Analyst : Thank you. On your Memphis acquisition, you mentioned Credo Health is leaving some of their space by year end. Was that known previously? In the last call you mentioned the 70% tenant retention rate on the portfolio.

Question: John Kim - BMO Capital Markets - Analyst : Okay. And then communication test design, they renewed or extended for a year, which is what you had indicated. What are the chances that they extend past that year? And would that be at market rents or is there a prearranged renewal rate?

Question: John Kim - BMO Capital Markets - Analyst : In your prepared commentary. There was a mention of transitory vacancy 487,000 square feet. Some of that was going to it sounds like a start into 2025 but then there was wording about executing leases and 70% of that space. So, I am not really sure two sentences tied to each other. I was wondering if you could just elaborate on that.

Question: John Kim - BMO Capital Markets - Analyst : So, when you say executed, that means occupancy, not signing a lease. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 2:00PM, PLYM.N - Q3 2024 Plymouth Industrial REIT Inc Earnings Call

Question: John Kim - BMO Capital Markets - Analyst : And then on your pursuit pipeline, I think the first time you used that wording of 11 million square feet. How much of that do you expect to eventually close?

Question: John Kim - BMO Capital Markets - Analyst : Yeah because, last quarter, it was less than a million square feet. Now it is 11, it is a pretty big jump. So, I am just wondering.

Question: John Kim - BMO Capital Markets - Analyst : Thank you.

Question: Todd Thomas - Keybanc Capital Markets - Analyst : Hi, thanks. Good morning. I wanted to ask about the NOI bridge or the FFO bridge that was provided in the prepared commentary which was really helpful. Thank you for that. And sort of going back to Rich's question about earnings or NOI growth going forward maybe just to confirm around the fourth quarter, it looks like the ó0.3 NOI shortfall. That is the piece that is not recurring. So, your four Q implied guidance is ó0.48 to midpoint ó0.47 at the lower bound. Is that right? And is that how we should think about the exit rate into 2025 or when we think about, some of the moving REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 2:00PM, PLYM.N - Q3 2024 Plymouth Industrial REIT Inc Earnings Call pieces around the Sixth Street transaction and other leasing, and so forth. Is there anything else that would weigh on FFO as we do think about, sort of the run rate into 25?

Question: Todd Thomas - Keybanc Capital Markets - Analyst : Got it. So, that includes now everything that is been announced, everything, you know, and then some of the lease up some of the commencements and some of the capital deployment, all of that should build off of the fourth quarter FFO run rate,

Question: Todd Thomas - Keybanc Capital Markets - Analyst : Okay. And then I just had a question about leasing in general and sort of the leasing pipeline and some of the discussions that you are having with tenants, we have heard about longer decision-making time frames, and I am just curious to get your take with the election being behind us. Does that improve leasing activity at all at the margin or is there still a bit of uncertainty or maybe more uncertainty and hesitation around, maybe certain policies that might prohibit leasing activity from picking up a bit. What's your thought process there? What are you hearing?

Question: Todd Thomas - Keybanc Capital Markets - Analyst : Okay. Thank you.

Question: Brendan Lynch - Barclays - Analyst : Great. Thank you for taking my question on the St. Louis asset Jeff, you mentioned that you have about 10 prospects and now you have different prospects. Can you give any color on how that process is evolving and to do these proposals?

Question: Brendan Lynch - Barclays - Analyst : Okay, Thank you. that is helpful. Some of your peers are also leaning more into occupancy over rate at present given the uptick in vacancy in the portfolio, can you talk about how you are trying to balance those two things as we go into 2025.

Question: Brendan Lynch - Barclays - Analyst : Great. Thank you for taking my questions.

Question: Anthony - Truist Securities - Analyst : Good morning, guys. Can you guys provide me a progress update on the remaining space at [Latty], St. Louis and the 16,801 exchange in Chicago. And what's the interest level for these spaces right now?

Question: Anthony - Truist Securities - Analyst : Then for the St. Louis building, if you guys cannot find an attractive deal, at what point do you decide to redevelop it into a multi-tenant building? And what would the incremental return be?

Question: Anthony - Truist Securities - Analyst : And that in that particular building.

Question: Anthony - Truist Securities - Analyst : Okay. And just one last question for me, for the Cleveland Spaces, are you guys expecting to receive rent payments through the Eviction court?

Question: Anthony - Truist Securities - Analyst : And how much would that be? And would you guys like we see it like year-end or like in 2025?