Plymouth Industrial REIT, Inc.

Hello and welcome to the Plymouth Industrial REIT third quarter 2023 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 a question, you may press star then one on your telephone keypad. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Trip Sullivan of SCR. Please go ahead.

Thank you. Good morning. Welcome to the Plymouth Industrial Reef Conference call to review the company's results for the third quarter of 2023. On the call today will be Jeff Witherill, Chairman and Chief Executive Officer, Anthony Saladino, Executive Vice President and Chief Financial Officer, Jim Connolly, Executive Vice President of Asset Management, and Ann 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 10Q and supplemental filed with the SEC. A replay of this call will be available shortly after the conclusion of the call through November 9th, 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 are as of today, November 2nd, 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 law, including statements related to the future performance of our portfolio, potential acquisitions, dispositions, 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 risks 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 balance with the 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 SEC. And now I'll turn the call over to Jeff Witherow. Please go ahead.

Thanks, Tripp. Good morning, everyone, and thank you for joining us today. Our third quarter operating metrics reinforce my belief that our properties located within the golden triangle are well positioned to capture the demand from a broad array of users. We experienced a 24.1% increase in rents on a cash basis for the quarter and expect to be higher than 20% for all leases commencing in 2023. That's at the high end of our 18 to 20% mark to market. We've also addressed our over 93% of our 2023 expirations and have made a lot of progress on 2024 expirations. Organic growth remains on track as well with a 6.8% increase on a cash basis through the first three quarters of the year in same store occupancy of 98.6%. In the Golden Triangle markets, we're seeing positive space absorption, continued market rent growth, and favorable supply demand environment for our type and size of space. We expect to roll out a new white paper on the Golden Triangle ahead of NA REIT this month, but we have continued to see further investment in these markets that indicates there should be a substantial demand associated with the onshoring and nanshoring for many years to come. We believe we continue to be in the right markets at a low per square foot basis and able to provide attractive space to tenants that need greater access to these markets or might operate with more of a focus on margin. In our development program, we delivered two projects during the quarter. The first is our second building in Atlanta, which has a new lease for 72,000 square feet that commenced in September. We have proposals under consideration for the balance of the space. The other building is in Jacksonville, where we have a single tenant fully leased that also commenced in September. Our final building in our Phase I development program is under construction in Jacksonville. It is fully leased and expected to deliver in mid-2024. As we've noted before, tenants are taking a little more time to make decisions on this new space, but we essentially have two spaces left to lease in the new developments, and we have active proposals under consideration for both. Improving our capital structure through disciplined capital allocation has been a major initiative for us. We demonstrated our commitment to this improvement during the quarter with the elimination of the Series A preferred stock, strategic execution of the ATM program at prices close to our NAB, and the disposition of an industrial building in Chicago for a substantial gain. As a result of these decisions, we lowered our net debt plus preferred metric for the sixth straight quarter. At 6.7 times as of quarter end, we exceeded our year-end goal of seven times ahead of schedule we are on a path to further gradual de-levering in 2024. Yesterday, we also took care of our largest debt maturity with the payoff of the AIG loan. I'll let Anthony get into the details, but I do want to call out that our initiatives to swap our debt at the beginning of the year have put us in a good position. I want to focus on the September disposition for a moment. We had previously identified several properties that could be potential disposition candidates for real estate decisions. One of these factors was if it made more sense for an owner-user, and that was the case with 6510 West 73rd Street in Chicago. We sold that property for $19.9 million, which was a price of $65 per square foot, yielding a 4.9% cap rate on in-place NOI and an IRR of 31.1% over a six-year hold. After paying off a mortgage on the property, we had nearly $14 million in net proceeds to combine with the ATM proceeds to eliminate the Series A preferred. We have another disposition that is under contract to sell by year-end for $16.8 million. This property is our only asset in New Jersey and should result in another gain on sale. This expected sale provides additional proceeds for debt repayment and or acquisitions and eliminates a market where we did not have any scale, another factor we'd previously identified. We will continue to evaluate buildings that, for real estate reasons, we no longer desire to hold. For what remains of 2023, you can expect us to be laser-focused on getting our remaining spaces leased in the development program and taking advantage of the leasing opportunities ahead of us in the existing portfolio. We will also continue to take a hard look at how we might apply any proceeds from additional dispositions to reduce debt and or fund acquisitions on an accretive basis and set us up for a successful 2024. Jim, why don't you provide some color on the leasing activity?