INDUS Realty Trust, Inc. (Nasdaq: INDT) (“INDUS” or the
“Company”), a U.S. based industrial/logistics REIT, reported
financial results for the quarter ended September 30, 2022:
2022 Third Quarter
Highlights
- Net income of $1.1 million, or $0.11 per diluted share, for the
2022 third quarter compared to a net loss of $3.5 million, or $0.46
per diluted share, for the 2021 third quarter
- Core Funds from Continuing Operations (“Core FFO from
continuing operations”)1 of $5.7 million, or $0.55 per diluted
share, for the 2022 third quarter compared to $3.8 million, or
$0.49 per diluted share, for the 2021 third quarter
- Net Operating Income from Continuing Operations (“NOI from
continuing operations”)1 of $10.2 million for the 2022 third
quarter compared to $7.6 million for the 2021 third quarter
- As of September 30, 2022, stabilized2 portfolio was 100.0%
leased; total in-service portfolio was 97.6% leased
- During the 2022 third quarter, executed 5 leases totaling
418,000 square feet across the Company’s portfolio
- Completed and placed into service two development projects in
the Hartford, Connecticut and Orlando, Florida markets totaling
430,000 square feet
- Completed the acquisition, for a purchase price of $6.5
million, of a 7.6 acre parcel of land in Allentown, Pennsylvania
which can support the construction of a 91,000 square foot
building
- Repaid a $26.3 million, variable rate construction loan with
cash on hand
- Subsequent to quarter end, a lease for 63,000 square feet was
signed at the two-building forward acquisition in the Nashville,
Tennessee market, bringing the project to 77.2% pre-leased
- Joined the CEO Action for Diversity & Inclusion pledge and
endorsed UN Women’s Empowerment Principles
2022 Third Quarter Results of
Operations INDUS reported total rental revenue of
approximately $13.0 million for the 2022 third quarter as compared
to approximately $10.2 million for the 2021 third quarter. The 27%
increase in rental revenue was primarily due to a net addition of
1.2 million square feet in total industrial/logistics square
footage versus the prior year comparable period. This 1.2 million
square foot increase is comprised of the Company’s acquisition of
746,000 square feet and development of 673,000 square feet,
partially offset by the sale or reclassification as discontinued
operations of 183,000 square feet. Also included in rental revenue
during the 2022 third quarter was a one-time lease termination
payment of approximately $0.4 million.
For the 2022 third quarter, INDUS recorded net income of
approximately $1.1 million as compared to a net loss of
approximately $3.5 million for the comparable prior year
period.
Core FFO from continuing operations for the 2022 third quarter
increased to approximately $5.7 million, or $0.55 per diluted
share, compared to approximately $3.8 million, or $0.49 per diluted
share, for the comparable prior year period.
NOI from continuing operations, which is defined as rental
revenue less operating expenses of rental properties and real
estate taxes, increased 34.1% to approximately $10.2 million in the
2022 third quarter from approximately $7.6 million in the 2021
third quarter.
Cash NOI from continuing operations for the 2022 third quarter
increased 29.9% to approximately $8.9 million as compared to
approximately $6.9 million for the comparable prior year
period.
General and administrative expenses were approximately $2.9
million for the 2022 third quarter as compared to approximately
$2.3 million for the comparable prior year period, primarily due to
higher employee headcount related to the Company’s growth.
Interest expense was approximately $1.5 million for the 2022
third quarter as compared to approximately $1.7 million in the 2021
third quarter, primarily reflecting the reduction in the aggregate
debt balance over this time period, offset slightly by lower
capitalized interest due to fewer projects in the development
pipeline as of September 30, 2022 as compared to the prior year
period.
Leasing Activity
INDUS reported the following second
generation leasing metrics3 for the 2022 third quarter:
Number of Leases
Square Feet
Weighted Avg. Lease Term in
Years
Weighted Avg. Lease Costs PSF
per Year4
Weighted Avg. Rent
Growth5
Straight-line Basis
Cash Basis
New Lease
1
216,615
5.1
$1.38
45.7
%
38.9
%
Renewal Lease
1
16,375
3.0
$0.20
20.3
%
13.8
%
Total /Average
2
232,990
4.9
$1.30
43.1
%
36.3
%
In addition to the above leases signed during the period, INDUS
also executed two first generation leases totaling 59,000 square
feet and one short-term renewal totaling 127,000 square feet.
- 35,000 square foot first generation lease in the Lehigh Valley
building that was completed in the 2022 second quarter. This lease
commenced during the 2022 third quarter.
- 24,000 square foot first generation lease in a two-building
development project in the Orlando market that was completed in the
2022 third quarter. With this lease, which is expected to commence
during the 2023 second quarter, the project is now 24.7%
leased.
- 127,000 square foot renewal for a one-year term in the Hartford
market. Subsequent to quarter end, the tenant entered into an
amendment to extend the term for an additional two years at a 15.9%
increase in cash rental rate as compared to the rate for the
initial one year renewal term.
Additionally, subsequent to the end of the 2022 third quarter, a
63,000 square foot first generation lease was signed at the
two-building Nashville, Tennessee forward acquisition in the
Company’s pipeline. With this lease, the to-be-acquired Nashville
portfolio is now 77.2% pre-leased (see below section on
“Acquisition Pipeline”).
As of September 30, 2022, INDUS’ 42 buildings aggregated 6.1
million square feet. INDUS’ portfolio percentage leased and
percentage leased of stabilized properties were as follows:
Sept. 30, 2022
June 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Percentage Leased
97.6
%
99.4
%
100.0
%
98.4
%
Percentage Leased – Stabilized
Properties
100.0
%
100.0
%
100.0
%
100.0
%
As of September 30, 2022, INDUS’ only vacancy reflects 147,000
square feet in the recently delivered Landstar Logistics
development project.
Acquisition
Pipeline
The following is a summary of INDUS’
acquisition pipeline:
Market
Building Count
Building Size (SF)
Type
Purchase Price (in
millions)
Expected Closing
Nashville
2
184,000
Forward (77.2%
pre-leased)
$
31.5
Q1 2023
Charleston
1
263,000
Forward
$
28.0
Q1 2023
Greenville-Spartanburg
1
280,000
Forward
$
28.5
Q2 2023
Charlotte
1
231,000
Forward
$
21.2
Q3 2023
Total Acquisition Pipeline
5
958,000
$
109.2
INDUS expects that the total acquisition and stabilization costs
of acquisitions in its pipeline will total approximately $122.7
million, of which approximately $16.2 million was spent as of
September 30, 2022. The acquisitions in INDUS’ pipeline are each
subject to certain remaining contingencies. There can be no
guarantee that these transactions will be completed under their
current terms, anticipated timelines, or at all.
Development
Pipeline
The following is a summary of INDUS’
development pipeline as of September 30, 2022:
Project
Market
Building Size (SF)
Type
Projected Total Cost (in
millions)
Expected Delivery
American Parkway (one building)
Lehigh Valley
206,000
Speculative
$
28.3
Q2 2023
INDUS expects that the total development and stabilization costs
of the American Parkway development will total approximately $28.3
million, of which approximately $6.9 million was spent as of
September 30, 2022. The Company estimates that the underwritten
weighted average stabilized Cash NOI yield on this project is
between 6.4% – 6.8%.6 Actual initial full year stabilized Cash NOI
yields may vary from INDUS’ estimated underwritten stabilized Cash
NOI yield range based on the actual total cost to complete a
project or acquire a property and its actual initial full year
stabilized Cash NOI from continuing operations.
Additionally, the following is a summary of INDUS’ land for
future expected development that is owned or under contract as of
September 30, 2022:
Project
Market
Building Size (SF)
Acreage
Purchase Price of Land (in
millions)
Expected Land Closing
Windsor Land (one building)
Lehigh Valley
91,000
8
$6.5
Completed
Lehigh Valley Land (one building)
Lehigh Valley
90,000
11
$2.3
Q1 2023
Charlotte Land (four buildings)
Charlotte
597,000
231
$4.8
Q4 2023
Closing on the purchase of the land parcels under contract and
the commencement, completion and/or stabilization of the projects
in the development pipeline and on the land for expected future
development are each subject to a number of contingencies. 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.
Liquidity & Capital
Resources In August 2022, the Company repaid a variable
rate construction loan with a principal balance of approximately
$26.3 million using cash on hand.
As of September 30, 2022, the Company maintained approximately
$216.0 million of liquidity which reflects approximately $26.0
million of cash and cash equivalents (including $0.3 million in
restricted cash), $90.0 million of available draws under the
Company’s delayed draw term loan facility (the “DDTL”) and $100.0
million of borrowing capacity under the revolving credit facility.
The Company currently has no borrowings outstanding under its
revolving credit facility and no debt maturities until 2027.
Additionally, the Company has no floating rate debt outstanding as
the Company’s DDTL, including future available draws, is hedged at
a fixed effective interest rate of 4.15%.
Discontinued Operations — Office/Flex
Property Portfolio In March 2022, INDUS commenced a
sales process to fully exit its office/flex portfolio, which is
comprised of seven buildings totaling 175,000 square feet located
in Bloomfield, Connecticut and an 18,000 square foot storage
building which had been used in the operations of the portfolio
(the “Office/Flex Portfolio”). In September 2022, INDUS signed a
definitive agreement for the sale of the Office/Flex Portfolio at a
gross sales price of $11.0 million and expects to complete the
transaction in the fourth quarter of 2022. The sale of the
Office/Flex Portfolio is subject to a number of contingencies and
there can be no guarantee that the transaction will be completed
under its current terms, anticipated timeline, at the expected
gross sale price, or at all.
ESG Initiatives During the
2022 third quarter, INDUS announced that it had become a signatory
to the CEO Action for Diversity & Inclusion™ pledge (the “CEO
Action Pledge”) as well as endorsed the United Nations Women’s
Empowerment Principles (“WEPs”). The CEO Action Pledge is the
largest CEO-driven business commitment to elevate diversity and
inclusion in the workplace, and the WEPs are a set of principles
that guide businesses to create an environment that supports gender
equality and women’s empowerment in the workplace and beyond.
In addition, during the 2022 third quarter, INDUS launched its
LED Lighting Energy Efficiency Program (“LEEP”) for tenants. The
LEEP is designed to encourage tenants throughout INDUS’ portfolio
to upgrade their lighting to LED with the goals of enhancing the
sustainability of INDUS’ buildings by reducing energy consumption
and improving the tenant experience.
Common Stock Dividend During
the 2022 third quarter, INDUS’ board of directors declared a
quarterly cash distribution on its common stock of $0.16 per share,
or $0.64 per share on an annualized basis. The 2022 third quarter
dividend was paid on October 14, 2022 to shareholders of record on
September 30, 2022.
2022 Earning Guidance INDUS
expects 2022 fourth quarter NOI from continuing operations of
between approximately $10.0 million to approximately $10.3 million
and full year NOI from continuing operations of between
approximately $38.1 million to approximately $38.4 million. The
Company’s 2022 guidance reflects expectations that INDUS will
continue to produce rent growth metrics similar to recent results,
in addition to the impact of recent acquisition and development
completions, as well as announced leasing activity.
A full reconciliation of forecasted NOI from continuing
operations to net income, the most-directly comparable GAAP metric,
cannot be provided without unreasonable efforts due to the inherent
difficulty in forecasting and quantifying with reasonable accuracy
certain non-cash, nonrecurring or other items that are included in
net income and required for the reconciliations.
2022 Third Quarter Earnings Conference
Call, Earnings, Supplement, and Investor Presentation
INDUS is hosting a live earnings conference call on Tuesday,
November 8, 2022, at 10:00 am Eastern Time, to discuss its results
and to provide a business update, followed by a live question and
answer session. Supplemental materials containing additional
financial and operating information will be available on INDUS’
website in advance 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’ website at ir.indusrt.com, by clicking
this link, or by calling the following numbers:
PARTICIPANT DIAL IN (TOLL FREE): 1-833-630-0580 PARTICIPANT
INTERNATIONAL DIAL IN: 1-412-317-1813
An archived recording of the webcast will be available for three
months under the Investors section of INDUS’ website at
ir.indusrt.com.
About INDUS INDUS is a real
estate business principally engaged in developing, acquiring,
managing and leasing industrial/logistics properties. INDUS owns 42
industrial/logistics buildings totaling 6.1 million square feet in
Connecticut, Pennsylvania, North Carolina, South Carolina and
Florida.
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’ beliefs and expectations regarding future
events or conditions including, without limitation, statements
regarding future financial results, the completion of acquisitions
under agreements, pre-leasing agreements, construction and
development plans and timelines, expected total development and
stabilization costs of developments in INDUS’ pipeline, and the
estimated underwritten stabilized Cash NOI yield of the Company’s
development pipeline. 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’ Securities and Exchange
Commission (“SEC”) filings, including the “Business,” “Risk
Factors” and “Forward-Looking Statements” sections in INDUS’ Annual
Report on Form 10-K for the year ended December 31, 2021, filed
with the SEC on March 11, 2022, as updated by other filings with
the SEC. 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 from continuing operations, Core FFO from
continuing operations per share, Adjusted FFO from continuing
operations, NOI from continuing operations, and Cash NOI from
continuing operations, 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 Core FFO from continuing operations and Core
FFO per share from continuing operations 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; (e) discontinued
operations; (f) amortization of terminated swap agreement; and (g)
non-recurring items. Per share metrics are calculated as Core FFO
from continuing operations for the period divided by the weighted
average diluted share count for the period.
The Company defines Adjusted FFO from continuing operations as
Core FFO from continuing operations less (a) noncash rental revenue
including straight-line rents, (b) amortization of debt issuance
costs, (c) noncash compensation expenses, (d) non-real estate
depreciation and amortization expense, (e) tenant improvements and
leasing commissions of second generation space and (f) maintenance
capital expenditures needed to maintain the Company’s existing
buildings.
NOI from continuing operations 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. The Company uses NOI from continuing operations as a
supplemental performance measure because, in excluding income tax
benefit, real estate depreciation and amortization expense, general
and administrative expenses, interest expense, change in fair value
of financial instruments, gains (or losses) on the sale of real
estate assets, impairment of real estate assets, gains (or losses)
on debt extinguishment, investment income and other income, other
expenses and other non-operating items, it provides 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 from continuing operations will be useful to
investors as a basis to compare its operating performance with that
of other REITs. However, because NOI from continuing operations
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 from continuing operations as
a measure of the Company’s performance is limited. Other equity
REITs may not calculate NOI from continuing operations in a similar
manner and, accordingly, the Company’s NOI from continuing
operations may not be comparable to such other REITs’ NOI from
continuing operations. Accordingly, NOI from continuing operations
should be considered only as a supplement to net income (loss) as a
measure of the Company’s performance. NOI from continuing
operations should not be used as a measure of the Company’s
liquidity, nor is it indicative of funds available to fund the
Company’s cash needs. NOI from continuing operations should not be
used as a substitute for cash flow from operating activities in
accordance with U.S. GAAP.
Cash NOI from continuing operations is a non-GAAP measure that
the Company calculates by adding or subtracting non-cash rental
revenue, including straight-line rental revenue, from NOI from
continuing operations. The Company uses Cash NOI from continuing
operations together with NOI from continuing operations, as
supplemental performance measures. Cash NOI from continuing
operations should not be used as a measure of the Company’s
liquidity, nor is it indicative of funds available to fund the
Company’s cash needs. Cash NOI from continuing operations 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 and share count in
thousands, except per share data)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
Rental revenue
$
13,044
$
10,243
$
36,291
$
29,076
Expenses:
Operating expenses of rental
properties
1,194
1,040
3,533
3,409
Real estate taxes
1,659
1,601
4,643
4,341
Depreciation and amortization expense
4,823
3,739
13,301
10,048
General and administrative expenses
2,906
2,283
8,238
7,977
Total expenses
10,582
8,663
29,715
25,775
Other income (expense):
Interest expense
(1,507
)
(1,700
)
(3,178
)
(5,160
)
Impairment of real estate assets
—
(3,000
)
—
(3,000
)
Change in fair value of financial
instruments
—
(2,027
)
—
(2,746
)
Losses on early extinguishment of debt
(189
)
—
(653
)
—
Gain on sales of real estate assets
—
1,450
—
1,792
Investment and other income
90
119
195
241
Other expense
(26
)
—
(32
)
—
(1,632
)
(5,158
)
(3,668
)
(8,873
)
Income (loss) from continuing operations
before income taxes
830
(3,578
)
2,908
(5,572
)
Income tax (provision) benefit
—
(24
)
585
(24
)
Income (loss) from continuing
operations
830
(3,602
)
3,493
(5,596
)
Discontinued operations:
Income from discontinued operations
286
55
511
130
Gain on sale of equipment
—
—
203
—
286
55
714
130
Net income (loss)
$
1,116
$
(3,547
)
$
4,207
$
(5,466
)
Income (loss) per common
share-basic:
Income (loss) from continuing
operations
$
0.08
$
(0.47
)
$
0.34
$
(0.78
)
Income from discontinued operations
0.03
0.01
0.07
0.02
Net income (loss) per common
share
$
0.11
$
(0.46
)
$
0.41
$
(0.76
)
Income (loss) per common
share-diluted:
Income (loss) from continuing
operations
$
0.08
$
(0.47
)
$
0.34
$
(0.78
)
Income from discontinued operations
0.03
0.01
0.07
0.02
Net income (loss) per common
share
$
0.11
$
(0.46
)
$
0.41
$
(0.76
)
Weighted average shares outstanding -
basic
10,192
7,724
10,188
7,231
Weighted average shares outstanding -
diluted
10,292
7,724
10,365
7,231
INDUS REALTY TRUST,
INC.
Consolidated Balance
Sheets
(dollars in thousands)
(unaudited)
September 30, 2022
December 31, 2021
ASSETS
Real estate assets at cost, net
$
479,561
$
387,647
Cash and cash equivalents
25,741
150,263
Restricted cash
267
10,644
Interest rate swap assets
7,573
188
Assets of discontinued operations
9,585
7,990
Other assets
45,054
33,914
Total assets
$
567,781
$
590,646
LIABILITIES AND STOCKHOLDERS'
EQUITY
Mortgage loans and construction loan, net
of debt issuance costs
$
80,172
$
169,818
Delayed draw term loan, net of debt
issuance costs
58,639
—
Deferred revenue
7,377
7,365
Accounts payable and accrued
liabilities
11,608
9,671
Interest rate swap liabilities
—
3,995
Dividends payable
1,631
1,629
Liabilities of discontinued operations
859
832
Other liabilities
10,099
11,259
Total liabilities
$
170,385
$
204,569
Stockholders' equity
Common stock
102
102
Additional paid-in capital
400,963
399,754
Accumulated deficit
(11,554
)
(10,869
)
Accumulated other comprehensive income
(loss)
7,885
(2,910
)
Total stockholders' equity
397,396
386,077
Total liabilities and stockholders'
equity
$
567,781
$
590,646
INDUS REALTY TRUST,
INC.
Non-GAAP Reconciliations –
Funds from Operations (“FFO”) and Core FFO
(dollars and share count in
thousands, except per share measures)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
Net income (loss):
$
1,116
$
(3,547
)
$
4,207
$
(5,466
)
Exclude:
Depreciation and amortization expense
4,823
3,739
13,301
10,048
FFO adjustments related to discontinued
operations
—
196
236
654
Non-real estate depreciation &
amortization expense
(17
)
(25
)
(63
)
(63
)
Gain on sales of real estate assets
—
(1,450
)
—
(1,792
)
Impairment of real estate assets
—
3,000
—
3,000
FFO
5,922
1,913
17,681
6,381
Exclude:
Core FFO adjustments related to
discontinued operations
(286
)
(251
)
(950
)
(784
)
Amortization of terminated swap
agreement
—
—
(1,812
)
—
General and administrative expenses
related to non-qualified deferred compensation plan performance
(113
)
(69
)
(888
)
351
Change in fair value of financial
instruments
—
2,027
—
2,746
Losses on early extinguishment of debt
189
—
653
—
General and administrative expenses
related to REIT conversion
—
144
—
407
Core FFO from continuing
operations
5,712
3,764
14,684
9,101
Exclude:
Noncash rental revenue including
straight-line rents
(1,259
)
(726
)
(3,056
)
(1,481
)
Amortization of debt issuance costs
227
412
719
819
Noncash compensation expenses
404
305
1,085
810
Non-real estate depreciation and
amortization expense
17
25
63
63
Tenant improvements and leasing
commissions (2nd generation space)
(513
)
(524
)
(915
)
(1,226
)
Maintenance capital expenditures
(810
)
(224
)
(1,305
)
(520
)
Adjusted FFO from continuing
operations
$
3,778
$
3,032
$
11,275
$
7,566
Weighted average number of shares
outstanding - basic
10,192
7,724
10,188
7,231
Dilutive securities
100
—
177
—
Weighted average number of shares
outstanding – diluted
10,292
7,724
10,365
7,231
Core FFO from continuing
operations/share – diluted
$
0.55
$
0.49
$
1.42
$
1.26
INDUS REALTY TRUST,
INC.
Non-GAAP Reconciliations – NOI
and Cash NOI
(dollars in thousands)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
Income (loss) from continuing
operations
$
830
$
(3,602
)
$
3,493
$
(5,596
)
Income tax provision (benefit)
—
24
(585
)
24
Pretax income (loss) from continuing
operations
830
(3,578
)
2,908
(5,572
)
Exclude:
Depreciation and amortization expense
4,823
3,739
13,301
10,048
General and administrative expenses
2,906
2,283
8,238
7,977
Interest expense
1,507
1,700
3,178
5,160
Change in fair value of financial
instruments
—
2,027
—
2,746
Gain on sales of real estate assets
—
(1,450
)
—
(1,792
)
Impairment of real estate assets
—
3,000
—
3,000
Other expense
26
—
32
—
Losses on early extinguishment of debt
189
—
653
—
Investment and other income
(90
)
(119
)
(195
)
(241
)
NOI from continuing operations
10,191
7,602
28,115
21,326
Noncash rental revenue including
straight-line rents
(1,259
)
(726
)
(3,056
)
(1,481
)
Cash NOI from continuing
operations
$
8,932
$
6,876
$
25,059
$
19,845
INDUS REALTY TRUST,
INC.
Reconciliation of Company
Guidance to NOI from continuing operations
(dollars in millions)
(unaudited)
Fourth Quarter 2022
Full Year
Lower End of Guidance
Higher End of Guidance
Lower End of Guidance
Higher End of Guidance
Income from continuing
operations
($
0.1
)
($
0.3
)
$
3.4
$
3.2
Exclude:
Income tax expense (benefit)
—
—
(0.6
)
(0.6
)
Depreciation and amortization expense
5.4
5.6
18.7
18.9
General and administrative expenses
3.1
3.3
11.3
11.5
Interest expense
1.7
1.8
4.9
5.0
Other7
(0.1
)
(0.1
)
0.4
0.4
NOI from continuing operations
$
10.0
$
10.3
$
38.1
$
38.4
___________________________________ 1 Core FFO, Core FFO from
continuing operations per share, NOI from continuing operations and
Cash NOI from continuing operations 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. 3 Leasing metrics
exclude new and renewal leases which have an initial term of twelve
months or less, as well as leases for first generation space on
properties acquired or developed by INDUS. Leasing metrics also
exclude leases tied to properties undergoing redevelopment or
repositioning. 4 Lease cost per square foot per year reflects total
lease costs (tenants improvements, leasing commissions and legal
costs) per square foot per year of the lease term. Lease costs
exclude any base building improvements. 5 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
renewed 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. 6 As a part of
INDUS’ 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 from continuing operations 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 developments or projects that are 100% pre-leased).
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. 7
Other includes income taxes, gains or losses on debt
extinguishment, as well as investment and other income or
expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221107006116/en/
Ashley Pizzo Vice President, Capital Markets &
Investor Relations (212) 218-7914
apizzo@indusrt.com
Jon Clark Executive Vice President, Chief Financial
Officer (860) 286-2419 jclark@indusrt.com
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