Plymouth Industrial REIT, Inc. (NYSE: PLYM): Solid Fundamentals and Promising Growth Prospects

Published on September 24, 2024 | Ticker: PLYM

Plymouth Industrial REIT, Inc. (NYSE: PLYM) is a full-service, vertically integrated real estate investment company focused on the acquisition, ownership, and management of single and multi-tenant industrial properties. The company has demonstrated strong financial performance, with annual net income of $13,660,000, annual revenue of $199,848,000, annual operating cash flow of $81,872,000, and annual free cash flow of $47,121,000 in its latest fiscal year.

In the first quarter of 2024, Plymouth Industrial REIT reported solid results. The company's total revenues for the quarter were $50,228,000, up from $49,400,000 in the same period of the previous year. Net income for the quarter was $6,286,000, compared to a net loss of $3,336,000 in the first quarter of 2023. The company's operating cash flow for the quarter was $16,614,000, while its free cash flow was $20,472,000.

Liquidity

The company's balance sheet and liquidity position remain strong, with available liquidity of approximately $214.6 million as of March 31, 2024, comprising $20.0 million in cash and cash equivalents and $194.6 million of borrowing capacity on its KeyBank unsecured line of credit. The company has fixed rates for well over 90% of its debt and is on track to operate in the 6x range during 2024.

Business Overview

Plymouth Industrial REIT's business overview is as follows: The company is a full-service, vertically integrated real estate investment company focused on the acquisition, ownership, and management of single and multi-tenant industrial properties, including distribution centers, warehouses, light industrial, and small bay industrial properties, located in primary and secondary markets within the main industrial, distribution, and logistics corridors of the United States. As of March 31, 2024, the company, through its subsidiaries, owned 156 industrial properties comprising 211 buildings with an aggregate of approximately 34.0 million square feet, and its regional property management office building located in Columbus, Ohio totaling approximately 17,260 square feet.

The company's core investment strategy is to acquire industrial properties located in primary and secondary markets across the U.S., as well as select sub-markets. Plymouth expects to acquire these properties through third-party purchases and structured sale-leasebacks, where it believes it can achieve attractive initial yields and strong ongoing cash-on-cash returns. The company's target markets are located in primary and secondary markets, as well as select sub-markets, because it believes these markets tend to have less occupancy and rental rate volatility and less buyer competition relative to gateway markets.

Financials

Plymouth's financial ratios paint a picture of a well-managed company. The company's dividend yield is 4%, and its payout ratio is 1.8. Its current ratio is 0.12, its quick ratio is 0.12, and its cash ratio is 0.08, indicating potential liquidity challenges. The company's gross profit margin is 68%, its operating profit margin is 15%, and its net profit margin is 12%, demonstrating its operational efficiency.

Geographic Breakdown

In terms of its geographic breakdown, Plymouth's portfolio is located in various primary and secondary markets within the main industrial distribution and logistics corridors of the United States, including markets such as Memphis, St. Louis, Chicago, and Atlanta. The company believes these markets tend to have less occupancy and rental rate volatility and less buyer competition relative to gateway markets.

Revenue Breakdown

Regarding revenue breakdowns, the company's rental revenue is the primary driver, accounting for $50,190,000, or 99.9%, of total revenues in the first quarter of 2024. The company's management fee revenue and other income contributed the remaining $38,000, or 0.1%, of total revenues.

Leasing Activity

The company's leasing activity has been strong, with leases commencing during the first quarter of 2024 totaling an aggregate of 1,387,977 square feet, all of which are associated with terms of at least six months. These leases included 928,217 square feet of renewal leases, experiencing a 5.9% increase in rental rates on a cash basis, and 459,760 square feet of new leases, experiencing a 48.4% increase in rental rates on a cash basis.

Outlook

Looking ahead, Plymouth Industrial REIT provided the following guidance for the full year 2024: The company expects to generate annual net income of $13,660,000, annual revenue of $199,848,000, annual operating cash flow of $81,872,000, and annual free cash flow of $47,121,000. The company also anticipates that it will have sufficient liquidity and access to capital resources to meet its current obligations and to meet any scheduled debt maturities.

Conclusion

In conclusion, Plymouth Industrial REIT has demonstrated strong financial performance, with solid fundamentals and promising growth prospects. The company's focus on acquiring and managing industrial properties in primary and secondary markets, as well as its vertically integrated business model, have positioned it well to capitalize on the growing demand for industrial real estate. With a strong balance sheet, ample liquidity, and a clear strategic vision, Plymouth Industrial REIT appears poised to continue delivering value to its shareholders.

You may be interested in...

Realty Income (NYSE: O) - The Consistent Dividend Growth Machine

Realty Income Corporation, known as "The Monthly Dividend Company," has been a consistent and reliable performer in the real estate investment trust (REIT) sector for decades. Founded in 1969, this diversified REIT has built an impressive portfolio of over 15,450 properties across the United States, United Kingdom, and six other European countries, leased to approximately 1,550 different clients operating in 90 separate industries.

Plymouth Industrial REIT (PLYM): Building a Diversified Portfolio Through Opportunistic Acquisitions

Plymouth Industrial REIT, Inc. (PLYM) is a real estate investment trust (REIT) focused on the acquisition, ownership, and management of single and multi-tenant industrial properties located in primary and secondary markets across the United States. The company has a vertically integrated platform that allows it to strategically grow through both direct property acquisitions and joint venture arrangements.

City Office REIT (CIO): Navigating the Office Sector's Evolving Landscape with Strategic Leasing

City Office REIT, Inc. (NYSE:CIO) is an internally managed real estate investment trust (REIT) that focuses on acquiring, owning, and operating high-quality office properties in metropolitan areas across the Southern and Western United States. With a diversified portfolio of 23 properties comprising 56 office buildings totaling approximately 5.6 million square feet of net rentable area, City Office REIT has established itself as a prominent player in the dynamic office sector.

ACRES Commercial Realty Corp. (NYSE:ACR): Navigating the Commercial Real Estate Landscape with Resilience

ACRES Commercial Realty Corp. (NYSE:ACR) is a Maryland-based real estate investment trust (REIT) that is primarily focused on originating, holding, and managing commercial real estate (CRE) mortgage loans and equity investments in commercial real estate properties through direct ownership and joint ventures. The company’s strategy is to provide its shareholders with total returns over time, including quarterly distributions and capital appreciation, while seeking to manage the risks associated with its investment strategies.

American Strategic Investment Co. (NYSE: NYC) - A REIT Poised for Transformation

American Strategic Investment Co. (NYSE: NYC) is an externally managed real estate investment trust (REIT) that has undergone a significant strategic shift in recent years. Formerly known as New York City REIT, Inc., the company has expanded its investment focus beyond traditional office properties to include a broader range of asset types, positioning it for potential growth opportunities.