Exhibit 99.2
NYSE: MDV
QUARTERLY SUPPLEMENTAL DATA
September 30, 2024
Financial Information
and
Portfolio Information
Supplemental Information - Third Quarter 2024
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Table of Contents
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About the Data
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3
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Company Overview
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4
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Financial Results
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Earnings Release
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5
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Consolidated Statements of Operations - Last Five Quarters
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8
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Consolidated Statements of Comprehensive (Loss) Income - Last Five Quarters
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10 |
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(Loss) Earnings Per Share - Last Five Quarters
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11 |
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FFO and AFFO - Last Five Quarters
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12
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Adjusted EBITDA - Last Five Quarters
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13
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Leverage Ratio
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14
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Balance Sheets and Capitalization
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Capitalization
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15
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Consolidated Balance Sheets
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16
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Debt Overview
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17
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Credit Facility and Mortgage Notes Covenants
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18
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Real Estate
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Real Estate Acquisitions
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19
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Real Estate Dispositions
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20
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Top 20 Tenants
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21
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Property Type
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22
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Tenant Industry Diversification
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23
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Tenant Geographic Diversification
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24
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Lease Expirations
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25
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Appendix
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Disclosures Regarding Non-GAAP and Other Metrics
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26
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About the Data
This data and other information described herein are as of and for the three months ended September
30, 2024 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. Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 7, 2024 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June
30, 2024 and September 30, 2024, including the financial statements and management’s discussion and analysis of financial condition and results of operations, filed on May
2, 2024, August 6, 2024 and November 6, 2024, respectively.
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 and Iran. These and other risks, assumptions, and uncertainties are described in our filings with the U.S.
Securities and Exchange Commission (“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.
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.
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Management Team:
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Independent Directors:
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Aaron S. Halfacre
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Thomas H. Nolan, Jr.
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Chief Executive Officer and Director
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Chairman of the Board
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Raymond J. Pacini
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Christopher R. Gringas
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Chief Financial Officer and Secretary
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John C. Raney
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Kimberly Smith
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Chief Operating Officer and General Counsel
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Sandra G. Sciutto
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Connie Tirondola
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Chief Accounting Officer
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William R. Broms
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Chief Investment Officer
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Investor Inquiries:
management@modiv.com
Transfer Agent:
Computershare Trust Company, N.A.
150 Royall Street
Canton, MA 02021
800-736-3001
Modiv Industrial Announces Third Quarter 2024 Results
and Increases Dividend
Denver, CO, November 6, 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 third quarter ended September 30, 2024.
The following is a statement from Aaron Halfacre, CEO of Modiv Industrial:
“The past few months the American public has been bombarded with so many hyperactive headlines and speculative soundbites, both political and
economic. The pummeling and abrasion from all the information noise have led to fatigue and frustration. Many of us just want to get back to living. Some of you, at least right now, might be tired of the opinion spewing. As the adage goes, opinions
are like arseholes, we all have them and if you get too close you may notice an unpleasant aroma. Facts, on the other hand, bring about certainty and the truth is a wonderful disinfectant that can readily cleanse any situation. If you are reading
this right after the election and right before the next Fed meeting, then it means we aren’t yet done with all the aromatic pontification, so we are going to scrub this quarter’s missive to the most basic of hygienic facts in hopes that you can
have a time dividend to get on with your pursuit of a better life for yourself and your loved ones.
Third quarter AFFO was 34 cents per share – a penny higher than this time last year and a penny above consensus. In September we
executed an eight-year lease extension, to February 2034, for our San Diego, CA, property leased to WSP. In October, we executed a five-year lease extension, to October 2030, for our San Carlos, CA, property leased to Labcorp. Since our last
earnings release, we have raised $3.9 million on our ATM Offering at an average price of $16.54. Fist bump.
Wanting more? No problem. We’re currently working on another UPREIT transaction for an industrial property located in the
Jacksonville, FL MSA that, should it pass our final due diligence this month, would result in us issuing approximately $6 million in OP units at $17.00 per share for a completely unlevered acquisition priced at an accretive cap rate. This
transaction, when combined with our recent ATM activity, calculates to roughly 600,000 shares/units being issued at an average price of $16.80, which further computes to a full $1.2 million profit on the same amount of equity we bought back just
last quarter at $14.80. We’re working hard to make you money.
There’s just one more present under the tree. We recommended to our Board of Directors that we increase our annual dividend rate,
paid monthly, to $1.17, and they approved!
Ok, we will get back to getting sh-t done in hopes that we can share more good news by our next earnings release. If you haven’t
already done so, vote your proxy for our annual meeting in December.
P.S. – I wish to personally thank all of you out there who have emailed us to say how much you like our transparent and candid
style. We care deeply about the individual investor, so it comes to us naturally. Please feel free to email us at management@modiv.com. I plan to share the questions and critiques we receive in an upcoming communication.
Grit, grind, get it done!” Aaron Halfacre, CEO of Modiv Industrial.
Conference Call and Webcast
A conference call and audio webcast with analysts and investors will be held on Wednesday, November 6, 2024, at 11:00 a.m. Eastern Time / 8:00 a.m.
Pacific Time, to discuss the third quarter 2024 operating results and answer questions.
Live conference call: 1-877-407-0789 or 1-201-689-8562 at 11:00 a.m. Eastern Time, Wednesday, November 6, 2024
Webcast: To listen to the webcast, either live or archived, please use this link https://viavid.webcasts.com/starthere.jsp?ei=1693498&tp_key=a423007083 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, 2023 filed with the SEC on March 7, 2024. 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
November 6, 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.
The Company defines “initial
cap rate” for property acquisitions as the initial annual cash rent divided by the purchase price of the property. The Company defines “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.
Inquiries:
management@modiv.com
Consolidated Statements of Operations - Last Five Quarters
(Unaudited)
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Three Months Ended
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September 30,
2024
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June 30,
2024
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March 31,
2024
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December 31,
2023
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September 30,
2023
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Income:
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Rental income (a)
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$
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11,589,370
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$
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11,343,521
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$
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11,900,567
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$
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12,288,516
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$
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12,500,338
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Management fee income
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65,993
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65,993
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65,993
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65,993
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65,991
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Total income
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11,655,363
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11,409,514
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11,966,560
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12,354,509
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12,566,329
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Expenses:
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General and administrative
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1,660,520
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1,418,893
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1,999,401
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1,402,055
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1,735,104
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Stock compensation expense (b)
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75,000
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67,500
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1,378,502
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1,381,001
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8,469,867
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Depreciation and amortization
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4,166,992
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4,136,528
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4,133,501
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4,147,570
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4,175,209
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Property expenses (c)
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1,025,051
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694,043
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983,982
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731,081
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1,195,224
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Impairment of real estate investment property (d)
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—
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—
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|
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—
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888,186
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|
|
|
—
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Total expenses
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6,927,563
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6,316,964
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8,495,386
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8,549,893
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15,575,404
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Gain (loss) on sale of real estate investments (e)
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172,001
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—
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|
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3,187,806
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—
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|
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(1,708,801
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)
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Operating income (loss)
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|
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4,899,801
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5,092,550
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6,658,980
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|
3,804,616
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(4,717,876
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)
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|
|
|
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|
|
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Other income (expense):
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|
|
|
|
|
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|
|
|
|
|
|
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Interest income
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81,622
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|
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|
197,883
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|
123,839
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|
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28,967
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|
|
|
26,386
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Dividend income
|
|
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—
|
|
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4,955
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108,373
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285,000
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190,000
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Income from unconsolidated investment in a real estate property
|
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74,509
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74,211
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73,854
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72,043
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|
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79,166
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Interest expense, including unrealized gain or loss on interest rate swaps and net of derivative settlements (f)
|
|
|
(6,103,668
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)
|
|
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(4,103,350
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)
|
|
|
(2,307,149
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)
|
|
|
(7,045,059
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)
|
|
|
(2,922,918
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)
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Loss on sale of investment in common stock (g)
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|
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—
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|
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(4,513
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)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
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|
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(Decrease) increase in fair value of investment in common and preferred stock (g)
|
|
|
—
|
|
|
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—
|
|
|
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(20,574
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)
|
|
|
978,658
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|
|
|
440,000
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|
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Other
|
|
|
—
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|
|
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—
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|
|
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—
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|
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33,724
|
|
|
|
—
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Other expense, net
|
|
|
(5,947,537
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)
|
|
|
(3,830,814
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)
|
|
|
(2,021,657
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)
|
|
|
(5,646,667
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)
|
|
|
(2,187,366
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)
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| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net (loss) income
|
|
|
(1,047,736
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)
|
|
|
1,261,736
|
|
|
|
4,637,323
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|
|
|
(1,842,051
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)
|
|
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(6,905,242
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)
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|
Less: net loss (income) attributable to noncontrolling interests in Operating Partnership
|
|
|
461,334
|
|
|
|
63,181
|
|
|
|
(912,864
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)
|
|
|
546,967
|
|
|
|
1,368,896
|
|
|
Net (loss) income attributable to Modiv Industrial, Inc.
|
|
|
(586,402
|
)
|
|
|
1,324,917
|
|
|
|
3,724,459
|
|
|
|
(1,295,084
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)
|
|
|
(5,536,346
|
)
|
|
Preferred stock dividends
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
Net (loss) income attributable to common stockholders
|
|
$
|
(1,508,277
|
)
|
|
$
|
403,042
|
|
|
$
|
2,802,584
|
|
|
$
|
(2,216,959
|
)
|
|
$
|
(6,458,221
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.18
|
)
|
|
$
|
0.03
|
|
|
$
|
0.33
|
|
|
$
|
(0.30
|
)
|
|
$
|
(0.86
|
)
|
|
Net (loss) income per share attributable to common stockholders and noncontrollling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
(0.18
|
)
|
|
$
|
0.03
|
|
|
$
|
0.33
|
|
|
$
|
(0.30
|
)
|
|
$
|
(0.86
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9,430,885
|
|
|
|
9,441,485
|
|
|
|
8,568,353
|
|
|
|
7,621,871
|
|
|
|
7,548,052
|
|
|
Weighted-average number of common shares and Class C OP Units outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (h)
|
|
|
10,959,030
|
|
|
|
11,419,115
|
|
|
|
11,359,258
|
|
|
|
9,221,769
|
|
|
|
9,147,950
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions declared per common share (i)
|
|
$
|
0.2875
|
|
|
$
|
0.2875
|
|
|
$
|
0.2875
|
|
|
$
|
1.3975
|
|
|
$
|
0.2875
|
|
| (a) |
Rental income includes tenant reimbursements primarily for property expenses.
|
| (b) |
Since there were no stock incentive awards outstanding after the final vesting of the Class P and Class R OP Units during the first quarter of 2024, stock compensation expense for the second and third quarters of 2024 reflect only the portion of independent directors’ fees that were paid in common stock. Stock compensation expense in the third quarter of 2023
included a one-time non-cash catch-up adjustment of $7,822,197 related to our determination that it was probable that we would achieve our performance target for FFO of $1.05 per diluted share for the year ending 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. As a result of achieving our performance target of FFO of $1.05 per diluted share (excluding the performance units), our Class R OP Units automatically converted based on a conversion ratio of 2.5 Class
C OP Units for each Class R OP Unit for a total of 790,857 Class C OP Units, some of which were then exchanged for the Company’s Class C Common Stock, as of March 31, 2024. Stock compensation expense of $733,332 for the performance units
was recorded for the fourth quarter of 2023 and the first quarter of 2024 to recognize the final vesting periods.
|
| (c) |
Property expense fluctuations are primarily due to the timing of property dispositions and acquisitions. The increase in the third quarter of 2024 primarily reflects $239,191 of abandoned pursuit
costs related to negotiation of a potential joint venture transaction that is no longer going forward.
|
| (d) |
The impairment charge for the fourth quarter of 2023 relates to an office property located in Nashville, Tennessee leased to Cummins, Inc., which was sold on February 28, 2024. The impairment charge reflected the property’s net realizable value based upon contracted sale price, less estimated selling costs.
|
| (e) |
Gain on sale of real estate investments of $3,187,806 for the first quarter of 2024 relates to the sales of two properties (one industrial property with a lease expiration at the end of 2024 and
one office property). Loss on sale of real estate investments for the third quarter of 2023 includes a loss of $(1,887,040) on the sale of 13 non-core 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. 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.
|
| (f) |
Interest expense includes unrealized (loss) gain on interest rate swaps and is net of derivative settlements as shown below.
|
| |
|
Three Months Ended
|
|
| |
|
September 30,
2024
|
|
|
June 30,
2024
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
Derivative settlements
|
|
$
|
1,647,754
|
|
|
$
|
1,634,702
|
|
|
$
|
1,670,732
|
|
|
$
|
1,617,279
|
|
|
$
|
1,586,641
|
|
|
Unrealized (loss) gain on interest rate swaps
|
|
$
|
(2,422,801
|
)
|
|
$
|
(550,042
|
)
|
|
$
|
1,289,364
|
|
|
$
|
(3,400,138
|
)
|
|
$
|
795,424
|
|
The unrealized loss results in an increase in interest expense and the unrealized gain decreases interest expense.
| (g) |
Decrease (increase) in fair value of investment in common and preferred stock relates to the 2,794,597 shares of GIPR common stock received on January 31, 2024 in redemption for the $12,000,000 liquidation value of GIPR Series A Redeemable Preferred Stock. We immediately distributed 2,623,153 shares of
the GIPR common stock to our stockholders and sold the remaining 171,444 shares of GIPR common stock in the open market by May 9, 2024 at an average price of $3.80 per share for aggregate net proceeds of $652,118.
|
| (h) |
Diluted shares outstanding for periods when we reported a net loss do not include Class M, Class P and Class R OP Units because their effect would be anti-dilutive since the units did not vest
until the first quarter of 2024 (when they automatically converted to Class C OP Units) and were not yet entitled to participate in earnings (losses).
|
| (i) |
Distributions during the fourth quarter of 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 common stock multiplied by $3.95 which was the closing price of GIPR common stock on December 29, 2023.
|
Consolidated Statements of Comprehensive (Loss) Income - Last Five Quarters
(Unaudited)
| |
|
Three Months Ended
|
|
| |
|
September 30,
2024
|
|
|
June 30,
2024
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
Net (loss) income
|
|
$
|
(1,047,736
|
)
|
|
$
|
1,261,736
|
|
|
$
|
4,637,323
|
|
|
$
|
(1,842,051
|
)
|
|
$
|
(6,905,242
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss: cash flow hedge adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of unrealized holding gain on interest rate swap (a)
|
|
|
(255,873
|
)
|
|
|
(253,093
|
)
|
|
|
(253,093
|
)
|
|
|
(258,655
|
)
|
|
|
(253,092
|
)
|
|
Comprehensive (loss) income
|
|
|
(1,303,609
|
)
|
|
|
1,008,643
|
|
|
|
4,384,230
|
|
|
|
(2,100,706
|
)
|
|
|
(7,158,334
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (income) attributable to noncontrolling interest in Operating Partnership
|
|
|
461,334
|
|
|
|
63,181
|
|
|
|
(912,864
|
)
|
|
|
546,967
|
|
|
|
1,368,896
|
|
|
Other comprehensive loss attributable to noncontrolling interest in Operating Partnership: cash flow hedge adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of unrealized holding gain on interest rate swap (a)
|
|
|
35,835
|
|
|
|
43,873
|
|
|
|
62,185
|
|
|
|
44,959
|
|
|
|
44,264
|
|
|
Comprehensive loss (income) attributable to noncontrolling interest in Operating Partnership
|
|
|
497,169
|
|
|
|
107,054
|
|
|
|
(850,679
|
)
|
|
|
591,926
|
|
|
|
1,413,160
|
|
|
Comprehensive (loss) income attributable to Modiv Industrial, Inc.
|
|
$
|
(806,440
|
)
|
|
$
|
1,115,697
|
|
|
$
|
3,533,551
|
|
|
$
|
(1,508,780
|
)
|
|
$
|
(5,745,174
|
)
|
| (a) |
Due to the $150 million Term Loan swap’s failure to qualify as a cash flow hedge for each of the quarterly periods presented, due to the one-time cancellation option on December 31, 2024 as
compared with the maturity of the Term Loan. 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.
|
Earnings (Loss) Per Share - Last Five Quarters
(Unaudited)
| |
|
Three Months Ended
|
|
| |
|
September 30,
2024
|
|
|
June 30,
2024
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
Numerator - Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(1,047,736
|
)
|
|
$
|
1,261,736
|
|
|
$
|
4,637,323
|
|
|
$
|
(1,842,051
|
)
|
|
$
|
(6,905,242
|
)
|
|
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership (a)
|
|
|
274,646
|
|
|
|
(58,859
|
)
|
|
|
(912,864
|
)
|
|
|
479,518
|
|
|
|
1,368,896
|
|
|
Preferred stock dividends
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
Net (loss) income attributable to common stockholders
|
|
$
|
(1,694,965
|
)
|
|
$
|
281,002
|
|
|
$
|
2,802,584
|
|
|
$
|
(2,284,408
|
)
|
|
$
|
(6,458,221
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator - Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(1,047,736
|
)
|
|
$
|
1,261,736
|
|
|
$
|
4,637,323
|
|
|
$
|
(1,842,051
|
)
|
|
$
|
(6,905,242
|
)
|
|
Preferred stock dividends
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
|
(921,875
|
)
|
|
Net (loss) income attributable to common stockholders and noncontrolling interests
|
|
$
|
(1,969,611
|
)
|
|
$
|
339,861
|
|
|
$
|
3,715,448
|
|
|
$
|
(2,763,926
|
)
|
|
$
|
(7,827,117
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic
|
|
|
9,430,885
|
|
|
|
9,441,485
|
|
|
|
8,568,353
|
|
|
|
7,621,871
|
|
|
|
7,548,052
|
|
|
Class C OP Units (b)(c)(d)
|
|
|
1,528,145
|
|
|
|
1,977,630
|
|
|
|
2,790,905
|
|
|
|
1,599,898
|
|
|
|
1,599,898
|
|
|
Weighted average shares and units outstanding - diluted (e)
|
|
|
10,959,030
|
|
|
|
11,419,115
|
|
|
|
11,359,258
|
|
|
|
9,221,769
|
|
|
|
9,147,950
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.18
|
)
|
|
$
|
0.03
|
|
|
$
|
0.33
|
|
|
$
|
(0.30
|
)
|
|
$
|
(0.86
|
)
|
|
(Loss) earnings per share attributable to common stockholders and noncontrolling interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
(0.18
|
)
|
|
$
|
0.03
|
|
|
$
|
0.33
|
|
|
$
|
(0.30
|
)
|
|
$
|
(0.86
|
)
|
| (a) |
Each Class C Common Share and Class C OP Unit have the same participation in earnings (loss) and therefore there is no difference between basic and diluted earnings (loss) per share. Consequently,
net loss (income) attributable to noncontrolling interest in Operating Partnership for the three month periods presented above equals the product of (i) the Operating Partnership weighted average units as a percentage of diluted weighted
average shares and units outstanding and (ii) the net (loss) income attributable to common shareholders and noncontrolling interests for each period presented. This can result in a different net loss (income) attributable to noncontrolling
interest in Operating Partnership than the amount presented on the statements of operations and equity for the three month periods, as those amounts are calculated for the year-to-date period less the prior quarter’s year-to-date net loss
(income) attributable to noncontrolling interest in Operating Partnership. The net loss (income) attributable to noncontrolling interest in Operating Partnership for the three months ended June 30, 2024 and December 31, 2023 reflect
immaterial error corrections as described in Note 2 of Notes to the Unaudited Condensed Consolidated Financial Statements for the period ended September 30, 2024.
|
| (b) |
During the third quarter of 2024, we purchased 656,191 Class C OP Units, which were issued in 2022.
|
| (c) |
An aggregate of 1,980,822 of Classes M, P and R Units automatically converted to Class C OP Units during the first quarter of 2024. An aggregate of 1,566,110 and 51,381 units of the outstanding
Class C OP Units were exchanged for Class C common stock during the first and second quarters of 2024, respectively.
|
| (d) |
Prior to the third quarter of 2023, we issued 1,599,898 Class C OP Units in “UPREIT” transactions in connection with property acquisitions.
|
| (e) |
During both the three months ended December 31, 2023 and September 30, 2023, the weighted average dilutive effect of 1,980,822
and 1,506,307 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 since the units did not vest until the first quarter
of 2024 and were not yet entitled to participate in earnings (losses). There were no other outstanding securities or commitments to issue common stock that would have a dilutive effect for the periods then ended.
|
FFO and AFFO - Last Five Quarters
(Unaudited)
| |
|
Three Months Ended
|
|
| |
|
September 30,
2024
|
|
|
June 30,
2024
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
Net (loss) income (in accordance with GAAP)
|
|
$
|
(1,047,736
|
)
|
|
$
|
1,261,736
|
|
|
$
|
4,637,323
|
|
|
$
|
(1,842,051
|
)
|
|
$
|
(6,905,242
|
)
|
|
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
|
|
|
(1,969,611
|
)
|
|
|
339,861
|
|
|
|
3,715,448
|
|
|
|
(2,763,926
|
)
|
|
|
(7,827,117
|
)
|
|
FFO adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of real estate properties
|
|
|
4,166,992
|
|
|
|
4,136,528
|
|
|
|
4,133,501
|
|
|
|
4,147,570
|
|
|
|
4,175,209
|
|
|
Amortization of lease incentives
|
|
|
1,197
|
|
|
|
1,198
|
|
|
|
(3,786
|
)
|
|
|
(63,956
|
)
|
|
|
40,397
|
|
|
Depreciation and amortization for unconsolidated investment in a real estate property
|
|
|
188,934
|
|
|
|
188,934
|
|
|
|
188,919
|
|
|
|
188,889
|
|
|
|
187,479
|
|
|
Impairment of real estate investment property
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
888,186
|
|
|
|
—
|
|
|
(Gain) loss on sale of real estate investments, net
|
|
|
(172,001
|
)
|
|
|
—
|
|
|
|
(3,187,806
|
)
|
|
|
—
|
|
|
|
1,708,801
|
|
|
FFO attributable to common stockholders and Class C OP Unit holders
|
|
|
2,215,511
|
|
|
|
4,666,521
|
|
|
|
4,846,276
|
|
|
|
2,396,763
|
|
|
|
(1,715,231
|
)
|
|
AFFO adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense (a)
|
|
|
75,000
|
|
|
|
67,500
|
|
|
|
1,378,502
|
|
|
|
1,381,001
|
|
|
|
8,469,867
|
|
|
Amortization of deferred financing costs
|
|
|
221,496
|
|
|
|
221,495
|
|
|
|
221,497
|
|
|
|
210,604
|
|
|
|
165,708
|
|
|
Abandoned pursuit costs
|
|
|
239,191
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,208
|
|
|
Amortization of deferred rents
|
|
|
(1,284,995
|
)
|
|
|
(1,422,070
|
)
|
|
|
(1,671,798
|
)
|
|
|
(1,704,137
|
)
|
|
|
(1,772,403
|
)
|
|
Unrealized loss (gain) on interest rate swap valuation
|
|
|
2,422,801
|
|
|
|
550,042
|
|
|
|
(1,289,364
|
)
|
|
|
3,400,138
|
|
|
|
(795,424
|
)
|
|
Amortization of (below) above market lease intangibles, net
|
|
|
(211,600
|
)
|
|
|
(211,599
|
)
|
|
|
(211,599
|
)
|
|
|
(211,600
|
)
|
|
|
(204,010
|
)
|
|
Loss on sale of investment in common stock
|
|
|
—
|
|
|
|
4,513
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Decrease (increase) in fair value of investment in common and preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
20,574
|
|
|
|
(978,658
|
)
|
|
|
(440,000
|
)
|
|
Other adjustments for unconsolidated investment in a real estate property
|
|
|
23,825
|
|
|
|
23,826
|
|
|
|
23,825
|
|
|
|
17,821
|
|
|
|
11,819
|
|
|
AFFO attributable to common stockholders and Class C OP Unit holders
|
|
$
|
3,701,229
|
|
|
$
|
3,900,228
|
|
|
$
|
3,317,913
|
|
|
$
|
4,511,932
|
|
|
$
|
3,721,534
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully diluted (b)
|
|
|
10,959,030
|
|
|
|
11,419,115
|
|
|
|
11,359,258
|
|
|
|
11,202,591
|
|
|
|
11,128,772
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully diluted
|
|
$
|
0.20
|
|
|
$
|
0.41
|
|
|
$
|
0.43
|
|
|
$
|
0.21
|
|
|
$
|
(0.23
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully diluted
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
$
|
0.29
|
|
|
$
|
0.40
|
|
|
$
|
0.33
|
|
| (a) |
Since there were no stock incentive awards outstanding after the final vesting of the Class P and Class R OP Units during first quarter of 2024, stock compensation expense for the second and third
quarters of 2024 only reflects the portion of independent directors’ fees that are paid in common stock. Stock compensation expense in the third quarter of 2023 included a one-time non-cash catch-up adjustment of $7,822,197 related to our
determination that it was probable that we would achieve our performance target for FFO of $1.05 per diluted share for the year ending 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. As a result of achieving our performance
target of FFO of $1.05 per diluted share (excluding the performance units), our Class R OP Units automatically converted based on a conversion ratio of 2.5 Class C OP Units for each Class R OP Unit for a total of 790,857 Class C OP Units,
some of which were then exchanged for the Company’s Class C Common Stock, as of March 31, 2024. Stock compensation expense of $733,332 for the performance units was recorded for the fourth quarter of 2023 and the first quarter of 2024 to
recognize the final vesting periods.
|
| (b) |
The weighted average shares outstanding - diluted includes the Class C, Class M, Class P and Class R OP Units in each applicable period.
|
Adjusted EBITDA - Last Five Quarters
(Unaudited)
| |
|
Three Months Ended
|
|
| |
|
September 30,
2024
|
|
|
June 30,
2024
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
Net (loss) income (in accordance with GAAP)
|
|
$
|
(1,047,736
|
)
|
|
$
|
1,261,736
|
|
|
$
|
4,637,323
|
|
|
$
|
(1,842,051
|
)
|
|
$
|
(6,905,242
|
)
|
|
Depreciation and amortization of real estate properties
|
|
|
4,166,992
|
|
|
|
4,136,528
|
|
|
|
4,133,501
|
|
|
|
4,147,570
|
|
|
|
4,175,209
|
|
|
Depreciation and amortization for unconsolidated investment in a real estate property (c)
|
|
|
188,934
|
|
|
|
188,934
|
|
|
|
188,919
|
|
|
|
188,889
|
|
|
|
187,479
|
|
|
Interest expense, including unrealized gain or loss on interest rate swaps and net of derivative settlements (a)
|
|
|
6,103,668
|
|
|
|
4,103,350
|
|
|
|
2,307,149
|
|
|
|
7,045,059
|
|
|
|
2,922,918
|
|
|
Interest expense for unconsolidated investment in real estate property (c)
|
|
|
94,045
|
|
|
|
93,650
|
|
|
|
94,234
|
|
|
|
95,801
|
|
|
|
96,375
|
|
|
Impairment of real estate investment property (b)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
888,186
|
|
|
|
—
|
|
|
Stock compensation expense
|
|
|
75,000
|
|
|
|
67,500
|
|
|
|
1,378,502
|
|
|
|
1,381,001
|
|
|
|
8,469,867
|
|
|
(Gain) loss on sale of real estate investments, net
|
|
|
(172,001
|
)
|
|
|
—
|
|
|
|
(3,187,806
|
)
|
|
|
—
|
|
|
|
1,708,801
|
|
|
Abandoned pursuit costs
|
|
|
239,191
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,208
|
|
|
Loss on sale of investment in common stock
|
|
|
—
|
|
|
|
4,513
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Decrease (increase) in fair value of investment in common and preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
20,574
|
|
|
|
(978,658
|
)
|
|
|
(440,000
|
)
|
|
Adjusted EBITDA
|
|
$
|
9,648,093
|
|
|
$
|
9,856,211
|
|
|
$
|
9,572,396
|
|
|
$
|
10,925,797
|
|
|
$
|
10,216,615
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized adjusted EBITDA
|
|
$
|
38,592,372
|
|
|
$
|
39,424,844
|
|
|
$
|
38,289,580
|
|
|
$
|
43,703,188
|
|
|
$
|
40,866,460
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated debt
|
|
$
|
281,011,068
|
|
|
$
|
281,082,633
|
|
|
$
|
281,153,337
|
|
|
$
|
281,200,000
|
|
|
$
|
284,284,849
|
|
|
Debt of unconsolidated investment in real estate property (c)
|
|
|
9,078,403
|
|
|
|
9,138,019
|
|
|
|
9,197,045
|
|
|
|
9,256,466
|
|
|
|
9,315,322
|
|
|
Consolidated cash and restricted cash
|
|
|
(6,824,847
|
)
|
|
|
(18,869,651
|
)
|
|
|
(18,404,990
|
)
|
|
|
(3,129,414
|
)
|
|
|
(5,641,610
|
)
|
|
Cash of unconsolidated investment in real estate property (c)
|
|
|
(310,219
|
)
|
|
|
(298,147
|
)
|
|
|
(350,269
|
)
|
|
|
(350,937
|
)
|
|
|
(387,278
|
)
|
| |
|
$
|
282,954,405
|
|
|
$
|
271,052,854
|
|
|
$
|
271,595,123
|
|
|
$
|
286,976,115
|
|
|
$
|
287,571,283
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt / Adjusted EBITDA
|
|
|
7.3
|
x
|
|
|
6.9
|
x
|
|
|
7.1
|
x
|
|
|
6.6
|
x
|
|
|
7.0
|
x
|
| (a) |
Interest expense includes unrealized (loss) gain on interest rate swaps and is net of derivative settlements as shown below.
|
| |
|
Three Months Ended
|
|
| |
|
September 30,
2024
|
|
|
June 30,
2024
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
Derivative settlements
|
|
$
|
1,647,754
|
|
|
$
|
1,634,702
|
|
|
$
|
1,670,732
|
|
|
$
|
1,617,279
|
|
|
$
|
1,586,641
|
|
|
Unrealized (loss) gain on interest rate swaps
|
|
$
|
(2,422,801
|
)
|
|
$
|
(550,042
|
)
|
|
$
|
1,289,364
|
|
|
$
|
(3,400,138
|
)
|
|
$
|
795,424
|
|
The unrealized loss results in an increase in interest expense and the unrealized gain decreases interest expense.
| (b) |
The impairment charge for the fourth quarter of 2023 relates to an office property located in Nashville, Tennessee leased to Cummins, Inc., which was sold on February 28, 2024. The impairment
charge reflected the property’s net realizable value based upon contracted sale price, less estimated selling costs.
|
| (c) |
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.
|
Leverage Ratio
(Unaudited)
We calculate our leverage ratio in conformance with the definition used in our KeyBank credit facility as set forth below.
| |
|
As of
|
|
| |
|
September 30,
2024
|
|
|
December 31,
2023
|
|
|
Total Asset Value
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
6,824,847
|
|
|
$
|
3,129,414
|
|
|
Borrowing base value (a)
|
|
|
493,985,000
|
|
|
|
471,126,446
|
|
|
Other real estate value
|
|
|
81,403,443
|
|
|
|
102,340,000
|
|
|
Pro-rata share of unconsolidated investment in a real estate property
|
|
|
28,361,737
|
|
|
|
28,402,455
|
|
|
Total asset value
|
|
$
|
610,575,027
|
|
|
$
|
604,998,315
|
|
| |
|
|
|
|
|
|
|
|
|
Indebtedness
|
|
|
|
|
|
|
|
|
|
Credit facility term loan
|
|
$
|
250,000,000
|
|
|
$
|
250,000,000
|
|
|
Mortgage debt
|
|
|
31,011,068
|
|
|
|
31,200,000
|
|
|
Pro-rata share of unconsolidated investment in a real estate property
|
|
|
9,078,403
|
|
|
|
9,256,466
|
|
|
Total indebtedness
|
|
$
|
290,089,471
|
|
|
$
|
290,456,466
|
|
| |
|
|
|
|
|
|
|
|
|
Leverage Ratio
|
|
|
48
|
%
|
|
|
48
|
%
|
| (a) |
The increase in borrowing base properties reflects the addition of the property leased to the State of California’s Office of Emergency Services (“OES”) following repayment of the mortgage in
December 2023, partially offset by the two properties sold in January and February of 2024.
|
Capitalization as of September 30, 2024
(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
|
|
|
9,554,766
|
|
|
Class C OP Units
|
|
|
1,307,038
|
|
|
Total Class C Common Stock and Class C OP Units
|
|
|
10,861,804
|
|
|
Price Per Share / Unit at September 30, 2024
|
|
$
|
16.80
|
|
|
IMPLIED EQUITY MARKET CAPITALIZATION
|
|
$
|
182,478,307
|
|
|
% of Total Capitalization
|
|
|
35
|
%
|
| |
|
|
|
|
|
DEBT
|
|
|
|
|
|
Mortgage Debt
|
|
|
|
|
|
Costco Property
|
|
$
|
18,661,068
|
|
|
Taylor Fresh Foods Property
|
|
|
12,350,000
|
|
|
Total Mortgage Debt
|
|
$
|
31,011,068
|
|
|
KeyBank Credit Facility
|
|
|
|
|
|
Revolver
|
|
$
|
—
|
|
|
Term Loan (a) (b) (c)
|
|
|
250,000,000
|
|
|
Total Credit Facility
|
|
$
|
250,000,000
|
|
|
TOTAL DEBT
|
|
$
|
281,011,068
|
|
|
% of Total Capitalization
|
|
|
55
|
%
|
|
% of Total Debt - Floating Rate Debt
|
|
|
—
|
%
|
|
% of Total Debt - Fixed Rate Debt (a) (b) (d)
|
|
|
100
|
%
|
|
% of Total Debt
|
|
|
100
|
%
|
|
ENTERPRISE VALUE
|
|
|
|
|
|
Total Capitalization
|
|
$
|
513,489,375
|
|
|
Less: Cash and Cash Equivalents
|
|
|
(6,824,847
|
)
|
|
Enterprise Value
|
|
$
|
506,664,528
|
|
| (a) |
On May 10, 2022, we entered into a five-year swap to fix the secured overnight financing rate (“SOFR”) at 2.258% on our $150
million Term Loan that results in a fixed interest rate of 4.058% based on our leverage ratio of 48% as of September 30, 2024. Under our Credit Agreement, the interest rate will continue to vary based on our leverage ratio. The counter-party has a
one-time right of cancellation on December 31, 2024.
|
| (b) |
On October 26, 2022, we entered into another five-year swap to fix SOFR at 3.44% on our $100 million Term Loan commitment that results in a fixed interest rate of 5.24% based on our leverage ratio
of 48% as of September 30, 2024. Under our Credit Agreement, the interest rate will
continue to vary based on our leverage ratio. The counter-party has a one-time right of cancellation on December 31, 2024.
|
| (c) |
We have evaluated various alternatives available to enter into new swap agreements given that we anticipate the exercise of the cancellation options discussed in (a) and (b) above and intend to
implement a new hedging arrangement prior to December 31, 2024.
|
| (d) |
The weighted average interest rate for the $281,011,068 total debt outstanding was 4.52% as of September 30, 2024.
|
Consolidated Balance Sheets
(Unaudited)
| |
|
September 30,
2024
|
|
|
December 31,
2023
|
|
|
Assets
|
|
|
|
|
|
|
|
Real estate investments:
|
|
|
|
|
|
|
|
Land
|
|
$
|
106,211,873
|
|
|
$
|
104,858,693
|
|
|
Buildings and improvements
|
|
|
405,065,910
|
|
|
|
399,666,781
|
|
|
Equipment
|
|
|
4,429,000
|
|
|
|
4,429,000
|
|
|
Tenant origination and absorption costs
|
|
|
15,833,293
|
|
|
|
15,707,458
|
|
|
Total investments in real estate property
|
|
|
531,540,076
|
|
|
|
524,661,932
|
|
|
Accumulated depreciation and amortization
|
|
|
(63,338,634
|
)
|
|
|
(50,901,612
|
)
|
|
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for
sale, net
|
|
|
468,201,442
|
|
|
|
473,760,320
|
|
|
Unconsolidated investment in a real estate property
|
|
|
9,490,189
|
|
|
|
10,053,931
|
|
|
Total real estate investments, net, excluding real estate investments held for sale, net
|
|
|
477,691,631
|
|
|
|
483,814,251
|
|
|
Real estate investments held for sale, net
|
|
|
—
|
|
|
|
11,557,689
|
|
|
Total real estate investments, net
|
|
|
477,691,631
|
|
|
|
495,371,940
|
|
|
Cash and cash equivalents
|
|
|
6,824,847
|
|
|
|
3,129,414
|
|
|
Tenant deferred rent and other receivables
|
|
|
17,388,119
|
|
|
|
12,794,568
|
|
|
Above-market lease intangibles, net
|
|
|
1,258,460
|
|
|
|
1,313,959
|
|
|
Prepaid expenses and other assets
|
|
|
3,402,025
|
|
|
|
4,173,221
|
|
|
Investment in preferred stock
|
|
|
—
|
|
|
|
11,038,658
|
|
|
Interest rate swap derivative
|
|
|
807,337
|
|
|
|
2,970,733
|
|
|
Other assets related to real estate investments held for sale
|
|
|
—
|
|
|
|
103,337
|
|
|
Total assets
|
|
$
|
507,372,419
|
|
|
$
|
530,895,830
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
Mortgage notes payable, net
|
|
$
|
30,863,014
|
|
|
$
|
31,030,241
|
|
|
Credit facility term loan, net
|
|
|
248,876,279
|
|
|
|
248,508,515
|
|
|
Accounts payable, accrued and other liabilities
|
|
|
4,985,424
|
|
|
|
4,469,508
|
|
|
Distributions payable
|
|
|
1,962,762
|
|
|
|
12,174,979
|
|
|
Below-market lease intangibles, net
|
|
|
8,178,307
|
|
|
|
8,868,604
|
|
|
Interest rate swap derivative
|
|
|
755,490
|
|
|
|
473,348
|
|
|
Other liabilities related to real estate investments held for sale
|
|
|
—
|
|
|
|
248,727
|
|
|
Total liabilities
|
|
|
295,621,276
|
|
|
|
305,773,922
|
|
| |
|
|
|
|
|
|
|
|
|
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 September 30, 2024 and December 31, 2023
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, 10,022,085 shares issued and 9,554,766 shares outstanding as of September 30, 2024 and 8,048,110 shares issued and 7,704,600 shares outstanding as of December 31, 2023
|
|
|
10,022
|
|
|
|
8,048
|
|
|
Class S common stock, $0.001 par value, 100,000,000 shares authorized no shares issued and outstanding as of September 30, 2024 and December 31, 2023
|
|
|
—
|
|
|
|
—
|
|
|
Additional paid-in-capital
|
|
|
343,216,935
|
|
|
|
292,617,486
|
|
|
Treasury stock, at cost, 467,319 and 343,510 shares held as of September 30, 2024 and December 31, 2023, respectively
|
|
|
(7,111,921
|
)
|
|
|
(5,290,780
|
)
|
|
Cumulative distributions and net losses
|
|
|
(151,893,580
|
)
|
|
|
(145,551,586
|
)
|
|
Accumulated other comprehensive income
|
|
|
2,047,473
|
|
|
|
2,658,170
|
|
|
Total Modiv Industrial, Inc. equity
|
|
|
186,270,929
|
|
|
|
144,443,338
|
|
|
Noncontrolling interests in the Operating Partnership
|
|
|
25,480,214
|
|
|
|
80,678,570
|
|
|
Total equity
|
|
|
211,751,143
|
|
|
|
225,121,908
|
|
|
Total liabilities and equity
|
|
$
|
507,372,419
|
|
|
$
|
530,895,830
|
|
Modiv Industrial, Inc.
Debt Overview
(Unaudited)
| |
|
Outstanding Balance
|
|
|
|
|
|
|
|
|
Collateral
|
|
September 30,
2024
|
|
|
December 31,
2023
|
|
|
Interest Rate
|
|
|
|
Loan
Maturity
|
|
Mortgage Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costco property
|
|
$
|
18,661,068
|
|
|
$
|
18,850,000
|
|
|
|
4.85
|
%
|
(b) |
|
01/01/2030
|
|
Taylor Fresh Foods property
|
|
|
12,350,000
|
|
|
|
12,350,000
|
|
|
|
3.85
|
%
|
(b) |
|
11/01/2029
|
|
|
|
|
31,011,068
|
|
|
|
31,200,000
|
|
|
|
|
|
|
|
|
|
Less unamortized deferred financing costs
|
|
|
(148,054
|
)
|
|
|
(169,759
|
)
|
|
|
|
|
|
|
|
|
Mortgage notes payable, net
|
|
|
30,863,014
|
|
|
|
31,030,241
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KeyBank Credit Facility (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolver
|
|
|
—
|
|
|
|
—
|
|
|
|
6.73%
|
%
|
(c)(e) |
|
01/18/2026(g)
|
|
Term loan
|
|
|
250,000,000
|
|
|
|
250,000,000
|
|
|
|
4.53%
|
%
|
(d)(e) |
|
01/18/2027
|
|
Total Credit Facility
|
|
|
250,000,000
|
|
|
|
250,000,000
|
|
|
|
|
|
|
|
|
|
Less unamortized deferred financing costs
|
|
|
(1,123,721
|
)
|
|
|
(1,491,485
|
)
|
|
|
|
|
|
|
|
| |
|
|
248,876,279
|
|
|
|
248,508,515
|
|
|
|
|
|
|
|
|
|
Total debt, net
|
|
$
|
279,739,293
|
|
|
$
|
279,538,756
|
|
|
|
4.52
|
%
|
(f) |
|
|
| (a) |
Our $400 million Credit Facility is comprised of a $150 million Revolver and a $250 million 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 million. 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 September 30, 2024, the spread over the SOFR, including a 10 basis point credit adjustment, is 185 basis points and the interest rate on the Revolver was
6.725% as of September 30, 2024, 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 entered into a five-year swap to fix SOFR at 2.258% on the $150
million Term Loan that results in a fixed interest rate of 4.058% based on our leverage ratio of 48% as of September 30, 2024. On October 26, 2022, we entered into another five-year swap to fix SOFR at 3.44% on our $100 million Term Loan
which results in a fixed interest rate of 5.24% based on our leverage ratio of 48% as of September
30, 2024. 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 September 30, 2024.
|
| (e) |
We have evaluated various alternatives available to enter into new swap agreements given that we anticipate the exercise of the cancellation options discussed in (d) above and
intend to implement a new hedging arrangement prior to December 31, 2024.
|
| (f) |
The weighted average interest rate for the $281,011,068 total debt outstanding was 4.52% as of September 30, 2024.
|
|
(g)
|
We have options to extend the Revolver to 1/18/2027.
|
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 SEC. These calculations, which are not based on U.S.
Generally Accepted Accounting Principles (“GAAP”) measurements are presented to demonstrate that as of September 30, 2024, we are in compliance with the covenants.
|
Unsecured Credit Facility Covenants
|
|
Required
|
|
|
September 30,
2024
|
|
|
Maximum leverage ratio
|
|
<60%
|
|
|
|
48%
|
|
|
Minimum fixed charge coverage ratio
|
|
>1.50x
|
|
|
|
1.80
|
|
|
Maximum secured indebtedness ratio
|
|
|
40%
|
|
|
|
7%
|
|
|
Minimum consolidated tangible net worth
|
|
$
|
217,525,078
|
|
|
$
|
275,089,776
|
|
|
Weighted average lease term (years) (a)
|
|
|
7
|
|
|
|
15
|
|
(a) The weighted average lease term above only reflects the 37 properties that are included in the Credit Facility borrowing base.
|
Mortgage Notes Key Covenants
|
|
Debt service
coverage ratio
|
|
|
September 30,
2024
|
|
|
Costco property
|
|
N.A.
|
|
|
N.A.
|
|
|
Taylor Fresh Foods property
|
|
|
1.5
|
|
|
|
3.4
|
|
Real Estate Acquisitions
(Unaudited)
The following table summarizes our property acquisition activity from January 1, 2023 through September
30, 2024:
|
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
|
|
|
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 (a)
|
|
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
|
%
|
|
Torrent, Seminole, FL
|
|
Industrial
|
|
July 2024
|
|
|
29,699
|
|
|
|
20.0
|
|
|
|
2.9
|
%
|
|
|
5,125,000
|
|
|
|
8.0
|
%
|
|
|
10.6
|
%
|
|
Total
|
|
|
|
|
|
|
1,730,704
|
|
|
|
|
|
|
|
|
|
|
$
|
134,273,574
|
|
|
|
|
|
|
|
|
|
| (a) |
Includes $1,800,000 funding provided for improvements to the previously acquired Lindsay property in Franklinton, North Carolina, of which $1,600,144 has been deployed as of September 30, 2024.
|
Real Estate Dispositions
(Unaudited)
The following table summarizes our property disposition activity from January 1, 2023 through September
30, 2024.
|
Tenant and Location
|
|
Property Type
|
|
Disposition Date
|
|
Area (Square
Feet)
|
|
|
Disposition
Price
|
|
|
Cap Rate
|
|
|
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
|
|
Office
|
|
August 2023
|
|
|
40,110
|
|
|
|
5,466,960
|
|
|
|
8.1
|
%
|
|
Levins, Sacramento, CA
|
|
Industrial
|
|
January 2024
|
|
|
76,000
|
|
|
|
7,075,000
|
|
|
|
7.5
|
%
|
|
Cummins, Nashville, TN
|
|
Office
|
|
February 2024
|
|
|
87,230
|
|
|
|
7,950,000
|
|
|
N.A.
|
|
|
Lindsay, Canal Fulton, OH (Land parcel) (1)
|
|
Industrial
|
|
September 2024
|
|
|
—
|
|
|
|
240,000
|
|
|
N.A.
|
|
|
Total
|
|
|
|
|
|
|
405,025
|
|
|
$
|
62,731,960
|
|
|
|
|
|
| (1) |
Represents sale of an unutilized land parcel of an operating property, which was sold to the City of Canal Fulton, Ohio as park space.
|
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
|
|
$
|
5,333,787
|
|
|
|
13
|
%
|
|
|
755,281
|
|
|
|
17
|
%
|
|
KIA of Carson
|
|
|
4,022,048
|
|
|
|
10
|
%
|
|
|
72,623
|
|
|
|
2
|
%
|
|
State of CA OES
|
|
|
2,598,934
|
|
|
|
7
|
%
|
|
|
106,592
|
|
|
|
2
|
%
|
|
AvAir
|
|
|
2,400,415
|
|
|
|
6
|
%
|
|
|
162,714
|
|
|
|
4
|
%
|
|
Costco Wholesale
|
|
|
2,065,309
|
|
|
|
5
|
%
|
|
|
97,191
|
|
|
|
2
|
%
|
3M
|
|
|
1,897,203
|
|
|
|
5
|
%
|
|
|
410,400
|
|
|
|
9
|
%
|
|
Valtir
|
|
|
1,886,848
|
|
|
|
5
|
%
|
|
|
293,612
|
|
|
|
7
|
%
|
|
FUJIFILM Dimatix (a)
|
|
|
1,714,964
|
|
|
|
4
|
%
|
|
|
91,740
|
|
|
|
2
|
%
|
|
Taylor Fresh Foods
|
|
|
1,682,111
|
|
|
|
4
|
%
|
|
|
216,727
|
|
|
|
5
|
%
|
|
Pacific Bearing
|
|
|
1,560,000
|
|
|
|
4
|
%
|
|
|
219,287
|
|
|
|
5
|
%
|
|
Titan
|
|
|
1,453,579
|
|
|
|
4
|
%
|
|
|
223,082
|
|
|
|
5
|
%
|
|
Northrup Grumman
|
|
|
1,319,105
|
|
|
|
3
|
%
|
|
|
107,419
|
|
|
|
2
|
%
|
|
Vistech
|
|
|
1,257,707
|
|
|
|
3
|
%
|
|
|
335,525
|
|
|
|
7
|
%
|
|
SJE
|
|
|
1,242,303
|
|
|
|
3
|
%
|
|
|
159,680
|
|
|
|
3
|
%
|
|
SixAxis
|
|
|
1,187,041
|
|
|
|
3
|
%
|
|
|
213,513
|
|
|
|
5
|
%
|
|
Husqvarna
|
|
|
938,704
|
|
|
|
2
|
%
|
|
|
64,637
|
|
|
|
1
|
%
|
|
L3Harris
|
|
|
897,855
|
|
|
|
2
|
%
|
|
|
46,214
|
|
|
|
1
|
%
|
|
Summit Steel
|
|
|
850,887
|
|
|
|
2
|
%
|
|
|
116,560
|
|
|
|
3
|
%
|
|
Arrow-TruLine
|
|
|
804,888
|
|
|
|
2
|
%
|
|
|
206,155
|
|
|
|
4
|
%
|
|
WSP USA
|
|
|
767,949
|
|
|
|
2
|
%
|
|
|
37,449
|
|
|
|
1
|
%
|
|
Total Top 20 Tenants
|
|
$
|
35,881,637
|
|
|
|
89
|
%
|
|
|
3,936,401
|
|
|
|
87
|
%
|
| (a) |
Reflects our approximate 72.71% tenant-in-common interest (“TIC Interest”).
|
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
|
|
|
$
|
30,796,690
|
|
|
|
77
|
%
|
|
|
4,196,497
|
|
|
|
93
|
%
|
|
Non-core (a)
|
|
|
4
|
|
|
|
9,409,223
|
|
|
|
23
|
%
|
|
|
302,442
|
|
|
|
7
|
%
|
|
Total
|
|
|
43
|
|
|
$
|
40,205,913
|
|
|
|
100
|
%
|
|
|
4,498,939
|
|
|
|
100
|
%
|
| (a) |
Non-core properties include the following:
|
|
(i) |
our non-core acquisition of a leading KIA auto dealership located in a prime location in Los Angeles County acquired in January 2022 which was structured as an UPREIT transaction resulting in a
favorable equity issuance of $32,809,550 of Class C OP Units at a cost basis of $25 per share;
|
|
(ii) |
our 12-year lease with OES, executed in January 2023, for one of our legacy assets located in Rancho Cordova, California that includes an attractive purchase option, which OES may exercise until
December 31, 2026. We have received preliminary indications from OES of interest in exercising the option. (We define legacy assets as those that were acquired by different management teams utilizing different investment objectives and
underwriting criteria);
|
|
(iii) |
our legacy property leased to Costco located in Issaquah, Washington which offers compelling redevelopment opportunities following Costco’s lease expiration on July 31, 2025, given its higher
density infill location and the fact that the land is zoned to allow for multi-family development. We entered into a purchase and sale agreement with KB Home, a national homebuilder, for the sale of this property, for a sale price of
$28,650,000. On April 1, 2024, we entered into an amendment to the purchase and sale agreement for a revised sale price of $25,300,000, due to the City of Issaquah’s setback requirements resulting in a reduced number of townhomes planned
for the property, with an agreement to increase the purchase price by $325,000 for each additional townhome the buyer can add to the development prior to closing. KB Home completed its due diligence on April 26, 2024 and deposited
$1,407,500 into escrow on May 1, 2024, bringing the total non-refundable deposit to $1,432,500;
|
Completing the sale remains subject to the buyer obtaining development approvals and
the sale will not close until the earlier of (a) 15 days following the later of buyer obtaining all necessary development approvals and tenant vacating the property, but not prior to February 1, 2025, and (b) August 15, 2025 unless extended. The
amendment to the purchase and sale agreement provides that the buyer can extend the closing date up to three times for 60 days for each extension. The nonrefundable extension fee for the first extension is $300,000 with 50% applicable to the
purchase price. The nonrefundable extension fees for the second and third extensions are $200,000 and $300,000, respectively, and none of these extension fees will be applicable to the purchase price. The buyer is not affiliated with the Company
or its affiliates. Since the pending disposition is not probable of being completed within 12 months of the balance sheet date, the property is not classified as a real estate investment held for sale as of September 30, 2024; and
|
(iv) |
our legacy property leased to Solar Turbines that we expect to sell after we complete a parcel split in order to maximize its value.
|
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
|
|
|
$
|
10,417,928
|
|
|
|
26
|
%
|
|
|
1,459,535
|
|
|
|
32
|
%
|
|
Automotive
|
|
|
3
|
|
|
|
5,982,366
|
|
|
|
15
|
%
|
|
|
501,233
|
|
|
|
11
|
%
|
|
Aerospace/Defense
|
|
|
4
|
|
|
|
5,029,323
|
|
|
|
13
|
%
|
|
|
346,046
|
|
|
|
8
|
%
|
|
Industrial Products
|
|
|
3
|
|
|
|
4,395,907
|
|
|
|
11
|
%
|
|
|
694,324
|
|
|
|
15
|
%
|
|
Government
|
|
|
1
|
|
|
|
2,598,934
|
|
|
|
6
|
%
|
|
|
106,592
|
|
|
|
2
|
%
|
|
Metals
|
|
|
5
|
|
|
|
2,494,590
|
|
|
|
6
|
%
|
|
|
450,263
|
|
|
|
10
|
%
|
|
Technology
|
|
|
2
|
|
|
|
2,330,579
|
|
|
|
6
|
%
|
|
|
130,240
|
|
|
|
3
|
%
|
|
Retailer
|
|
|
1
|
|
|
|
2,065,309
|
|
|
|
5
|
%
|
|
|
97,191
|
|
|
|
2
|
%
|
|
Energy
|
|
|
2
|
|
|
|
1,976,512
|
|
|
|
5
|
%
|
|
|
249,118
|
|
|
|
6
|
%
|
|
Agriculture/Food Production
|
|
|
2
|
|
|
|
1,682,111
|
|
|
|
4
|
%
|
|
|
295,584
|
|
|
|
7
|
%
|
|
Medical
|
|
|
1
|
|
|
|
668,688
|
|
|
|
2
|
%
|
|
|
20,800
|
|
|
|
1
|
%
|
|
Plastics
|
|
|
1
|
|
|
|
563,666
|
|
|
|
1
|
%
|
|
|
148,012
|
|
|
|
3
|
%
|
|
Total
|
|
|
43
|
|
|
$
|
40,205,913
|
|
|
|
100
|
%
|
|
|
4,498,938
|
|
|
|
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
|
|
|
8
|
|
|
$
|
12,008,985
|
|
|
|
30
|
%
|
|
|
439,954
|
|
|
|
10
|
%
|
|
Ohio
|
|
|
6
|
|
|
|
4,836,408
|
|
|
|
12
|
%
|
|
|
1,016,742
|
|
|
|
22
|
%
|
|
Arizona
|
|
|
2
|
|
|
|
4,082,526
|
|
|
|
10
|
%
|
|
|
379,441
|
|
|
|
8
|
%
|
|
Illinois
|
|
|
2
|
|
|
|
3,457,203
|
|
|
|
9
|
%
|
|
|
629,687
|
|
|
|
14
|
%
|
|
Florida
|
|
|
3
|
|
|
|
2,329,037
|
|
|
|
6
|
%
|
|
|
233,910
|
|
|
|
5
|
%
|
|
Pennsylvania
|
|
|
2
|
|
|
|
2,121,801
|
|
|
|
6
|
%
|
|
|
253,646
|
|
|
|
6
|
%
|
|
South Carolina
|
|
|
3
|
|
|
|
2,102,010
|
|
|
|
5
|
%
|
|
|
343,422
|
|
|
|
8
|
%
|
|
Washington
|
|
|
1
|
|
|
|
2,065,309
|
|
|
|
5
|
%
|
|
|
97,191
|
|
|
|
2
|
%
|
|
Texas
|
|
|
2
|
|
|
|
1,686,448
|
|
|
|
4
|
%
|
|
|
255,969
|
|
|
|
6
|
%
|
|
Minnesota
|
|
|
5
|
|
|
|
1,659,402
|
|
|
|
4
|
%
|
|
|
377,450
|
|
|
|
8
|
%
|
|
North Carolina
|
|
|
2
|
|
|
|
1,565,259
|
|
|
|
4
|
%
|
|
|
134,576
|
|
|
|
3
|
%
|
|
Colorado
|
|
|
3
|
|
|
|
865,812
|
|
|
|
2
|
%
|
|
|
98,994
|
|
|
|
2
|
%
|
|
Utah
|
|
|
1
|
|
|
|
520,947
|
|
|
|
1
|
%
|
|
|
72,498
|
|
|
|
2
|
%
|
|
Michigan
|
|
|
1
|
|
|
|
502,611
|
|
|
|
1
|
%
|
|
|
93,085
|
|
|
|
2
|
%
|
|
New York
|
|
|
2
|
|
|
|
402,155
|
|
|
|
1
|
%
|
|
|
72,373
|
|
|
|
2
|
%
|
|
Total
|
|
|
43
|
|
|
$
|
40,205,913
|
|
|
|
100
|
%
|
|
|
4,498,938
|
|
|
|
100
|
%
|
Lease Expirations
(Unaudited)
10 Years and Thereafter Lease Expirations
|
As of September 30, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
October to December 2024
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
%
|
|
|
—
|
%
|
|
$
|
—
|
|
|
|
—
|
%
|
|
|
—
|
%
|
|
2025
|
|
|
2
|
|
|
|
123,227
|
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
2,588,242
|
|
|
|
6
|
%
|
|
|
6
|
%
|
|
2026
|
|
|
2
|
|
|
|
199,159
|
|
|
|
5
|
%
|
|
|
8
|
%
|
|
|
3,034,069
|
|
|
|
8
|
%
|
|
|
14
|
%
|
|
2027
|
|
|
1
|
|
|
|
64,637
|
|
|
|
1
|
%
|
|
|
9
|
%
|
|
|
938,705
|
|
|
|
2
|
%
|
|
|
16
|
%
|
|
2028
|
|
|
1
|
|
|
|
148,012
|
|
|
|
3
|
%
|
|
|
12
|
%
|
|
|
563,666
|
|
|
|
1
|
%
|
|
|
17
|
%
|
|
2029
|
|
|
2
|
|
|
|
84,714
|
|
|
|
2
|
%
|
|
|
14
|
%
|
|
|
1,513,470
|
|
|
|
4
|
%
|
|
|
21
|
%
|
|
2030
|
|
|
1
|
|
|
|
20,800
|
|
|
|
—
|
%
|
|
|
14
|
%
|
|
|
668,688
|
|
|
|
2
|
%
|
|
|
23
|
%
|
|
2031
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
%
|
|
|
14
|
%
|
|
|
—
|
|
|
|
—
|
%
|
|
|
23
|
%
|
|
2032
|
|
|
1
|
|
|
|
162,714
|
|
|
|
4
|
%
|
|
|
18
|
%
|
|
|
2,400,415
|
|
|
|
6
|
%
|
|
|
29
|
%
|
|
2033
|
|
|
2
|
|
|
|
237,527
|
|
|
|
5
|
%
|
|
|
23
|
%
|
|
|
2,350,799
|
|
|
|
6
|
%
|
|
|
35
|
%
|
|
Thereafter
|
|
|
31
|
|
|
|
3,458,148
|
|
|
|
77
|
%
|
|
|
100
|
%
|
|
|
26,147,859
|
|
|
|
65
|
%
|
|
|
100
|
%
|
|
Total
|
|
|
43
|
|
|
|
4,498,938
|
|
|
|
100
|
%
|
|
|
|
|
|
$
|
40,205,913
|
|
|
|
100
|
%
|
|
|
|
|
Reflects expirations including lease extensions received through October 31,2024.
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 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 investments, preferred dividends 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 stock-based compensation, amortization of deferred rent, amortization of below/above market lease intangibles, amortization of deferred financing costs, 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 of 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 or loss from operations, net income or 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 or loss from operations, net income (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 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.
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.
27