Plymouth Industrial REIT (PLYM) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income rebounded to $1.3 million, reversing a prior-year loss, with Core FFO rising to $21.8 million and AFFO to $22.3 million, supported by lower expenses, gains on asset sales, and a major Memphis acquisition for $100.5 million.

• Portfolio occupancy remained strong at 97.0% as of June 30, 2024, with the Memphis acquisition expanding the footprint to nearly 7 million sq ft in that market.

• Q2 results exceeded expectations, aided by a one-time benefit from favorable Chicago real estate tax appeals and robust leasing demand.

• Development program is nearly 100% leased, with full stabilization benefits anticipated in 2025.

• Balance sheet remains strong, with leverage reduced to 6.4x and expectations to operate in the 6x range for 2024.

Financial highlights

• Q2 2024 rental revenue was $48.7 million, down from $49.9 million in Q2 2023, mainly due to property dispositions and lower average occupancy.

• Same-store NOI growth reached 9.7% in Q2 on a cash basis, but would have been 6.4% excluding the Chicago tax benefit.

• NOI for Q2 2024 was $35.1 million, up from $34.2 million in Q2 2023; EBITDAre was $31.2 million, up from $30.4 million.

• Leasing volume in Q2 was the third highest in company history, with robust tenant demand and renewal leases seeing a 19.5% cash rental rate increase.

• Cash releasing spreads in Memphis are projected at 18-20%, higher than the portfolio average of 14-15%.

Outlook and guidance

• 2024 Core FFO guidance tightened to $1.88–$1.90 per share and unit; net income guidance $0.10–$0.12 per share and unit.

• Same-store portfolio NOI growth (cash basis) expected at 7.0%–7.5% for 2024; average same-store occupancy projected at 97.5%–98.0%.

• Expect a dip in same-store occupancy to 96.5% in Q3, rebounding to 98% by year-end.

• Guidance includes the Memphis acquisition and anticipated Columbus, OH property sale; excludes future acquisitions/dispositions.

• No additional one-time items anticipated in the second half; outlook incorporates recent credit loss and leasing assumptions.