Fourth Quarter, Full Year 2023 and Subsequent Highlights
- Reported results for the fourth quarter of 2023 reflect net income attributable to common stockholders of
$0.20 per weighted average common share; Core Funds from Operations attributable to common stockholders and unit holders (“Core FFO”) of$0.47 per weighted average common share and units; and Adjusted FFO (“AFFO”) of$0.48 per weighted average common share and units. Reported results for the full year 2023 reflect net income attributable to common stockholders of$0.20 per weighted average common share; Core FFO of$1.84 per weighted average common share and units; and AFFO of$1.73 per weighted average common share and units. - Same store NOI (“SS NOI”) increased 6.6% on a GAAP basis excluding early termination income for the fourth quarter compared with the same period in 2022; increased 9.7% on a cash basis excluding early termination income. SS NOI increased 3.7% on a GAAP basis excluding early termination income for 2023 compared with the same period in 2022; increased 7.6% on a cash basis excluding early termination income.
- Commenced leases during the fourth quarter experienced a 23.4% increase in rental rates on a cash basis from leases greater than six months. Commenced leases during the full year 2023 experienced a 21.0% increase in rental rates on a cash basis from leases greater than six months. Through
February 19, 2024 , executed leases scheduled to commence during 2024, excluding leases associated with new construction, total an aggregate of 3,181,442 square feet, all of which are associated with terms of at least six months. The Company will experience a 15.7% increase in rental rates on a cash basis from these leases. - Completed the disposition of an industrial building in
New Jersey for$16.8 million , yielding a 6.3% cap rate on in-place NOI and an IRR of 18.2% over a nine-year hold period; the sale resulted in$16.2 million of net proceeds, all of which were used to reduce outstanding borrowings on the Company’s unsecured credit facility. During 2023, the Company completed$36.7 million of dispositions, which resulted in the paydown of$35.8 million in debt. - On
November 1 , repaid the AIG Loan in full in the amount of approximately$110 million , or$106.9 million after factoring the release of lender escrows; the repayment leaves the Company with only$18.4 million of debt maturing untilAugust 2025 . - Effective with the first quarter of 2024, the Board of Directors declared a 6.7% increase in the regular quarterly cash dividend for the common stock from
$0.225 per share to$0.240 per share, or$0.96 per share on an annualized basis. - Issued full year 2024 guidance ranges for net loss per weighted average common share of
$(0.12) to$(0.08) and Core FFO of$1.88 to$1.92 per weighted average common share and units along with accompanying assumptions.
Financial Results for the Fourth Quarter of 2023
Net income attributable to common stockholders for the quarter ended
Consolidated total revenues for the quarter ended
NOI for the quarter ended
EBITDAre for the quarter ended
Core FFO for the quarter ended
AFFO for the quarter ended
See “Non-GAAP Financial Measures” for complete definitions of NOI, EBITDAre, Core FFO and AFFO and the financial tables accompanying this press release for reconciliations of net income to NOI, EBITDAre, Core FFO and AFFO.
Liquidity and Capital Markets Activity
As of
As previously disclosed, on
On
After factoring in these interest rate swap agreements, 94% of the Company’s outstanding debt as of
Quarterly Distributions to Stockholders
On
On
Investment and Disposition Activity
As of
During the fourth quarter, Plymouth completed the previously announced sale of its 156,634-square-foot industrial building in
During the fourth quarter, Plymouth delivered a fully leased industrial building in
Leasing Activity
Leases commencing during the fourth quarter ended
Executed leases commencing during 2023, excluding leases associated with new construction, totaled an aggregate of 5,599,943 square feet, all of which are associated with terms of at least six months. These leases included 3,945,024 square feet of renewal leases and 1,654,919 square feet of new leases of which 109,098 square feet was vacant at the start of 2023.The Company will experience a 21.0% increase in rental rates on a cash basis from these leases with renewal leases experiencing a 16.3% increase on a cash basis and new leases experiencing a 31.4% increase on a cash basis.
Through
The remaining 2024 expirations include a 769,500-square-foot Class A industrial building in the Metro East submarket of
Guidance for 2024
Plymouth issued its full year 2024 guidance ranges for net loss and Core FFO per weighted average common share and units as well as the accompanying guidance assumptions, which can be found in the tables below.
(Dollars, shares and units in thousands) | Full Year 2024 Range1 | |||||||
Low | High | |||||||
Core FFO attributable to common stockholders and unit holder per share | $ | 1.88 | $ | 1.92 | ||||
Same Store Portfolio NOI growth – cash basis2 | 7.00% | 7.50% | ||||||
Average Same Store Portfolio occupancy – full year | 97.5% | 98.5% | ||||||
General and administrative expenses3 | $ | 15,650 | $ | 15,150 | ||||
Interest expense, net | $ | 37,650 | $ | 37,150 | ||||
Weighted average common shares and units outstanding4 | 45,880 | 45,880 | ||||||
Reconciliation of net income attributable to common stockholders and unit holders per share to Core FFO guidance: | ||||||||
Full Year 2024 Range1 | ||||||||
Low | High | |||||||
Net loss | $ | (0.12 | ) | $ | (0.08 | ) | ||
Real estate depreciation & amortization | 2.00 | 2.00 | ||||||
Core FFO | $ | 1.88 | $ | 1.92 | ||||
1) Our 2024 guidance refers to the Company's in-place portfolio as of
2) The Same Store Portfolio consists of 200 buildings aggregating 31,245,756 rentable square feet, representing approximately 92% of total in-place portfolio square footage.
3) Includes non-cash stock compensation of
4) As of
Earnings Conference Call and Webcast
The Company will host a conference call and live audio webcast, both open for the general public to hear, on
The Company has posted supplemental financial information on the fourth quarter results and prepared commentary that it will reference during the conference call. The supplemental information can be found under Financial Results on the Company’s Investor Relations page. The live audio webcast of the Company’s quarterly conference call will be available online in the Investor Relations section of the Company’s website at ir.plymouthreit.com. The online replay will be available approximately one hour after the end of the call and archived for one year.
About Plymouth
Forward-Looking Statements
This press release includes “forward-looking statements” that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements regarding management's plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statement, many of which may be beyond our control, including, without limitation, those factors described under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the
CONSOLIDATED BALANCE SHEETS | ||||||||
UNAUDITED | ||||||||
(In thousands, except share and per share amounts) | ||||||||
2023 | 2022 | |||||||
Assets | ||||||||
Real estate properties | $ | 1,567,866 | $ | 1,555,846 | ||||
Less accumulated depreciation | (268,046 | ) | (205,629 | ) | ||||
Real estate properties, net | 1,299,820 | 1,350,217 | ||||||
Cash | 14,493 | 11,003 | ||||||
Cash held in escrow | 4,716 | 13,376 | ||||||
Restricted cash | 6,995 | 6,834 | ||||||
Deferred lease intangibles, net | 51,474 | 70,718 | ||||||
Interest rate swaps | 21,667 | 30,115 | ||||||
Other assets | 42,734 | 39,055 | ||||||
Total assets | $ | 1,441,899 | $ | 1,521,318 | ||||
Liabilities, Preferred Stock and Equity | ||||||||
Liabilities: | ||||||||
Secured debt, net | 266,887 | 389,531 | ||||||
Unsecured debt, net | 447,990 | 447,345 | ||||||
Borrowings under line of credit | 155,400 | 77,500 | ||||||
Accounts payable, accrued expenses and other liabilities | 73,904 | 72,551 | ||||||
Deferred lease intangibles, net | 6,044 | 8,918 | ||||||
Interest rate swaps | 1,161 | - | ||||||
Financing lease liability | 2,271 | 2,248 | ||||||
Total Liabilities | 953,657 | 998,093 | ||||||
Preferred stock, par value | ||||||||
Series A; 0 and 1,955,513 shares issued and outstanding at | - | 46,844 | ||||||
Equity: | ||||||||
Common stock, | 452 | 428 | ||||||
Additional paid in capital | 644,938 | 635,068 | ||||||
Accumulated deficit | (182,606 | ) | (194,243 | ) | ||||
Accumulated other comprehensive income | 20,233 | 29,739 | ||||||
Total stockholders' equity | 483,017 | 470,992 | ||||||
Non-controlling interest | 5,225 | 5,389 | ||||||
Total equity | 488,242 | 476,381 | ||||||
Total liabilities, preferred stock and equity | $ | 1,441,899 | $ | 1,521,318 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
UNAUDITED | |||||||||||||||||
(In thousands, except share and per share amounts) | |||||||||||||||||
For the Three Months | For the Year | ||||||||||||||||
Ended | Ended | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Rental revenue | $ | 50,754 | $ | 47,322 | $ | 199,760 | $ | 183,442 | |||||||||
Management fee revenue and other income | 30 | 4 | 88 | 94 | |||||||||||||
Total revenues | 50,784 | 47,326 | 199,848 | 183,536 | |||||||||||||
Operating expenses: | |||||||||||||||||
Property | 15,144 | 14,232 | 62,542 | 56,601 | |||||||||||||
Depreciation and amortization | 22,793 | 23,553 | 92,891 | 95,312 | |||||||||||||
General and administrative | 4,318 | 4,163 | 14,904 | 15,939 | |||||||||||||
Total operating expenses | 42,255 | 41,948 | 170,337 | 167,852 | |||||||||||||
Other income (expense): | |||||||||||||||||
Interest expense | (9,686 | ) | (8,914 | ) | (38,278 | ) | (32,217 | ) | |||||||||
Earnings (loss) in investment of unconsolidated joint venture | - | - | - | (147 | ) | ||||||||||||
Loss on extinguishment of debt | - | - | (72 | ) | (2,176 | ) | |||||||||||
Gain on sale of real estate | 10,534 | - | 22,646 | - | |||||||||||||
(Appreciation) depreciation of warrants | - | - | - | 1,760 | |||||||||||||
Total other income (expense) | 848 | (8,914 | ) | (15,704 | ) | (32,780 | ) | ||||||||||
Net income (loss) | $ | 9,377 | $ | (3,536 | ) | $ | 13,807 | $ | (17,096 | ) | |||||||
Less: Net income (loss) attributable to non-controlling interest | $ | 101 | $ | (40 | ) | $ | 147 | $ | (210 | ) | |||||||
Net income (loss) attributable to | $ | 9,276 | $ | (3,496 | ) | $ | 13,660 | $ | (16,886 | ) | |||||||
Less: Preferred Stock dividends | - | 917 | 2,509 | 4,866 | |||||||||||||
Less: Series B Preferred Stock accretion to redemption value | - | - | - | 4,621 | |||||||||||||
Less: Loss on extinguishment/redemption of Series A Preferred Stock | - | 19 | 2,023 | 99 | |||||||||||||
Less: Amount allocated to participating securities | 84 | 62 | 337 | 256 | |||||||||||||
Net income (loss) attributable to common stockholders | $ | 9,192 | $ | (4,494 | ) | $ | 8,791 | $ | (26,728 | ) | |||||||
Net income (loss) per share attributable to common stockholders - basic | $ | 0.20 | $ | (0.11 | ) | $ | 0.20 | $ | (0.67 | ) | |||||||
Net income (loss) per share attributable to common stockholders - diluted | $ | 0.20 | $ | (0.11 | ) | $ | 0.20 | $ | (0.67 | ) | |||||||
Weighted-average common shares outstanding - basic | 44,879,341 | 42,569,415 | 43,554,504 | 39,779,128 | |||||||||||||
Weighted-average common shares outstanding - diluted | 44,992,450 | 42,569,415 | 43,631,693 | 39,779,128 | |||||||||||||
Non-GAAP Financial Measures Definitions
Net Operating Income (NOI): We consider net operating income, or NOI, to be an appropriate supplemental measure to net income in that it helps both investors and management understand the core operations of our properties. We define NOI as total revenue (including rental revenue and tenant reimbursements) less property-level operating expenses. NOI excludes depreciation and amortization, general and administrative expenses, impairments, gain/loss on sale of real estate, interest expense, and other non-operating items.
EBITDAre: We define earnings before interest, taxes, depreciation and amortization for real estate in accordance with the standards established by the
Funds from Operations (“FFO”): Funds from operations, or FFO, is a non-GAAP financial measure that is widely recognized as a measure of an REIT’s operating performance, thereby, providing investors the potential to compare our operating performance with that of other REITs. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. In
Core Funds from Operations (“Core FFO”): We calculate Core FFO by adjusting FFO for non-comparable items such as dividends paid (or declared) to holders of our preferred stock, acquisition and transaction related expenses for transactions not completed, and certain non-cash operating expenses such as impairment on real estate lease, appreciation/(depreciation) of warrants and loss on extinguishment of debt. We believe that Core FFO is a useful supplemental measure in addition to FFO by adjusting for items that are not considered by us to be part of the period-over-period operating performance of our property portfolio, thereby, providing a more meaningful and consistent comparison of our operating and financial performance during the periods presented. As with FFO, our reported Core FFO may not be comparable to other REITs’ Core FFO, should not be used as a measure of our liquidity, and is not indicative of our funds available for our cash needs, including our ability to pay dividends.
Adjusted Funds from Operations (“AFFO”): Adjusted funds from operations, or AFFO, is presented in addition to Core FFO. AFFO is defined as Core FFO, excluding certain non-cash operating revenues and expenses, capitalized interest and recurring capitalized expenditures. Recurring capitalized expenditures include expenditures required to maintain and re-tenant our properties, tenant improvements and leasing commissions. AFFO further adjusts Core FFO for certain other non-cash items, including the amortization or accretion of above or below market rents included in revenues, straight line rent adjustments, non-cash equity compensation and non-cash interest expense.
We believe AFFO provides a useful supplemental measure of our operating performance because it provides a consistent comparison of our operating performance across time periods that is comparable for each type of real estate investment and is consistent with management’s analysis of the operating performance of our properties. As a result, we believe that the use of AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance. As with Core FFO, our reported AFFO may not be comparable to other REITs’ AFFO, should not be used as a measure of our liquidity, and is not indicative of our funds available for our cash needs, including our ability to pay dividends.
SUPPLEMENTAL RECONCILIATION OF NON-GAAP DISCLOSURES | |||||||||||||||||
UNAUDITED | |||||||||||||||||
(In thousands, except share and per share amounts) | |||||||||||||||||
For the Three Months | For the Year | ||||||||||||||||
Ended | Ended | ||||||||||||||||
NOI: | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Net income (loss) | $ | 9,377 | $ | (3,536 | ) | $ | 13,807 | $ | (17,096 | ) | |||||||
General and administrative | 4,318 | 4,163 | 14,904 | 15,939 | |||||||||||||
Depreciation and amortization | 22,793 | 23,553 | 92,891 | 95,312 | |||||||||||||
Interest expense | 9,686 | 8,914 | 38,278 | 32,217 | |||||||||||||
(Earnings) loss in investment of unconsolidated joint venture | - | - | - | 147 | |||||||||||||
Loss on extinguishment of debt | - | - | 72 | 2,176 | |||||||||||||
Gain on sale of real estate | (10,534 | ) | - | (22,646 | ) | - | |||||||||||
Appreciation (depreciation) of warrants | - | - | - | (1,760 | ) | ||||||||||||
Management fee revenue and other income | (30 | ) | (4 | ) | (88 | ) | (94 | ) | |||||||||
NOI | $ | 35,610 | $ | 33,090 | $ | 137,218 | $ | 126,841 | |||||||||
For the Three Months | For the Year | ||||||||||||||||
Ended | Ended | ||||||||||||||||
EBITDAre: | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Net income (loss) | $ | 9,377 | $ | (3,536 | ) | $ | 13,807 | $ | (17,096 | ) | |||||||
Depreciation and amortization | 22,793 | 23,553 | 92,891 | 95,312 | |||||||||||||
Interest expense | 9,686 | 8,914 | 38,278 | 32,217 | |||||||||||||
Loss on extinguishment of debt | - | - | 72 | 2,176 | |||||||||||||
Gain on sale of real estate | (10,534 | ) | (22,646 | ) | |||||||||||||
Appreciation (depreciation) of warrants | - | - | - | (1,760 | ) | ||||||||||||
EBITDAre | $ | 31,322 | $ | 28,931 | $ | 122,402 | $ | 110,849 | |||||||||
For the Three Months | For the Year | ||||||||||||||||
Ended | Ended | ||||||||||||||||
FFO: | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Net income (loss) | $ | 9,377 | $ | (3,536 | ) | $ | 13,807 | $ | (17,096 | ) | |||||||
Gain on sale of real estate | (10,534 | ) | - | (22,646 | ) | - | |||||||||||
Depreciation and amortization | 22,793 | 23,553 | 92,891 | 95,312 | |||||||||||||
Depreciation and amortization from unconsolidated joint ventures | - | - | - | 268 | |||||||||||||
FFO: | $ | 21,636 | $ | 20,017 | $ | 84,052 | $ | 78,484 | |||||||||
Preferred stock dividends | - | (917 | ) | (2,509 | ) | (4,866 | ) | ||||||||||
Acquisition expenses | - | - | 85 | 201 | |||||||||||||
Appreciation (depreciation) of warrants | - | - | - | (1,760 | ) | ||||||||||||
Loss on extinguishment of debt | - | - | 72 | 2,176 | |||||||||||||
Core FFO | $ | 21,636 | $ | 19,100 | $ | 81,700 | $ | 74,235 | |||||||||
Weighted average common shares and units outstanding | 45,740 | 43,340 | 44,413 | 40,553 | |||||||||||||
Core FFO per share | $ | 0.47 | $ | 0.44 | $ | 1.84 | $ | 1.83 | |||||||||
For the Three Months | For the Year | ||||||||||||||||
Ended | Ended | ||||||||||||||||
AFFO: | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Core FFO | $ | 21,636 | $ | 19,100 | $ | 81,700 | $ | 74,235 | |||||||||
Amortization of debt related costs | 476 | 566 | 2,184 | 2,163 | |||||||||||||
Non-cash interest expense | 582 | 666 | 984 | 2,248 | |||||||||||||
Stock compensation | 838 | 1,105 | 2,966 | 2,603 | |||||||||||||
Capitalized interest | (134 | ) | (604 | ) | (1,102 | ) | (1,125 | ) | |||||||||
Straight line rent | (111 | ) | (637 | ) | (1,944 | ) | (3,682 | ) | |||||||||
Above/below market lease rents | (401 | ) | (519 | ) | (2,221 | ) | (3,151 | ) | |||||||||
Recurring capital expenditure(1) | (880 | ) | (1,353 | ) | (5,743 | ) | (6,793 | ) | |||||||||
AFFO: | $ | 22,006 | $ | 18,324 | $ | 76,824 | $ | 66,498 | |||||||||
Weighted average common shares and units outstanding | 45,740 | 43,340 | 44,413 | 40,553 | |||||||||||||
AFFO per share | $ | 0.48 | $ | 0.42 | $ | 1.73 | $ | 1.64 | |||||||||
(1) Excludes non-recurring capital expenditures of | |||||||||||||||||
Contact:
IR@plymouthreit.com
Source:
2024 GlobeNewswire, Inc., source