Plymouth Industrial REIT, Inc.

Good morning and welcome to the Plymouth Industrial REIT fourth quarter 2021 earnings 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 your question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tripp Sullivan of SCR Partners. Please go ahead.

Thank you. Good morning. Welcome to the Plymouth Industrial REIT conference call to review the company's results for the fourth quarter of 2021. On the call today will be Jeff Witherall, Chairman and Chief Executive Officer, Penn White, President and Chief Investment Officer, Dan Wright, Executive Vice President and Chief Financial Officer, Jim Connolly, Executive Vice President of Asset Management, Anthony Saladino, Chief Accounting Officer, and Anne Hayward, General Counsel. Our results were released this morning in our earnings press release, which can be found on the Investor Relations section of our website, along with our Form 10-K and supplemental, followed with SEC. A replay of this call will be available shortly after the conclusion of the call through March 2nd, 2022. Numbers to access the replay are provided in the earnings press release. For those who listen to the replay of this call, we remind you that the remarks made herein, as of today, February 23rd, 2022, it will not be updated subsequent to this call. During this call, certain comments and statements we make may be deemed forward-looking statements within the meaning prescribed by the securities laws, including statements related to the future performance of our portfolio, our pipeline of potential acquisitions and other investments, future dividends, and financing activities. All forward-looking statements represent Plymouth's judgment as of the date of this conference call and are subject to risk and uncertainties that can cause actual results to differ materially from our current expectations. Investors are urged to carefully review various disclosures made by the company, including the risk and other information disclosed in the company's filings with the SEC. We also will discuss certain non-GAAP measures, including but not limited to core FFO, AFFO, and adjusted EBITDA RE. Definitions of these non-GAAP measures and reconciliations to the most comparable GAAP measures are included in our filings with the SEC. I'll now turn the call over to Jeff Witherill. Please go ahead.

Thanks, Tripp. Good morning, everyone, and thank you for joining us today. By any measure, I think 2021 was a very good year for Plymouth. Before I get into the details, I want to first thank our entire team in Boston as well as the regional offices in Columbus, Memphis, and Jacksonville for a strong finish to 2021 and for making it possible to report these results. I've talked about the next 12 to 18 months as a period of transformation for our company. We have an opportunity to continue growing in our markets, We have a large percentage of our leases rolling over in a historically strong period of rent growth, and we have an opportunity to continue to simplify and strengthen our balance sheet. Throughout the fourth quarter and to date in the first quarter, we have turned those opportunities into reality. Another recognition that we've shared as a company was the inclusion in the RMZ at the end of November. This was a significant milestone for us and should help elevate our visibility within the REIT sector. It's just a milestone, though, and we are focused on how we drive growth from here. Turning to our key operating stats for the quarter, we ended up at year-end where we had anticipated. Occupancy was 97.4%. Cash releasing spreads were 22.1% and 11.1% for the full year, with over 5 million square feet signed during the year for 2021 expirations. Same-store NOI on a cash basis was up 7.6%. Rent collections were 99.9%, and core FFO and AFFO per share were in line with our forecast after factoring in a slightly higher share count. In addition to the strong leasing activity, we had another record quarter of acquisitions. The use of the ATM provided us with the capital to fund our completed acquisitions as well as those assumed in our 2022 guidance. What we have projected for Q1 2022 and early Q2 would represent one of our larger starts to the year in recent memory. Our development program continues to gain momentum with 10 projects currently in various stages of planning and development in four different markets, with three of them currently under construction or active development. All told, we believe these projects will total 1.15 million square feet and represent an investment of approximately $87 million, with a resulting yield targeted in the high single-digit range. In Cincinnati, at our Fisher Industrial Park, we finished installing floors over the open crane pit areas in Q4 to create an additional 150,000 square feet had an investment of approximately $4.3 million. As of this quarter, all of that new space is leased and occupied. We have two additional projects currently underway. The first project is two separate new buildings totaling almost 330,000 square feet that are under development on additional acreage on the site. We are on schedule to break ground with the first by early April and the second building during the summer. The second project is a potential third building that could be developed during 2023. At our $7.5 million, 70,000 square foot ground up development in Portland, Maine, we completed construction of the shell in December and expect to have a certificate of occupancy this quarter. Half of this building is leased commencing July 1st, and we are working on proposals with other prospects for potentially earlier occupancy of the balance of the space. We broke ground on a new $13 million, 240,000 square foot industrial building in Atlanta in Q4 and expect to complete construction in Q3 of this year. There are active proposals being worked with prospects for this building looking to occupy later this year. We are under development with another 180,000 square feet on an adjacent site that is likely to begin construction later this year. Moving to Jacksonville, there are four buildings in the design phase right now, for which we are waiting on final permitting. These are all located within two of our existing business parks and will total approximately 175,000 square feet of new space. Construction should start before the summer and we expect to have these buildings fully leased early to mid 2023. As a reminder, the development projects we are currently pursuing are adjacent to existing properties of ours or directly on site. All of them are on land we already own and were included in the original purchase price, essentially unlocking value from additional space that was unrealized on our balance sheet. We have tightly controlled the size and scope of our new development program so that it complements our acquisitions and market cluster strategy while leveraging the leasing expertise we have within these markets. Given the amount of investment in projects under construction and projected by year-end, we do expect this program to temporarily add to our leverage until they are online, but we believe the returns more than compensate for that. As you've heard me say before, our top priorities with the balance sheet are to ensure that our dividend is well covered, that our leverage profile continues to improve, and that we have access to multiple sources of capital. We did a great job managing those priorities again in 21, and based on our outlook for improvement in all three areas, the Board elected to increase our quarterly common stock dividend by 4.8%, effective with the first quarter dividend of 2022. Even with this increase, we continue to have one of the lowest payout ratios in our industry. Strength of the economy, the ongoing challenges to the supply chain, and availability of labor continue to hit the headlines every time we look. We believe each of these trends is driving the fundamentals within the industrial sector, particularly within where we are focused, from the first mile to the last mile. This is not only the time to own industrial buildings, but also the time to own them where we do, with strong rent growth, a lower relative basis, and a team full of real estate operators. Penn, why don't you walk us through our acquisition activity?