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Jun 30, 2024
Plymouth Industrial Q2 2024 Earnings Report
Plymouth Industrial's Q2 2024 performance was better than expected, marked by strategic acquisitions and solid operational results.
Key Takeaways
Plymouth Industrial REIT reported better-than-expected Q2 2024 results, driven by a one-time benefit from favorable real estate tax appeals in Chicago and the accretive acquisition in Memphis. The company maintained a strong balance sheet and liquidity, using disposition proceeds to fund the acquisition. While challenges in leasing up certain properties led to tightening the top end of full-year guidance, the development program is nearing full stabilization, promising benefits in 2025.
Acquired a portfolio in Memphis, significantly expanding presence in this core market.
Maintained a healthy balance sheet with leverage at 6.4x and funded acquisition through disposition proceeds.
Q2 results exceeded expectations, with FFO per share up sequentially due to favorable real estate tax appeals in Chicago.
Development program is nearing 100% leased, with benefits expected from full stabilization in 2025.
Plymouth Industrial
Plymouth Industrial
Forward Guidance
The company tightened the top end of its full-year guidance range due to challenges in leasing up certain properties and a tenant issue. The company anticipates that the space in St. Louis would have a positive leasing outcome.
Positive Outlook
- Development program getting close to 100% leased, with benefits from full stabilization expected in 2025.
- Strong tenant demand and interest in renewing 2025 leases early due to anticipated interest rate decreases and rent increases.
- Potential for additional tax wins in the Chicago portfolio, with assessments valid for two more years.
- Robust pipeline of investment opportunities, ranging from small portfolios to one-off deals.
- Onshoring movement driving demand for industrial space, particularly in the Golden Triangle region.
Challenges Ahead
- Challenges in leasing up certain properties, leading to a tightening of the top end of the full-year guidance range.
- One tenant issue muted growth in the quarter.
- Anticipated dip in same-store occupancy in Q3 to around 96.5% before returning to 98% by year-end.
- Uncertainty regarding the timing of leasing and rent commencement for the St. Louis property.
- Potential variability in expenses due to future tax appeals and credit losses.