Proxy Statement Pursuant to Section 14(a) of
The Securities Exchange Act of 1934
(Amendment No. )
☐ Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of
its filing.
Land & Buildings Investment
Management, LLC together with the other participants named herein (collectively, "Land & Buildings"), intends to
file a preliminary proxy statement and accompanying GOLD proxy card with the Securities and Exchange Commission ("SEC")
to be used to solicit votes for the election of its slate of highly-qualified director nominees at the 2021 annual meeting of shareholders
of Monmouth Real Estate Investment Corporation, a Maryland corporation (the “Company”).
Item 1: On January 26,
2021, Land & Buildings issued the following press release:
Land & Buildings Issues Letter to Monmouth
Real Estate Shareholders
Expresses Serious Concerns Regarding Sales
Process Run by Entrenched, Insider-Heavy Board
Demands that Board Form a Special Committee
of Truly Independent Directors to Reach a Value-Maximizing Outcome for ALL Shareholders
Has Nominated a Slate of Four Highly-Qualified
Director Candidates for Election at the Company’s 2021 Annual Meeting
Stamford, CT, January 26, 2021 –
Land & Buildings Investment Management, LLC (together with its affiliates, "Land & Buildings") today issued the
following letter to shareholders of Monmouth Real Estate Investment Corporation (NYSE: MNR) (“Monmouth” or the "Company”)
regarding the Company’s flawed strategic alternatives process and Land & Buildings’ nomination of four highly-qualified
director candidates for election at Monmouth’s 2021 Annual Meeting of Shareholders (“2021 Annual Meeting”).
The full text of the letter follows:
January 26, 2021
Dear Fellow Monmouth Shareholders:
We invested in Monmouth because we believe the
Company’s shares are deeply undervalued relative to its robust portfolio of industrial warehouse properties and the extremely
favorable market environment within which it operates. Our belief was, and remains, that improved oversight – in the form
of new independent directors – would help unlock significant value for shareholders. Such refreshment would revitalize the
Company’s leadership and address the poor corporate governance that are key contributors to Monmouth’s underperformance.
That is why we decided to nominate exceptionally qualified director candidates to the Company’s Board of Directors (the “Board”).
In the midst of preparing these nominations
we learned of the offer by Blackwells Capital LLC (“Blackwells”) to acquire the Company for $18 per share in cash,
up from $16.75 previously. In the interest of avoiding a proxy contest and helping all shareholders realize the true value of their
investment in Monmouth, we submitted our nominations privately and urged the Board to immediately establish a Special Committee
which would include our nominees to conduct a thorough strategic review process to evaluate the Blackwells offer and the best path
forward for the Company. Such a process would be unencumbered by either the personal and professional conflicts of interest that
exist on the incumbent Board or the taint of a competing desire to take the Company private. Now more than ever shareholders need
an objective Board to determine which course of action will maximize value.
Unfortunately, the Board rebuffed our efforts
at constructive dialogue and has elected to run what we believe will likely be a flawed strategic alternative process overseen
by the same entrenched, insider-laden leadership that bears responsibility for the persistent underperformance of the Company relative
to its peers. Consider the following:
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The Board includes three Landy immediate
family members who occupy the roles of Chairman, President and Chief Executive Officer, and an additional Board member, Matthew
I. Hirsch, who serves as a director alongside the Landys at UMH Properties Inc., a related company in which the Landy family has
separate interests.
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The average director tenure of 17 years
far exceeds good corporate governance practices, increasing the likelihood that directors’ allegiances lay with management
rather than the best interest of all shareholders.
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The Board oversaw $127 million of losses
on Monmouth’s stakes in public securities of real estate companies, including regional mall owners CBL & Associates Properties,
Inc. (formerly NYSE: CBL) and Pennsylvania Real Estate Investment Trust (NYSE: PEI), where the Company has lost 98% and 93%, respectively,
on their investments as of September 30, 2020.
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Monmouth’s stock price and funds
from operations (“FFO”) have consistently underperformed those of its industrial peers.i
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Monmouth’s Total Shareholder Returns Have Significantly
Underperformed Industrial Peers
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Total Shareholder Returns
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Trailing
10 Years
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Trailing
5 Years
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Trailing
3 Years
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Trailing
1 Year
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Monmouth Real Estate Investment Corporation
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215%
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79%
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-5%
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1%
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Industrial REITs
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350%
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146%
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118%
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9%
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MNR Underperformance vs. Industrial REITs
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-135%
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-67%
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-123%
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-8%
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Monmouth’s FFO Growth Has Significantly Trailed Industrial
Peers
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FFO Growth
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Trailing
10 Years
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Trailing
5 Years
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Trailing
3 Years
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Trailing
1 Year
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Monmouth Real Estate Investment Corporation
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27%
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33%
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1%
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-8%
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Industrial REITs
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94%
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54%
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24%
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10%
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MNR Underperformance vs. Industrial REITs
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-67%
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-21%
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-23%
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-18%
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Given the relatively straightforward nature
of the Company’s assets, with 55% of Monmouth’s revenue derived from assets leased to FedEx Corporation,ii
we believe a full and fair sales process should generate significant interest in the Company’s industrial warehouse assets
and take no more than 30 to 60 days to arrive at an outcome. We would interpret any delay beyond the 60 days as an indication that
this process is merely a smoke screen being used by an entrenched Board and management to remain in control beyond the vote for
new directors at the 2021 Annual Meeting.
In addition, we believe that in order for this
process to have a legitimate chance of achieving a successful outcome for shareholders, it should not be encumbered at the outset
by a clubby, underperforming Board. Monmouth shareholders deserve better – a credible process lead by a Special Committee
of truly independent directors including our nominees squarely focused on reaching a value-maximizing outcome for ALL shareholders.
Our highly-qualified nominees to the Board at
the 2021 Annual Meeting are as follows:
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Gregory F. Hughes, who brings significant
experience in public and private real estate markets, including as Chief Operating Officer and Chief Financial Officer of SL Green
Realty Corp. (NYSE: SLG) and Chief Financial Officer of Fortress Investment Group LLC.
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Mark A. Filler, who has extensive
executive experience in the real estate industry including as Chief Executive Officer of Prospect Mortgage Company and Apex National
Real Estate LLC, and as Co-Founder of Prism Financial. While at Prospect, the Company originated approximately $10 billion annually
and had a servicing portfolio in excess of $15 billion.
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Michelle Applebaum, who previously
served as a director of Northwest Pipe Company (NASDAQ: NWPX) and whose deep capital markets expertise includes building one of
the first “independent” equity research and corporate advisory boutiques and repeated top ratings from Institutional
Investor Magazine.
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Jonathan Litt, an advocate of shareholder
rights with decades of experience investing in the REIT industry and extensive expertise in developing strategies to maximize long-term
shareholder value in the sector – both as an investor and as a public company director.
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We look forward to continuing to communicate
with shareholders about our director candidates and the best way to maximize the value of your investment in Monmouth.
Sincerely,
Jonathan Litt
Founder & Chief Investment Officer
Land and Buildings Investment Management, LLC
About Land & Buildings:
Land & Buildings is a registered investment
manager specializing in publicly traded real estate and real estate related securities. Land & Buildings seeks to deliver attractive
risk adjusted returns through its proactive, engagement-focused approach and research-driven strategy, leveraging its investment
professionals' deep experience, research expertise and industry relationships.
Media Contact:
Sloane & Company
Dan Zacchei / Joe Germani
dzacchei@sloanepr.com
/ jgermani@sloanepr.com
212-486-9500
CERTAIN INFORMATION CONCERNING
THE PARTICIPANTS
Land & Buildings Investment Management,
LLC together with the other participants named herein (collectively, "Land & Buildings"), intends to file a preliminary
proxy statement and accompanying GOLD proxy card with the Securities and Exchange Commission ("SEC") to be used to solicit
votes for the election of its slate of highly-qualified director nominees at the 2021 annual meeting of shareholders of Monmouth
Real Estate Investment Corporation, a Maryland corporation (the “Company”).
LAND & BUILDINGS STRONGLY ADVISES ALL SHAREHOLDERS
OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.
The participants in the proxy solicitation are
anticipated to be Land & Buildings Capital Growth Fund, LP (“L&B Capital”), Land & Buildings GP LP (“L&B
GP”), L&B Opportunity Fund, LLC (“L&B Opportunity”), Land & Buildings Investment Management, LLC
(“L&B Management”), Jonathan Litt, Michelle Applebaum, Mark A. Filler and Gregory F. Hughes.
As of the date hereof, L&B Capital directly
owns 178,668 shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”). L&B GP, as
the general partner of each of L&B Capital and L&B Opportunity, may be deemed the beneficial owner of an aggregate of 208,781
shares of Common Stock owned by L&B Capital and L&B Opportunity. As of the date hereof, L&B Opportunity directly owns
30,113 shares of Common Stock. As of the date hereof, 480,749 shares of Common Stock were held in certain accounts managed by L&B
Management (the “Managed Accounts”). L&B Management, as the investment manager of each of L&B Capital and L&B
Opportunity, and as the investment advisor of the Managed Accounts, may be deemed the beneficial owner of an aggregate of 689,530
shares of Common Stock directly owned by L&B Capital, L&B Opportunity and held in the Managed Accounts. Mr. Litt, as the
managing principal of L&B Management, may be deemed the beneficial owner of an aggregate of 689,530 shares of Common Stock
directly owned by L&B Capital, L&B Opportunity and held in the Managed Accounts. As of the date hereof, none of Ms. Applebaum
or Messrs. Filler or Hughes owns any shares of Common Stock.
i
Peer group comprised of members of the Bloomberg REIT Industrial/Warehouse
Index: Americold Realty Trust (NYSE: COLD), Duke Realty Corporation (NYSE: DRE), EastGroup Properties, Inc. (NYSE: EGP), First
Industrial Realty Trust, Inc. (NYSE: FR), Innovative Industrial Properties, Inc. (NYSE: IIPR), Industrial Logistics Properties
Trust (Nasdaq: ILPT), Prologis, Inc. (NYSE: PLD), Plymouth Industrial REIT, Inc. (NYSE: PLYM), PS Business Parks, Inc. (NYSE: PSB),
Rexford Industrial Realty, Inc. (NYSE: REXR), STAG Industrial, Inc. (NYSE: STAG) and Terreno Realty Corporation (NYSE: TRNO). Total
shareholder returns reported through December 1, 2020, the unaffected share price before the initial Blackwells offer. FFO growth
sourced from Bloomberg based on actual results reported by the respective peer companies or, where actual results have not yet
been reported, 2020 consensus FFO estimates as of January 25, 2021.
ii
Source: Annual Report on Form 10-K for the fiscal year ended September
30, 2020.
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