Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 4, 2024

Modiv Industrial, Inc.

(Exact name of registrant as specified in its charter)

Maryland		001-40814		47-4156046
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

200 S. Virginia Street, Suite 800 Reno, Nevada		89501
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (888) 686-6348

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class C Common Stock, $0.001 par value per share	MDV	New York Stock Exchange

7.375% Series A Cumulative Redeemable Perpetual Preferred	MDV.PA	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.

Results of Operations and Financial Condition

On March 4, 2024, Modiv Industrial, Inc. (formerly known as Modiv Inc.), a Maryland corporation (the “Company”), issued an earnings press release relating to the Company’s financial results for the fourth quarter and full year ended December 31, 2023. A copy of the press release is available on the Company’s website, is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The Company also released supplemental data on the Company’s website relating to the Company’s portfolio information as of December 31, 2023 and its financial results for the fourth quarter and full year ended December 31, 2023. A copy of the supplemental data is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2 are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless it is specifically incorporated by reference therein. References to the Company’s website in this Current Report on Form 8-K and in the attached Exhibits 99.1 and 99.2 to this Current Report on Form 8-K do not incorporate by reference the information on such website into this Current Report on Form 8-K and the Company disclaims any such incorporation by reference.

Item 7.01.

Regulation FD Disclosure

On March 4, 2024, the Company issued an earnings press release relating to the Company’s financial results for the fourth quarter and full year ended December 31, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The Company also released supplemental data on the Company’s website relating to the Company’s portfolio information as of December 31, 2023 and its financial results for the fourth quarter and full year ended December 31, 2023. A copy of the supplemental data is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

The furnishing of this earnings press release and supplemental data are not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the earnings release and supplemental data include material investor information that is not otherwise publicly available. In addition, the Company does not assume any obligation to update such information in the future.

The information in Item 7.01 of this Current Report, including Exhibits 99.1 and 99.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act or the Exchange Act, unless it is specifically incorporated by reference therein.

Item 9.01.

Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description

99.1	Modiv Industrial, Inc. Earnings Press Release dated March 4, 2024

99.2	Modiv Industrial, Inc. Supplemental Data For The Year and Quarter Ended December 31, 2023

104	Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MODIV INDUSTRIAL, INC. (Registrant)

	By:	/s/ RAYMOND J. PACINI
		Name: Raymond J. Pacini
		Title: Chief Financial Officer

Date: March 4, 2024

Exhibit 99.1

Modiv Industrial Announces Fourth Quarter and Full Year 2023 Results

Management Provides Forward-Looking Thoughts

Reno, Nevada, March 4, 2024 – Modiv Industrial, Inc. (“Modiv Industrial”, “Modiv”, the “Company”, “we” or “our”), (NYSE:MDV), the only public REIT exclusively focused on acquiring industrial manufacturing real estate, today announced operating results for the fourth quarter and full year ended December 31, 2023.

Highlights:

•

Annual revenue of $46.9 million increased 7.1% year-over-year compared with 2022 revenue of $43.8 million. 2022 revenue included a $3.8 million non-recurring early lease termination fee and excluding that fee, 2023 revenue increased $6.9 million, or 17.3%.

•

Full year 2023 AFFO of $14.7 million, or $1.33 per diluted share, exceeding street expectations by $0.04 per share.

•

Fourth quarter revenue of $12.3 million increased $2.3 million year-over-year, or 23%, excluding the 2022 lease termination fee.

•

Fourth quarter AFFO of $4.5 million, or $0.40 per diluted share, exceeding street expectations by $0.05 per share.

•

Sold and issued 162,063 shares of MDV common stock between November 15, 2023 and January 29, 2024 at an average price of $15.22 per share.

•

December 29, 2023, prepaid the remaining $3.0 million balance of the mortgage on our Rancho Cordova, California property leased to the State of California’s Office of Emergency Services, resulting in no debt maturities until 2027.

•

January 10, 2024, sold our Sacramento property leased to Levins for $7.0 million.

•

January 11, 2024, entered into a contingent purchase and sale agreement to sell our Issaquah, Washington office property (currently leased to Costco until July 31, 2025) to a national home builder for $28.7 million which would close no later than August 15, 2025.

•

January 31, 2024, completed the stock distribution of Generation Income Properties, Inc. (NASDAQ: GIPR), common stock to the stockholders of Modiv Industrial.

•

February 28, 2024, sold our Nashville, Tennessee office property leased to Cummins for $7.95 million.

•

Currently have a cash balance of $17.9 million and full availability on our $150 million revolving credit facility.

“We’ve now been public for over two years, having listed without any shareholder lock-ups on February 11, 2022, mere weeks before the Russian invasion of Ukraine and the Fed’s expedient climb up the yield curve. To date, our entire publicly-traded existence has been during one of the more pronounced risk-off trade environments. REITs have been plagued by a historic increase in interest rates and a backdrop of heightened geo-political risk and price volatility. All of this has effectively left public REITs, who rely upon the capital markets, bereft of an opportunity to show meaningful growth. Yet, Modiv Industrial, a diminutive tardigrade of the stock market, has been able to produce eight quarters of transformational growth – accretively shedding non-core assets while building a stalwart industrial manufacturing portfolio. We may currently be the size of a water bear, but we have the fighting spirit of a grizzly.

For those quant hedge funds and the AI text bots still with us, feel free to drop off as the remainder of this release has more words than numbers and has been written for those that spend their time analyzing management’s thinking.

Business Outlook:

Acquisitions – Yes, that’s right, no acquisitions for fourth quarter or YTD 2024. As we mentioned in last quarter’s release, we take the Buffett-esque view that, at this stage of the market cycle, we can afford to stand over the plate looking for the fat pitch without fear of strikes being called. We saw several pitches, even a few where our grip of the bat twitched a bit, but we didn’t swing. What did swing though was market sentiment, with greed and fear tussling about, from a December sentiment when folks were speculating about a March Fed cut to recent rhetoric fearing that the Fed might not cut at all this year. We believe that there will be no shortage of assets to acquire, and we believe this because we have no shortage of the patience needed to wait for the right opportunities.

Dispositions – $135 million of assets sold across 24 properties (including 10 office) in the past two years is no small feat. When I first joined this firm, nearly 55% of the portfolio was office and less than 20% industrial. With our recently announced sale contract with a national homebuilder to buy our Issaquah, Washington office asset, we are now down to two office properties which I have the highest confidence will be the easiest to sell. Two years ago we quickly surmised that few would pay attention to our transformation while it was happening, but they sure as heck would pay attention to see that it did happen. Happen it has, drama-free and at a fast clip. There is still some portfolio maneuvering to be completed, with some likely to occur in 2024, so we will continue to keep our nose to the grindstone.

Balance Sheet – We now have $281 million of indebtedness, 100% of which is at fixed rates, with a weighted average interest rate of 4.52% and a weighted average maturity of 3.4 years with the earliest maturity not until January 2027. Our debt to asset ratio is 48%, our debt to adjusted EBITDA multiple is 6.6x.

Barring a compelling consolidation or M&A opportunity, we do not see any further benefit in using additional leverage and intend to make any single asset purchases on an unlevered basis with the intent that our $150 million revolver will be used only in those instances where there may be a short-term timing mismatch.

A healthy counterbalance to our manageable debt load is a ~$600 million portfolio of 42 assets producing over $44 million of net operating income, contractually growing about 2.5% per annum, with a hearty weighted average lease duration of approximately 14 years. Any future acquisitions, most likely on the heels of our remaining capital recycling activity, will help to further strengthen our future.

Strategic Partner – For those who are new to this topic, we encourage you to read our third quarter 2023 earnings release for a bit of back story. For those anxiously waiting to decipher our latest cave paintings, we are now under ten nondisclosure agreements (with several others working with public info only) with a list of organizations that are well known and far more impressive than us. Yes, many of these organizations are private-equity (PE) firms, or at the very least have private-equity mindsets. We hereby affectionately call this journey ‘Project Fuh’.

For those who don’t know, a stereotypical dialogue with a potential PE partner goes something like this…1) an enthusiastic kick-off call with a lot of friendly banter, from them, about how their firm’s flexibility and creativity can help MDV; 2) a nearly glazed over look from them when you describe that which you seek, all the while, nodding their heads in agreement; 3) a healthy due diligence deep dive, typically on the backs of some junior analyst tasked to complete too many models in too short a time frame; and 4) an end result whereby they tell you they need a total rate of return that you might find more appropriate for a growth stock like Nvidia or Tesla all the while seeking a guaranteed, or nearly so, repayment of any capital they invest.

Clearly, I jest (in part) as not all our conversations suffered from such hyperbole, but several did. I feel for them though as they have all raised institutional funds predicated on past performances and today’s market is not yet feeding them the deals like they saw in yesteryears. We get it, they are the titans of the money universe, and they are used to getting their way with wayward companies lining up with hats in hand seeking alms. Alas, even though we are a lowly REIT who would enjoy some capital, we don’t own a hat and, as such, aren’t in any state of desperation.

That said, all is not lost. We have had some very productive conversations with firms that believe in our asset class and see the opportunity. We have discussed terms with these parties that are worthy of continued consideration. Terms that contemplate contributing industrial manufacturing assets in exchange for equity. Terms that contemplate contributing additional equity capital to be used to further consolidate the many buckets of manufacturing assets out there that we know exist (and that we actively monitor). Terms that could, potentially, accelerate our transformation and provide the scale our REIT needs to be even more vibrant. Terms that might just be actionable. Our management team is working with our independent board of directors to contemplate, discern and diligence all the varying terms that have been discussed. There is nothing material to report today, and there may never be, but there is more to come on this topic.

Sundry thoughts:

Raison D’etre – I have long been a fan of Simon Sinek’s classic, Start With WHY, and how it advocates for having a clear purpose. A large part of our job as management, beyond the buying and selling of real estate, is to educate those who wish to know more. One of the more common questions I get is ‘Why Manufacturing?’. Let’s tackle this question with a rhetorical triangle…

Logos – 1989 marked a seminal year for U.S. manufacturing, it was the year that Eastman Kodak not only decided to outsource their manufacturing to a third party, but they did so overseas. Sure, as early as the late 70’s we saw a few international manufacturing conglomerates shuffle production to their various owned facilities across the globe, but Kodak’s decision began an accelerated trend in U.S. business to ‘offshore’ large swaths of the once dominant U.S. manufacturing capability. As we know, China was one of the earliest to capitalize on this trend by building manufacturing facilities which in turn helped fuel its multi-decade economic growth and improved the economic quality of life of many Chinese citizens. Concurrently, countless business school professors began to teach the glorious simplicity of a global-just-in-time-delivery supply chain model whereby the smart corporate manager could globally arbitrage labor costs, keep thin inventories and benefit from being an asset-light company. For the past thirty years, the U.S. consciously chose to underinvest in U.S. manufacturing and fully embrace a supply chain model that was inherently dependent on the premise that it would always work.

Flash forward to 2020 and we have seen rampant supply disruptions emerge from a slew of uncharacteristically frequent ‘black swan’ events to include the COVID-19 pandemic (LINK), the Russian invasion of Ukraine (LINK), the physical limitations of the Panama Canal (LINK) and the geo-political risk threatening the Suez Canal/Red Sea (LINK).

The culmination of events has led to considerable economic, military, and political discourse. Thought leaders now clearly recognize that the past 30+ year pursuit of economic profit has resulted in a massive under investment in U.S. manufacturing capacity, particular for those critical infrastructure items that are essential to a nation’s viability (LINK).

As a result of the new level of awareness, we have witnessed the emergence of several government economic initiatives (e.g. CHIPS Act, etc.) to spur a long-term manufacturing reinvestment process while at the same time many corporate leaders have decided to accept the risk of higher cost of goods sold for their critical components in order to reduce, or eliminate, the risk of even costlier supply chain disruptions. The value of domestic manufacturing has come back into our collective purview and strong economic tailwinds for the sector have only just begun.

We own manufacturing assets because we clearly see their critical need, their economic value and believe that countless others will soon begin to see the same.

Pathos – Modiv’s culture is about as politically agnostic as they come (think purple and balanced), but when it comes to our fellow citizens, we patriotically bleed red, white and blue. For me personally, maybe it’s part of my origin, living in a trailer in Indiana when my dad got promoted from electrician to the maintenance supervisor at a manufacturing facility. Or maybe it’s the time I spent working in a poultry processing factory in West Virginia or the time I spent in the United States Air Force learning how to fix electronics in Mississippi. Or maybe it’s what I learned from my father and uncles who worked summer jobs picking cotton in the Arkansas heat. Whatever the reason, I care deeply about the well-being of our nation, about our collective quality of life and the belief that the rungs of life’s ladder should at least attempt to lead us to a better vantage point. I know that my team cares as much as I do. As such, we are mindful of capitalism’s impact on human life as it marches toward the never-ending goal to maximize profit. REITs, being capitalistic constructs, exist to maximize real estate profit for their investors; however, such pursuits can sometimes have unintended consequences. For example, in the net-lease REIT sector, most of these REITs rely upon the continuous consumption of cheap goods by the American citizen as their portfolios are chock full of dollar stores, fast food chains, pharmacies, car washes and, in some instances, even casinos – all capitalistic venues that entice individuals to spend their money on things they very likely don’t need. So many of these property concepts sell things and so few make things.

If you travel the heartland of America, like we do when we tour manufacturing assets, you see so many small towns pervaded with low paying, low skill retail jobs and their streets lined with redundant franchises. Yes, on the margin, we do need elements of these retail concepts, but overall, it definitely reminds us that too much of something can be detrimental in the long run.

We own manufacturing assets because we believe that, as humans, we benefit more in our daily lives from making things of critical value rather than the constant consuming of things of questionable value.

Ethos – A REIT’s management team, and particularly the role of the CEO, exist to advocate for, and steward the well-being of, the capital entrusted by its many REIT investors. It is a prerequisite that a company’s leadership have the necessary levels of expertise, integrity, and alignment to perform their duties. However, it is rare in the for-hire executive ranks to find leadership that holds the same level of extreme passion for their business, mission, and advocacy as we find from the famous entrepreneurs that we have all come to admire and fawn over. When I invest my hard-earned capital in a particular stock, I want the leader of that company to be absolutely relentless in thinking about all that can go wrong while focusing on making sure as many things go right. Further, I want them to be a raving fan for the investment at a level of motivation that no compensation can induce.

Maybe because of my background, I find that I resonate with this asset class at a level that likely makes me look a bit different than your standard REIT CEO – and I am ok with that. I feel blessed to be the scrappy type who can tirelessly champion the benefits of owning manufacturing real estate to all that will listen. Culturally here at Modiv, we are comfortable with the role of the underdog and wake up every morning willing to fight the fight by embracing our inner Johnny Cash (LINK).

We own manufacturing assets because we are extraordinarily passionate about this asset class, for our investment thesis and for the tremendous upside potential we see for all MDV investors.

Calf Kicks – I have been a fan of the UFC for about 20 years, rarely missing a PPV. Over the years I have witnessed the evolution of this form of combat sport as the tactics, strategies, athleticism, and skills have been honed to an impressive degree. One byproduct of this evolution is the calf kick. Whereas the jab exists for the upper body, the calf kick exists for the lower body. A hard and fast kick to the calf, especially right below the knee, can stun or stumble a fighter. Excessive kicks to the calf, usually a result of someone not learning to avoid them, will likely leave a fighter limping out of the octagon - possibly with a loss and a pair of crutches. However, a few kicks to the calf early in the fight do not portend failure but rather are more likely to cause the best champions to alter their gameplan, learn valuable lessons and go on to prevent calf kicks, and their resulting pain, altogether. Oftentimes, those initial kicks will make you better.

We pride ourselves here at Modiv on being candid and transparent. It would be disingenuous for us to only speak of the great things and never deal with the not-so-great. Like everyone, our stuff can stink too, and we have recently suffered from a few non-fatal, kicks to our proverbial calf (e.g. Kalera).

As we have stated in our SEC filings over the past quarters and in our forthcoming 2023 Form 10-K, Kalera, which was the tenant in our Saint Paul, Minnesota, property filed for bankruptcy protection and is seeking to reject our lease. Kalera’s mistake was relying upon a SPAC transaction to successfully close amidst the massive risk-off market environment that resulted from the Fed’s rate increase – it didn’t go according to their plan. Beyond them no longer paying rent, they left several mechanics liens on the property that we ultimately had to pay. The process is ongoing, but we fully expect that we will soon have full control over the destiny of this property. Given the leasing and sale prospects we have for the asset as well as the value confirmation from two recent independent appraisals valuing it at an average of $11.9 million compared to our net $10 million cash investment, we currently see a path forward with this property that could very well end up with no economic loss. Lucky for us we have a property in a prime location that had a massive amount of capital expenditure (including refrigerated space) installed by Kalera as they renovated the space to become a premier indoor growing facility.

We are grateful this investment hasn’t resulted in a broken nose or a concussion, but as a REIT team always looking to improve, we have learned a few lessons to prevent future calf kicks. Namely, we will no longer invest in early stage or pre-revenue growth concepts without substantial credit behind the lease. Instead, we will continue to hone our focus on those assets which have benefitted from survivorship bias having survived years of global outsourcing and multiple Federal Reserve Chairs. We will also never again do a related party transaction. Even though the fact that it was sourced, arms-length, from a related party had nothing to do with the lease failure, it is a terrible look if not a black eye. We have learned lessons; we have modified our gameplan and we will continue to strive to serve you better tomorrow than we did yesterday.

Wordy Missives – Why all the dialogue? Surely, some have contemplated that exact question. Despite errant speculation that maybe we are trying to emulate a certain oracle of the Midwest, the truth lies distinctly within two broader thoughts – 1) the simplicity of REITs and 2) infinite monetary returns.

If I may…

The simplicity of REITs – For those who have heard me speak, they have heard me say that this REIT business isn’t a terribly complicated one. There is no risk of life or limb, which makes for a better job than many. There are roughly 150 publicly traded REITs in North America, with a rough average of three named executive officers per REIT – let’s round up and say there are 500 of these so-called ‘executives’. If you think about it, that is a more exclusive club than what you might find with the NFL, MLB, or NBA. If the REITs are the teams, then management are the players. You, the savvy REIT investor, get to choose the players that you want to play in your league.

In the simplest of terms, a REIT investor must form an opinion on three primary things…the asset class, the balance sheet and the quality of management. The asset class is easy to ascertain and either the potential investor likes it or doesn’t. Next is the balance sheet which is something that is best taken in a relative context given that balance sheets can, and do, change – for better or worse. You might not like a balance sheet today, but maybe you can see how you could like it, with some changes, tomorrow. Of course, the asset class and the balance sheets are subject to the decisions made, in large part, by the management team, and it is here, on this third tenant of REIT simplicity, that compels us to share more (not less). As a genuine REIT nerd, I have read so many press releases and listened to so many earnings calls. In the vast, vast, majority of these instances you are left with a word soup that feels like it was written by either an investor relations professional, an accountant or an attorney – effectively saying nothing. As management, we understand that your job is to figure out if we will make good ‘plays’ with your capital and not fumble the ball. The less we say with candor, the less we share on how we are thinking, then the harder it is for you to figure out if we are any good. You, the savvy REIT investor, will figure out our thinking by hook or by crook, sooner or later. Why not sooner? Why not be open with our thinking so that you can get on with your investment choice. That’s the first reason why we will continue to share more and not less.

Infinite monetary returns – Have you ever picked up a penny off the ground? I do every chance I can because that one cent of monetary return is infinite when you consider I invested no money in exchange for that penny (a dime is a real treat because I liken it to a monthly MDV dividend). Most don’t know this, but when you list on a public stock exchange you typically get some listing benefits. In our case, when we listed on the NYSE, we got four years’ worth of earnings press releases for free. A typical press release might cost you anywhere from $500 to $1,000, some newswire companies charge by the word. Even if this press release cost $1,000, it would be a worthwhile monetary investment because this press release will be accessible by millions of potential readers. Why spend multiples more for generic internet outreach or advertising for a lower potential return? Given that this particular press release was a proverbial penny found on the ground, it is truly an infinite monetary return for MDV. But wait, there is more…

Allow me to continue the use of abstract analogies this last time. The ‘stock market’ is arguably the biggest social media platform on the planet. Millions upon millions tune in every day to see what’s new and what’s changing. Countless of us have our favorite ‘feeds’ and we regularly consume copious amounts of ‘content’ that is generated by and about this ‘platform’. MDV, if we like it or not, is one of the many thousands of content creators on this platform. We believe it is better to produce candid content with the prospect that it will find its target audience in time rather than mimic everyone else and find no audience at all. To produce this content with a far-reaching, free press release is just smart money.

Ok, that’s a wrap. Until next time. Stay Modivated!” – Aaron Halfacre, CEO of Modiv Industrial.

Conference Call and Webcast

A conference call and audio webcast with analysts and investors will be held on Monday, March 4, 2024, at 8:30 a.m. Eastern Time / 5:30 a.m. Pacific Time, to discuss the fourth quarter and full year 2023 operating results and answer questions.

Live conference call: 1-877-407-0789 at 8:30 a.m. Eastern Time, Monday, March 4, 2023

Webcast: To listen to the webcast, either live or archived, please use this https://viavid.webcasts.com/starthere.jsp?ei=1658305&tp_key=83c3e36e04

or visit the investor relations page of Modiv’s website at www.modiv.com.

About Modiv Industrial

Modiv Industrial, Inc. is an internally managed REIT that is focused on single-tenant net-lease industrial manufacturing real estate. The Company actively acquires critical industrial manufacturing properties with long-term leases to tenants that fuel the national economy and strengthen the nation’s supply chains. For more information, please visit: www.modiv.com.

Forward-looking Statements

Certain statements contained in this press release, other than historical facts, may be considered forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements regarding our plans, strategies and prospects, both business and financial. Such forward-looking statements are subject to various risks and uncertainties, including but not limited to those described under the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 13, 2023. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in the Company’s other filings with the SEC. Any forward-looking statements herein speak only as of the time when made and are based on information available to the Company as of such date and are qualified in their entirety by this cautionary statement. The Company assumes no obligation to revise or update any such statement now or in the future, unless required by law.

Notice Involving Non-GAAP Financial Measures

In addition to U.S. GAAP financial measures, this press release and the supplemental financial and operating report included in our Form 8-K dated March 4, 2024 contain and may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures and statements of why management believes these measures are useful to investors are provided below.

AFFO is a measure that is not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See the Reconciliation of Non-GAAP Measures later in this press release.

Inquiries:

management@modiv.com

MODIV INDUSTRIAL, INC.

Consolidated Statements of Operations

For the Three and Twelve Months Ended December 31, 2023 and 2022

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Rental income	$	12,288,516		$	13,804,539		$	46,936,599		$	43,822,032

Expenses:
General and administrative		1,402,055			2,252,304			6,642,990			7,812,057
Stock compensation expense		1,381,001			660,170			11,171,207			2,401,022
Depreciation and amortization		4,147,570			4,347,809			15,551,173			14,929,574
Property expenses		731,081			1,537,690			5,161,017			6,547,391
Impairment of real estate investment property		888,186			2,080,727			4,387,624			2,080,727
Impairment of goodwill		-			-			-			17,320,857
Total expenses		8,549,893			10,878,700			42,914,011			51,091,628

(Loss) gain on sale of real estate investments, net		-			669,186			(1,708,801	)		12,196,371
Operating income		3,738,623			3,595,025			2,313,787			4,926,775

Other (expense) income:
Interest income		28,967			5,047			325,888			21,910
Dividend income		285,000			-			475,000			-
Income from unconsolidated investment in a real estate property		72,043			51,312			279,549			278,002
Interest expense, including unrealized loss on interest rate swaps and net of derivative settlements		(7,045,059	)		(2,826,491	)		(13,806,838	)		(8,106,658	)
Increase in fair value of investment in preferred stock		978,658			-			1,418,658			-
Loss on early extinguishment of debt		-			-			-			(1,725,318	)
Other		99,717			(104,158	)		297,695			93,971
Other expense, net		(5,580,674	)		(2,874,290	)		(11,010,048	)		(9,438,093	)

Net loss		(1,842,051	)		720,735			(8,696,261	)		(4,511,318	)
Less: net loss attributable to noncontrolling interest in Operating Partnership		546,967			42,508			2,082,419			1,222,783
Net loss attributable to Modiv Industrial, Inc.		(1,295,084	)		763,243			(6,613,842	)		(3,288,535	)
Preferred stock dividends		(921,875	)		(921,875	)		(3,687,500	)		(3,687,500	)
Net loss attributable to common stockholders	$	(2,216,959	)	$	(158,632	)	$	(10,301,342	)	$	(6,976,035	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.29	)	$	(0.02	)	$	(1.36	)	$	(0.93	)

Weighted-average number of common shares outstanding:
Basic and diluted		7,621,871			7,487,728			7,558,833			7,487,204

Distributions declared per common share (1)	$	1.3975		$	0.2875		$	2.2600		$	1.2500

(1)	Distributions for the three and 12 months ended December 31, 2023 include the distribution of GIPR common stock of $1.11 declared on December 29, 2023; and distributions for the 12 months ended December 31, 2022 includes a 13th distribution of $0.10 for 2021 that was declared on January 5, 2022.

MODIV INDUSTRIAL, INC.

Consolidated Balance Sheets

(Unaudited)

	As of
	December 31,
	2023			2022
Assets
Real estate investments:
Land	$	104,858,693		$	103,657,237
Building and improvements		399,666,781			329,867,099
Equipment		4,429,000			4,429,000
Tenant origination and absorption costs		15,707,458			19,499,749
Total investments in real estate property		524,661,932			457,453,085
Accumulated depreciation and amortization		(50,901,612	)		(46,752,322	)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net		473,760,320			410,700,763
Unconsolidated investment in a real estate property		10,053,931			10,007,420
Total real estate investments, net, excluding real estate investments held for sale, net		483,814,251			420,708,183
Real estate investments held for sale, net		11,557,689			5,255,725
Total real estate investments, net		495,371,940			425,963,908
Cash and cash equivalents		3,129,414			8,608,649
Tenant deferred rent and other receivables		12,794,568			7,263,202
Above-market lease intangibles, net		1,313,959			1,850,756
Prepaid expenses and other assets		4,173,221			6,100,937
Investment in preferred stock		11,038,658			-
Interest rate swap derivatives		2,970,733			4,629,702
Other assets related to real estate investments held for sale		103,337			12,765
Total assets	$	530,895,830		$	454,429,919
Liabilities and Equity
Mortgage notes payable, net	$	31,030,241		$	44,435,556
Credit facility revolver		-			3,000,000
Credit facility term loan, net		248,508,515			148,018,164
Accounts payable, accrued and other liabilities		4,469,508			5,881,738
Distributions payable		12,174,979			1,768,068
Below-market lease intangibles, net		8,868,604			9,675,686
Interest rate swap derivative		473,348			498,866
Other liabilities related to real estate investments held for sale		248,727			117,881
Total liabilities		305,773,922			213,395,959

Commitments and contingencies

7.375% Series A cumulative redeemable perpetual preferred stock, $0.001 par value, 2,000,000 shares authorized, issued and outstanding as of December 31, 2023 and 2022		2,000			2,000
Class C common stock, $0.001 par value, 300,000,000 shares authorized; 8,048,110 shares issued and 7,704,600 shares outstanding as of December 31, 2023 and 7,762,506 shares issued and 7,512,353 shares outstanding as of December 31, 2022		8,048			7,762
Class S common stock, $0.001 par value, 100,000,000 shares authorized; no shares issued and outstanding as of December 31, 2023 and 2022		-			-
Additional paid-in-capital		292,617,486			278,339,020
Treasury stock, at cost, 343,510 and 250,153 shares held as of December 31, 2023 and 2022, respectively		(5,290,780	)		(4,161,618	)
Cumulative distributions and net losses		(145,551,586	)		(117,938,876	)
Accumulated other comprehensive income		2,658,170			3,502,616
Total Modiv Industrial, Inc. equity		144,443,338			159,750,904
Noncontrolling interest in the Operating Partnership		80,678,570			81,283,056
Total equity		225,121,908			241,033,960
Total liabilities and equity	$	530,895,830		$	454,429,919

MODIV INDUSTRIAL, INC.

Reconciliation of Non-GAAP Measures - FFO and AFFO

For the Three and Twelve Months Ended December 31, 2023 and 2022

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Net (loss) income (in accordance with GAAP)	$	(1,842,051	)	$	720,735		$	(8,696,261	)	$	(4,511,318	)
Preferred stock dividends		(921,875	)		(921,875	)		(3,687,500	)		(3,687,500	)
Net loss attributable to common stockholders and Class C OP Unit holders		(2,763,926	)		(201,140	)		(12,383,761	)		(8,198,818	)
FFO adjustments:
Depreciation and amortization of real estate properties		4,147,570			4,347,809			15,551,173			14,929,574
Amortization of deferred lease incentives		(63,956	)		88,751			153,581			412,098
Depreciation and amortization for unconsolidated investment in a real estate property		188,889			203,554			756,610			777,041
Impairment of real estate investment property		888,186			2,080,727			4,387,624			2,080,727
Loss (gain) on sale of real estate investments, net		-			(669,186	)		1,708,801			(12,196,371	)
FFO attributable to common stockholders and Class C OP Unit holders		2,396,763			5,850,515			10,174,028			(2,195,749	)
Stock compensation for performance units expense		733,332			-			8,555,529			-
FFO excluding performance units expense		3,130,095			5,850,515			18,729,557			(2,195,749	)
AFFO adjustments:
Impairment of goodwill		-			-			-			17,320,857
Non-recurring corporate relocation costs		-			500,000			-			500,000
Stock compensation excluding performance units expense		647,669			660,170			2,615,678			2,401,022
Deferred financing costs		210,604			179,641			766,738			484,931
Loss on early extinguishment of debt		-			-			-			1,725,318
Due diligence expenses, including abandoned pursuit costs		-			25,051			347,598			661,222
Amortization of deferred rents		(1,704,137	)		(643,784	)		(6,232,257	)		(3,237,482	)
Unrealized loss (gain) on valuation of interest rate swaps, net		3,400,138			505,263			618,300			(25,733	)
Amortization of (below) above market lease intangibles, net		(211,600	)		(142,626	)		(807,794	)		(1,005,487	)
Unrealized gain on investment in preferred stock		(978,658	)		-			(1,418,658	)		-
Other adjustments for unconsolidated investment in a real estate property		17,821			5,815			53,278			5,251
AFFO attributable to common stockholders and Class C OP Unit holders	$	4,511,932		$	6,940,045		$	14,672,440		$	16,634,150

Weighted average shares outstanding:
Basic		7,621,871			7,487,728			7,558,833			7,487,204
Fully diluted excluding performance units (1)		10,728,076			10,195,869			10,593,160			10,225,850
Fully diluted (2)		11,202,591			10,195,869			11,067,675			10,225,850

FFO Per Share:
Basic	$	0.31		$	0.78		$	1.35		$	(0.29	)
Fully diluted	$	0.21		$	0.57		$	0.92		$	(0.29	)

FFO Per Share Excluding Performance Units Expense:
Basic	$	0.41		$	0.78		$	2.48		$	(0.29	)
Fully diluted	$	0.29		$	0.57		$	1.77		$	(0.29	)

AFFO Per Share:
Basic	$	0.59		$	0.93		$	1.94		$	2.22
Fully diluted	$	0.40		$	0.68		$	1.33		$	1.63

(1)	Excludes 474,515 performance units in accordance with the terms of the Operating Partnership Agreement.

(2)

Includes the Class M OP Units which were automatically converted to Class C OP Units on January 30, 2024, and Class P and Class R OP Units (time vesting and performance), which will be automatically converted to Class C OP Units on March 31, 2024, to compute the fully diluted weighted average number of shares.

FFO is defined by the National Association of Real Estate Investment Trusts (“Nareit”) as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships, joint ventures, preferred distributions and real estate impairments. Because FFO calculations adjust for such items as depreciation and amortization of real estate assets and gains and losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), they facilitate comparisons of operating performance between periods and between other REITs. As a result, we believe that the use of FFO, together with the required GAAP presentations, provides a more complete understanding of our performance relative to our competitors and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. It should be noted, however, that other REITs may not define FFO in accordance with the current Nareit definition or may interpret the current Nareit definition differently than we do, making comparisons less meaningful.

Additionally, we use AFFO as a non-GAAP financial measure to evaluate our operating performance. AFFO excludes non-routine and certain non-cash items such as revenues in excess of cash received, stock-based compensation, deferred rents, amortization of in-place lease valuation intangibles, deferred financing fees, gain or loss from the extinguishment of debt, unrealized gains (losses) on derivative instruments, and write-offs of due diligence expenses for abandoned pursuits. We also believe that AFFO is a recognized measure of sustainable operating performance by the REIT industry. Further, we believe AFFO is useful in comparing the sustainability of our operating performance with the sustainability of the operating performance of other real estate companies. Management believes that AFFO is a beneficial indicator of our ongoing portfolio performance and ability to sustain our current distribution level. More specifically, AFFO isolates the financial results of our operations. AFFO, however, is not considered an appropriate measure of historical earnings as it excludes certain significant costs that are otherwise included in reported earnings. Further, since the measure is based on historical financial information, AFFO for the period presented may not be indicative of future results or our future ability to pay our dividends.

By providing FFO and AFFO, we present information that assists investors in aligning their analysis with management’s analysis of long-term operating activities. For all of these reasons, we believe the non-GAAP measures of FFO and AFFO, in addition to income (loss) from operations, net income (loss) and cash flows from operating activities, as defined by GAAP, are helpful supplemental performance measures and useful to investors in evaluating the performance of our real estate portfolio. AFFO is useful in assisting management and investors in assessing our ongoing ability to generate cash flow from operations and continue as a going concern in future operating periods. However, a material limitation associated with FFO and AFFO is that they are not indicative of our cash available to fund distributions since other uses of cash, such as capital expenditures at our properties and principal payments of debt, are not deducted when calculating FFO and AFFO. Therefore, FFO and AFFO should not be viewed as a more prominent measure of performance than income (loss) from operations, net income (loss) or cash flows from operating activities and each should be reviewed in connection with GAAP measurements.

MODIV INDUSTRIAL, INC.

Reconciliation of Non-GAAP Measures - Adjusted EBITDA

For the Three and Twelve Months Ended December 31, 2023 and 2022

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2023			2022			2023			2022
Net (loss) income (in accordance with GAAP)	$	(1,842,051	)	$	720,735		$	(8,696,261	)	$	(4,511,318	)

Depreciation and amortization of real estate properties		4,147,570			4,347,809			15,551,173			14,929,574
Depreciation and amortization for unconsolidated investment in a real estate property		188,889			203,554			756,610			777,041
Interest expense, unrealized loss on interest rate swaps and net of derivative settlements		7,045,059			2,826,491			13,806,838			8,106,658
Loss on early extinguishment of debt		-			-			-			1,725,318
Interest expense on unconsolidated investment in real estate property		95,801			98,073			383,594			392,477
Impairment of real estate investment property		888,186			2,080,727			4,387,624			2,080,727
Impairment of goodwill		-			-			-			17,320,857
Stock compensation expense		1,381,001			660,170			11,171,207			2,401,022
Due diligence expenses, including abandoned pursuit costs		-			25,051			347,598			661,222
Loss (gain) on sale of real estate investments, net		-			(669,186	)		1,708,801			(12,196,371	)
Unrealized gain on investment in preferred stock		(978,658	)		-			(1,418,658	)		-
Adjusted EBITDA	$	10,925,797		$	10,293,424		$	37,998,526		$	31,687,207

Annualized Adjusted EBITDA	$	43,703,188		$	41,173,696		$	37,998,526		$	31,687,207

Net debt:
Consolidated debt	$	281,200,000		$	197,515,009		$	281,200,000		$	197,515,009
Debt of unconsolidated investment in real estate property (a)		9,256,466			9,487,515			9,256,466			9,487,515
Consolidated cash and cash equivalents		(3,129,414	)		(8,608,649	)		(3,129,414	)		(8,608,649	)
Cash of unconsolidated investment in real estate property (a)		(350,937	)		(218,424	)		(350,937	)		(218,424	)
	$	286,976,115		$	198,175,451		$	286,976,115		$	198,175,451

Net debt / Adjusted EBITDA		6.6	x		4.8	x		7.6	x		6.3	x

(a)	Reflects the Company’s 72.71% pro rata share of the tenant-in-common’s mortgage note payable and cash.

We define Net Debt as gross debt less cash and cash equivalents and restricted cash. We define Adjusted EBITDA as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, gains or losses from the sales of depreciable property, extraordinary items, provisions for impairment on real estate investments and goodwill, interest expense, non-cash items such as stock compensation and write-offs of transaction costs and other one-time transactions. We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. EBITDA is not a measure of financial performance under GAAP, and our EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDA as an alternative to net income or cash flows from operating activities determined in accordance with GAAP.

###

Exhibit 99.2

NYSE: MDV

QUARTERLY SUPPLEMENTAL DATA

December 31, 2023

Financial Information

and

Portfolio Information

Modiv Industrial, Inc.

Supplemental Information - Fourth Quarter 2023

Table of Contents

About the Data		3

Company Overview		4

Financial Results
	Earnings Release	5
	Consolidated Statements of Operations - Last Five Quarters	10
	Property Portfolio - Statements of Operations - Fourth Quarter of 2023	12
	Consolidated Statements of Comprehensive (Loss) Income - Last Five Quarters	14
	(Loss) Earnings Per Share - Last Five Quarters	15
	FFO and AFFO - Last Five Quarters	16
	Property Portfolio - FFO and AFFO - Fourth Quarter of 2023	18
	Adjusted EBITDA - Last Five Quarters	19
	Leverage Ratio	20
Balance Sheets and Capitalization
	Capitalization	21
	Consolidated Balance Sheets	22
	Property Portfolio - Balance Sheets - As of December 31, 2023	23
	Debt Overview	24
	Credit Facility and Mortgage Notes Covenants	25

Real Estate
	Real Estate Acquisitions	26
	Real Estate Dispositions	27
	Top 20 Tenants	28
	Property Type	29
	Tenant Industry Diversification	30
	Tenant Geographic Diversification	30
	Lease Expirations	31

Appendix
	Disclosures Regarding Non-GAAP and Other Metrics	32

About the Data

This data and other information described herein are as of and for the three months ended December 31, 2023 unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with Modiv Industrial, Inc.’s (f/k/a Modiv Inc.) Annual Report on Form 10-K for the year ended December 31, 2023, including the financial statements and management’s discussion and analysis of financial condition and results of operations, which will be filed in the first week of March 2024.

Forward-Looking Statements

Information set forth herein contains forward-looking statements, which reflect our current views regarding our business, financial performance, growth prospects and strategies, market opportunities, and market trends. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. All of the forward-looking statements herein are subject to various risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance, and achievements could differ materially from those expressed in or by the forward-looking statements and may be affected by a variety of risks and other factors. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from such forward-looking statements. These factors include, but are not limited to, changes in the rate of inflation and interest rates, general economic conditions, local real estate conditions, tenant financial health, property acquisitions and dispositions and the timing of any acquisitions and dispositions, supply-chain disruptions and negative impacts associated with the violence and unrest in the Middle East, and the ongoing Russian war against Ukraine and sanctions which have been implemented by the United States and other countries against Russia. These and other risks, assumptions, and uncertainties are described in our filings with the SEC, which are available on the SEC’s website at www.sec.gov. You are cautioned not to place undue reliance on any forward-looking statements included herein. All forward-looking statements are made as of the date of this document and the risk that actual results, performance, and achievements will differ materially from the expectations expressed or referenced herein will increase with the passage of time. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

Company Overview

Modiv Industrial, Inc. (NYSE:MDV) (“Modiv Industrial”, the “Company”, “we”, “us” and “our”) is a real estate investment trust (“REIT”) that acquires, owns and manages a portfolio of single-tenant net-lease real estate. The Company actively acquires critical industrial manufacturing properties with long-term leases to tenants that fuel the national economy and strengthen the nation’s supply chains. For more information, please visit: www.modiv.com.

Modiv Industrial strives towards a “best-in-class” corporate governance structure through a board of directors and management team with decades of institutional real estate industry experience.

Management Team:	Independent Directors:

Aaron S. Halfacre	Adam S. Markman
Chief Executive Officer and Director	Chairman of the Board

Raymond J. Pacini	Curtis B. McWilliams
Chief Financial Officer and Secretary

John C. Raney	Kimberly Smith
Chief Operating Officer and General Counsel

Sandra G. Sciutto	Thomas H. Nolan, Jr.
Chief Accounting Officer

William R. Broms	Connie Tirondola
Chief Investment Officer

Investor Inquiries:

management@modiv.com

Transfer Agent:

Computershare Trust Company, N.A.

150 Royall Street

Canton, MA 02021

800-736-3001

Modiv Industrial Announces Fourth Quarter and Full Year 2023 Results

Management Provides Forward-Looking Thoughts

Highlights:

•

Full year 2023 AFFO of $14.7 million, or $1.33 per diluted share, exceeding street expectations by $0.04 per share.

•

Fourth quarter revenue of $12.3 million increased $2.3 million year-over-year, or 23%, excluding the 2022 lease termination fee.

•

Fourth quarter AFFO of $4.5 million, or $0.40 per diluted share, exceeding street expectations by $0.05 per share.

•

Sold and issued 162,063 shares of MDV common stock between November 15, 2023 and January 29, 2024 at an average price of $15.22 per share.

•

January 10, 2024, sold our Sacramento property leased to Levins for $7.0 million.

•

January 31, 2024, completed the stock distribution of Generation Income Properties, Inc. (NASDAQ: GIPR), common stock to the stockholders of Modiv Industrial.

•

February 28, 2024, sold our Nashville, Tennessee office property leased to Cummins for $7.95 million.

•

Currently have a cash balance of $17.9 million and full availability on our $150 million revolving credit facility.

Business Outlook:

Dispositions – $135 million of assets sold across 24 properties (including 10 office) in the past two years is no small feat. When I first joined this firm, nearly 55% of the portfolio was office and less than 20% industrial. With our recently announced sale contract with a national homebuilder to buy our Issaquah, WA, office asset, we are now down to two office properties which I have the highest confidence will be the easiest to sell. Two years ago we quickly surmised that few would pay attention to our transformation while it was happening, but they sure as heck would pay attention to see that it did happen. Happen it has, drama-free and at a fast clip. There is still some portfolio maneuvering to be completed, with some likely to occur in 2024, so we will continue to keep our nose to the grindstone.

Sundry thoughts:

We own manufacturing assets because we clearly see their critical need, their economic value and believe that countless others will soon begin to see the same.

We own manufacturing assets because we are extraordinarily passionate about this asset class, for our investment thesis and for the tremendous upside potential we see for all MDV investors.

If I may…

Ok, that’s a wrap. Until next time. Stay Modivated!” – Aaron Halfacre, CEO of Modiv Industrial.

Conference Call and Webcast

Live conference call: 1-877-407-0789 at 8:30 a.m. Eastern Time, Monday, March 4, 2023

Webcast: To listen to the webcast, either live or archived, please use this link:

https://viavid.webcasts.com/starthere.jsp?ei=1658305&tp_key=83c3e36e04

or visit the investor relations page of Modiv’s website at www.modiv.com.

Notice Involving Non-GAAP Financial Measures

Inquiries:

management@modiv.com

Modiv Industrial, Inc.

Consolidated Statements of Operations - Last Five Quarters

(Unaudited)

	Three Months Ended
	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Rental income (a)	$	12,288,516		$	12,500,338		$	11,836,563		$	10,311,182		$	13,804,539

Operating expenses:
General and administrative (b)		1,402,055			1,735,104			1,597,776			1,908,055			2,252,304
Stock compensation expense (c)		1,381,001			8,469,867			660,170			660,169			660,170
Depreciation and amortization		4,147,570			4,175,209			3,956,334			3,272,060			4,347,809
Property expenses (d)		731,081			1,195,224			1,527,868			1,706,844			1,537,690
Impairment of real estate investment property (e)		888,186			—			—			3,499,438			2,080,727
Total operating expenses		8,549,893			15,575,404			7,742,148			11,046,566			10,878,700

(Loss) gain on sale of real estate investments (f)		—			(1,708,801	)		—			—			669,186
Operating income (loss)		3,738,623			(4,783,867	)		4,094,415			(735,384	)		3,595,025

Other (expense) income:
Interest income		28,967			26,386			216,841			53,694			5,047
Dividend income		285,000			190,000			—			—			—
Income from unconsolidated investment in a real estate property		72,043			79,164			72,773			55,569			51,312
Interest expense (income), including unrealized loss (gain) on interest rate swaps and net of derivative settlements (g)		(7,045,059	)		(2,922,918	)		179,931			(4,018,792	)		(2,826,491	)
Increase in fair value of investment in preferred stock (h)		978,658			440,000			—			—			—
Other		99,717			65,993			65,993			65,992			(104,158	)
Other (expense) income, net		(5,580,674	)		(2,121,375	)		535,538			(3,843,537	)		(2,874,290	)

Net (loss) income		(1,842,051	)		(6,905,242	)		4,629,953			(4,578,921	)		720,735
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership		546,967			1,368,896			(649,643	)		816,199			42,508
Net (loss) income attributable to Modiv Industrial, Inc.		(1,295,084	)		(5,536,346	)		3,980,310			(3,762,722	)		763,243
Preferred stock dividends		(921,875	)		(921,875	)		(921,875	)		(921,875	)		(921,875	)
Net (loss) income attributable to common stockholders	$	(2,216,959	)	$	(6,458,221	)	$	3,058,435		$	(4,684,597	)	$	(158,632	)

Net (loss) income per share attributable to common stockholders:
Basic	$	(0.29	)	$	(0.86	)	$	0.41		$	(0.62	)	$	(0.02	)
Diluted	$	(0.29	)	$	(0.86	)	$	0.35		$	(0.62	)	$	(0.02	)

Weighted-average number of common shares outstanding:
Basic		7,621,871			7,548,052			7,532,106			7,532,452			7,487,728
Diluted (i)		7,621,871			7,548,052			10,638,311			7,532,452			7,487,728

Distributions declared per common share (j)	$	1.3975		$	0.2875		$	0.2875		$	0.2875		$	0.2875

(a)	Rental income includes tenant reimbursements for property expenses and the fourth quarter of 2022 includes an early termination fee of $3,781,929 received from Sutter Health.

(b)	General and administrative expenses in the fourth quarter of 2022 include a $500,000 accrual for costs of relocating our corporate offices to Reno, Nevada.

(c)

Stock compensation expense in the third quarter of 2023 includes a one-time non-cash catch-up adjustment of $7,822,197 related to our determination that at that time it was probable that we would achieve our performance target for FFO of $1.05 per diluted share for the year ended December 31, 2023, exclusive of the dilutive effect of the performance units and related stock compensation expense. Our FFO per fully diluted share excluding the dilutive impact of the performance units and the related stock compensation expense was $1.77 for the year ended December 31, 2023. The $0.72 of FFO per diluted share in excess of the performance target of $1.05 per diluted share exceeded the target by 69%. As a result of achieving our performance target of FFO of $1.05 per diluted share (excluding the performance units), an additional 474,515 Class C OP Units will be issued on March 31, 2024 upon the automatic conversion of our Class R OP Units based on a conversion ratio of 2.5 Class C OP Units for each Class R OP Unit. This catch-up adjustment reflects amortization of the grant date fair value of $19.58 per share for the 474,515 performance units from the January 25,2021 grant date through September 30, 2023. Stock compensation expense of $733,331 was recorded for the performance units for the fourth quarter of 2023 and an additional $733,331 will be recorded through the end of the vesting period on March 31, 2024.

(d)	Property expenses are largely offset by tenant reimbursements included in rental income.

(e)

The impairment charges for the first and fourth quarters of 2023 relate to an office property located in Nashville, Tennessee leased to Cummins, Inc. through February 29, 2024, which was sold on February 28, 2024. We determined that an impairment charge in the first quarter of 2023 was triggered by expectations of a shortened holding period and estimated the property’s fair value based upon market comparables at the time. The additional charge in the fourth quarter of 2024 was based on the sale agreement executed on December 15, 2023, reflecting the excess of the property’s carrying value over the property’s contracted sale price less estimated selling costs for the sale. The impairment charge for the fourth quarter of 2022 relates to an office property located in Rocklin, California to reflect the net realizable value as a result of its reclassification to asset held for sale. On June 29, 2023, the property was leased to the EMC Shop, LLC for 11.5 years for industrial use and then sold to EMC Shop, LLC on August 31, 2023 resulting in a gain of $178,239 included in the third quarter of 2023.

(f)

(Loss) gain on sale of real estate investments for the third quarter of 2023 includes a loss of $(1,887,040) on the sale of 13 properties to Generation Income Properties, Inc. (“GIPR”) (11 retail and two office), partially offset by a gain on the sale of the Rocklin, California property discussed above. Sale proceeds from the GIPR sale included cash of $30,000,000 and newly issued GIPR preferred stock with a liquidation value of $12,000,000. The loss includes the $2,380,000 difference between the $12,000,000 liquidation value and the $9,620,000 fair value of our investment in GIPR’s newly-created Series A Redeemable Preferred Stock received on August 10, 2023.

(g)

Interest (expense) income, including unrealized (loss) gain on interest rate swaps and net of derivative settlements in the fourth quarter of 2023 includes $3,400,139 of unrealized loss on interest rate swaps, net of $1,617,279 of derivative cash settlements received. The third quarter of 2023 is net of $795,425 unrealized gain on interest rate swaps and $1,586,641 of derivative cash settlements received, the second quarter of 2023 is net of $3,708,597 unrealized gain on interest rate swaps and $1,401,716 of derivative cash settlements received and the first quarter of 2023 includes $1,722,184 unrealized loss on interest rate swaps and is net of $1,074,085 of derivative cash settlements received.

(h)	Increase in fair value of investment in preferred stock in the third and fourth quarters of 2023 reflect adjustment to fair value.

(i)

Diluted shares outstanding for periods when we reported a net loss do not include the OP Units since they would be anti-dilutive. Diluted shares outstanding in the second quarter of 2023 include Class C, Class M, Class P and time vesting Class R OP Units since we reported net income for the quarter.

(j)

Distributions for the three months ended December 31, 2023 include the distribution of GIPR common stock of $1.11 per share declared on December 29, 2023 which reflects 0.28 shares of GIPR common stock per one share of our stock multiplied by $3.95 which was the closing price of GIPR common stock on December 29, 2023.

Modiv Industrial, Inc.

Property Portfolio - Statements of Operations - Fourth Quarter of 2023

(Unaudited)

	Three Months Ended December 31, 2023
	Industrial Core			Tactical Non-Core (1)			Other Non-Core (2)			Non-Property & Other (3)			Consolidated
Rental income	$	8,815,404		$	2,778,276		$	694,836		$	—		$	12,288,516

Operating expenses:
General and administrative		—			—			—			1,402,055			1,402,055
Stock compensation expense		—			—			—			1,381,001			1,381,001
Depreciation and amortization		3,294,284			808,619			44,667			—			4,147,570
Property expenses		384,021			335,878			11,182			—			731,081
Impairment of real estate investment property		—			—			888,186			—			888,186
Total operating expenses		3,678,305			1,144,497			944,035			2,783,056			8,549,893

Operating income (loss):
Gain (loss) on sale of real estate investments		—			—			—			—			—
Operating income (loss)		5,137,099			1,633,779			(249,199	)		(2,783,056	)		3,738,623

Other (expense) income:
Interest income		—			—			—			28,967			28,967
Dividend income		—			—			—			285,000			285,000
Income from unconsolidated investment in a real estate property		72,043			—			—			—			72,043
Interest expense, including unrealized loss on interest rate swaps and net of derivative settlements (4)		(4,091,348	)		(995,058	)		(175,793	)		(1,782,860	)		(7,045,059	)
Increase in fair value of investment in preferred stock		—			—			—			978,658			978,658
Other (5)		(1,175	)		—			—			100,892			99,717
Other (expense), income net		(4,020,480	)		(995,058	)		(175,793	)		(389,343	)		(5,580,674	)

Net income (loss)		1,116,619			638,721			(424,992	)		(3,172,399	)		(1,842,051	)
Less: net loss attributable to noncontrolling interest in Operating Partnership		—			—			—			546,967			546,967
Net income (loss) attributable to Modiv Industrial, Inc.		1,116,619			638,721			(424,992	)		(2,625,432	)		(1,295,084	)
Preferred stock dividends		—			—			—			(921,875	)		(921,875	)
Net income (loss) attributable to common stockholders	$	1,116,619		$	638,721		$	(424,992	)	$	(3,547,307	)	$	(2,216,959	)

(1)

We categorize Tactical Non-Core Assets as those assets that offer compelling value-add or opportunistic investment characteristics when measured over a near-term or interim holding period. We currently hold three such assets: (i) our tactical non-core acquisition of a leading KIA auto dealership located in a prime location in Los Angeles County in January 2022, which was structured as an UPREIT transaction resulting in a favorable equity issuance of $32,809,550 Class C OP Units at a cost basis of $25.00 per share; (ii) our 12 year lease to the State of California’s Office of Emergency Services (OES) executed in January 2023 for one of our existing assets located in Rancho Cordova, California that includes an attractive purchase option by the tenant which we believe has a favorable probability of being executed in the next 24 months; and (iii) our property leased to Costco located in Issaquah, Washington which offers compelling redevelopment opportunities following Costco’s lease expiration in July 2025 given its higher density infill location and the fact that the land is zoned for additional uses to include multi-family. In January 2024, we entered into a purchase and sale agreement with a national homebuilder for the sale of this property, for a sale price of $28,650,000, which is contingent upon the buyer’s satisfaction of various due diligence matters in its sole discretion by April 1, 2024. The sale would not close until 15 days following the earlier of (a) buyer obtaining all necessary development approvals, or (b) tenant vacating the property, but not prior to February 1, 2025, and not later than August 15, 2025. The buyer is not affiliated with the Company or its affiliates.

(2)

Other non-core assets includes one remaining legacy office property leased to Solar Turbines in San Diego and the Cummins office property in Nashville, Tennessee that was sold in February 2024. We define legacy assets as those inherited through prior mergers and acquisitions activity and such assets that were acquired by different management teams utilizing different investment objectives or underwriting criteria.

(3)

We do not allocate non-property expenses across our property-specific segments; therefore, we report these expenses separately under the Non-Property & Other caption in the table above. Such expenses and income include stock compensation expense, general and administrative, unrealized gains and losses on valuation of interest rate swaps, and other comprehensive items.

(4)	Non-Property & Other’s interest expense, including unrealized loss on interest rate swaps and net of derivative settlements in the fourth quarter of 2023 includes $3,400,139 of unrealized loss on interest rate swaps and is net of $1,617,279 of derivative cash settlements received.

(5)	Other income reflects management fees earned for managing the TIC Interest.

Modiv Industrial, Inc.

Consolidated Statements of Comprehensive (Loss) Income - Last Five Quarters

(Unaudited)

	Three Months Ended
	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Net (loss) income	$	(1,842,051	)	$	(6,905,242	)	$	4,629,953		$	(4,578,921	)	$	720,735

Other comprehensive (loss) income: cash flow hedge adjustment
Amortization of unrealized holding gain on interest rate swap (a)		(258,655	)		(253,092	)		(253,093	)		(250,311	)		—
Unrealized holding loss on interest rate swap designated as a cash flow hedge (b)		—			—			—			—			(216,200	)
Comprehensive (loss) income		(2,100,706	)		(7,158,334	)		4,376,860			(4,829,232	)		504,535

Net loss (income) attributable to noncontrolling interest in Operating Partnership		546,967			1,368,896			(649,643	)		816,199			42,508
Other comprehensive loss (income) attributable to noncontrolling interest in Operating Partnership:
Amortization of unrealized holding gain on interest rate swap (a)		44,959			44,264			44,341			37,141			—
Unrealized holding loss on interest rate swap designated as a cash flow hedge (b)		—			—			—			—			(34,942	)
Comprehensive loss (income) attributable to noncontrolling interest in Operating Partnership		591,926			1,413,160			(605,302	)		853,340			7,566
Comprehensive (loss) income attributable to Modiv Industrial, Inc.	$	(1,508,780	)	$	(5,745,174	)	$	3,771,558		$	(3,975,892	)	$	512,101

(a)

Due to the $150 million Term Loan swap’s failure to qualify as a cash flow hedge for each of the quarterly periods ended December 31, 2023, the unrealized gain on interest rate swap derivative on the consolidated balance sheet is being amortized on a straight-line basis, as a reduction to interest expense, through the maturity date of the Term Loan. The interest rate swap derivative instrument failed to qualify as a cash flow hedge during each of the quarterly periods ended December 31, 2023 because the swap was deemed ineffective due to the one-time cancellation option on December 31, 2024 as compared with the maturity of the Term Loan. The Company has begun, and intends to further explore various alternatives available to extend or restructure the cancellation option.

(b)	Reflects the change in fair value of the interest rate swap derivative for the three months ended December 31, 2022 when the swap qualified as a cash flow hedge for financial accounting purposes.

Modiv Industrial, Inc.

(Loss) Earnings Per Share - Last Five Quarters

(Unaudited)

	Three Months Ended
	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Numerator - Basic:
Net (loss) income	$	(1,842,051	)	$	(6,905,242	)	$	4,629,953		$	(4,578,921	)	$	720,735
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership		546,967			1,368,896			(649,643	)		816,199			42,508
Preferred stock dividends		(921,875	)		(921,875	)		(921,875	)		(921,875	)		(921,875	)
Net (loss) income attributable to common stockholders	$	(2,216,959	)	$	(6,458,221	)	$	3,058,435		$	(4,684,597	)	$	(158,632	)

Numerator - Diluted:
Net (loss) income	$	(1,842,051	)	$	(6,905,242	)	$	4,629,953		$	(4,578,921	)	$	720,735
Preferred stock dividends		(921,875	)		(921,875	)		(921,875	)		(921,875	)		(921,875	)
Net (loss) income attributable to common stockholders	$	(2,763,926	)	$	(7,827,117	)	$	3,708,078		$	(5,500,796	)	$	(201,140	)

Denominator:
Weighted average shares outstanding - basic		7,621,871			7,548,052			7,532,106			7,532,452			7,487,728
Operating Partnership Units - Class C (a)(b)		—			—			1,599,898			—			—
Operating Partnership Units - Classes M, P and R (c)		—			—			1,506,307			—			—
Weighted average shares outstanding - diluted		7,621,871			7,548,052			10,638,311			7,532,452			7,487,728

(Loss) earnings per share attributable to common stockholders:
Basic	$	(0.29	)	$	(0.86	)	$	0.41		$	(0.62	)	$	(0.02	)
Diluted	$	(0.29	)	$	(0.86	)	$	0.35		$	(0.62	)	$	(0.02	)

(a)

We issued 1,312,382 Class C OP Units at an agreed upon value of $25.00 per unit in connection with our January 18, 2022 acquisition of a KIA auto dealership property in an “UPREIT” transaction. These units were not included in the computation of Diluted EPS for the quarters ended December 31, 2023, September 30, 2023, March 31, 2023 and December 31, 2022 because their effect would be anti-dilutive.

(b)

The weighted average Class C OP Units of 1,599,898 for the quarter ended June 30, 2023 included the weighted effect of 287,516 units issued in April 2023 in conjunction with our acquisition in an “UPREIT” transaction of the property in Reading, Pennsylvania leased to Summit Steel & Manufacturing, LLC.

(c)

During the three months ended December 31, 2023, September 30, 2023, March 31, 2023 and December 31, 2022, the weighted average dilutive effect of 1,506,307, 1,506,307, 1,506,307 and 1,395,759 shares, respectively, related to Classes M, P and R Operating Partnership units were excluded from the computation of Diluted EPS because their effect would be anti-dilutive. There were no other outstanding securities or commitments to issue common stock that would have a dilutive effect for the periods then ended.

Modiv Industrial, Inc.

FFO and AFFO - Last Five Quarters

(Unaudited)

	Three Months Ended
	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Net (loss) income (in accordance with GAAP)	$	(1,842,051	)	$	(6,905,242	)	$	4,629,953		$	(4,578,921	)	$	720,735
Preferred stock dividends		(921,875	)		(921,875	)		(921,875	)		(921,875	)		(921,875	)
Net (loss) income attributable to common stockholders and Class C OP Unit holders		(2,763,926	)		(7,827,117	)		3,708,078			(5,500,796	)		(201,140	)
FFO adjustments:
Depreciation and amortization of real estate properties		4,147,570			4,175,209			3,956,334			3,272,060			4,347,809
Amortization of lease incentives		(63,956	)		40,397			88,570			88,570			88,751
Depreciation and amortization for unconsolidated investment in a real estate property		188,889			187,479			186,069			194,173			203,554
Impairment of real estate investment property		888,186			—			—			3,499,438			2,080,727
Loss (gain) on sale of real estate investments, net		—			1,708,801			—			—			(669,186	)
FFO attributable to common stockholders and Class C OP Unit holders (a)		2,396,763			(1,715,231	)		7,939,051			1,553,445			5,850,515
Stock compensation for performance units expense (b)		733,332			7,822,197			—			—			—
FFO excluding performance units expense		3,130,095			6,106,966			7,939,051			1,553,445			5,850,515
AFFO adjustments:
Non-recurring corporate relocation costs		—			—			—			—			500,000
Stock compensation excluding performance units expense (c)		647,669			647,670			660,170			660,169			660,170
Deferred financing costs		210,604			165,709			195,213			195,212			179,641
Due diligence expenses, including abandoned pursuit costs (d)		—			1,208			3,848			342,542			25,051
Amortization of deferred rents		(1,704,137	)		(1,772,403	)		(1,580,358	)		(1,175,359	)		(643,784	)
Unrealized loss (gain) on interest rate swaps, net		3,400,138			(795,425	)		(3,708,598	)		1,722,185			505,263
Amortization of (below) above market lease intangibles, net		(211,600	)		(204,011	)		(195,901	)		(196,282	)		(142,626	)
Unrealized gain on investment in preferred stock		(978,658	)		(440,000	)		—			—			—
Other adjustments for unconsolidated investment in a real estate property		17,821			11,819			11,819			11,819			5,815
AFFO attributable to common stockholders and Class C OP Unit holders (e)	$	4,511,932		$	3,721,533		$	3,325,244		$	3,113,731		$	6,940,045

Weighted Average Shares Outstanding:
Basic		7,621,871			7,548,052			7,532,106			7,532,452			7,487,728
Fully diluted excluding performance units		10,728,076			10,654,257			10,638,311			10,351,141			10,195,869
Fully diluted (e) (f)		11,202,591			11,128,772			10,638,311			10,351,141			10,195,869
FFO Per Share:
Basic	$	0.31		$	(0.23	)	$	1.05		$	0.21		$	0.78
Fully diluted	$	0.21		$	(0.23	)	$	0.75		$	0.15		$	0.57
FFO Per Share Excluding Performance Units Expense:
Basic	$	0.41		$	0.81		$	1.05		$	0.21		$	0.78
Fully diluted	$	0.29		$	0.58		$	0.75		$	0.15		$	0.57
AFFO Per Share:
Basic	$	0.59		$	0.49		$	0.44		$	0.41		$	0.93
Fully diluted	$	0.40		$	0.33		$	0.31		$	0.30		$	0.68

(a)	FFO and AFFO for the fourth quarter of 2022 include an early termination fee of $3,751,984 received from Sutter Health.

(b)

Stock compensation expense for the performance-based portion of the Class R OP Units for the quarter ended September 30, 2023 reflects a non-cash catch-up adjustment of $7,822,197 for the period from the January 25, 2021 grant date through September 30, 2023 based on our determination that at that time it was probably that we would achieve our performance target for FFO of $1.05 per diluted share for the year ended December 31, 2023, exclusive of the effect of the performance units and related stock compensation expense. Our FFO per fully diluted share excluding the performance units expense was $1.77 for the year ended December 31, 2023. The $0.72 of FFO per diluted share in excess of the performance target of $1.05 per diluted share exceeded the target by 69%. The fully diluted shares include the additional 474,515 Class R performance OP Units for the quarters ended September 2023 and December 31, 2023, respectively, that have vested and will automatically convert to Class C OP Units on March 31, 2024. Stock compensation expense of $733,331 was recorded for the performance units for the fourth quarter of 2023 and an additional $733,331 will be recorded through the end of the vesting period on March 31, 2024.

(c)

Stock compensation expense includes (i) amortization of the value of Class P OP Units granted to our Chief Executive Officer and Chief Financial Officer on December 31, 2019; (ii) amortization of the value of the time-based Class R OP Units granted to all of our employees, including the Chief Executive Officer and Chief Financial Officer, on January 25, 2021; and (iii) stock granted to our independent directors each quarter as partial consideration for their service as directors.

(d)	Abandoned pursuit costs for the first quarter of 2023 primarily reflect the write-off of due diligence costs incurred during 2022 and 2023 for a potential acquisition of a portfolio of industrial manufacturing properties that we abandoned due to changes in market conditions.

(e)

The weighted average Class C OP Units for the second, third and fourth quarters of 2023 included the weighted effect of 287,516 units issued in April 2023 in conjunction with our acquisition in an “UPREIT” transaction of the property in Reading, Pennsylvania leased to Summit Steel & Manufacturing, LLC.

(f)

Includes the Class C, Class M, Class P and Class R OP Units to compute the weighted average number of shares for each of the five quarters ended December 31, 2023 presented above, including the performance portion of the Class R OP Units for the quarters ended September 30, 2023 and December 31, 2023.

Modiv Industrial, Inc.

Property Portfolio - FFO and AFFO - Fourth Quarter of 2023

(Unaudited)

	Three Months Ended December 31, 2023
	Industrial Core			Tactical Non- Core (1)			Other Non- Core (1)			Non-Property & Other (1)			Consolidated
Net (loss) income (in accordance with GAAP)	$	1,116,619		$	638,721		$	(424,992	)	$	(3,172,399	)	$	(1,842,051	)
Preferred stock dividends		—			—			—			(921,875	)		(921,875	)
Net (loss) income attributable to common stockholders and Class C OP Unit holders		1,116,619			638,721			(424,992	)		(4,094,274	)		(2,763,926	)
FFO adjustments:
Depreciation and amortization of real estate properties		3,294,284			808,619			44,667			—			4,147,570
Amortization of lease incentives		(63,956	)		—			—			—			(63,956	)
Depreciation and amortization for unconsolidated investment in a real estate property		188,889			—			—			—			188,889
(Gain) loss on sale of real estate investments, net		—			—			888,186			—			888,186
FFO attributable to common stockholders and Class C OP Unit holders		4,535,836			1,447,340			507,861			(4,094,274	)		2,396,763
Stock compensation for performance units expense		—			—			—			733,332			733,332
FFO excluding performance units expense		4,535,836			1,447,340			507,861			(3,360,942	)		3,130,095
AFFO adjustments:
Stock compensation		—			—			—			647,669			647,669
Deferred financing costs		178,829			(8,657	)		40,432			—			210,604
Deferred rents		(1,130,483	)		(593,410	)		19,756			—			(1,704,137	)
Unrealized gains on interest rate swap valuations		—			—			—			3,400,138			3,400,138
Amortization of (below) above market lease intangibles, net		(211,600	)		—			—			—			(211,600	)
Increase in fair value of investment in preferred stock		—			—			—			(978,658	)		(978,658	)
Other adjustments for unconsolidated investment in a real estate property		17,821			—			—			—			17,821
AFFO attributable to common stockholders and Class C OP Unit holders	$	3,390,403		$	845,273		$	568,049		$	(291,793	)	$	4,511,932

Weighted average shares outstanding:
Basic		7,621,871			7,621,871			7,621,871			7,621,871			7,621,871
Fully diluted excluding performance units		10,728,076			10,728,076			10,728,076			10,728,076			10,728,076
Fully diluted (2)		11,202,591			11,202,591			11,202,591			11,202,591			11,202,591

FFO Per Share:
Basic	$	0.60		$	0.19		$	0.07		$	(0.54	)	$	0.31
Fully diluted (2)	$	0.40		$	0.13		$	0.05		$	(0.37	)	$	0.21
FFO Per Share Excluding Performance Units Expense:
Basic	$	0.59		$	0.19		$	0.07		$	(0.44	)	$	0.41
Fully diluted	$	0.42		$	0.13		$	0.05		$	(0.31	)	$	0.29
AFFO Per Share:
Basic	$	0.44		$	0.11		$	0.07		$	(0.04	)	$	0.59
Fully diluted (2) (3)	$	0.30		$	0.08		$	0.05		$	(0.03	)	$	0.40

(1)	See Footnotes (1), (2), (3) and (4) of Property Portfolio Statement - Statement of Operations - Fourth Quarter of 2023.

(2)	Weighted average fully diluted shares outstanding includes the following:

(i)

7,621,871 shares of Class C Common Stock;

(ii)

1,599,898 Class C OP Units, including 1,312,382 issued in January 2022 in connection with the acquisition of the KIA auto dealership property discussed above and 287,516 Class C OP Units issued in April 2023 in conjunction with our acquisition of the property in Reading, Pennsylvania leased to Summit Steel & Manufacturing, LLC;

(iii)

1,096,582 Class C OP Units that converted from 657,949.5 Class M OP Units on January 30, 2024;

(iv)

93,382 Class C OP Units that will result from automatic conversion of 56,029 Class P OP Units on March 31, 2024, based on the conversion ratio of 1.6667 Class C OP Units for each Class P OP Unit outstanding; and

(v)

790,858 Class R OP Units which have vested and will automatically convert to Class C OP Units on March 31, 2024, reflecting the conversion ratio of 2.5-for-1 based on achievement of the FFO performance target of $1.05 per diluted share for the year ended December 31, 2023. Our FFO per fully diluted share excluding the performance units expense was $1.77 for the year ended December 31, 2023. The $0.72 of FFO per diluted share in excess of the performance target of $1.05 per diluted share exceeded the target by 69%.

(3)	For the intraperiod allocation, we treat all component per share amounts as fully-diluted to correspond with the consolidated FFO and AFFO results reflected above.

Modiv Industrial, Inc.

Adjusted EBITDA - Last Five Quarters

(Unaudited)

	Three Months Ended
	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Net (loss) income (in accordance with GAAP)	$	(1,842,051	)	$	(6,905,242	)	$	4,629,953		$	(4,578,921	)	$	720,735
Depreciation and amortization of real estate properties		4,147,570			4,175,209			3,956,334			3,272,060			4,347,809
Depreciation and amortization for unconsolidated investment in a real estate property		188,889			187,479			186,069			194,173			203,554
Interest expense (income), including unrealized loss on interest rate swaps and net of derivative settlements (a)		7,045,059			2,922,918			(179,931	)		4,018,792			2,826,491
Interest expense on unconsolidated investment in real estate property		95,801			96,375			95,932			95,485			98,073
Impairment of real estate investment property (b)		888,186			—			—			3,499,438			2,080,727
Stock compensation expense		1,381,001			8,469,867			660,170			660,169			660,170
Due diligence expenses, including abandoned pursuit costs		—			1,208			3,848			342,542			25,051
(Loss) gain on sale of real estate investments, net		—			1,708,801			—			—			(669,186	)
Unrealized gain on investment in preferred stock		(978,658	)		(440,000	)		—			—			—
Adjusted EBITDA (c)	$	10,925,797		$	10,216,615		$	9,352,375		$	7,503,738		$	10,293,424

Annualized adjusted EBITDA	$	43,703,188		$	40,866,460		$	37,409,500		$	30,014,952		$	41,173,696

Net debt:
Debt	$	281,200,000		$	284,284,849		$	294,361,357		$	214,436,983		$	197,515,009
Debt of unconsolidated investment in real estate property (d)		9,256,466			9,315,322			9,372,615			9,429,343			9,487,515
Cash and restricted cash		(3,129,414	)		(5,641,610	)		(9,912,109	)		(13,280,104	)		(8,608,649	)
Cash of unconsolidated investment in real estate property (d)		(350,937	)		(387,278	)		(494,250	)		(420,947	)		(218,424	)
	$	286,976,115		$	287,571,283		$	293,327,613		$	210,165,275		$	198,175,450

Net debt / Adjusted EBITDA		6.6	x		7.0	x		7.8	x		7.0	x		4.8	x

(a)	Includes $(3,658,794), $542,332, $3,708,597 and $(1,722,184) of unrealized (losses) gains on swap valuations in the fourth, third, second and first quarters of 2023, respectively.

(b)

The impairment charges for the first and fourth quarters of 2023 relate to an office property located in Nashville, Tennessee leased to Cummins, Inc. through February 29, 2024 that was sold on February 28, 2024. We determined that an impairment charge in the first quarter of 2023 was triggered by expectations of a shortened holding period and estimated the property’s fair value based upon market comparables at the time. The additional charge in the fourth quarter of 2024 was based on the sale agreement executed on December 15, 2023 reflecting the excess of the property’s carrying value over the property’s contracted sale price less estimated selling costs for the sale. The impairment charge for the fourth quarter of 2022 relates to an office property located in Rocklin, California to reflect the net realizable value as a result of its reclassification to asset held for sale. On June 29, 2023, the property was leased to the EMC Shop, LLC for 11.5 years for industrial use and then sold to EMC Shop, LLC in the third quarter of 2023.

(c)	Adjusted EBITDA for the fourth quarter of 2022 includes an early termination fee of $3,781,929 received from Sutter Health.

(d)	Includes our approximate 72.71% pro rata share of the tenant-in-common’s mortgage note payable and cash of our unconsolidated investment in real estate property.

Modiv Industrial, Inc.

Leverage Ratio

(Unaudited)

We calculate our leverage ratio in conformance with the definition used in our KeyBank credit facility as set forth below.

	December 31,
	2023			2022
Total Asset Value
Cash and cash equivalents	$	3,129,414		$	8,608,649
Borrowing base value (a)		471,126,446			408,598,973
Other real estate value		102,340,000			97,340,000
Pro-rata share of unconsolidated investment in a real estate property		28,402,455			28,582,595
Total asset value	$	604,998,315		$	543,130,217

Indebtedness
Credit facility revolver	$	—		$	3,000,000
Credit facility term loan		250,000,000			150,000,000
Mortgage debt		31,200,000			44,515,009
Pro-rata share of unconsolidated investment in a real estate property		9,256,466			9,487,515
Total indebtedness	$	290,456,466		$	207,002,524

Leverage Ratio		48	%		38	%

(a)	The increase in borrowing base properties reflects $129.8 million of acquisitions, excluding a property with a lease term of less than seven years, partially offset by the 13 properties sold to GIPR in the third quarter of 2023.

Modiv Industrial, Inc.

Capitalization as of December 31, 2023

(Unaudited)

PREFERRED EQUITY
7.375% Series A Cumulative Redeemable Perpetual Preferred Stock	$	50,000,000
% of Total Capitalization		10	%

COMMON EQUITY
Shares of Class C Common Stock		7,704,600
OP Units (Class M, Class P, Class R and Class C)		3,580,720
Total Class C Common Stock and OP Units		11,285,320
Price Per Share / Unit at December 31, 2023	$	13.76
IMPLIED EQUITY MARKET CAPITALIZATION	$	155,286,003
% of Total Capitalization		32	%

DEBT
Mortgage Debt
Costco Property	$	18,850,000
Taylor Fresh Foods Property		12,350,000
Total Mortgage Debt	$	31,200,000
KeyBank Credit Facility
Revolver	$	—
Term Loan (a) & (b)		250,000,000
Total Credit Facility	$	250,000,000
TOTAL DEBT	$	281,200,000
% of Total Capitalization		58	%
% of Total Debt - Floating Rate Debt		—	%
% of Total Debt - Fixed Rate Debt (a) (b) & (c)		100	%
% of Total Debt		100	%
ENTERPRISE VALUE
Total Capitalization	$	486,486,003
Less: Cash and Cash Equivalents		(3,129,414	)
Enterprise Value	$	483,356,589

(a)	On May 10, 2022, we purchased a five-year swap at 2.258% on our $150,000,000 term loan that results in a fixed interest rate of 4.058% based on our leverage ratio of 48% as of December 31, 2023. Under our Credit Agreement, the interest rate will continue to vary based on our leverage ratio.

(b)

On October 26, 2022, we purchased another five-year swap at 3.440% on our $100,000,000 term loan commitment that results in a fixed interest rate of 5.240% based on our leverage ratio of 48% as of December 31, 2023. Under our Credit Agreement, the interest rate will continue to vary based on our leverage ratio.

(c)	The weighted average interest rate for the $281,200,000 Total Debt outstanding was 4.52% as of December 31, 2023.

Modiv Industrial, Inc.

Consolidated Balance Sheets

(Unaudited)

	As of December 31,
	2023			2022
Assets
Real estate investments:
Land	$	104,858,693		$	103,657,237
Buildings and improvements		399,666,781			329,867,099
Equipment		4,429,000			4,429,000
Tenant origination and absorption costs		15,707,458			19,499,749
Total investments in real estate property		524,661,932			457,453,085
Accumulated depreciation and amortization		(50,901,612	)		(46,752,322	)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net		473,760,320			410,700,763
Unconsolidated investment in a real estate property		10,053,931			10,007,420
Total real estate investments, net, excluding real estate investments held for sale, net		483,814,251			420,708,183
Real estate investments held for sale, net		11,557,689			5,255,725
Total real estate investments, net		495,371,940			425,963,908
Cash and cash equivalents		3,129,414			8,608,649
Tenant deferred rent and other receivables		12,794,568			7,263,202
Above-market lease intangibles, net		1,313,959			1,850,756
Prepaid expenses and other assets		4,173,221			6,100,937
Investment in preferred stock		11,038,658			—
Interest rate swap derivative		2,970,733			4,629,702
Other assets related to real estate investments held for sale		103,337			12,765
Total assets	$	530,895,830		$	454,429,919
Liabilities and Equity
Mortgage notes payable, net	$	31,030,241		$	44,435,556
Credit facility revolver		—			3,000,000
Credit facility term loan, net		248,508,515			148,018,164
Accounts payable, accrued and other liabilities		4,469,508			5,881,738
Distributions payable		12,174,979			1,768,068
Below-market lease intangibles, net		8,868,604			9,675,686
Interest rate swap derivative		473,348			498,866
Other liabilities related to real estate investments held for sale		248,727			117,881
Total liabilities		305,773,922			213,395,959

Commitments and contingencies

7.375% Series A cumulative redeemable perpetual preferred stock, $0.001 par value, 2,000,000 shares authorized, issued and outstanding as of December 31, 2023 and 2022 with an aggregate liquidation value of 50,000,000		2,000			2,000
Class C common stock, $0.001 par value, 300,000,000 shares authorized, 8,048,110 shares issued and 7,704,600 shares outstanding as of December 31, 2023 and 7,762,506 shares issued and 7,512,353 shares outstanding as of December 31, 2022		8,048			7,762
Class S common stock, $0.001 par value, 100,000,000 shares authorized no shares issued and outstanding as of December 31, 2023 and 2022		—			—
Additional paid-in-capital		292,617,486			278,339,020
Treasury stock, at cost, 343,510 and 250,153 shares held as of December 31, 2023 and 2022, respectively		(5,290,780	)		(4,161,618	)
Cumulative distributions and net losses		(145,551,586	)		(117,938,876	)
Accumulated other comprehensive income		2,658,170			3,502,616
Total Modiv Industrial, Inc. equity		144,443,338			159,750,904
Noncontrolling interests in the Operating Partnership		80,678,570			81,283,056
Total equity		225,121,908			241,033,960
Total liabilities and equity	$	530,895,830		$	454,429,919

Modiv Industrial, Inc.

Property Portfolio - Balance Sheets - As of December 31, 2023

(Unaudited)

	As of December 31, 2023
	Industrial Core			Tactical Non-Core (1)			Other Non-Core (1)			Non-Property & Other (2)			Consolidated
Assets
Real estate investments:
Land	$	58,986,797		$	43,387,936		$	2,483,960		$	—		$	104,858,693
Buildings and improvements		311,840,089			83,128,327			4,698,365			—			399,666,781
Equipment		4,429,000			—			—			—			4,429,000
Tenant origination and absorption costs		10,882,884			4,500,352			324,222			—			15,707,458
Total investments in real estate property		386,138,770			131,016,615			7,506,547			—			524,661,932
Accumulated depreciation and amortization		(36,417,654	)		(13,558,116	)		(925,842	)		—			(50,901,612	)
Total investments in real estate property, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net		349,721,116			117,458,499			6,580,705			—			473,760,320
Unconsolidated investment in a real estate property		10,053,931			—			—			—			10,053,931
Total real estate investments, net, excluding real estate investments held for sale, net		359,775,047			117,458,499			6,580,705			—			483,814,251
Real estate investments held for sale, net		3,817,689			—			7,740,000			—			11,557,689
Total real estate investments, net		363,592,736			117,458,499			14,320,705			—			495,371,940
Cash and cash equivalents		—			—			—			3,129,414			3,129,414
Tenant receivables		8,824,293			3,938,943			31,332			—			12,794,568
Above-market lease intangibles, net		1,313,959			—			—			—			1,313,959
Prepaid expenses and other assets		3,316,678			171,223			108,704			576,616			4,173,221
Investment in preferred stock		—			—			—			11,038,658			11,038,658
Interest rate swap derivative		—			—			—			2,970,733			2,970,733
Other assets related to real estate investments held for sale		42,066			—			61,271			—			103,337
Total assets	$	377,089,732		$	121,568,665		$	14,522,012		$	17,715,421		$	530,895,830
Liabilities and Equity
Mortgage notes payable, net	$	12,233,789		$	18,796,452		$	—		$	—		$	31,030,241
Credit facility term loan		201,614,183			37,961,072			8,933,260			—			248,508,515
Accounts payable, accrued and other liabilities		1,760,725			754,824			70,403			1,883,556			4,469,508
Distributions payable		—			—			—			12,174,979			12,174,979
Below-market lease intangibles, net		8,868,604			—			—			—			8,868,604
Interest rate swap derivative		—			—			—			473,348			473,348
Liabilities related to real estate investments held for sale		22,040			—			226,687			—			248,727
Total liabilities		224,499,341			57,512,348			9,230,350			14,531,883			305,773,922

Commitments and contingencies

Total Modiv Industrial, Inc. equity, net of due to affiliates		152,590,391			64,056,317			5,291,662			(77,495,032	)		144,443,338
Noncontrolling interests in the Operating Partnership		—			—			—			80,678,570			80,678,570
Total equity		152,590,391			64,056,317			5,291,662			3,183,538			225,121,908
Total liabilities and equity	$	377,089,732		$	121,568,665		$	14,522,012		$	17,715,421		$	530,895,830

(1)	See Footnotes (1) and (2) of Property Portfolio Statement - Statement of Operations - Fourth Quarter of 2023.

(2)	Non-Property & Other’s prepaid expenses and other assets include deferred financing fees on our Revolver and prepaid directors and officers insurance.

Modiv Industrial, Inc.

Debt Overview

(Unaudited)

	Outstanding Balance
	As of December 31,
Collateral	2023			2022			Interest Rate	Loan Maturity
Mortgage Notes:
Costco property	$	18,850,000		$	18,850,000		4.85%(b)	1/1/2030
Taylor Fresh Foods property		12,350,000			12,350,000		3.85%(b)	11/1/2029
OES property		—			13,315,009		Repaid	Repaid
		31,200,000			44,515,009
Plus unamortized mortgage premium		—			119,245
Less unamortized deferred financing costs		(169,759	)		(198,698	)
Mortgage notes payable, net		31,030,241			44,435,556

KeyBank Credit Facility (a):
Revolver		—			3,000,000		7.16%(c)	1/18/2026
Term loan		250,000,000			150,000,000		4.53%(d)	1/18/2027
Total Credit Facility		250,000,000			153,000,000
Less unamortized deferred financing costs		(1,491,485	)		(1,981,836	)
		248,508,515			151,018,164
Total debt, net	$	279,538,756		$	195,453,720		4.52%(e)

(a)

Our $400,000,000 Credit Facility is comprised of a $150,000,000 Revolver and a $250,000,000 Term Loan. The Credit Facility includes an accordion option that allows us to request additional Revolver and Term Loan lender commitments up to a total of $750,000,000. As of the filing date of this Supplemental Data, the $250,000,000 Term Loan is fully drawn and the Revolver has zero outstanding balance.

(b)	Contractual fixed rate.

(c)

The interest rate on the Revolver is based on our leverage ratio at the end of the prior quarter. With our leverage ratio at 48% as of December 31, 2023, the spread over the Secured Overnight Financing Rate (‘‘SOFR’’), including a 10 basis point credit adjustment, is 185 basis points and the interest rate on the Revolver was 7.1625% as of December 31, 2023, although we had no outstanding borrowings under the Revolver. We also pay an annual unused fee of up to 25 basis points on the Revolver, based on the daily amount of the unused commitment.

(d)

To mitigate the risk of rising interest rates, on May 10, 2022, we purchased a five-year swap at fixing SOFR at 2.258% on the $150,000,000 term loan that results in a fixed interest rate of 4.058% based on our leverage ratio of 48% as of September 30, 2023. On October 26, 2022, we purchased another five-year swap fixing SOFR at 3.440% on our $100,000,000 term loan commitment which results in a fixed interest rate of 5.24% based on our leverage ratio of 48% as of December 31, 2023. Under our Credit Agreement, the interest rate will continue to vary based on our leverage ratio. The weighted average interest rate on the Term Loan was 4.53% as of December 31, 2023.

(e)	The weighted average interest rate for the $281,200,000 Total Debt outstanding was 4.52% as of December 31, 2023.

Modiv Industrial, Inc.

Covenants

Credit Facility and Mortgage Notes Covenants

The following is a summary of key financial covenants for our credit facility and mortgage notes, as defined and calculated per the terms of the facility’s credit agreement and the mortgage notes’ governing documents, respectively, which are included in our filings with the U.S. Securities and Exchange Commission. These calculations, which are not based on U.S. GAAP measurements are presented to demonstrate that as of December 31, 2023, we are in compliance with the covenants.

Unsecured Credit Facility Covenants	Required			December 31, 2023
Maximum leverage ratio	<60		%		48	%
Minimum fixed charge coverage ratio	>1.50		x		1.77	x
Maximum secured indebtedness ratio		40	%		5	%
Minimum consolidated tangible net worth	$	213,384,302		$	280,835,049
Weighted average lease term (years)		7			16

Mortgage Notes Key Covenants	Debt service coverage ratio	December 31, 2023
Costco property	N.A.	N.A.
Taylor Fresh Foods property	1.5	3.4

Modiv Industrial, Inc.

Real Estate Acquisitions

(Unaudited)

The following table summarizes our property acquisition activity from our February 11, 2022 listing on the NYSE through December 31, 2023:

Tenant and Location	Property Type	Acquisition Date	Area (Square Feet)		Lease Term (Years)		Annual Rent Increase			Acquisition Price		Initial Cap Rate			Weighted Average Cap Rate
Lindsay Precast, eight properties acquired in: Colorado (3), Ohio (2), North Carolina, South Carolina and Florida	Industrial	April 2022		618,195		25.0		2.1	%	$	56,150,000		6.7	%		8.5	%
Producto, two properties acquired in upstate New York	Industrial	July 2022		72,373		20.0		2.0	%		5,343,862		7.2	%		8.8	%
Valtir, four properties acquired in Ohio, South Carolina, Texas and Utah (a)	Industrial	July 2022 and August 2022		293,612		20.0		2.3	%		23,375,000		7.7	%		9.7	%
Plastic Products, Princeton, MN	Industrial	January 2023		148,012		5.8		3.0	%		6,368,776		7.5	%		9.2	%
Stealth Manufacturing, Savage MN	Industrial	March 2023		55,175		20.0		2.5	%		5,500,000		7.7	%		9.8	%
Lindsay Precast, Gap, PA (b)	Industrial	April 2023		137,086		24.0		2.2	%		18,343,624		7.5	%		10.1	%
Summit Steel, Reading, PA	Industrial	April 2023		116,560		20.0		2.9	%		11,200,000		7.3	%		9.7	%
PBC Linear, Roscoe, IL	Industrial	April 2023		219,287		20.0		2.5	%		20,000,000		7.8	%		9.4	%
Cameron Tool, Lansing, MI	Industrial	May 2023		93,085		20.0		2.5	%		5,721,174		8.5	%		10.9	%
S.J. Electro Systems, Minnesota (2) and Texas	Industrial	May 2023		159,680		17.0		2.8	%		15,975,000		7.5	%		9.4	%
Titan, Alleyton, TX	Industrial	May 2023		223,082		20.0		2.9	%		17,100,000		8.2	%		10.8	%
Vistech, Piqua, OH	Industrial	July 2023		335,525		25.0		3.0	%		13,500,000		9.0	%		13.1	%
SixAxis, Andrews, SC	Industrial	July 2023		213,513		25.0		2.8	%		15,440,000		7.5	%		10.5	%
				2,685,185						$	214,017,436

(a)	The South Carolina and Ohio properties have a 25-year master lease and the Texas and Utah properties have a 15-year master lease.

(b)	Includes $1,800,000 funding provided for improvements to the previously acquired Lindsay property in Franklinton, North Carolina.

Modiv Industrial, Inc.

Real Estate Dispositions

(Unaudited)

The following table summarizes our property disposition activity from our February 11, 2022 listing on the NYSE through December 31, 2023.

Tenant and Location	Property Type	Disposition Date	Area (Square Feet)		Disposition Price		Cap Rate
Bon Secours, Richmond, VA	Office	February 2022		72,890	$	10,200,000		8.1	%
Omnicare, Richmond, VA	Flex	February 2022		51,800		8,760,000		6.8	%
Texas Health, Dallas, TX	Office	February 2022		38,794		7,040,000		7.9	%
Accredo, Orlando, FL	Office	February 2022		63,000		14,000,000		7.3	%
EMCOR, Cincinnati, OH	Office	June 2022		39,385		6,525,000		7.8	%
Williams Sonoma, Summerlin, NV	Office	August 2022		35,867		9,300,000		7.4	%
Wyndham, Summerlin, NV	Office	September 2022		41,390		12,900,000		7.4	%
Raising Cane’s, San Antonio, TX	Retail	December 2022		3,853		4,313,045		5.7	%
Dollar General, Litchfield, ME	Retail	August 2023		9,026		1,247,974		7.5	%
Dollar General, Wilton, ME	Retail	August 2023		9,100		1,452,188		7.7	%
Dollar General, Thompsontown, PA	Retail	August 2023		9,100		1,111,831		7.7	%
Dollar General, Mt. Gilead, OH	Retail	August 2023		9,026		1,066,451		8.1	%
Dollar General, Lakeside, OH	Retail	August 2023		9,026		1,134,522		7.1	%
Dollar General, Castalia, OH	Retail	August 2023		9,026		1,111,831		7.1	%
Dollar General, Bakersfield, CA	Retail	August 2023		18,827		4,855,754		6.6	%
Dollar General, Big Spring, TX	Retail	August 2023		9,026		1,270,665		6.8	%
Dollar Tree, Morrow, GA	Retail	August 2023		10,906		1,293,355		8.0	%
PreK Education, San Antonio, TX	Retail	August 2023		50,000		12,888,169		7.2	%
Walgreens, Santa Maria, CA	Retail	August 2023		14,490		6,081,036		6.1	%
exp US Services, Maitland, FL	Office	August 2023		33,118		5,899,514		10.6	%
GSA (MSHA), Vacaville, CA	Office	August 2023		11,014		2,586,710		7.8	%
EMC Shop (formerly Gap), Rocklin, CA	Flex	August 2023		40,110		5,466,960		8.1	%
				588,774	$	120,505,005

Modiv Industrial, Inc.

Top 20 Tenants

(Unaudited)

Tenant	ABR		ABR as a Percentage of Total Portfolio			Area (Square Feet)		Square Feet as a Percentage of Total Portfolio
Lindsay	$	5,249,962		13	%		755,281		16	%
KIA of Carson		3,962,641		10	%		72,623		2	%
Costco Wholesale		2,435,849		6	%		97,191		2	%
AvAir		2,364,941		6	%		162,714		4	%
State of CA OES		2,133,348		6	%		106,592		2	%
3M		1,879,624		5	%		410,400		9	%
Valtir		1,855,681		5	%		293,612		6	%
FUJIFILM Dimatix (a)		1,678,944		4	%		91,740		2	%
Taylor Fresh Foods		1,663,467		4	%		216,727		5	%
Pacific Bearing		1,560,000		4	%		219,287		5	%
Titan		1,423,275		4	%		223,082		5	%
Northrup Grumman		1,299,770		3	%		107,419		2	%
Vistech		1,230,188		3	%		335,525		7	%
SJE		1,217,291		3	%		159,680		3	%
SixAxis		1,163,177		3	%		213,513		5	%
Husqvarna		921,428		2	%		64,637		1	%
L3Harris		878,103		2	%		46,214		1	%
Summit Steel		833,134		2	%		116,560		3	%
Arrow-TruLine		792,993		2	%		206,155		4	%
WSP USA		751,076		2	%		37,449		1	%
Total Top 20 Tenants	$	35,294,892		89	%		3,936,401		85	%

(a)	Reflects our approximate 72.71% tenant-in-common interest (“TIC Interest”).

Modiv Industrial, Inc.

Property Type

(Unaudited)

Property Type	Number of Properties		ABR		ABR as a Percentage of Total Portfolio			Area (Square Feet)		Square Feet as a Percentage of Total Portfolio
Industrial Core, including TIC Interest		39	$	29,906,534		76	%		4,242,797		92	%
Tactical Non-Core (1)		3		8,817,672		22	%		276,406		6	%
Non-Core		2		862,505		2	%		113,266		2	%
Total Properties		44	$	39,586,711		100	%		4,632,469		100	%

(1)

We categorize Tactical Non-Core Assets as those assets that offer compelling value-add or opportunistic investment characteristics when measured over a near-term or interim holding period. We currently hold three such assets: (i) our tactical non-core acquisition of a leading KIA auto dealership located in a prime location in Los Angeles County in January 2022; this acquisition was structured as an UPREIT transaction resulting in a favorable equity issuance of $32,809,550 in Class C OP Units at a cost basis of $25.00 per share; (ii) our 12 year lease with the State of California’s Office of Emergency Services (OES) for an existing asset located in Rancho Cordova, California that includes an attractive purchase option by the tenant which we believe has a favorable probability of being executed in next 24 months; and (iii) our property leased to Costco located in Issaquah, Washington which offers compelling redevelopment opportunities following Costco’s lease expiration given its higher density infill location and the fact that the land is zoned for additional uses to include multi-family. In January 2024, we entered into a purchase and sale agreement with a national homebuilder for the sale of this property, for a sale price of $28,650,000, which is contingent upon the buyer’s satisfaction of various due diligence matters in its sole discretion by April 1, 2024. The sale would not close until 15 days following the earlier of (a) buyer obtaining all necessary development approvals, or (b) tenant vacating the property, but not prior to February 1, 2025, and not later than August 15, 2025. The buyer is not affiliated with the Company or its affiliates.

Modiv Industrial, Inc.

Tenant Industry Diversification

(Unaudited)

Industry	Number of Properties		ABR		ABR as a Percentage of Total Portfolio			Area (Square Feet)		Square Feet as a Percentage of Total Portfolio
Infrastructure		18	$	10,237,187		26	%		1,459,535		32	%
Automotive		5		6,230,572		16	%		664,463		14	%
Aerospace/Defense		3		4,542,814		12	%		316,347		7	%
Industrial Products		3		4,361,052		11	%		694,324		15	%
Metals		5		2,451,001		6	%		450,263		10	%
Retailer		1		2,435,849		6	%		97,191		2	%
Technology		2		2,281,148		6	%		130,240		3	%
Government		1		2,133,348		5	%		106,592		2	%
Energy		2		2,040,133		5	%		249,118		5	%
Agriculture/Food Production		2		1,663,467		4	%		295,584		6	%
Medical		1		658,817		2	%		20,800		1	%
Plastics		1		551,323		1	%		148,012		3	%
Total		44	$	39,586,711		100	%		4,632,469		100	%

Modiv Industrial, Inc.

Tenant Geographic Diversification

(Unaudited)

State	Number of Properties		ABR		ABR as a Percentage of Total Portfolio			Area (Square Feet)		Square Feet as a Percentage of Total Portfolio
California		9	$	11,580,695		29	%		515,954		11	%
Ohio		6		4,749,720		12	%		1,016,742		22	%
Arizona		2		4,028,408		10	%		379,441		8	%
Illinois		2		3,439,624		9	%		629,687		14	%
Washington		1		2,435,849		6	%		97,191		2	%
Pennsylvania		2		2,083,596		5	%		253,646		5	%
South Carolina		3		2,063,223		5	%		343,422		7	%
Florida		2		1,888,772		5	%		204,211		4	%
Texas		2		1,652,296		5	%		255,969		6	%
Minnesota		5		1,625,769		4	%		377,450		8	%
North Carolina		2		1,538,571		4	%		134,576		3	%
Colorado		3		852,574		2	%		98,994		2	%
Utah		1		512,339		1	%		72,498		2	%
Michigan		1		493,392		1	%		93,085		2	%
New York		2		396,235		1	%		72,373		2	%
Tennessee		1		245,648		1	%		87,230		2	%
Total		44	$	39,586,711		100	%		4,632,469		100	%

Modiv Industrial, Inc.

Lease Expirations

(Unaudited)

10 Years and Thereafter Lease Expirations

As of December 31, 2023
Year	Number of Leases Expiring		Leased Square Footage Expiring		Percentage of Leased Square Footage Expiring			Cumulative Percentage of Leased Square Footage Expiring			Annualized Base Rent Expiring		Percentage of Annualized Base Rent Expiring			Cumulative Percentage of Annualized Base Rent Expiring
2024 (1)		2		163,230		3.5	%		3.5	%	$	258,519		0.7	%		0.7	%
2025		3		144,027		3.1	%		6.6	%		3,711,525		9.4	%		10.1	%
2026		3		236,608		5.1	%		11.7	%		3,729,789		9.4	%		19.5	%
2027		1		64,637		1.4	%		13.1	%		921,428		2.3	%		21.8	%
2028		1		148,012		3.2	%		16.3	%		551,323		1.4	%		23.2	%
2029		2		84,714		1.8	%		18.1	%		1,480,307		3.7	%		26.9	%
2030		—		—		—	%		18.1	%		—		—	%		26.9	%
2031		—		—		—	%		18.1	%		—		—	%		26.9	%
2032		1		162,714		3.5	%		21.6	%		2,364,941		6.0	%		32.9	%
2033		1		216,727		4.7	%		26.3	%		1,663,467		4.2	%		37.1	%
Thereafter		30		3,411,800		73.7	%		100.0	%		24,905,412		62.9	%		100.0	%
Total		44		4,632,469		100.0	%				$	39,586,711		100.0	%

(1)	Includes ABR prior to the date of sale for two properties held for sale. The Cummins property was sold on February 28, 2024 (lease term expired on February 29, 2024) and the Levins property was sold on January 10, 2024 (lease term expires on December 31, 2024).

Modiv Industrial, Inc.

Disclosures Regarding Non-GAAP and Other Metrics

Notice Involving Non-GAAP Financial Measures

In addition to U.S. GAAP financial measures, this supplemental report contains and may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures and statements of why management believes these measures are useful to investors are provided below.

Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”)

In order to provide a more complete understanding of the operating performance of a REIT, the National Association of Real Estate Investment Trusts (“Nareit”) promulgated a measure known as FFO. FFO is defined as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships, joint ventures and preferred distributions. Because FFO calculations adjust for such items as depreciation and amortization of real estate assets and gains and losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), they facilitate comparisons of operating performance between periods and between other REITs. As a result, we believe that the use of FFO, together with the required GAAP presentations, provides a more complete understanding of our performance relative to our competitors and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. It should be noted, however, that other REITs may not define FFO in accordance with the current Nareit definition or may interpret the current Nareit definition differently than we do, making comparisons less meaningful.

Additionally, we use AFFO as a non-GAAP financial measure to evaluate our operating performance. AFFO excludes non-routine and certain non-cash items such as revenues in excess of cash received, deferred rent, amortization of stock-based compensation, amortization of in-place lease valuation intangibles, deferred financing fees, gain or loss from the extinguishment of debt, unrealized gains (losses) on derivative instruments, and write-offs of due diligence costs for abandoned pursuits. We also believe that AFFO is a recognized measure of sustainable operating performance by the REIT industry. Further, we believe AFFO is useful in comparing the sustainability of our operating performance with the sustainability of the operating performance of other real estate companies. Management believes that AFFO is a beneficial indicator of our ongoing portfolio performance and ability to sustain our current distribution level. More specifically, AFFO isolates the financial results of our operations. AFFO, however, is not considered an appropriate measure of historical earnings as it excludes certain significant costs that are otherwise included in reported earnings. Further, since the measure is based on historical financial information, AFFO for the period presented may not be indicative of future results or our future ability to pay our dividends. By providing FFO and AFFO, we present information that assists investors in aligning their analysis with management’s analysis of long-term operating activities.

For all of these reasons, we believe the non-GAAP measures of FFO and AFFO, in addition to income (loss) from operations, net income (loss) and cash flows from operating activities, as defined by GAAP, are helpful supplemental performance measures and useful to investors in evaluating the performance of our real estate portfolio. However, a material limitation associated with FFO and AFFO is that they are not indicative of our cash available to fund distributions since other uses of cash, such as capital expenditures at our properties and principal payments of debt, are not deducted when calculating FFO and AFFO. AFFO is useful in assisting management and investors in assessing our ongoing ability to generate cash flow from operations and continue as a going concern in future operating periods. Therefore, FFO and AFFO should not be viewed as a more prominent measure of performance than income (loss) from operations, net income or loss or cash flows from operating activities and each should be reviewed in connection with GAAP measurements.

Neither the SEC, Nareit, nor any other applicable regulatory body has opined on the acceptability of the adjustments contemplated to adjust FFO in order to calculate AFFO and its use as a non-GAAP performance measure. In the future, the SEC or Nareit may decide to standardize the allowable exclusions across the REIT industry, and we may have to adjust the calculation and characterization of this non-GAAP measure. Furthermore, as described in the notes to our unaudited condensed consolidated financial statements, the conversion ratios for units of Class M limited partnership interest in the Operating Partnership, units of Class P limited partnership interest in the Operating Partnership and units of Class R limited partnership interest (“Class R OP Units”) in the Operating Partnership can increase if the specified performance hurdles are achieved. The increased conversion ratio for the Class R OP Units is reflected in the fully-diluted weighted average shares outstanding above.

Adjusted EBITDA

We define Adjusted EBITDA as GAAP net income or loss adjusted to exclude depreciation and amortization, gains or losses from the sales of depreciable property, extraordinary items, provisions for impairment on investment in real estate and goodwill and intangibles, interest expense and non-cash items such as non-cash compensation expenses and write-offs of due diligence costs for abandoned pursuits We believe these non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. EBITDA is not a measure of financial performance under GAAP, and our EBITDA may not be comparable to similarly titled measures of other companies. You should not consider our EBITDA as an alternative to net income or cash flows from operating activities determined in accordance with GAAP.

Net Debt

We define Net Debt as gross debt less cash and cash equivalents and restricted cash.

Leverage Ratio

We define our “leverage ratio” as total debt as a percentage of the aggregate fair value of our real estate properties, including our proportionate interest in real estate owned by unconsolidated entities, plus our cash and cash equivalents.

Annualized Base Rent (“ABR”)

ABR represents contractual annual base rent for the next 12 months.

Initial Cap Rate

We define “initial cap rate” for property acquisitions as the initial annual cash rent divided by the purchase price of the property.

Weighted Average Cap Rate

We define “weighted average cap rate” for property acquisitions as the average annual cash rent including rent escalations over the lease term, divided by the purchase price of the property.

Document and Entity Information	Mar. 04, 2024
Entity Listings [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Mar. 04, 2024
Entity File Number	001-40814
Entity Registrant Name	Modiv Industrial, Inc.
Entity Central Index Key	0001645873
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	47-4156046
Entity Address, Address Line One	200 S. Virginia Street
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	Reno
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89501
City Area Code	888
Local Phone Number	686-6348
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Common Class C [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Class C Common Stock, $0.001 par value per share
Trading Symbol	MDV
Security Exchange Name	NYSE
7.375% Series A Cumulative Redeemable Perpetual Preferred [Member]
Entity Listings [Line Items]
Title of 12(b) Security	7.375% Series A Cumulative Redeemable Perpetual Preferred
Trading Symbol	MDV.PA
Security Exchange Name	NYSE

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