Mach Natural Resources LP

Good morning and welcome to Monmouth Real Estate Investment Corporation's first quarter 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. It is now my pleasure to introduce your host, Ms. Becky Coleridge, Vice President of Investor Relations. Thank you, Ms. Coleridge. You may begin.

Thank you very much, operator. In addition to the 10Q that we filed with the SEC yesterday, we have filed an unaudited first quarter supplemental information presentation. This supplemental information presentation, along with our 10-Q, are available on the company's website at mreic.read. I would like to remind everyone that certain statements made during this conference call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements that we make on this call are based on our current expectations and involve various risks and uncertainties. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company's first quarter 2020 earnings release and filings with the Securities and Exchange Commission. The company disclaims any obligation to update its forward-looking statements. Having said that, I'd like to introduce management with us today. Eugene Landy, Chairman, Michael Landy, President and Chief Executive Officer, Kevin Miller, Chief Financial Officer, and Richard Mulkey, Vice President of Asset Management. It is now my pleasure to turn the call over to MAMIS President and Chief Executive Officer, Michael Landy.

Thank you, Becky. Good morning, everyone, and thank you for joining us. We are pleased to report our results for the first quarter ended December 31, 2019. During the quarter, we acquired one property for $81.5 million, consisting of a newly constructed 616,000 square foot distribution center situated on 79 acres in the Indianapolis MSA. This property is leased to Amazon for 15 years. Following last year's 5% growth in our gross leasable area, at the end of the first quarter, our gross leasable area has increased to approximately 22.9 million square feet, representing 6% growth over the prior year period and a 3% increase on a sequential basis. As of the quarter end, our portfolio consisted of 115 properties geographically diversified across 30 states. At quarter end, our weighted average lease maturity was 7.6 years. We continue to experience strong demand for our properties as evidenced by our 99.2% occupancy rate at quarter end. Subsequent to the quarter, we leased up our 105,000 square foot facility in the Buffalo, New York MSA, thereby bringing our occupancy rate up to 99.6%. During the quarter, we grew our acquisition pipeline to include five new built-to-suit properties containing 1.2 million total square feet, representing $178.5 million, in future acquisitions. All five properties are leased to investment grade tenants. These future acquisitions will have a weighted average lease term of 13.4 years. Subject to our customary due diligence, we anticipate closing each of these transactions upon completion and occupancy, which is currently expected to be during fiscal 2020 and the first half of fiscal 2021. In connection with one of these five properties, we've entered into a commitment to obtain a 10-year fully amortizing mortgage loan of $9.4 million with a fixed interest rate of 3.47%. We expect to continue to grow our high-quality acquisition pipeline further during fiscal 2020. During the quarter, we raised approximately $15.5 million in equity capital through our dividend reinvestment plans. Of this amount, a total of $4.2 million in dividends were reinvested, representing a 26% participation rate. We also raised $43.2 million in net proceeds through our preferred stock ATM program with a sale of 1.8 million shares of our six and an eighth Series C preferred stock at a weighted average price of $25 per share. Subsequent to the quarter end, we raised an additional $27.7 million in net proceeds through our preferred stock ATM program with a sale of 1.1 million shares at a weighted average price of $25.04 per share. Yesterday, we established a common stock ATM program that provides for the issuance of up to $150 million of our common stock at prevailing market prices. We are implementing the common stock ATM program for the flexibility that it provides to opportunistically access the capital markets and to best time our equity capital needs as we close on acquisitions. ATM programs, as most of you know, are widespread throughout the REIT industry. Our preferred ATM, which has been in place since 2017, has proven to be a very useful source of long-term capital to help fund our growth strategy. While we intend to opportunistically raise equity under our ATM program, Based on current prevailing prices, we do not expect to utilize the common ATM extensively at this time. Turning to the overall US industrial market, our property sector continues to perform exceptionally well. As per Cushman and Wakefield's fourth quarter report, net absorption for the fourth quarter was 68.8 million square feet. This brings year-to-date net absorption to 233.8 million square feet, representing the 39th consecutive quarter of positive net absorption. Net absorption has been greater than 200 million square feet for six consecutive years. U.S. industrial vacancy rate remained unchanged during the quarter at a record low of 4.8%. Weighted average asking rents increased 2.4% over the prior year period to $6.51 per square foot. Currently, there is approximately 321 million square feet of industrial product under construction, representing a 14 percent increase over the prior year period. The overall U.S. economy remains healthy, with Q4 real GDP growing at 2.1 percent and at 2.3 percent for the full year, driven primarily by strong retail spending and record employment. U.S. manufacturing expanded last month for the first time in six months. Lastly, while it remains to be seen how the coronavirus situation plays out, it is a reminder that black swan events do appear suddenly, surprising and disrupting the global marketplace in profound ways that algorithms are, in my opinion, ill-prepared for. The widespread growth of passive index investing has resulted in the two largest components of the S&P 500 now becoming bigger than the entire Russell 2000. Further illustrating this point, the five largest companies now make up 20 percent of the entire S&P 500. In other words, the broad market has narrowed substantially due in no small manner to the widespread growth of passive index investing. Because Monmouth's income streams are secured by long-term leases to investment-grade tenants, we have been a safe harbor in turbulent times. Even during the depths of the Great Recession, Our shareholder dividends were paid without missing a beat. With reliable dividends should come patience and less volatility. And now let me turn it over to Rich so he can provide you with more detail on the property level as well as our progress on the leasing front.