Plymouth Industrial REIT, Inc.

Good day and welcome to the Plymouth Industrial REIT fourth quarter 2022 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the start key followed by zero. After today's presentation, there will be an opportunity to ask questions. 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 2022. On the call today will be Jeff Witherell, Chairman and Chief Executive Officer, Penn White, President and Chief Investment Officer, Anthony Saladino, Executive Vice President and Chief Financial Officer, Jim Connolly, Executive Vice President of Asset Management, and Anne Hayward, General Counsel. Our results were released this morning in our earnings press release, which can be found on the Best Relations section of our website, along with our Form 10-K and supplemental filed with the SEC. A replay of this call will be available shortly after the conclusion of the call through March 2, 2023. The numbers to access the replay are provided in the earnings press release. For those who listened to the replay of this call, we remind you that the remarks made herein or as of today, February 23, 2023, and 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 SEC. We will also discuss certain non-GAAP measures, including but not limited to core FFO AFFO, and adjusted EBITDA. 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 Witherow. Please go ahead.

Thanks, Tripp. Good morning, everyone, and thank you for joining us today. To restating the obvious, 2022 was an interesting and exceptionally busy year. Under the busy category, We expanded our vertical integration strategy by adding an office in Atlanta and bringing close to 70% of our portfolio under in-house property management. In addition, we leased 7.8 million square feet, acquired 254 million of properties, and made major strides in simplifying our capital structure. Under the interesting category, 2022 was a year of rising interest rates, rampant inflation, and an almost complete halt to the transaction market. Amid all this change, there were a few constants, namely the commitment of our people to be responsive to our tenants' needs, to find new opportunities to push the company forward, and to create value for our fellow shareholders. This commitment, along with the backdrop of strong fundamentals in the Golden Triangle markets, helped the internal growth of our portfolio come to the forefront in the fourth quarter. Occupancy improved to 99% from 97.4% at the end of 2021. Cash releasing spreads were up 18.1%, up 18.5% for the year. Same store NOI on a cash basis was up 10.7%, exceeding the top end of our full year forecast. Rent collections remained well over 99%. Core FFO per share was 44 cents, bringing us to the midpoint for the year. And AFFO per share was up 7.7%. Every week, I canvass our entire asset and property management team and begin with a simple question. How do you feel? Their response remains unchanged. We feel good. We're still not seeing indications of a slowdown in fundamentals. Our tenants are coming to us with space demands to meet their growth needs. Leasing velocity is strong, and our conversations around renewals continues to be robust. it's natural to expect that if the economy begins to come under stress, that we would see that manifest in our tenants. But to date, we have seen very little evidence of that. Our outlook for 2023 is best described as cautiously optimistic. As Penn will describe later, we are seeing a large number of announcements on reshoring and nearshoring initiatives that are impacting the Golden Triangle with new demand catalysts. We are in front of that trend with our diversified focus on the Golden Triangle markets and 90% of our properties located in the region. While we are uncertain if there will be a hard or soft landing in the US economy in the second half of the year, or for that matter, no impact at all, we believe we are well positioned for either outcome. Our asset management and property management teams have addressed most of our 2023 lease expirations, putting our expiring leases below 10% of the overall portfolio for the first time in years. To put this in perspective, the 7.6 million square feet we signed and commenced in 2022 for terms longer than six months was equal to all the leases we signed and commenced in 2020 and 2021 combined. While that's a good thing from a real estate perspective, it will temporarily limit our ability to capture the 18 to 20% mark to market that exists within our portfolio. Our development program is another example. We have unlocked the value of land held in the portfolio with over 643,000 square feet completed or under construction and with expected returns in the range of 7% to 9% on this $49 million investment. We will get to the leasing done to hit these returns, and that's a top priority. The timing of the leasing and occupancy is more weighted to the second half of the year. While that's on average one to two quarters later than originally anticipated, We have been able to source external growth at several hundred basis points above current market returns. Our capital structure is another facet of the business that should see sequential improvement during the year as a gradual de-levering takes place with higher EBITDA growth from the new developments coming online and strong organic growth from our same store properties. We eliminated the Series B preferred stock by conversion in 2022. which was a big step in simplifying the balance sheet. We know where we need to be with leverage, and we will get there. Overall, I'm more confident than ever that we have the right strategy, that our markets within the golden triangle are going to deliver significant returns over the next five to 10 years, and that we have a team who is fully committed to maximizing value in our portfolio. 2023 is an important year for Plymouth, and we are laser focused on achieving each one of the priorities I've outlined today. Ben, why don't you take it from here?