Modiv Inc.

Good day and welcome to Motive's third quarter 2022 earnings conference call and webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. On today's call, management will provide prepared remarks and then we will open up the call for your questions. To ask a question, analysts may press star and then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the star key. And to withdraw your question, please press star and then two. Participants may also ask a question by emailing ir at motive.com. And please note that this event is being recorded. I would now like to turn the conference over to Margaret Boyce, Investor Relations for Motive. Thank you. Please go ahead, ma'am.

Thank you, Operator, and thank you all for joining us today to discuss Motive's third quarter 2022 financial results. We issued our earnings release and investor supplement before the market opened this morning. These documents are available in the investor relations section of our website at motive.com. I'm here today with Aaron Halfacre, Chief Executive Officer of Motive, and Ray Puccini, Chief Financial Officer. On today's call, management will provide prepared remarks and then we'll open up the call for your questions. Participants may also ask a question by emailing ir at motive.com. Before we begin, I would like to remind you that today's comments will include forward looking statements under the federal securities laws. Forward looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts, such as statements about our expected acquisitions or dispositions are also forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause our results to differ materially from those forward-looking statements are contained in our SEC filings, including our reports on Form 10-Q. With that, I'd now like to turn the call over to Aaron. Aaron, please go ahead.

Thank you, Margaret. Hello, everyone, and thank you for joining our third quarter earnings call. Joining me today is Ray Puccini, our CFO, who will cover our financial results in detail following my opening remarks. I will then close with a few more thoughts on the market before we open the line for Q&A. The major theme for the third quarter was steady, disciplined executions. We completed two core acquisitions and two non-core asset dispositions as part of our continued long-term growth plan and strategic portfolio repositioning. We have been intently focused on price discovery as we evaluate both potential portfolio acquisitions and select industrial manufacturing investments. As part of our focus on identifying investment opportunities that could offer motive greater enterprise scale, we successfully expanded the capacity of our credit facility by $150 million. As most of you know, the markets remained volatile during the quarter, with large swings in interest rates creating disruption in the real estate markets. An environment like this requires patience and an experienced management team to navigate the uncertainty, and we have been in no hurry to sign deals unless they can create long-term value for our shareholders. That said, third quarter revenue increased 17% year-over-year, excluding the one-time early termination revenue reported the prior year quarter, reflecting strong portfolio performance. Due to market conditions, we exercised patience this quarter, and our reported transaction activity was lighter than the second quarter. That said, our pipeline is robust, and we see significant opportunities on the horizon. We are especially focused on the emerging trend of U.S. industrials reshoring their manufacturing operations. Based on our experience in providing the vital infrastructure needed for critical manufacturing facilities, Motive is well qualified to partner with key manufacturers making this transition. As I'm sure you are aware, reshoring is gaining momentum primarily due to both global supply chain and geopolitical issues. We think that industrial manufacturing real estate will prove to be a bright spot for investors looking to capitalize on this long-term economic trend. As we continue to scale our portfolio in conjunction with this reshoring resurgence, we believe this can create strong, sustainable, and differentiated value for our shareholders. We are already making good headway in transitioning our portfolio into industrial manufacturing properties. In the past 12 months, our team has completed over 100 million in industrial manufacturing acquisitions at greater than an 8.5% blended weighted average cap rate, while also completing multiple non-core dispositions for total proceeds of over $83 million. And now some observations on the overall market. Over the quarter, we witnessed accelerated upward cap rate momentum as buyers began to sit on the sidelines searching for a modicum of price stability. Even so, we continue to find highly compelling opportunities in the industrial manufacturing sector. Specifically, we are actively identifying properties where demand is consistent and relatively defensive in nature. such as those that can be equipped to produce manufactured goods like infrastructure and component products. The volunteer and productive acquisitions we completed in the beginning of the third quarter reflect this strategy. While market volatility remains high, we are very optimistic about the opportunities in front of us. Motive provides much-needed liquidity to companies that want to monetize their industrial real estate assets and invest in the growth of their manufacturing businesses, ranging anywhere from highway guardrails to indoor farming. Even in a rising interest rate environment, the need for capital does not go away, and the commercial real estate market will eventually find pricing equilibrium, with some sectors adjusting more quickly than others. Right now, we are seeing volatility in cap rates along with the volatility in treasuries. That said, we believe most of the bad news is out and is increasingly being priced into the market as transactions get printed. To state the obvious, the broader market volatility has not only impacted property transactions, but also public company stock prices. On September 30th, the last day of the quarter that insiders were eligible to acquire more shares, I purchased additional motive shares at $14.86, a price that was comfortably below the $17 share price range seen in mid-September. Since then, throughout October and into November, our share price has traded at an even lower level that quite candidly defies rational investment behavior, considering that our last reported NAV per share was greater than $28, the Research Analyst Consensus target price is $20, And even our depreciated gap book value is greater than $18 per share. No matter which number you choose to focus on, we are trading at a steep and valuable discount. At present, it appears our stock is suffering the vagaries of small-scale day traders able to induce daily price volatility with minuscule share transactions. Meanwhile, these short-term profit seekers fail to realize that investors can collect a double-digit dividend yield with full knowledge that the company is currently trading for less than the sum of its parts. We see no logical long-term reason for this price dislocation to continue, and as such, remain adroitly focused on our long-term growth plans and strategic portfolio repositioning. I'll now turn the call over to Ray.