INDUS Realty Trust, Inc. (Nasdaq: INDT) (“INDUS” or the
“Company”), a U.S. based industrial/logistics REIT, today
reported financial results for the three months ended September 30,
2021 (the “2021 third quarter”).
2021 Third Quarter & Recent Highlights
- Net loss of $3.5 million, or $0.46 per basic and diluted share,
for the 2021 third quarter compared to a net loss of $0.7 million
for the three months ended September 30, 2020 (the “2020 third
quarter”)
- Core Funds from Operations (“Core FFO”)1 of $4.0 million, or
$0.51 per diluted share, for the 2021 third quarter as compared to
$3.6 million for the 2020 third quarter
- Net Operating Income (“NOI”)1 and Cash Net Operating Income
(“Cash NOI”)1 from industrial/logistics properties of $7.1 million
and $6.4 million, respectively, for the 2021 third quarter as
compared to $6.3 million and $5.6 million, respectively, for the
2020 third quarter
- Industrial/logistics portfolio was 95.4% leased; stabilized2
industrial/logistics portfolio was 99.4% leased
- Weighted average rent growth on new and renewal leases of 20.0%
on a straight-line basis3,4
- Acquired a fully-leased industrial/logistics building in
Lakeland, Florida (139,500 square feet) for a purchase price of
$17.8 million, before transaction costs
- Entered into separate agreements to acquire an
under-construction, 184,000 square foot industrial/logistics
two-building portfolio in Nashville, Tennessee for a purchase price
of $31.5 million and 10.6 acres of undeveloped land in the Lehigh
Valley of Pennsylvania for a purchase price of $2.25 million
- Entered into an agreement to acquire, for a purchase price of
$14.6 million, a 128,000 square foot, fully-leased,
industrial/logistics building in Charlotte, North Carolina and,
subsequent to quarter end, closed on the acquisition
- Entered into three separate non-binding letters of intent
(“LOIs”) for three industrial/logistics buildings totaling
approximately 690,000 square feet for a combined purchase price of
approximately $77.8 million and, subsequent to quarter end, entered
into two separate purchase agreements for two of the three
industrial/logistics buildings and remained a party under one
non-binding LOI for the third building
- Entered into an agreement for a new secured revolving credit
facility of up to $100 million to replace the Company’s former
revolving credit facility and acquisition facility
- Subsequent to quarter end, completed an underwritten public
offering and issued 2,443,228 shares of common stock, inclusive of
an option exercised by the underwriters to purchase additional
shares, for net proceeds of $152.8 million
2021 Third Quarter Results of OperationsINDUS
reported total rental revenue of approximately $10.8 million in the
2021 third quarter, as compared to approximately $9.7 million for
the 2020 third quarter. The approximately $1.1 million increase in
rental revenue year-over-year was principally due to acquisitions
of new industrial/logistics buildings acquired during the year as
well as, to a lesser extent, new leases of first generation space
and second generation leases in the 2021 third quarter that were
either not in place or were in place for only a portion of the 2020
third quarter.
NOI from industrial/logistics properties, which
is defined as rental revenue less operating expenses of rental
properties and real estate taxes, increased to approximately $7.1
million in the 2021 third quarter, from approximately $6.3 million
in the 2020 third quarter. NOI from industrial/logistics properties
on a cash basis (“Cash NOI”) for the 2021 third quarter was
approximately $6.4 million, as compared to approximately $5.6
million for the comparable prior year period. The increases in NOI
and Cash NOI from industrial/logistics properties both principally
reflected the increase in rental revenue as described above, offset
slightly by higher real estate taxes.
NOI and Cash NOI for INDUS’s
industrial/logistics properties was as follows:
($ in 000s) |
For the Three Months Ended |
|
For the Nine Months Ended |
|
Sept. 30, 2021 |
|
Sept. 30, 2020 |
|
Increase |
|
Sept. 30, 2021 |
|
Sept. 30, 2020 |
|
Increase |
NOI |
$ |
7,136 |
|
$ |
6,343 |
|
12.5 |
% |
|
$ |
19,923 |
|
$ |
17,758 |
|
12.2 |
% |
Cash NOI |
$ |
6,387 |
|
$ |
5,570 |
|
14.7 |
% |
|
$ |
18,375 |
|
$ |
16,190 |
|
13.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
INDUS incurred a net loss of approximately
$3.5 million, or $0.46 per basic and diluted share, in the
2021 third quarter, as compared to a net loss of approximately
$0.7 million for the 2020 third quarter. The largest factor
contributing to the higher net loss was an impairment charge in the
2021 third quarter of $3.0 million on certain office/flex
properties that are currently under agreement for sale as well as
an approximately $2.0 million charge for a change in the fair value
of financial instruments, partially offset by a gain on the sale of
real estate assets.
Core FFO for the 2021 third quarter was
approximately $4.0 million, or $0.51 per diluted share, as
compared to approximately $3.6 million in the 2020 third
quarter. Core FFO was driven higher principally by increased NOI
from industrial/logistics properties in the 2021 third quarter as
compared to the 2020 third quarter, for the reasons mentioned
above.
Industrial/Logistics Leasing
ActivityINDUS reported the following metrics for its
industrial/logistics portfolio for the 2021 third quarter:
|
Number of Leases |
Square Feet |
Weighted Avg. Lease Term in Years |
Weighted Avg. Lease Costs PSF per
Year5 |
Weighted Avg. Rent Growth |
|
Straight-line Basis |
Cash Basis |
New Leases |
2 |
115,000 |
4.9 |
$0.44 |
27.0% |
14.2% |
Renewals |
2 |
145,000 |
4.2 |
$0.53 |
15.7% |
4.3% |
Total / Avg. |
4 |
260,000 |
4.5 |
$0.49 |
20.0% |
8.0% |
As of September 30, 2021, INDUS’s 33
industrial/logistics buildings aggregated approximately 4.9 million
square feet. INDUS’s industrial/logistics portfolio’s percentage
leased and percentage leased of stabilized properties were as
follows:
|
Sept. 30,2021 |
June 30,2021 |
Mar. 31,2021 |
Dec. 31,2020 |
Percentage Leased |
95.4% |
95.3% |
99.2% |
94.5% |
Percentage Leased – Stabilized
Properties |
99.4% |
99.4% |
99.2% |
95.7% |
As of September 30, 2021, INDUS’s industrial/logistics portfolio
vacancy was approximately 225,000 square feet, of which
approximately 198,000 square feet is attributable to the Company’s
395,000 square foot value-add acquisition in Charlotte, North
Carolina completed on June 28, 2021.
Acquisition PipelineOn August
5, 2021, INDUS purchased a 139,500 square foot industrial/logistics
building in Lakeland, Florida for a purchase price of $17.8 million
(the “Lakeland Acquisition”). The Lakeland Acquisition is fully
leased to two tenants with a weighted average remaining lease term
of a little over two years and has a 4.0% in-place cash
capitalization rate.
On August 5, 2021, INDUS also entered into an
agreement (the “Forward Purchase Agreement”) to acquire, for a
purchase price of $31.5 million, an under-construction,
approximately 184,000 square foot industrial/logistics portfolio in
Nashville, Tennessee (the “Nashville Acquisition”). The Nashville
Acquisition is being developed on speculation by the seller and,
upon completion, will be comprised of two buildings located in
close proximity to downtown Nashville that will be delivered to
INDUS vacant. Under the terms of the Forward Purchase Agreement,
INDUS expects to close on the Nashville Acquisition by the end of
the 2022 first quarter.
On August 20, 2021, INDUS entered into an
agreement to acquire, for a purchase price of $14.6 million, an
approximately 128,000 square foot fully leased,
industrial/logistics building in Charlotte, North Carolina (the
“Charlotte Acquisition”). The Charlotte Acquisition is fully leased
to one tenant with a weighted average remaining lease term of just
under one year and has a 4.6% in-place cash capitalization rate.
Subsequent to quarter end, on October 12, 2021, INDUS closed on the
Charlotte Acquisition.
During September 2021, INDUS entered into three
non-binding LOIs for the purchases of three industrial/logistics
buildings for a combined purchase price of approximately $77.8
million. Subsequent to quarter end:
- On October 27, 2021, INDUS entered
into an agreement for one of the properties previously announced as
under a non-binding LOI (the "South Carolina Purchase Agreement")
to acquire, for a purchase price of $28.6 million before
transaction costs, an industrial/logistics building in South
Carolina (the “South Carolina Acquisition”) that is partially
leased. The closing of the acquisition contemplated under the South
Carolina Purchase Agreement is expected to take place in the 2021
fourth quarter.
- On November 3, 2021, INDUS entered
into an agreement for the second of the properties previously
announced as under a non-binding LOI (the “Charleston Purchase
Agreement”) to acquire, for a purchase price of $28.0 million
before transaction costs, a to-be-constructed industrial/logistics
building in Charleston, South Carolina (the “Charleston
Acquisition”). The Charleston Acquisition is being developed on
speculation by the seller and, upon completion, will be comprised
of one building which will be delivered to INDUS vacant. Under the
terms of the Charleston Purchase Agreement, INDUS expects to close
on the Charleston Acquisition by the end of the 2022 fourth
quarter.
- INDUS is still a party to one
non-binding LOI for the forward purchase of a to-be-constructed
industrial/logistics building in the Charlotte, North Carolina
market for a purchase price of $21.2 million.
The following is a summary of INDUS’s
acquisition pipeline for its industrial/logistics portfolio as of
November 3, 2021:
Acquisitions |
Market |
Building Size (SF) |
|
Type |
Purchase Price ($ in millions) |
Expected Closing |
Acquisitions Under
Contract |
|
|
|
|
|
|
South Carolina Acquisition
(one building) |
South Carolina |
Subject to confidentiality |
|
Value Add |
$28.6 |
Q4 2021 |
Nashville Acquisition (two
buildings) |
Nashville, TN |
184,000 |
|
Forward |
$31.5 |
Q1 2022 |
Charleston Acquisition (one
building) |
Charleston, SC |
263,000 |
|
Forward |
$28.0 |
Q4 2022 |
|
|
|
|
|
|
|
Acquisitions Under LOI |
Forward
purchase (one building) |
Charlotte, NC |
231,000 |
|
Forward |
$21.2 |
Q4 2022 |
Total Acquisition Pipeline – Under Contract &
LOI |
|
|
|
$109.3 |
|
Closings on the purchases of the Nashville
Acquisition, the South Carolina Acquisition, the Charleston
Acquisition, and the remaining transaction under LOI are each
subject to a number of contingencies, including the satisfactory
completion of due diligence by INDUS. There can be no guarantee
that these transactions will be completed under their current
terms, anticipated timelines, or at all.
Development PipelineOn August
6, 2021, INDUS entered into an agreement (the “Land Purchase
Agreement”) to acquire, for a purchase price of $2.25 million,
approximately 10.6 acres of undeveloped land in the Lehigh Valley
of Pennsylvania (the “Lehigh Valley Land”). Under the terms of the
Land Purchase Agreement, INDUS expects to close on the Lehigh
Valley Land upon the seller receiving the requisite development
entitlements for the Lehigh Valley Land, estimated to be during the
first half of fiscal 2022. Subsequent to closing on the purchase of
the Lehigh Valley Land, INDUS expects to begin construction, on
speculation, of an approximately 90,000 square foot
industrial/logistics building.
Subsequent to the end of the 2021 third quarter,
INDUS completed and placed into service its approximately 141,000
square foot build-to-suit for Amazon in Charlotte (the “Charlotte
Build-to-Suit”). With the addition of the Charlotte Acquisition and
completion of the Charlotte Build-to-Suit, INDUS owns approximately
1.2 million square feet across six high quality
industrial/logistics buildings in the Charlotte market.
The following is a summary of INDUS’s
development pipeline for its industrial/logistics portfolio as of
November 3, 2021:
Project |
Market |
Building Size (SF) |
|
Type |
Estimated Completion |
Ongoing Developments on Owned Land |
|
|
|
|
|
Chapmans Road (one building) |
Lehigh Valley, PA |
103,000 |
|
Speculative |
Q1 2022 |
110 Tradeport Drive (one building) |
Hartford, CT |
234,000 |
|
67% Pre-leased |
Q3 2022 |
Jetport - Landstar Logistics (two buildings) |
Orlando, FL |
195,000 |
|
Speculative |
Q3 2022 |
|
|
|
|
|
|
Planned Developments on Land Under Purchase & Sale
Agreement |
First & Second Allentown Purchase Agreements |
Lehigh Valley, PA |
206,000 |
|
Speculative |
Q1 2023 |
Lehigh Valley Land |
Lehigh Valley, PA |
90,000 |
|
Speculative |
Q2 2023 |
Total Ongoing and Planned Developments |
|
828,000 |
|
|
|
INDUS expects that the total development and
stabilization costs of the development projects in its pipeline
listed above will total approximately $90.5 million, of which
approximately $18.0 million has been expended through September 30,
2021. The Company has underwritten a weighted average stabilized
Cash NOI yield between 5.8% - 6.3% 6 on its development pipeline.
Actual initial full year stabilized Cash NOI yields may vary from
INDUS’s underwritten stabilized Cash NOI yield ranges based on the
actual total cost to complete a project or acquire a property and
its actual initial full year stabilized Cash NOI.
Closings on the purchases contemplated under the
First & Second Allentown Purchase Agreements and the Lehigh
Valley Land parcel, in addition to the completion and stabilization
of the development pipeline, are each subject to a number of
contingencies including the satisfactory completion of due
diligence by INDUS. There can be no guarantee that these
transactions and developments will be completed under their current
terms, anticipated timelines, at the Company’s estimated
underwritten yields, or at all.
Disposition PipelineDuring the
2021 third quarter, INDUS received a total of approximately $7.4
million of cash from several sales of real estate assets, including
approximately $5.5 million from the sale of the approximately 277
acres of undeveloped land that comprised the Company’s Meadowood
residential development in Simsbury, Connecticut.
On September 23, 2021, the Company entered into
an agreement to sell, for a purchase price of $5.2 million, before
transaction costs: (a) 5 and 7 Waterside Crossing, two adjacent
multi-story office buildings aggregating approximately 161,000
square feet; (b) 21 Griffin Road North, an approximately 48,000
square foot office/flex building; and (c) 25 Griffin Road North, an
approximately 8 acre parcel of undeveloped land.
As of November 3, 2021, INDUS had agreements in
place to sell the following non-core properties and undeveloped
land parcels:
Name |
Type |
Location |
Property Size |
Estimated Closing |
Sale Price($ in millions) |
1975, 1985 & 1995 Blue Hills Ave |
Industrial + Land |
Windsor, CT |
165,000 SF and 39 acres |
Q4 2021 |
$18.0 |
5 & 7 Waterside Crossing;
21 Griffin Road North; 25 Griffin Road North |
Office/Flex + Land |
Windsor, CT |
209,000 SF and 8 acres |
Q4 2021 |
$5.2 |
Connecticut Nursery Farm |
Land |
E. Granby/ Granby, CT |
670 acres |
Q4 2021 |
$10.3 |
Florida Farm |
Land |
Quincy, FL |
1,066 acres |
Q4 2021 |
$1.0 |
East
Granby / Windsor Parcels |
Land |
E. Granby / Windsor, CT |
280 acres |
2022 |
$6.0 |
Total Gross Proceeds of Property & Land Dispositions
Under Agreement, if Consummated |
|
$40.5 |
The completion of the sales contemplated under
these agreements is subject to satisfactory completion of due
diligence by the buyers, among other contingencies. There can be no
guarantee that the transactions contemplated will be completed
under their current terms, or at all.
Liquidity & Capital
ResourcesThe Company ended the 2021 third quarter with
approximately $137.1 million of liquidity including approximately
$37.1 million of cash on hand and $100.0 million available
under the New Credit Facility (as defined below).
On August 5, 2021, the Company’s operating
partnership, INDUS RT, LP, and the Company, as parent guarantor,
entered into an agreement for a new secured revolving credit
facility of up to $100 million (the “New Credit Facility”) that
replaced its former credit facilities. Based on the Company’s
current leverage, the initial annual interest rate under the New
Credit Facility is one-month LIBOR plus 1.20%. As of September 30,
2021, INDUS had no borrowings under the New Credit Facility.
On September 2, 2021, INDUS entered into a sales
agreement, with Robert W. Baird & Co. Incorporated, BMO Capital
Markets Corp., BTIG, LLC, Citigroup Global Markets Inc., JMP
Securities LLC, KeyBanc Capital Markets Inc. and Morgan Stanley
& Co. LLC, each an agent (collectively “the agents”), relating
to shares of its common stock, $0.01 par value per share (the
“Common Stock”), offered by a prospectus supplement and the
accompanying prospectus pursuant to a continuous offering or
at-the-market equity issuance program (the “ATM program”). In
accordance with the terms of the sales agreement, INDUS may, from
time to time, offer and sell shares of its Common Stock having an
aggregate gross sales price of up to $100 million through the
agents, or directly to the agents, acting as principals, pursuant
to the prospectus supplement filed on September 3, 2021, and the
accompanying prospectus, dated August 10, 2021. As of September 30,
2021, INDUS had not yet issued any shares of common stock under the
ATM program.
Subsequent to the end of the 2021 third quarter,
on October 8, 2021, INDUS completed an underwritten public offering
of 2,150,000 shares of its Common Stock at a price to the
underwriters of $62.70 per share. On October 22, 2021, the
underwriters exercised their option to purchase an additional
293,228 shares of common stock from INDUS at the same price. INDUS
received net proceeds of approximately $152.8 million, after
expenses, from the aggregate of 2,443,228 shares issued on October
8, 2021, and October 22, 2021. The Company intends to use the
proceeds from this issuance of its Common Stock to finance its
acquisition and development pipeline and for other corporate
purposes.
Third Quarter Earnings Conference Call,
Earnings Supplement and Investor PresentationINDUS is
hosting a live earnings conference call that will take place
tomorrow, November 5, 2021, at 11:00 am Eastern Time, to discuss
its 2021 third quarter financial and operating results and to
provide a business update. Supplemental materials containing
additional financial and operating information will be available on
INDUS’s website at the start of the call. All investors and other
interested parties are invited to either dial in to the call (to
participate in a live Q&A) or log in to a listen-only webcast
which, together with the supplemental information, can be accessed
via the Investors section of INDUS’s website at ir.indusrt.com, by
clicking this link, or by calling the following numbers:
PARTICIPANT DIAL IN (TOLL FREE):
1-866-777-2509PARTICIPANT INTERNATIONAL DIAL IN: 1-412-317-5413
An archived recording of the webcast will be
available for three months under the Investors section of INDUS’s
website at ir.indusrt.com.
About INDUSINDUS is a real
estate business principally engaged in developing, acquiring,
managing and leasing industrial/logistics properties. INDUS owns 45
buildings totaling approximately 5.5 million square feet (including
35 industrial/logistics buildings aggregating approximately 5.1
million square feet) in Connecticut, Pennsylvania, North Carolina
and Florida in addition to over 3,100 acres of undeveloped
land.
Forward-Looking Statements:
This Press Release includes “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 forward-looking statements include
INDUS’s beliefs and expectations regarding future events or
conditions including, without limitation, the completion of
acquisitions and dispositions under agreements and letters of
intent, any sales of securities under the ATM Program, construction
and development plans and timelines, the estimated underwritten
stabilized Cash NOI of its developments and Cash NOI yield
estimates, expected total development and stabilization costs of
developments in INDUS’s pipeline, and expected capital availability
and liquidity. Although INDUS believes that its plans, intentions
and expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such plans, intentions or
expectations will be achieved. The projected information disclosed
herein is based on assumptions and estimates that, while considered
reasonable by INDUS as of the date hereof, are inherently subject
to significant business, economic, competitive and regulatory
uncertainties and contingencies, many of which are beyond the
control of INDUS and which could cause actual results and events to
differ materially from those expressed or implied in the
forward-looking statements. Other important factors that could
affect the outcome of the events set forth in these statements are
described in INDUS’s Securities and Exchange Commission (“SEC”)
filings, including the “Business,” “Risk Factors” and
“Forward-Looking Statements” sections in INDUS’s Annual Report on
Form 10-K for the fiscal year ended November 30, 2020, filed with
the SEC on February 18, 2021, as updated by the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2021. INDUS
disclaims any obligation to update any forward-looking statements
as a result of developments occurring after the date of this press
release except as required by law.
Note Regarding Non-GAAP Financial Measures:
The Company uses FFO, Core FFO, Core FFO per
share, NOI, Cash NOI, NOI of Industrial/Logistics Properties and
Cash NOI of Industrial/Logistics Properties, as supplemental
non-GAAP performance measures. Management believes that the use of
these measures combined with net income (loss) (which remains the
Company’s primary measure of performance), improves the
understanding of the Company’s operating results among the
investing public and makes comparisons of operating results to
other REITs more meaningful.
The Company presents a funds from operations
metric substantially similar to funds from operations as calculated
in accordance with standards established by Nareit (“Nareit FFO”).
Nareit FFO is calculated as net income (calculated in accordance
with U.S. GAAP), excluding: (a) depreciation and amortization
related to real estate, (b) gains and losses from the sale of
certain real estate assets, (c) gains and losses from change in
control and (d) impairment write-downs of certain real estate
assets and investments in entities when the impairment is directly
attributable to decreases in the value of depreciable real estate
held by the entity.
The Company defines FFO as Nareit FFO, plus an
adjustment to remove the impact of an income tax benefit or
provision in the periods prior to January 1, 2021. The Company
includes the adjustment for income taxes because, beginning with
the taxable year ending December 31, 2021, the Company intends to
elect to be taxed as a REIT and believes including this adjustment
enhances the comparability of the Company’s results for periods
prior to this tax election. The Company believes it is useful to
investors to have enhanced transparency into the way in which its
management evaluates operating performance to prior comparable
periods and with that of other REITs. This tax adjustment was not
required for the 2021 nine month period.
The Company defines Core FFO and Core FFO per
share as FFO and FFO per share, respectively, excluding: (a) costs
related to conversion to a REIT; (b) expense related to the
performance of the non-qualified deferred compensation plan; (c)
change in fair value of financial instruments; (d) gains or losses
on insurance recoveries and/or extinguishment of debt or derivative
instruments; and (e) the write-off of non-recurring items. Per
share metrics are calculated as Core FFO for the period divided by
the weighted average diluted share count for the period.
NOI is a non-GAAP measure that includes the
rental revenue and operating expenses and real estate taxes
directly attributable to the Company’s real estate properties. NOI
of Industrial/Logistics Properties is NOI excluding NOI for the
Company’s non-industrial/logistics properties. The Company uses NOI
and NOI of Industrial/Logistics Properties as supplemental
performance measures because, in excluding real estate depreciation
and amortization expense, general and administrative expenses,
interest expense, gains (or losses) on the sale of real estate
assets, investment income and other non-operating items, they
provide a performance measure that, when compared year over year,
captures trends in occupancy rates, rental rates and operating
costs. The Company also believes that NOI and NOI of
Industrial/Logistics Properties will be useful to investors as a
basis to compare its operating performance with that of other
REITs. However, because NOI and NOI of Industrial/Logistics
Properties excludes depreciation and amortization expense and
captures neither the changes in the value of the Company’s
properties that result from use or market conditions, nor the level
of capital expenditures and leasing commissions necessary to
maintain the operating performance of its properties (all of which
have a real economic effect and could materially impact the
Company’s results from operations), the utility of NOI and NOI of
Industrial/Logistics Properties as measures of the Company’s
performance is limited. Other equity REITs may not calculate NOI or
NOI of Industrial/Logistics Properties in a similar manner and,
accordingly, the Company’s NOI and NOI of Industrial/Logistics
Properties may not be comparable to such other REITs’ NOI.
Accordingly, NOI and NOI of Industrial/Logistics Properties should
be considered only as a supplement to net income (loss) as a
measure of the Company’s performance. NOI and NOI of
Industrial/Logistics Properties should not be used as measures of
the Company’s liquidity, nor is it indicative of funds available to
fund the Company’s cash needs. NOI and NOI of Industrial/Logistics
Properties should not be used as a substitute for cash flow from
operating activities in accordance with U.S. GAAP.
Cash NOI is a non-GAAP measure that the Company
calculates by adding or subtracting non-cash rental revenue,
including straight-line rental revenue, from NOI. Cash NOI of
Industrial/Logistics Properties is Cash NOI excluding NOI for the
Company’s non-industrial/logistics properties. The Company uses
Cash NOI and Cash NOI of Industrial/Logistics Properties, together
with NOI and NOI of Industrial/Logistics Properties, as
supplemental performance measures. Cash NOI and Cash NOI of
Industrial/Logistics Properties should not be used as measures of
the Company’s liquidity, nor are they indicative of funds available
to fund the Company’s cash needs. Cash NOI and Cash NOI of
Industrial/Logistics Properties should not be used as a substitute
for cash flow from operating activities computed in accordance with
U.S. GAAP.
INDUS REALTY TRUST, INC.Consolidated
Statements of Operations(dollars in thousands, except per share
data)(unaudited)
|
|
2021 ThirdQuarter |
|
2020 ThirdQuarter |
|
2021 NineMonth Period |
|
2020 NineMonth Period |
|
|
|
|
|
|
|
|
|
Rental revenue |
|
$ 10,754 |
|
|
$ 9,714 |
|
|
$ 30,677 |
|
|
$ 27,846 |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Operating expenses of rental
properties |
|
1,218 |
|
|
1,247 |
|
|
3,983 |
|
|
3,499 |
|
Real estate taxes |
|
1,683 |
|
|
1,338 |
|
|
4,584 |
|
|
4,135 |
|
Depreciation and amortization
expense |
|
3,935 |
|
|
3,410 |
|
|
10,702 |
|
|
10,225 |
|
General and administrative
expenses |
|
2,283 |
|
|
2,379 |
|
|
7,977 |
|
|
6,935 |
|
Total
expenses |
|
9,119 |
|
|
8,374 |
|
|
27,246 |
|
|
24,794 |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest expense |
|
(1,700 |
) |
|
(1,800 |
) |
|
(5,160 |
) |
|
(5,476 |
) |
Impairment of real estate
assets |
|
(3,000 |
) |
|
— |
|
|
(3,000 |
) |
|
— |
|
Change in fair value of
financial instruments |
|
(2,027 |
) |
|
(570 |
) |
|
(2,746 |
) |
|
(570 |
) |
Gain on sales of real estate
assets |
|
1,450 |
|
|
126 |
|
|
1,792 |
|
|
825 |
|
Investment and other
income |
|
119 |
|
|
6 |
|
|
241 |
|
|
32 |
|
|
|
(5,158 |
) |
|
(2,238 |
) |
|
(8,873 |
) |
|
(5,189 |
) |
|
|
|
|
|
|
|
|
|
Loss before income tax
(provision) benefit |
|
(3,523 |
) |
|
(898 |
) |
|
(5,442 |
) |
|
(2,137 |
) |
Income tax (provision)
benefit |
|
(24 |
) |
|
241 |
|
|
(24 |
) |
|
500 |
|
Net loss |
|
($ 3,547 |
) |
|
($ 657 |
) |
|
($ 5,466 |
) |
|
($ 1,637 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per common share |
|
($ 0.46 |
) |
|
($ 0.12 |
) |
|
($ 0.76 |
) |
|
($ 0.32 |
) |
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding |
|
7,724,000 |
|
|
5,352,000 |
|
|
7,231,000 |
|
|
5,190,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDUS REALTY TRUST, INC.Consolidated Balance
Sheets(dollars in thousands, except per share data)(unaudited)
|
|
|
|
|
|
|
Sep. 30, 2021 |
|
Dec. 31, 2020 |
ASSETS |
|
|
|
|
Real estate assets at cost, net |
|
$ |
343,815 |
|
|
$ |
242,321 |
|
Cash and cash equivalents |
|
|
37,135 |
|
|
|
28,124 |
|
Real estate assets held for
sale, net |
|
|
4,633 |
|
|
|
6,802 |
|
Other assets |
|
|
36,419 |
|
|
|
22,137 |
|
Total
assets |
|
$ |
422,002 |
|
|
$ |
299,384 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Mortgage loans and
construction loan, net of debt issuance costs |
|
$ |
166,457 |
|
|
$ |
160,655 |
|
Deferred revenue |
|
|
9,632 |
|
|
|
9,586 |
|
Warrant liability |
|
|
— |
|
|
|
8,790 |
|
Accounts payable and accrued
liabilities |
|
|
11,055 |
|
|
|
3,669 |
|
Mortgage loan related to asset
held for sale |
|
|
4,816 |
|
|
|
— |
|
Other liabilities |
|
|
16,440 |
|
|
|
17,567 |
|
Total
liabilities |
|
|
208,400 |
|
|
|
200,267 |
|
Commitments and
Contingencies |
|
|
|
|
Stockholders'
Equity |
|
|
|
|
Common stock, par value $0.01
per share, 50,000,000 authorized, 7,730,723 shares issued and
outstanding, and 10,000,000 shares authorized, 5,663,040 shares
issued and outstanding, respectively |
|
|
77 |
|
|
|
57 |
|
Additional paid-in
capital |
|
|
246,643 |
|
|
|
116,732 |
|
Accumulated deficit |
|
|
(28,850 |
) |
|
|
(9,817 |
) |
Accumulated other
comprehensive loss, net of tax |
|
|
(4,268 |
) |
|
|
(7,855 |
) |
Total stockholders'
equity |
|
|
213,602 |
|
|
|
99,117 |
|
Total liabilities and
stockholders' equity |
|
$ |
422,002 |
|
|
$ |
299,384 |
|
|
|
|
|
|
|
|
|
|
INDUS REALTY TRUST, INC.Non-GAAP
Reconciliations – Funds from Operations (“FFO”) and Core
FFO(dollars in thousands)(unaudited)
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
Third |
|
|
Third |
|
|
Nine Month |
|
|
Nine Month |
|
|
|
Quarter |
|
|
Quarter |
|
|
Period |
|
|
Period |
|
Net loss |
($ 3,547 |
) |
|
($ 657 |
) |
|
($ 5,466 |
) |
|
($ 1,637 |
) |
Exclude: |
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
3,935 |
|
|
3,410 |
|
|
10,702 |
|
|
10,225 |
|
Non-real estate depreciation & amortization expense |
|
(25 |
) |
|
(26 |
) |
|
(63 |
) |
|
(67 |
) |
Gain on sales of real estate assets |
|
(1,450 |
) |
|
(126 |
) |
|
(1,792 |
) |
|
(825 |
) |
Impairment loss |
|
3,000 |
|
|
- |
|
|
3,000 |
|
|
- |
|
Income tax benefit |
|
- |
|
|
(241 |
) |
|
- |
|
|
(500 |
) |
FFO |
|
1,913 |
|
|
2,360 |
|
|
6,381 |
|
|
7,196 |
|
Exclude: |
|
|
|
|
|
|
|
General and administrative expenses related to REIT conversion
(1) |
|
144 |
|
|
426 |
|
|
407 |
|
|
751 |
|
General and administrative expenses related to non-qualified
deferred compensation plan performance (2) |
|
(69 |
) |
|
204 |
|
|
351 |
|
|
82 |
|
Change in fair value of financial instruments |
|
2,027 |
|
|
570 |
|
|
2,746 |
|
|
570 |
|
Core FFO |
$ 4,015 |
|
|
$ 3,560 |
|
|
$ 9,885 |
|
|
$ 8,599 |
|
|
2021 Third |
|
2020 Third |
|
2021 Nine |
|
2020 Nine |
|
Quarter |
|
Quarter |
|
Month Period |
|
Month Period |
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding - basic |
7,724,000 |
|
5,352,000 |
|
7,231,000 |
|
5,190,000 |
Dilutive
securities |
175,000 |
|
72,000 |
|
150,000 |
|
62,000 |
Weighted
average number of shares outstanding - dilutive |
7,899,000 |
|
5,424,000 |
|
7,381,000 |
|
5,252,000 |
|
|
|
|
|
|
|
|
Incremental shares from dilutive securities are not used for per
share measures when the inclusion would be anti-dilutive. |
(1) |
The 2021 third quarter reflects
consulting costs related to compensation and recruitment of
personnel of $144. The 2020 third quarter includes legal fees of
$411 and consulting costs related to compensation and recruitment
of personnel of $15. The 2021 nine month period includes legal fees
of $216 and consulting costs related to compensation and
recruitment of personnel of $191. The 2020 nine month period
includes legal fees of $535 and consulting costs related to
compensation and recruitment of personnel of $216. |
(2) |
The 2021 third quarter is the
first reporting period in which the Company has made an adjustment
to remove G&A Expenses from Non-Qualified Deferred Compensation
Plan Performance from the calculation of Core FFO. G&A Expenses
from Non-Qualified Deferred Compensation Plan Performance are
non-cash expenses and will be subject to stock market fluctuations
from period-to-period and, as such, the Company expects that
removal of these expenses from Core FFO will provide a more
consistent and useful metric to investors going forward. |
|
|
INDUS REALTY TRUST, INC.Non-GAAP
Reconciliations – NOI and Cash NOI(dollars in
thousands)(unaudited)
|
|
|
|
|
|
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
Third |
|
|
Third |
|
|
Nine Month |
|
|
Nine Month |
|
|
Quarter |
|
|
Quarter |
|
|
Period |
|
|
Period |
|
Net loss |
($ 3,547 |
) |
|
($ 657 |
) |
|
($ 5,466 |
) |
|
($ 1,637 |
) |
Income tax provision
(benefit) |
24 |
|
|
(241 |
) |
|
24 |
|
|
(500 |
) |
Pretax
loss |
(3,523 |
) |
|
(898 |
) |
|
(5,442 |
) |
|
(2,137 |
) |
Exclude: |
|
|
|
|
|
|
|
Depreciation and amortization expense |
3,935 |
|
|
3,410 |
|
|
10,702 |
|
|
10,225 |
|
General and administrative expenses |
2,283 |
|
|
2,379 |
|
|
7,977 |
|
|
6,935 |
|
Interest expense |
1,700 |
|
|
1,800 |
|
|
5,160 |
|
|
5,476 |
|
Change in fair value of financial instruments |
2,027 |
|
|
570 |
|
|
2,746 |
|
|
570 |
|
Gain on sales of real estate assets |
(1,450 |
) |
|
(126 |
) |
|
(1,792 |
) |
|
(825 |
) |
Impairment loss |
3,000 |
|
|
- |
|
|
3,000 |
|
|
- |
|
Investment and other income |
(119 |
) |
|
(6 |
) |
|
(241 |
) |
|
(32 |
) |
NOI |
7,853 |
|
|
7,129 |
|
|
22,110 |
|
|
20,212 |
|
Noncash rental revenue
including straight-line rents |
(754 |
) |
|
(824 |
) |
|
(1,610 |
) |
|
(1,942 |
) |
Cash NOI |
$ 7,099 |
|
|
$ 6,305 |
|
|
$ 20,500 |
|
|
$ 18,270 |
|
|
|
|
|
|
|
|
|
NOI |
$ 7,853 |
|
|
$ 7,129 |
|
|
$ 22,110 |
|
|
$ 20,212 |
|
Exclude: |
|
|
|
|
|
|
|
Rental revenue from non-industrial/logistics properties |
(1,448 |
) |
|
(1,577 |
) |
|
(4,361 |
) |
|
(4,645 |
) |
Operating expenses of non-industrial/logistics properties |
528 |
|
|
576 |
|
|
1,576 |
|
|
1,540 |
|
Real estate taxes of non-industrial/logistics properties |
203 |
|
|
215 |
|
|
598 |
|
|
651 |
|
NOI of
Industrial/Logistics Properties |
7,136 |
|
|
6,343 |
|
|
19,923 |
|
|
17,758 |
|
Noncash rental revenue
including straight-line rents of industrial/logistics
properties |
(749 |
) |
|
(773 |
) |
|
(1,548 |
) |
|
(1,568 |
) |
Cash NOI of
Industrial/Logistics Properties |
$ 6,387 |
|
|
$ 5,570 |
|
|
$ 18,375 |
|
|
$ 16,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Core FFO, Core FFO per share, NOI and Cash NOI are not
financial measures in conformity with generally accepted accounting
principles in the United States of America (“U.S. GAAP”). For
additional information, see “Note Regarding Non-GAAP Financial
Measures.”2 Stabilized Properties reflect buildings that have
reached 90% leased or have been in service for at least one year
since development completion or acquisition date, whichever is
earlier. 7800 Tuckaseegee Road, which was 50.1% leased as of
September 30, 2021, was acquired on June 28, 2021, and is not
included in the Stabilized Properties pool for the 2021 third
quarter.3 Leasing metrics are for industrial/logistics properties
only and exclude new and renewal leases that have an initial term
of twelve months or less, as well as leases for first generation
space on properties acquired or developed by INDUS.4 Weighted
average rent growth reflects the percentage change of annualized
rental rates between the previous leases and the current leases.
The rental rate change on a straight-line basis represents average
annual base rental payments on a straight-line basis for the term
of each lease including free rent periods. Cash basis rent growth
represents the change in starting rental rates per the lease
agreement on new and renewal leases signed during the period, as
compared to the previous ending rental rates for that same space.
The cash rent growth calculation excludes free rent periods.5 Lease
cost per square foot per year reflects total lease costs (tenant
improvements, leasing commissions and legal costs) per square foot
per year of the lease term.6 As a part of INDUS’s standard
development and acquisition underwriting process, INDUS analyzes
the targeted initial full year stabilized Cash NOI yield for each
development project and acquisition target and establishes a range
of initial full year stabilized Cash NOI yields, which it refers to
as “underwritten stabilized Cash NOI yields.” Underwritten
stabilized Cash NOI yields are calculated as a development
project’s or acquisition’s initial full year stabilized Cash NOI as
a percentage of its estimated total investment, including costs to
stabilize the buildings to 95% occupancy (other than in connection
with build-to-suit development projects and single tenant
properties). INDUS calculates initial full year stabilized Cash NOI
for a development project or acquisition by subtracting its
estimate of the development project’s or acquisition’s initial full
year stabilized operating expenses, real estate taxes and non-cash
rental revenue, including straight-line rents (before interest,
income taxes, if any, and depreciation and amortization), from its
estimate of its initial full year stabilized rental revenue.
CONTACT:Anthony
GaliciExecutive Vice President, Chief Financial
Officer(860) 286-1307
agalici@indusrt.com
Ashley PizzoVice President, Capital
Markets & Investor Relations(212)
218-7914 apizzo@indusrt.com
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