EDGAR 10-K Filing

Company CIK: 1515816
Filing Year: 2024
Filename: 1515816_10-K_2024_0001171520-24-000136.json

---

ITEM 1. BUSINESS
Item 1. Business
Overview
We are a full service, vertically integrated, self-administered and self-managed REIT focused on the acquisition, ownership, management, redevelopment and development of single and multi-tenant industrial properties, including distribution centers, warehouses, light industrial and small bay industrial properties, located in primary and secondary markets, as well as select sub-markets, with access to large pools of skilled labor in the main industrial, distribution and logistics corridors of the United States. The Company was founded in March 2011 by Jeffrey Witherell and Pendleton White, Jr., each of whom have over 25 years of experience acquiring, owning and operating commercial real estate properties. We are a Maryland corporation and our common stock is publicly traded on the New York Stock Exchange under the symbol “PLYM”. Our headquarters and executive offices are located in Boston, Massachusetts. Additionally, we have regional offices in Columbus, Ohio, Jacksonville, Florida, Memphis, Tennessee, and Atlanta, Georgia.
We are structured as an umbrella partnership REIT, commonly called an UPREIT, and own substantially all of our assets and conduct substantially all of our business through Plymouth Industrial OP, LP, a Delaware limited partnership (the “Operating Partnership”). As of December 31, 2023, the Company owned a 98.9% equity interest in the Operating Partnership. Any net proceeds from our public offerings will be contributed to the Operating Partnership in exchange for OP units. Our interest in the Operating Partnership will generally entitle us to share in cash distributions from, and in the profits and losses of, our Operating Partnership in proportion to our percentage ownership. As the sole general partner of the Operating Partnership, we generally have the exclusive power under the partnership agreement to manage and conduct its business and affairs, subject to certain limited approval and voting rights of the limited partners.
As of December 31, 2023, the Company’s portfolio consists of 156 industrial properties (the “Company Portfolio”) comprising of 211 buildings located in twelve states with an aggregate of approximately 34.0 million rentable square feet. The Company Portfolio was 98.1% leased to 465 different tenants across 33 industry types as of December 31, 2023.
Investment Strategy
We intend to continue to focus on the acquisition of industrial properties located in primary and secondary markets, as well as select sub-markets, with access to large pools of skilled labor in the main industrial, distribution and logistics corridors of the United States, which we refer to as our target markets. We believe industrial properties in such target markets will provide superior and consistent cash flow returns at generally lower acquisition costs relative to replacement cost and to industrial properties in gateway markets. Further, we believe there is a greater potential for higher rates of appreciation in the value of industrial properties in our target markets relative to industrial properties in gateway markets.
We believe our target markets provide us with opportunities to acquire both stabilized properties generating favorable cash flows, as well as properties where we can enhance returns through leasing, value-add renovations, value-add redevelopment and ground-up development. We focus primarily on the following investments:
• single-tenant and multi-tenant industrial properties where tenants are paying below-market rents with near-term lease expirations that we believe have a high likelihood of renewal at market rents; and
• multi-tenant industrial properties that we believe would benefit from our value-add management approach to create attractive leasing options for our tenants, and as a result of the presence of smaller tenants, obtain higher per-square-foot rents.
We believe there are a significant number of attractive acquisition opportunities available to us in our target markets and that the fragmented ownership of industrial properties within our target markets and the complex operating requirements of the industrial properties we target generally make it more difficult for less-experienced or less-focused operators to access comparable investment opportunities on a consistent basis. While we will focus on investment opportunities in our target markets, we may make opportunistic acquisitions of industrial properties in other markets when we believe we can achieve attractive risk-adjusted returns.
We also intend to continue pursuing joint venture arrangements with institutional partners which could provide management fee income, a residual profit-sharing income and the ability to purchase properties out of the joint venture over time. Such joint ventures may involve investing in industrial assets that would be characterized as opportunistic or value-add investments. These may involve development or redevelopment strategies that may require significant up-front capital expenditures, lengthy lease-up periods and result in inconsistent cash flows. As such, these properties’ risk profiles and return metrics would likely differ from the non-joint venture properties that we target for acquisition.
Investment Criteria
We believe that our market knowledge, operations systems and internal processes allow us to efficiently analyze the risks associated with an asset’s ability to produce cash flow going forward. We blend fundamental real estate analysis with corporate credit analysis to make an assessment of probable cash flows that will be realized in future periods. We also use data-driven and event-driven analytics and primary research to identify and pursue emerging investment opportunities.
Our investment strategy focuses on industrial properties in primary and secondary markets, as well as select sub-markets, with access to large pools of skilled labor in the main industrial, distribution and logistics corridors of the United States for the following reasons:
• investment yields for industrial properties located in our target markets are often greater than investment yields on both industrial properties and other commercial property types located in gateway markets;
• we believe there is less competition for industrial properties in our target markets from institutional real estate buyers; our typical competitors are local investors who often do not have ready access to debt or equity capital;
• the industrial markets that we target are highly fragmented with complex operating requirements, which we believe makes it difficult for less-experienced or less-focused operators to access comparable investment opportunities on a consistent basis;
• we believe that there is a limited new supply of industrial space in our target markets;
• our target markets generally have less occupancy and rental rate volatility than gateway markets;
• we believe our target markets generally have more capital appreciation and growth potential at a lower cost basis than gateway markets; and
• we believe that the demand for e-commerce-related properties, or e-fulfillment facilities, will continue to grow and play a significant role in our investing strategy.
We seek to maximize our cash flows through proactive asset management. Our asset management team actively manages our properties in an effort to maintain high retention rates, lease vacant space, manage operating expenses and maintain our properties to an appropriate standard. In doing so, we have developed strong tenant relationships. We intend to leverage those relationships and market knowledge to increase renewals, achieve market rents, obtain early notification of departures to provide longer re-leasing periods and work with tenants to properly maintain the quality and attractiveness of our properties.
Our asset management team functions include strategic planning and decision-making, centralized leasing activities and management of third-party leasing companies. Our asset management team oversees property management activities relating to our properties which include controlling capital expenditures and expenses that are not reimbursable by tenants, making regular property inspections, overseeing rent collections and cost control and planning and budgeting activities. Tenant relations matters, including monitoring of tenant compliance with their property maintenance obligations and other lease provisions, will be handled by in-house personnel for most of our properties.
Financing Strategy
We intend to maintain a flexible and growth-oriented capital structure. We intend to use the net proceeds from our public offerings along with additional indebtedness to acquire industrial properties. Our additional indebtedness may include unsecured arrangements such as our revolving credit facility and term loans, or, secured arrangements such as a mortgage. We believe that we will have the ability to leverage newly-acquired properties with our long-term target debt-to-value ratio of less than 50%. We also anticipate using OP units to acquire properties from existing owners interested in tax-deferred transactions.
Competition
In acquiring our properties, we compete with other public industrial property sector REITs, income oriented non-traded REITs, private real estate fund managers and local real estate investors and developers. Historically, local real estate investors and developers have represented our dominant competition for acquisition opportunities, however, they do not typically have the same access to capital as afforded to us as a publicly traded entity. We also face significant competition in leasing available space to prospective tenants and in re-leasing space to existing tenants.
We believe we have a competitive advantage in sourcing attractive acquisitions because the competition for our target assets is primarily from local investors who are not likely to have ready access to debt or equity capital. In addition, our umbrella partnership real estate investment trust, or UPREIT, structure enables us to acquire industrial properties on a non-cash basis in a tax efficient manner through the issuance of OP units as full or partial consideration for the transaction. We will also continue to develop our large existing network of relationships with real estate and financial intermediaries. These individuals and companies give us access to significant deal flow-both those broadly marketed and those exposed through only limited marketing. The acquisition of properties will be transacted primarily from third-party owners of existing leased buildings and secondarily from owner-occupiers through sale-leaseback transactions.
Regulation
General
Our properties are subject to various laws, ordinances and regulations, including regulations relating to common areas and fire and safety requirements. We believe that we have the necessary permits and approvals to operate each of our properties.
Americans with Disabilities Act
Our properties must comply with Title III of the ADA to the extent that such properties are “public accommodations” as defined under the ADA. Under the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. The ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. Although we believe that the properties in the Company Portfolio in the aggregate substantially comply with present requirements of the ADA, and we have not received any notice for correction from any regulatory agency, we have not conducted a comprehensive audit or investigation of all of our properties to determine whether we are in compliance and therefore we may own properties that are not in compliance with the ADA.
ADA compliance is dependent upon the tenant’s specific use of the property, and as the use of a property changes or improvements to existing spaces are made, we will take steps to ensure compliance. Noncompliance with the ADA could result in additional costs to attain compliance, imposition of fines by the U.S. government or an award of damages or attorney’s fees to private litigants. The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations to achieve compliance as necessary.
Environmental Matters
The Company Portfolio is subject to various federal, state and local environmental laws. Under these laws, courts and government agencies have the authority to require us, as owner of a contaminated property, to clean up the property, even if we did not know of or were not responsible for the contamination. These laws also apply to persons who owned a property at the time it became contaminated, and therefore, it is possible we could incur these costs even after we sell some of the properties we acquire. In addition to the costs of cleanup, environmental contamination can affect the value of a property and, therefore, an owner’s ability to borrow using the property as collateral or to sell the property. Under applicable environmental laws, courts and government agencies also have the authority to require that a person who sent waste to a waste disposal facility, such as a landfill or an incinerator, pay for the clean-up of that facility if it becomes contaminated and threatens human health or the environment.
Furthermore, various court decisions have established that third parties may recover damages for injury caused by property contamination. For instance, a person exposed to asbestos at one of our properties may seek to recover damages if he or she suffers injury from the asbestos. Lastly, some of these environmental laws restrict the use of a property or place conditions on various activities. An example would be laws that require a business using chemicals to manage them carefully and to notify local officials that the chemicals are being used.
We could be responsible for any of the costs discussed above. The costs to clean up a contaminated property, to defend against a claim, or to comply with environmental laws could be material and could adversely affect the funds available for distribution to our stockholders. We usually require Phase I or similar environmental assessments by independent environmental consultants at the time of acquisition of a property. We generally expect to continue to obtain a Phase I or similar environmental site assessments by independent environmental consultants on each property prior to acquiring it. However, these environmental assessments may not reveal all environmental costs that might have a material adverse effect on our business, assets, results of operations or liquidity and may not identify all potential environmental liabilities.
We can make no assurances that (1) future laws, ordinances or regulations will not impose material environmental liabilities on us, or (2) the current environmental condition of our properties will not be affected by tenants, the condition of land or operations in the vicinity of our properties (such as releases from underground storage tanks), or by third parties unrelated to us.
Insurance
We carry commercial property, liability and terrorism coverage on all the properties in the Company Portfolio under a blanket insurance policy. Generally, we do not carry insurance for certain types of extraordinary losses, including, but not limited to, losses caused by riots, war, earthquakes and wildfires unless the property is in a higher risk area for those events. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and standard industry practice, however, our insurance coverage may not be sufficient to fully cover all of our losses. In addition, our title insurance policies may not insure for the current aggregate market value of the Company Portfolio, and we do not intend to increase our title insurance coverage as the market value of the Company Portfolio increases.
Human Capital
As of December 31, 2023, we had forty-three full time employees. None of our employees are represented by a collective bargaining agreement.
We are committed to maintaining a work culture that treats all employees fairly and with respect, promotes inclusivity, provides equal opportunities for the professional development of our employees and advancement based on merit. As of December 31, 2023, females constituted approximately 40% of our workforce and 40% of our managerial employees. We intend to continue utilizing a multifaceted recruiting, talent development, and internal promotion strategy to expand the diversity of our employee base across all roles and functions.
To attract and retain top talent in our highly competitive industry, we have designed our compensation and benefits programs to provide an effective reward structure aligned with the achievement of key business objectives. Our employees are eligible for medical and dental insurance, a savings/retirement plan, disability insurance and receive restricted stock grants per the 2014 Incentive Plan.
Legal Proceedings
We are not currently a party, as plaintiff or defendant, to any material legal proceedings. From time to time, we may become party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. There can be no assurance that these matters that may arise in the future, individually or in the aggregate, will not have a material adverse effect on our financial condition or results of operations.
Our Corporate Information
Our principal executive offices are located at 20 Custom House Street, 11th Floor, Boston, Massachusetts 02110. Our telephone number is (617) 340-3814. Our website is www.plymouthreit.com. We electronically file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports with the United States Securities and Exchange Commission (“SEC”). Access to those reports and other filings with the SEC may be obtained, free of charge from our website, www.plymouthreit.com or through the SEC’s website at www.sec.gov. These reports are available as soon as reasonably practicable after such material is electronically filed or furnished to the SEC.

---

ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
The following risk factors and other information in this Annual Report on Form 10-K, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations section, should be carefully considered. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we may currently deem immaterial also may impair our business operations. If any of the following or other risks occur, our business financial condition, operating results, cash flows and distributions, as well as the market price of our securities, could be materially adversely affected.
Summary of Risk Factors
Risks Related to Our Business and Operations:
• Our assets are concentrated in the industrial real estate sector, and our business could be materially and adversely affected by an economic downturn in that sector.
• We are subject to risks associated with single tenant leases, and the default by one or more tenants could materially and adversely affect our results of operations and financial results.
• We are subject to risks related to tenant concentration, which could materially adversely affect our cash flows, result of operations and financial condition.
• Our assets are geographically concentrated in two of our primary markets and ten of our secondary markets, which causes us to be especially susceptible to adverse developments in those markets.
• Our assets are comprised entirely of industrial properties located in primary and secondary markets, as well as select sub-markets, with access to large pools of skilled labor in the main industrial, distribution and logistics corridors of the United States, which subjects us to risks associated with concentrating the Company’s portfolio on such assets.
Risks Associated with Our Indebtedness:
• Debt service payments on our significant indebtedness may leave us with insufficient cash resources to operate our properties or pay dividends as current contemplated or necessary to maintain our REIT qualification.
• Continued increases in interest rates, or a prolonged period with rates at current levels, could adversely impact our financial condition, results of operations and cash flows.
• Our hedging strategies are subject to the risks that the counterparty fails to perform or that the contacts may not mitigate the risks related to our variable rate debt.
• Restrictive covenants in our debt instruments could restrict our operations and failure to comply with these restrictions could result in the acceleration of our debt.
• Unavailability of mortgage debt may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire.
• Our existing loan agreements contain balloon payment obligations, which may materially and adversely affect our financial condition and our ability to make distributions.
• Our existing loan agreements are secured by various properties within our portfolio or the equity of our property-owning subsidiaries, so a default under any of these loan documents could result in a loss of the secured properties.
Risks Related to the Real Estate Industry and the Broader Economy:
• The illiquidity of real estate assets could significantly impede our ability to response to adverse changes in the performance of our properties and harm our financial results.
• Any resurgence of the COVID-19 pandemic or any unforeseen factor that emerges out of that pandemic or any other public health crisis could materially adversely affect our results of operations and financial results.
• Declining real estate valuations and impairment charges could materially adversely affect our financial condition and results of operations.
• Adverse economic conditions and any dislocations in the credit markets could materially adversely affect our financial condition and results of operations.
Risks Related to Our Organizational Structure:
• Our success depends on key personnel whose continued service is not guaranteed, and the departure of one or more of our key personnel could adversely affect our ability to manage our business and to implement our growth strategy.
• Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of the holders of the partnership interests of our operating partnership.
• Our charter and bylaws, the partnership agreement of our operating partnership and Maryland law contain provisions that may delay, defer, or prevent a change of control transaction.
• Our charter contains certain ownership limits with respect to our stock.
• We could increase the number of authorized shares of stock, classify and reclassify unissued stock and issue stock without stockholder approval.
Risks Related to Our Status as a REIT:
• Failure to maintain our qualification as a REIT would have significant adverse consequences to us.
• If our operating partnership failed to qualify as a partnership or a disregarded entity for federal tax purposes, we would cease to qualify as a REIT.
• To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions.
• Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
• Complying with REIT requirements may affect our profitability and may force us to liquidate or forgo otherwise attractive investments.
Risks Related to Our Business and Operations
Our portfolio is concentrated in the industrial real estate sector, and our business could be adversely affected by an economic downturn in that sector.
Our Company Portfolio is comprised entirely of industrial properties, including distribution centers, warehouses, light industrial and small bay industrial properties. This concentration may expose us to the risk of economic downturns in the industrial real estate sector to a greater extent than if our properties were more diversified across other sectors of the real estate industry. In particular, an economic downturn affecting the market for industrial properties could have a material adverse effect on our results of operations, cash flows, financial condition and our ability to pay distributions to our stockholders.
We are subject to risks associated with single-tenant leases, and the default by one or more tenants could materially and adversely affect our results of operations and financial condition.
We are subject to the risk that the default, financial distress or bankruptcy of a single tenant could cause interruptions in the receipt of rental revenue and/or result in a vacancy, which is likely to result in the complete reduction in the operating cash flows generated by the property leased to that tenant and may decrease the value of that property. In addition, a majority of our leases generally require the tenant to pay all or substantially all of the operating expenses normally associated with the ownership of the property, such as utilities, real estate taxes, insurance and routine maintenance. Following a vacancy at a single-tenant property, we will be responsible for all of the operating costs at such property until it can be re-let, if at all.
Our portfolio is geographically concentrated in two of our primary markets and ten of our secondary markets, which causes us to be especially susceptible to adverse developments in those markets.
In addition to general, regional, national, and international economic conditions, our operating performance is impacted by the economic conditions of the specific geographic markets in which we have concentrations of properties. Our wholly owned portfolio consists of holdings in the following markets (which accounted for the percentage of our total annualized rent indicated) as of December 31, 2023: Chicago (20.1%); Cleveland (12.3%); Memphis (11.8%); Jacksonville (10.4%); St. Louis (10.1%); Indianapolis (10.0%); Columbus (9.0%); Cincinnati (7.2%); Atlanta (6.5%); Boston (1.4%); Charlotte (0.8%); and Kansas City (0.4%). This geographic concentration could adversely affect our operating performance if conditions become less favorable in any of the markets in which we have a concentration of properties. We cannot assure you that any of our target markets will grow or that underlying real estate fundamentals will be favorable to owners and operators of industrial properties. Our operations may also be affected if competing properties are built in our target markets. Any adverse economic or real estate developments in our target markets, or any decrease in demand for industrial space resulting from the regulatory environment, business climate or energy or fiscal problems, could materially and adversely impact our financial condition, results of operations, cash flow, our ability to satisfy our debt service obligations and our ability to pay distributions to our stockholders.
Our portfolio is comprised of industrial properties in primary and secondary markets, as well as select sub-markets which subjects us to risks associated with concentrating our portfolio on such assets.
Our portfolio is comprised of industrial properties, including distribution centers, warehouses, light industrial and small bay industrial properties in primary and secondary markets, as well as select sub-markets. While we believe that industrial properties in our targeted markets have shown positive trends, we cannot give any assurance that these trends will continue. Any developments or circumstances that adversely affect the value of such industrial properties generally could have a more significant adverse impact on us than if our portfolio was diversified by asset type, which could materially and adversely impact our financial condition, results of operations and ability to make distributions to our stockholders.
Our business strategy depends on achieving revenue growth from anticipated increases in demand for industrial space in our target markets; accordingly, any delay or a weaker than anticipated economic recovery could materially and adversely affect us and our growth prospects.
Our business strategy depends on achieving revenue growth and capital appreciation from anticipated near-term growth in demand for industrial space in our target markets as a result of improving demographic trends and supply and demand fundamentals. As a result, any delay or a weaker than anticipated economic recovery, particularly in our target markets, could materially and adversely affect us and our growth prospects. Furthermore, even if economic conditions generally improve, we cannot provide any assurances that demand for industrial space in our target markets will increase from current levels. If demand does not increase in the near future, or if demand weakens, our future results of operations and our growth prospects could also be materially and adversely affected.
We may not be aware of characteristics or deficiencies involving any one or all of the properties that we acquire in the future, which could have a material adverse effect on our business.
Newly acquired properties may have characteristics or deficiencies unknown to us that could affect their valuation or revenue potential and such properties may not ultimately perform to our expectations. We cannot assure you that the operating performance of any newly acquired properties will not decline under our management. Any characteristics or deficiencies in any newly acquired properties that adversely affect the value of the properties or their revenue-generation potential could have a material adverse effect on our results of operations and financial condition.
We may be unable to renew leases, lease vacant space or re-lease space as leases expire.
Leases representing 13.4%, 23.2% and 16.7% of the rentable square footage of the industrial properties in our portfolio will expire in 2024, 2025 and 2026, respectively. We cannot assure you that our leases will be renewed or that our properties will be re-leased at rental rates equal to or above the current average rental rates or that we will not offer substantial rent abatements, tenant improvements, early termination rights or below-market renewal options to attract new tenants or retain existing tenants. If the rental rates for our properties decrease, or if our existing tenants do not renew their leases or we do not re-lease a significant portion of our available space and space for which leases will expire, our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock could be adversely affected.
We may be unable to identify and complete acquisitions of properties that meet our investment criteria, which may have a material adverse effect on our growth prospects.
Our primary investment strategy involves the acquisition of industrial properties located in primary and secondary markets, as well as select sub-markets, with access to large pools of skilled labor in the main industrial, distribution and logistics corridors of the United States. These activities require us to identify suitable acquisition candidates or investment opportunities that meet our investment criteria and are compatible with our growth strategies. We may be unable to acquire properties identified as potential acquisition opportunities. Our ability to acquire properties on favorable terms, or at all, may expose us to the following significant risks:
• we may incur significant costs and divert management attention in connection with evaluating and negotiating potential acquisitions, including ones that we are subsequently unable to complete;
• even if we enter into agreements for the acquisition of properties, these agreements are subject to conditions to closing, which we may be unable to satisfy; and
• we may be unable to finance any given acquisition on favorable terms or at all.
If we are unable to finance property acquisitions or acquire properties on favorable terms, or at all, our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock could be adversely affected. In addition, failure to identify or complete acquisitions of suitable properties could limit our growth.
Our acquisition activities may pose risks that could harm our business.
In connection with future acquisitions, we may be required to incur debt and expenditures and issue additional common stock, preferred stock, or units of limited partnership interest in our operating partnership, or OP units, to pay for the acquired properties. These acquisitions may dilute our stockholders’ ownership interests, delay or prevent our profitability and expose us to risks such as:
• the possibility that we may not be able to successfully integrate any future acquisitions into our portfolio;
• the possibility that senior management may be required to spend considerable time negotiating agreements and integrating acquired properties, diverting their attention from our other objectives;
• the possibility that we may overpay for a property;
• the possible loss or reduction in value of acquired properties; and
• the possibility of pre-existing undisclosed liabilities regarding acquired properties, including environmental or asbestos liability, for which our insurance may be insufficient or for which we may be unable to secure insurance coverage.
We cannot assure you that the price for any future acquisitions will be similar to prior acquisitions. If our revenue does not keep pace with these potential acquisition and expansion costs, we may incur net losses. There is no assurance that we will successfully overcome these risks or other problems encountered with acquisitions. See risk factor “-We are a holding company with no direct operations and, as such, we will rely on funds received from our operating partnership to pay liabilities, and the interests of our stockholders will be structurally subordinated to all liabilities and obligations of our operating partnership and its subsidiaries.”
We may obtain limited or no warranties when we purchase a property, which increases the risk that we may lose invested capital in or rental income from such property.
The seller of a property will often sell such property in its “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. Also, many sellers of real estate are single-purpose entities without any other significant assets. The purchase of properties with limited warranties or from undercapitalized sellers increases the risk that we may lose some or all of our invested capital in the property as well as the loss of rental income from such property.
We face significant competition for acquisitions of industrial properties, which may reduce the number of acquisition opportunities available to us and increase the costs of these acquisitions.
The current market for acquisitions of industrial properties in our target markets continues to be extremely competitive. This competition may increase the demand for our target properties and, therefore, reduce the number of suitable acquisition opportunities available to us and increase the prices paid for such acquisition properties. We also face significant competition for attractive acquisition opportunities from an indeterminate number of investors, including publicly traded and privately held REITs, private equity investors and institutional investment funds, some of which have greater financial resources than we do, a greater ability to borrow funds to acquire properties and the ability to accept more risk than we can prudently manage, including risks with respect to the geographic proximity of investments and the payment of higher acquisition prices. This competition will increase if investments in real estate become more attractive relative to other forms of investment. Competition for investments may reduce the number of suitable investment opportunities available to us and may have the effect of increasing prices paid for such acquisition properties and/or reducing the rents we can charge and, as a result, adversely affecting our operating results.
Our future acquisitions may not yield the returns we expect.
Our future acquisitions and our ability to successfully operate the properties we acquire in such acquisitions may be exposed to the following significant risks:
• even if we are able to acquire a desired property, competition from other potential acquirers may significantly increase the purchase price;
• we may acquire properties that are not accretive to our results upon acquisition, and we may not successfully manage and lease those properties to meet our expectations;
• our cash flow may be insufficient to meet our required principal and interest payments;
• we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties;
• we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and as a result our results of operations and financial condition could be adversely affected;
• market conditions may result in higher-than-expected vacancy rates and lower than expected rental rates; and
• we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of the properties, liabilities incurred in the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.
If we cannot operate acquired properties to meet our financial expectations, our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock could be materially and adversely affected.
We may not be able to successfully operate our business or generate sufficient cash flows to make or sustain distributions to our stockholders as a publicly traded company.
We may not be able to successfully operate our business or implement our operating policies and investment strategy as described in this prospectus. Failure to operate successfully as a listed public company, to develop and implement appropriate control systems and procedures in accordance with the Sarbanes-Oxley Act or maintain our qualification as a REIT would have an adverse effect on our financial condition, results of operations, cash flow and per share trading price of our stock. Furthermore, we may not be able to generate sufficient cash flows to pay our operating expenses, service any debt we may incur in the future and make distributions to our stockholders. Our ability to successfully operate our business and implement our operating policies and investment strategy will depend on many factors, including:
• the availability of, and our ability to identify, attractive acquisition opportunities consistent with our investment strategy;
• our ability to contain renovation, maintenance, marketing, and other operating costs for our properties;
• our ability to maintain high occupancy rates and target rent levels;
• costs that are beyond our control, including title litigation, litigation with tenants, legal compliance, real estate taxes and insurance; interest rate levels and volatility, such as the accessibility of short- and long-term financing on desirable terms; and
• economic conditions in our target markets as well as the condition of the financial and real estate markets and the economy generally.
We face significant competition in the leasing market, which may decrease or prevent increases of the occupancy and rental rates of our properties.
We compete with numerous developers, owners, and operators of real estate, many of whom own properties similar to ours in the same submarkets in which our properties are located. If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge our tenants, we may lose existing or potential tenants and we may be pressured to reduce our rental rates below those we currently charge or to offer more substantial rent abatements, tenant improvements, early termination rights or below-market renewal options in order to retain tenants when our tenants’ leases expire. As a result, our financial condition, results of operations, cash flows and our ability to pay distributions on, and the value of, our stock could be adversely affected.
We may be required to make rent or other concessions and/or significant capital expenditures to improve our properties in order to retain and attract tenants, causing our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock to be adversely affected.
In order to attract and retain tenants, we may be required to make rent or other concessions to tenants, accommodate requests for renovations, build-to-suit remodeling and other improvements or provide additional services to our tenants. Additionally, when a tenant at one of our properties does not renew its lease or otherwise vacates its space, it is likely that, in order to attract one or more new tenants, we will be required to expend funds for improvements in the vacated space. As a result, we may have to make significant capital or other expenditures in order to retain tenants whose leases expire and to attract new tenants in sufficient numbers. Additionally, we may need to raise capital to make such expenditures. If we are unable to do so or if capital is otherwise unavailable, we may be unable to make the required expenditures. This could result in non-renewals by tenants upon expiration of their leases, which could have an adverse effect on our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock.
A substantial majority of the leases in our portfolio are with tenants who have non-investment grade credit ratings, which may result in our leasing to tenants that are more likely to default in their obligations to us than an entity with an investment grade credit rating.
A substantial majority of the leases in our portfolio are with tenants who have non-investment grade credit ratings. The ability of a non-investment grade tenant to meet its obligations to us cannot be considered as well assured as that of an investment grade tenant. All of our tenants may face exposure to adverse business or economic conditions which could lead to an inability to meet their obligations to us. However, non-investment grade tenants may not have the financial capacity or liquidity to adapt to these conditions or may have less diversified businesses, which may exacerbate the effects of adverse conditions on their businesses. Moreover, the fact that so many of our tenants are not investment grade may cause investors or lenders to view our cash flows as less stable, which may increase our cost of capital, limit our financing options, or adversely affect the trading price of our stock.
The actual rents we receive for our portfolio may be less than our asking rents, and we may experience lease roll down from time to time.
As a result of various factors, including competitive pricing pressure in our submarkets, adverse conditions in our target markets, a general economic downturn and a decline in the desirability of our properties compared to other properties in our submarkets, we may be unable to realize the asking rents for properties in our portfolio. In addition, the degree of discrepancy between our asking rents and the actual rents we are able to obtain may vary both from property to property and among different leased spaces within a single property. If we are unable to obtain rental rates comparable to our asking rents for the properties in our portfolio, our ability to generate cash flow growth will be negatively impacted. In addition, depending on fluctuations in asking rental rates at any given time, from time-to-time rental rates for expiring leases in our portfolio may be higher than starting rental rates for new leases.
Our acquisition of properties or portfolios of properties through tax-deferred contribution transactions, which could result in stockholder dilution and limit our ability to sell such assets.
We have acquired, and in the future we may acquire, properties or portfolios of properties through tax-deferred contribution transactions in exchange for OP units, which may result in stockholder dilution. This acquisition structure may have the effect of, among other things, reducing the amount of tax depreciation we are able to deduct over the tax life of the acquired properties, and requires that we agree to protect the contributors’ ability to defer recognition of taxable gain through restrictions on our ability to dispose of the acquired properties and/or the allocation of partnership debt to the contributors to maintain their tax bases. These restrictions limit our ability to sell an asset at a time, or on terms, that would be favorable absent such restrictions.
Potential losses, including from adverse weather conditions and natural disasters, may not be covered by insurance.
We carry commercial property, liability, and terrorism coverage on all the properties in our portfolio under a blanket insurance policy, in addition to other coverages that may be appropriate for certain of our properties. We will select policy specifications and insured limits that we believe to be appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. Some of our policies will be insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses, which could affect certain of our properties that are located in areas particularly susceptible to natural disasters. In addition, we may discontinue terrorism or other insurance on some or all of our properties in the future if the cost of premiums for any such policies exceeds, in our judgment, the value of the coverage discounted for the risk of loss. We do not carry insurance for certain types of extraordinary losses, such as loss from riots, war, earthquakes, and wildfires because such coverage may not be available or is cost prohibitive or available at a disproportionately high cost. As a result, we may incur significant costs in the event of loss from riots, war, earthquakes, wildfires, and other uninsured losses.
If we or one or more of our tenants experiences a loss that is uninsured or that exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. Furthermore, we may not be able to obtain adequate insurance coverage at reasonable costs in the future as the costs associated with property and casualty renewals may be higher than anticipated.
We may not be able to rebuild our portfolio to its existing specifications if we experience a substantial or comprehensive loss of such properties.
In the event that we experience a substantial or comprehensive loss of one of our properties, we may not be able to rebuild such property to its existing specifications. Further, reconstruction or improvement of such a property would likely require significant upgrades to meet zoning and building code requirements. Environmental and legal restrictions could also restrict the rebuilding of our properties.
We may be unable to sell a property if or when we decide to do so.
We expect to hold the various properties in our portfolio until such time as we decide that a sale or other disposition is appropriate. Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. We cannot predict the various market conditions affecting the industrial real estate market which will exist at any particular time in the future. Due to the uncertainty of market conditions which may affect the future disposition of our properties, we cannot assure you that we will be able to sell our properties at a profit in the future, which could adversely affect our financial condition, results of operations, cash flows and our ability to pay distributions on, and the value of, our stock.
Furthermore, we may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure you that we will have funds available to correct such defects or to make such improvements.
Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers.
We have co-invested and may co-invest in the future with third parties through partnerships, joint ventures, or other entities, acquiring non-controlling interests in or sharing responsibility for managing the affairs of a property, partnership, joint venture or other entity. In such event, we have not been and would not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity. Investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions. Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives, and they may have competing interests in our markets that could create conflict of interest issues. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturers would have full control over the partnership or joint venture. In addition, prior consent of our joint venture partners may be required for a sale or transfer to a third party of our interests in the joint venture, which would restrict our ability to dispose of our interest in the joint venture. If we become a limited partner or non-managing member in any partnership or limited liability company and such entity takes or expects to take actions that could jeopardize our company’s status as a REIT or require us to pay tax, we may be forced to dispose of our interest in such entity. Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. Consequently, actions by or disputes with partners or co-venturers might result in subjecting properties owned by the partnership or joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers. Our joint ventures may be subject to debt and, in the current volatile credit market, the refinancing of such debt may require equity capital calls.
If we fail to implement and maintain an effective system of integrated internal controls, we may not be able to accurately report our financial results.
We are required to implement substantial control systems and procedures in order to maintain our qualification as a REIT, satisfy our periodic and current reporting requirements under applicable SEC regulations and comply with the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Dodd Frank, and the NYSE or other relevant listing standards. As a result, we will incur significant legal, accounting, and other expenses, and our management and other personnel will need to devote a substantial amount of time to comply with these rules and regulations and establish the corporate infrastructure and control systems and procedures demanded of a publicly traded REIT. These costs and time commitments could be substantially more than we currently expect.
Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, and result in a breach of the covenants under the agreements governing any of our financing arrangements. There could also be a negative reaction in the financial markets due to a loss of investor confidence in the Company and the reliability of our financial statements. Confidence in the reliability of our financial statements could also suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the market price of our stock.
Our growth depends on external sources of capital that are outside of our control and may not be available to us on commercially reasonable terms or at all.
In order to maintain our qualification as a REIT, we are required under the Code, among other things, to distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our REIT taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund future capital needs, including any necessary acquisition financing, from operating cash flow. Consequently, we intend to rely on third-party sources to fund our capital needs. We may not be able to obtain such financing on favorable terms or at all and any additional debt we incur will increase our leverage and likelihood of default. Our access to third-party sources of capital depends, in part, on:
• general market conditions;
• the market’s perception of our growth potential;
• our current debt levels;
• our current and expected future earnings;
• our cash flow and cash distributions; and
• the market price per share of our common stock.
In recent years, the capital markets have been subject to significant disruptions. If we cannot obtain capital from third-party sources, we may not be able to acquire or develop properties when strategic opportunities exist, meet the capital and operating needs of our portfolio, satisfy our debt service obligations, or make the cash distributions to our stockholders necessary to maintain our qualification as a REIT.
Risks Related to Our Indebtedness
We have significant indebtedness outstanding, which may expose us to the risk of default under our debt obligations.
Our total consolidated indebtedness as of December 31, 2023 consists of approximately $873.4 million of indebtedness. We may incur significant additional debt to finance future acquisition and development activities.
Payments of principal and interest on borrowings may leave us with insufficient cash resources to operate our properties or to pay the dividends currently contemplated or necessary to maintain our REIT qualification. Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following:
• our cash flow may be insufficient to meet our required principal and interest payments;
• we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to meet operational needs;
• we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness;
• we may be forced to dispose of one or more of our properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject;
• we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; and
• our default under any loan with cross default provisions could result in a default on other indebtedness.
If any one of these events were to occur, our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock could be materially adversely affected. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Internal Revenue Code of 1986, as amended, or the Code.
Continued increases in interest rates, or prolonged rates at current levels, could adversely impact our financial condition, results of operations and cash flows.
Our financial condition, results of operations and cash flows could be significantly negatively affected by increases in interest rates and other actions taken by the Federal Reserve or changes in the Secured Overnight Financing Rate (“SOFR”). The Federal Reserve raised interest rates by 525 basis points during the past two years. Future increases in market interest rates, or a prolonged period with rates at current levels, would increase our interest expense under our unhedged variable rate borrowings and would increase the costs of refinancing existing indebtedness or obtaining new debt. In addition, increases in market interest rates may result in a decrease in the value of our real estate and a decrease in the market price of our common stock. Increases in market interest rates may also adversely affect the securities markets generally, which could reduce the market price of our common stock without regard to our operating performance. Accordingly, unfavorable changes to our borrowing costs and stock price could significantly impact our ability to access new debt and equity capital going forward. At December 31, 2023, we had approximately $55.4 million (or 6.3% of our indebtedness then outstanding) in variable rate debt outstanding not hedged by interest rate swaps. If we are unable to enter into hedge agreements with respect to, or otherwise refinance, this indebtedness with acceptable terms, the ultimate impact of future interest rate increases could result in unanticipated reductions in our net operating income.
Our hedging strategies may not mitigate our risks associated with variable interest rates.
Changes in the interest rates on a material portion of our variable rate debt (69.3%) have been hedged by interest rate swap agreements. These derivative financial instruments involve certain risks, such as the risk of failure of the counterparty to perform under the terms of the contract, that these arrangements may not be effective in reducing our exposure to interest rate changes and that a court could rule that such agreements are not legally enforceable. These instruments may also produce non-qualifying REIT income for purposes of REIT income tests. In addition, the nature, timing and costs of hedging transactions may influence the effectiveness of our hedging strategies. Poorly designed strategies or improperly executed transactions could actually increase our risk and losses. We cannot assure you that our hedging strategies and derivative financial instruments will adequately offset the risk of interest rate volatility or that such instruments will not result in losses that may adversely impact our financial condition.
Our existing loan agreements contain, and future indebtedness we incur may contain, various covenants, and the failure to comply with those covenants could materially and adversely affect our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock.
Our existing loan agreements contain, and any future indebtedness we incur, including debt assumed pursuant to property acquisitions, may contain, certain covenants, which, among other things, restrict our activities, including, as applicable, our ability to sell the underlying property without the consent of the holder of such indebtedness, to repay or defease such indebtedness or to engage in mergers or consolidations that result in a change in control of our company. We may also be subject to financial and operating covenants. Failure to comply with any of these covenants would likely result in a default under the applicable indebtedness that would permit the acceleration of amounts due thereunder and under other indebtedness and foreclosure of properties, if any, serving as collateral therefor.
High mortgage rates and/or unavailability of mortgage debt may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our net income and the amount of cash distributions we can make.
If mortgage debt is unavailable to us in the future at reasonable rates, we may not be able to finance the purchase of additional properties or refinance our properties on favorable terms or at all. If interest rates are higher when we refinance our properties, our income could be reduced. If any of these events occur, our cash flow could be reduced. This, in turn, could reduce cash available for distribution to our stockholders and materially and adversely affect our ability to raise more capital by issuing additional equity securities or by borrowing more money.
Our existing loan agreements, and some of our future financing arrangements are expected to, involve balloon payment obligations, which may materially and adversely affect our financial condition and our ability to make distributions.
Our existing loan agreements require, and some of our future financing arrangements may, require us to make a lump-sum or “balloon” payment at maturity. Our ability to satisfy a balloon payment at maturity is uncertain and may depend upon our ability to obtain additional financing or our ability to sell property securing such financing. At the time the balloon payment is due, we may or may not be able to refinance the existing financing on terms as favorable as the original loan or sell the property at a price sufficient to satisfy the balloon payment. The effect of a refinancing or sale could affect the rate of return to stockholders and the projected time of disposition of our assets. In addition, payments of principal and interest made to service our debts may leave us with insufficient cash to pay the distributions that we are required to pay to maintain our qualification as a REIT.
Certain loan agreements are secured by various properties within our portfolio, so a default under any of these loan documents could result in a loss of the secured properties.
Certain loan agreements are secured by a first lien mortgage on various properties within our portfolio. A default under certain of the loan agreements could result in the foreclosure on all, or a material portion, of the properties within our portfolio, which could leave us with insufficient cash to make debt service payments under our loan agreements and to make distributions to our stockholders.
Our existing loan agreements restrict our ability to engage in some business activities, which could put us at a competitive disadvantage and materially and adversely affect our results of operations and financial condition.
Our existing loan agreements contain customary negative covenants and other financial and operating covenants that, among other things:
• restrict our ability to incur additional indebtedness;
• restrict our ability to dispose of properties;
• restrict our ability to make certain investments;
• restrict our ability to enter into material agreements;
• limit our ability to make capital expenditures;
• require us to maintain a specified amount of capital as guarantor;	
• restrict our ability to merge with another company;
• restrict our ability to make distributions to stockholders; and
• require us to maintain financial coverage and leverage ratios.
These limitations could restrict our ability to engage in some business activities, which could materially and adversely affect our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock. In addition, debt agreements we enter into in the future may contain specific cross-default provisions with respect to specified other indebtedness, giving the lenders the right to declare a default if we are in default under other loans in some circumstances.
Future mortgage and other secured debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt.
Incurring mortgage and other secured debt obligations increases our risk of property losses because defaults on indebtedness secured by properties may result in foreclosure actions initiated by lenders and ultimately our loss of the property securing any loans for which we are in default. Any foreclosure on a mortgaged property or group of properties could adversely affect the overall value of our portfolio. For tax purposes, a foreclosure on any of our properties that is subject to a nonrecourse mortgage loan would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code.
Risks Related to the Real Estate Industry and the Broader Economy
Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition.
The real estate investments made, and to be made, by us are relatively difficult to sell quickly. As a result, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial and investment conditions is limited. Return of capital and realization of gains, if any, from an investment generally will occur upon disposition or refinancing of the underlying property. We may be unable to realize our investment objectives by sale, other disposition or refinancing at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy. Our ability to dispose of one or more properties within a specific time period is subject to the possible weakness in or even the lack of an established market for a property, changes in the financial condition or prospects of prospective purchasers, changes in national or international economic conditions, and changes in laws, regulations or fiscal policies of jurisdictions in which the property is located.
In addition, the Code imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. In particular, the tax laws applicable to REITs effectively require that we hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forego or defer sales of properties that otherwise would be in our best interest. Therefore, we may not be able to vary our portfolio in response to economic or other conditions promptly or on favorable terms, which may adversely affect our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock.
Our performance and value are subject to risks associated with real estate assets and the real estate industry.
Our ability to pay expected dividends to our stockholders depends on our ability to generate revenues in excess of expenses, scheduled principal payments on debt and capital expenditure requirements. Events and conditions generally applicable to owners and operators of real property that are beyond our control may decrease cash available for distribution and the value of our properties. These events include many of the risks set forth above under “-Risks Related to Our Business and Operations,” as well as the following:
• local oversupply or reduction in demand for industrial space;
• adverse changes in financial conditions of buyers, sellers, and tenants of properties;
• vacancies or our inability to rent space on favorable terms, including possible market pressures to offer tenants rent abatements, tenant improvements, early termination rights or below-market renewal options, and the need to periodically repair, renovate and re-lease space;
• increased operating costs, including insurance premiums, utilities, real estate taxes and state and local taxes;
• civil unrest, acts of war, terrorist attacks and natural disasters, including earthquakes, floods, and wildfires, which may result in uninsured or underinsured losses;
• decreases in the underlying value of our real estate;
• changing submarket demographics; and
• changing traffic patterns.
In addition, periods of economic downturn or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in rents or an increased incidence of defaults under existing leases, which would adversely affect our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock.
The resurgence of the COVID-19 pandemic or any unforeseen factor that emerges out of that pandemic or otherwise could materially adversely affect our results of operations and financial results.
The COVID-19 pandemic severely impacted global economic activity, caused significant volatility in and negative pressure on the financial markets and has had adverse effects on almost every industry, directly or indirectly. A number of our tenants have been impacted by precautionary health measures as they either temporarily closed down their operations or scaled back activity in order to comply, causing a strain on their ability to generate revenue. As such, our future operations may be adversely impacted if our tenants are unable to generate revenue and pay their rent due as a result of any actions taken to contain or treat the impact of COVID-19. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted.
Any resurgence of the COVID-19 pandemic or any future pandemic, epidemic or outbreak of infectious disease could have material and adverse effects on our business, financial condition, operating results, and cash flows due to, among other factors, the following:
• governmental authorities requiring the closure of offices or other businesses or instituting quarantines of personnel as a result of, or in order to avoid, exposure to a contagious disease;
• disruption in supply and delivery chains;
• a general decline in business activity and demand for real estate;
• the repurposing or redevelopment of properties made obsolete by the pandemic;
• reduced economic activity, general economic decline, or recession, which may impact our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to make rent payments to us timely, or at all, or to otherwise seek modifications of their lease obligations;
• difficulty accessing debt and equity capital on attractive terms, or at all, and a significant disruption and instability in global financial markets or deteriorations in credit and financing conditions, which may affect our access to capital to fund business operations or address maturing liabilities on a timely basis; and
• the potential negative impact on the health of our personnel, particularly if a significant number of our employees are impacted, which may result in a deterioration of our ability to maintain business continuity during a disruption.
The COVID-19 pandemic did not have a significant negative impact on our operations for the year ended December 31, 2023. We did not enter into any rent deferrals or rent abatements as a result of the pandemic during the year ended December 31, 2023.
Additional unforeseen factors may emerge from time-to-time, and we cannot predict which factors will arise or their ultimate impact on our operations or the extent to which any such factor, or combination of factors, may cause actual results to differ materially from anticipated results. Any further downward changes in the economy, whether local, national or global, resulting from COVID-19 or some other unforeseen event, could materially adversely affect the value of our properties and our financial condition and results of operations.
Any real estate development and redevelopment activities are subject to risks particular to development and redevelopment.
We may engage in development and redevelopment activities with respect to certain properties. To the extent that we do so, we will be subject to the following risks associated with such development and redevelopment activities:
• unsuccessful development or redevelopment opportunities could result in direct expenses to us;
• construction or redevelopment costs of a project may exceed original estimates, possibly making the project less profitable than originally estimated, or unprofitable;
• time required to complete the construction or redevelopment of a project or to lease up the completed project may be greater than originally anticipated, thereby adversely affecting our cash flow and liquidity;
• contractor and subcontractor disputes, strikes, labor disputes or supply disruptions;
• failure to achieve expected occupancy and/or rent levels within the projected time frame, if at all;
• delays with respect to obtaining or the inability to obtain necessary zoning, occupancy, land use and other governmental permits, and changes in zoning and land use laws;
• occupancy rates and rents of a completed project may not be sufficient to make the project profitable;
• our ability to dispose of properties developed or redeveloped with the intent to sell could be impacted by the ability of prospective buyers to obtain financing given the current state of the credit markets; and
• the availability and pricing of financing to fund our development activities on favorable terms or at all.
These risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development or redevelopment activities once undertaken, any of which could have an adverse effect on our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock.
Declining real estate valuations and impairment charges could materially adversely affect our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock.
We intend to review the carrying value of our properties when circumstances, such as adverse market conditions, indicate a potential impairment may exist. We intend to base our review on an estimate of the future cash flows (excluding interest charges) expected to result from the property’s use and eventual disposition on an undiscounted basis. We intend to consider factors such as future operating income, trends, and prospects, as well as the effects of leasing demand, competition and other factors. If our evaluation indicates that we may be unable to recover the carrying value of a real estate investment, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property.
Impairment losses have a direct impact on our operating results because recording an impairment loss results in an immediate negative adjustment to our operating results. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results in future periods. A worsening real estate market may cause us to reevaluate the assumptions used in our impairment analysis. Impairment charges could materially adversely affect our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock.
Adverse economic conditions and the dislocation in the credit markets could materially adversely affect our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock.
Ongoing challenging economic conditions have negatively impacted the lending and capital markets, particularly for real estate. The capital markets have experienced significant adverse conditions in recent years, including a substantial reduction in the availability of, and access to, capital. The risk premium demanded by lenders has increased markedly, as they are demanding greater compensation for risk, and underwriting standards have been tightened. In addition, failures and consolidations of certain financial institutions have decreased the number of potential lenders, resulting in reduced lending sources available to the market. These conditions may limit the amount of indebtedness we are able to obtain and our ability to refinance our indebtedness and may impede our ability to develop new properties and to replace construction financing with permanent financing, which could result in our having to sell properties at inopportune times and on unfavorable terms. If these conditions continue, our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock could be materially adversely affected.
The lack of availability of debt financing may require us to rely more heavily on additional equity issuances, which may be dilutive to our current stockholders, or on less efficient forms of debt financing. Additionally, the limited amount of financing currently available may reduce the value of our properties and limit our ability to borrow against such properties, which could materially adversely affect our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock.
Acquired properties may be located in new markets where we may face risks associated with investing in an unfamiliar market.
We have acquired, and may continue to acquire, properties in markets that are new to us. When we acquire properties located in new markets, we may face risks associated with a lack of market knowledge or understanding of the local economy, forging new business relationships in the area and unfamiliarity with local government and permitting procedures.
We may choose not to distribute the proceeds of any sales of real estate to our stockholders, which may reduce the amount of our cash distributions to stockholders.
We may choose not to distribute any proceeds from the sale of real estate investments to our stockholders. Instead, we may elect to use such proceeds to:
• acquire additional real estate investments;
• repay debt;
• buy out interests of any partners in any joint venture in which we are a party;
• create working capital reserves; or
• make repairs, maintenance, tenant improvements or other capital improvements or expenditures on our other properties.
Any decision to retain or invest the proceeds of any sales, rather than distribute such proceeds to our stockholders may reduce the amount of cash distributions you receive on your stock.
Uninsured losses relating to real property may adversely affect your returns.
We attempt to ensure that all of our properties are adequately insured to cover casualty losses. However, there are certain losses, including losses from floods, earthquakes, wildfires, acts of war, acts of terrorism or riots, that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so. In addition, changes in the cost or availability of insurance could expose us to uninsured casualty losses. In the event that any of our properties incurs a casualty loss that is not fully covered by insurance, the value of our assets will be reduced by the amount of any such uninsured loss, and we could experience a significant loss of capital invested and potential revenue in these properties and could potentially remain obligated under any recourse debt associated with the property. Moreover, we, as the general partner of our operating partnership, generally will be liable for all of our operating partnership’s unsatisfied recourse obligations, including any obligations incurred by our operating partnership as the general partner of joint ventures. Any such losses could adversely affect our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock. In addition, we may have no source of funding to repair or reconstruct the damaged property, and we cannot assure you that any such sources of funding will be available to us for such purposes in the future. We evaluate our insurance coverage annually in light of current industry practice through an analysis prepared by outside consultants.
Our property taxes could increase due to property tax rate changes or reassessment, which could adversely impact our cash flows.
Even if we maintain our qualification as a REIT for federal income tax purposes, we will be required to pay some state and local taxes on our properties. The real property taxes on our properties may increase as property tax rates change or as our properties are assessed or reassessed by taxing authorities. The amount of property taxes we pay in the future may increase substantially from what we have paid in the past. If the property taxes we pay increase, our cash flow would be adversely impacted to the extent that we are not reimbursed by tenants for those taxes, and our ability to pay any expected dividends to our stockholders could be adversely affected.
Existing conditions at some of our properties may expose us to liability related to environmental matters.
Independent environmental consultants conducted a Phase I or similar environmental site assessment of our properties at the time of their acquisition or in connection with subsequent financings. Such Phase I or similar environmental site assessments are limited in scope and may not include or identify all potential environmental liabilities or risks associated with the relevant properties. We have not obtained and do not intend to obtain new or updated Phase I or similar environmental site assessments, which may expose us to liability related to unknown or unanticipated environmental matters. Unless required by applicable laws or regulations, we may not further investigate, remedy, or ameliorate the liabilities disclosed in the existing Phase I or similar environmental site assessments and this failure may expose us to liability in the future.
We could incur significant costs related to government regulation and litigation over environmental matters.
Under various federal, state and local laws and regulations relating to the environment, as a current or former owner or operator of real property, we may be liable for costs and damages resulting from the presence or discharge of hazardous or toxic substances, waste or petroleum products at, on, in, under or migrating to or from such property, including costs to investigate, clean up such contamination and liability for harm to natural resources. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such contamination, and the liability may be joint and several. These liabilities could be substantial and the cost of any required remediation, removal, fines or other costs could exceed the value of the property and/or our aggregate assets. In addition, the presence of contamination or the failure to remediate contamination at our properties may expose us to third-party liability for costs of remediation and/or personal, property, or natural resources damage or materially adversely affect our ability to sell, lease or develop our properties or to borrow using the properties as collateral. In addition, environmental laws may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures.
Some of the properties in our portfolio have been or may be impacted by contamination arising from current or prior uses of the property, or adjacent properties, for commercial or industrial purposes. Such contamination may arise from spills of petroleum or hazardous substances or releases from tanks used to store such materials.
From time to time, we may acquire properties with known adverse environmental conditions where we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return. We perform a Phase I environmental site assessment at any property we are considering acquiring. In connection with certain financing transactions our lenders have commissioned independent environmental consultants to conduct Phase I environmental site assessments on the properties in our portfolio. However, we have not always received copies of the Phase I environmental site assessment reports commissioned by our lenders and, as such, may not be aware of all potential or existing environmental contamination liabilities at the properties in our portfolio. In addition, Phase I environmental site assessments are limited in scope and do not involve sampling of soil, soil vapor, or groundwater, and these assessments may not include or identify all potential environmental liabilities or risks associated with the property. Even where subsurface investigation is performed, it can be very difficult to ascertain the full extent of environmental contamination or the costs that are likely to flow from such contamination. We cannot assure you that the Phase I environmental site assessment or other environmental studies identified all potential environmental liabilities, or that we will not face significant remediation costs or other environmental contamination that makes it difficult to sell any affected properties. Also, we have not always implemented actions recommended by these assessments, and recommended investigation and remediation of known or suspected contamination has not always been performed. As a result, we could potentially incur material liability for these issues, which could adversely impact our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock.
Environmental laws also govern the presence, maintenance, and removal of asbestos-containing building materials, or ACBM, and may impose fines and penalties for failure to comply with these requirements. Such laws require that owners or operators of buildings containing ACBM (and employers in such buildings) properly manage and maintain the asbestos, adequately notify, or train those who may come into contact with asbestos, and undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a building. In addition, the presence of ACBM in our properties may expose us to third-party liability (e.g., liability for personal injury associated with exposure to asbestos).
In addition, the properties in our portfolio also are subject to various federal, state, and local environmental and health and safety requirements, such as state and local fire requirements. Moreover, some of our tenants routinely handle and use hazardous or regulated substances and wastes as part of their operations at our properties, which are subject to regulation. Such environmental and health and safety laws and regulations could subject us or our tenants to liability resulting from these activities. Environmental liabilities could affect a tenant’s ability to make rental payments to us. In addition, changes in laws could increase the potential liability for noncompliance. This may result in significant unanticipated expenditures or may otherwise materially and adversely affect our operations, or those of our tenants, which could in turn have a material adverse effect on us.
We cannot assure you that costs or liabilities incurred as a result of environmental issues will not affect our ability to make distributions to you or that such costs or other remedial measures will not have an adverse effect on our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock. If we do incur material environmental liabilities in the future, we may face significant remediation costs, and we may find it difficult to sell any affected properties.
Our properties may contain or develop harmful mold or suffer from other air quality issues, which could lead to liability for adverse health effects and costs of remediation.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses, and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury is alleged to have occurred.
We may incur significant costs complying with various federal, state, and local laws, regulations and covenants that are applicable to our properties.
The properties in our portfolio are subject to various covenants and federal, state, and local laws and regulatory requirements, including permitting and licensing requirements. Local regulations, including municipal or local ordinances and zoning restrictions may restrict our use of our properties and may require us to obtain approval from local officials or restrict our use of our properties and may require us to obtain approval from local officials of community standards organizations at any time with respect to our properties, including prior to acquiring a property or when undertaking renovations of any of our portfolio. Among other things, these restrictions may relate to fire and safety, seismic or hazardous material abatement requirements. There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future acquisitions or renovations, or that additional regulations will not be adopted that increase such delays or result in additional costs. Our growth strategy may be adversely affected by our ability to obtain permits, licenses, and zoning relief. Our failure to obtain such permits, licenses, and zoning relief or to comply with applicable laws could have an adverse effect on our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock.
In addition, federal and state laws and regulations, including laws such as the Americans with Disabilities Act, or ADA, and the Fair Housing Amendment Act of 1988, or FHAA, impose further restrictions on our properties and operations. Under the ADA and the FHAA, all public accommodations must meet federal requirements related to access and use by disabled persons. Some of our properties may currently be in non-compliance with the ADA or the FHAA. If one or more of the properties in our portfolio is not in compliance with the ADA, the FHAA or any other regulatory requirements, we may be required to incur additional costs to bring the property into compliance, including the removal of access barriers, and we might incur governmental fines or the award of damages to private litigants. In addition, we do not know whether existing requirements will change or whether future requirements will require us to make significant unanticipated expenditures that will adversely impact our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock.
Risks Related to Our Organizational Structure
Our success depends on key personnel whose continued service is not guaranteed, and the departure of one or more of our key personnel could adversely affect our ability to manage our business and to implement our growth strategies or could create a negative perception in the capital markets.
Our continued success and our ability to manage anticipated future growth depend, in large part, upon the efforts of key personnel, particularly Mr. Jeffrey E. Witherell, our Chief Executive Officer, and Mr. Anthony Saladino, our Chief Financial Officer, who have extensive market knowledge and relationships and exercise substantial influence over our operational, financing, acquisition and disposition activity.
Our ability to retain our senior management, particularly Messrs. Witherell and Saladino, or to attract suitable replacements should any member of our senior management leave, is dependent on the competitive nature of the employment market. We have not obtained and do not expect to obtain key man life insurance on any of our key personnel. The loss of services of one or more members of our senior management team, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities, and weaken our relationships with lenders, business partners, existing and prospective tenants and industry participants. Further, the loss of a member of our senior management team could be negatively perceived in the capital markets. Any of these developments could adversely affect our financial condition, results of operations, cash flows and our ability to pay distributions on, and the value of, our stock.
Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of OP units, which may impede business decisions that could benefit our stockholders.
Conflicts of interest may exist or could arise in the future as a result of the relationships between us and our affiliates, on the one hand, and our operating partnership or any partner thereof, on the other. Our directors and officers have duties to our company under Maryland law in connection with their management of our company. At the same time, we, as the general partner of our operating partnership, have fiduciary duties and obligations to our operating partnership and its limited partners under Delaware law and the partnership agreement of our operating partnership in connection with the management of our operating partnership. Our fiduciary duties and obligations as the general partner of our operating partnership may come into conflict with the duties of our directors and officers to our company.
Under Delaware law, a general partner of a Delaware limited partnership has fiduciary duties of loyalty and care to the partnership and its partners and must discharge its duties and exercise its rights as general partner under the partnership agreement or Delaware law consistent with the obligation of good faith and fair dealing. The partnership agreement provides that, in the event of a conflict between the interests of our operating partnership or any partner, on the one hand, and the separate interests of our company or our stockholders, on the other hand, we, in our capacity as the general partner of our operating partnership, may give priority to the separate interests of our company or our stockholders (including with respect to tax consequences to limited partners, assignees or our stockholders), and, in the event of such a conflict, any action or failure to act on our part or on the part of our directors that gives priority to the separate interests of our company or our stockholders that does not result in a violation of the contract rights of the limited partners of our operating partnership under its partnership agreement does not violate the duty of loyalty or any other duty that we, in our capacity as the general partner of our operating partnership, owe to our operating partnership and its partners or violate the obligation of good faith and fair dealing.
Additionally, the partnership agreement provides that we generally will not be liable to our operating partnership or any partner for any action or omission taken in our capacity as general partner, for the debts or liabilities of our operating partnership or for the obligations of the operating partnership under the partnership agreement, except for liability for our fraud, willful misconduct or gross negligence, pursuant to any express indemnity we may give to our operating partnership or in connection with a redemption of our OP units. Our operating partnership must indemnify us, our directors and officers, officers of our operating partnership and our designees from and against any and all claims that relate to the operations of our operating partnership, unless (1) an act or omission of the person was material to the matter giving rise to the action and either was committed in bad faith or was the result of active and deliberate dishonesty, (2) the person actually received an improper personal benefit in violation or breach of the partnership agreement or (3) in the case of a criminal proceeding, the indemnified person had reasonable cause to believe that the act or omission was unlawful. Our operating partnership must also pay or reimburse the reasonable expenses of any such person in advance of a final disposition of the proceeding upon its receipt of a written affirmation of the person’s good faith belief that the standard of conduct necessary for indemnification has been met and a written undertaking to repay any amounts paid or advanced if it is ultimately determined that the person did not meet the standard of conduct for indemnification. Our operating partnership is not required to indemnify or advance funds to any person with respect to any action initiated by the person seeking indemnification without our approval (except for any proceeding brought to enforce such person’s right to indemnification under the partnership agreement) or if the person is found to be liable to our operating partnership on any portion of any claim in the action.
Our charter and bylaws, the partnership agreement of our operating partnership and Maryland law contain provisions that may delay, defer, or prevent a change of control transaction.
Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could trigger rights to require us to redeem our shares of common stock.
Certain provisions of the Maryland General Corporate Law (“MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including:
• “business combination” provisions that, subject to certain exceptions, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding voting stock at any time within the two-year period); and
• “control share” provisions that provide that holders of “control shares” of our company (defined as shares that, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise voting power in the election of directors within one of three increasing ranges) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of the voting power of issued and outstanding “control shares,” subject to certain exceptions) have no voting rights with respect to their control shares, except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
As permitted by the MGCL, our bylaws provide that we will not be subject to the control share provisions of the MGCL, and our board of directors has, by resolution, exempted us from the business combination between us and any other person. In addition, the board resolution opting out of the business combination provisions of the MGCL provides that any alteration or repeal of the resolution shall be valid only if approved, at a meeting duly called, by the affirmative vote of a majority of votes cast by stockholders entitled to vote generally for directors, and our bylaws provide that any such alteration or repeal of the resolution, or any amendment, alteration or repeal of the provision in our bylaws exempting from the control share acquisition statute any and all acquisitions by any person of shares of our stock, will be valid only if approved, at a meeting duly called, by the affirmative vote of a majority of votes cast by stockholders entitled to vote generally for directors.
Certain provisions of the MGCL permit the board of directors of a Maryland corporation with at least three independent directors and a class of stock registered under the Securities Exchange Act of 1934 (“Exchange Act”) without stockholder approval and regardless of what is currently provided in its charter or bylaws, to implement certain corporate governance provisions, some of which (for example, a classified board) are not currently applicable to us. These provisions may have the effect of limiting or precluding a third party from making an unsolicited acquisition proposal for our company or of delaying, deferring, or preventing a change in control under circumstances that otherwise could provide the holders of our stock with the opportunity to realize a premium over the current market price.
Certain provisions in the partnership agreement of our operating partnership may delay or prevent unsolicited acquisitions of us.
Provisions of the partnership agreement of our operating partnership may delay or make more difficult unsolicited acquisitions of us or changes of our control. These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some stockholders or limited partners might consider such proposals, if made, desirable. These provisions include, among others:
• redemption rights of qualifying parties;
• a requirement that we may not be removed as the general partner of our operating partnership without our consent;
• transfer restrictions on OP units;
• our ability, as general partner, in some cases, to amend the partnership agreement and to cause our operating partnership to issue additional partnership interests with terms that could delay, defer, or prevent a merger or other change of control of us or our operating partnership without the consent of our stockholders or the limited partners; and
• the right of the limited partners to consent to certain transfers of our general partnership interest (whether by sale, disposition, statutory merger or consolidation, liquidation or otherwise).
Our charter and bylaws, the partnership agreement of our operating partnership and Maryland law also contain other provisions that may delay, defer, or prevent a transaction or a change of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest.
Our charter contains certain ownership limits with respect to our stock.
Our charter authorizes our board of directors to take such actions as it determines are advisable, in its sole and absolute discretion, to preserve our qualification as a REIT. Our charter also prohibits the actual, beneficial, or constructive ownership by any person of more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding shares of any class or series of our capital stock, in each case excluding any shares that are not treated as outstanding for federal income tax purposes. Our board of directors, in its sole and absolute discretion, may exempt a person, prospectively or retroactively, from these ownership limits if certain conditions are satisfied. However, our bylaws provide that the board of directors must waive the ownership limit with respect to a particular person if it: (1) determines that such person’s ownership will not cause any individual’s beneficial ownership of shares of our stock to violate the ownership limit and that any exemption from the ownership limit will not jeopardize our status as a REIT; and (2) determines that such stockholder does not and will not own, actually or constructively, an interest in a tenant of ours (or a tenant of any entity whose operations are attributed in whole or in part to us) that would cause us to own, actually or constructively, more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant or that any such ownership would not cause us to fail to qualify as a REIT under the Code. The restrictions on ownership and transfer of our stock may:
• discourage a tender offer or other transactions or a change in management or of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interests; or
• result in the transfer of shares acquired in excess of the restrictions to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.
We could increase the number of authorized shares of stock, classify and reclassify unissued stock and issue stock without stockholder approval.
Our board of directors, without stockholder approval, has the power under our charter to amend our charter to increase the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue, to authorize us to issue authorized but unissued shares of our common stock or preferred stock and to classify or reclassify any unissued shares of our common stock or preferred stock into one or more classes or series of stock and set the terms of such newly classified or reclassified shares. As a result, we may issue additional classes or series of preferred stock with preferences, powers and rights, voting or otherwise, that are senior to, or otherwise conflict with, the rights of holders of our common stock and could, depending on the terms of such series, delay or prevent a transaction or change of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest. The holders of our common stock bear the risk of our future offerings reducing the market price of our securities and diluting their proportionate ownership.
Our board of directors may change our investment and financing policies without stockholder approval, and we may become more highly leveraged, which may increase our risk of default under our debt obligations.
Our investment and financing policies are exclusively determined by our board of directors. Accordingly, our stockholders, do not control these policies. Further, our charter and bylaws do not limit the amount or percentage of indebtedness, funded or otherwise, that we may incur. Our board of directors may alter or eliminate our current policy on borrowing at any time without stockholder approval. If this policy changed, we could become more highly leveraged which could result in an increase in our debt service. Higher leverage also increases the risk of default on our obligations. In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or the types of assets in which we seek to invest, may increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk. Changes to our policies with regard to the foregoing could adversely affect our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock.
Our rights and the rights of our stockholders to take action against our directors and officers are limited.
As permitted by Maryland law, our charter eliminates the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from:
• actual receipt of an improper benefit or profit in money, property, or services; or
• active and deliberate dishonesty by the director or officer that was established by a final judgment and was material to the cause of action adjudicated.
In addition, our charter authorizes us to obligate our company, and our bylaws require us, to indemnify our directors and officers for actions taken by them in those and certain other capacities to the maximum extent permitted by Maryland law in effect from time to time. Generally, Maryland law permits a Maryland corporation to indemnify its present and former directors and officers except in instances where the person seeking indemnification acted in bad faith or with active and deliberate dishonesty, actually received an improper personal benefit in money, property or services or, in the case of a criminal proceeding, had reasonable cause to believe that his or her actions were unlawful. Under Maryland law, a Maryland corporation also may not indemnify a director or officer in a suit by or on behalf of the corporation in which the director or officer was adjudged liable to the corporation or for a judgment of liability on the basis that a personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct; however, indemnification for an adverse judgment in a suit by us or on our behalf, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist. Accordingly, in the event that actions taken in good faith by any of our directors or officers impede the performance of our company, your ability to recover damages from such director or officer will be limited.
We are a holding company with no direct operations and, as such, we will rely on funds received from our operating partnership to pay liabilities, and the interests of our stockholders will be structurally subordinated to all liabilities and obligations of our operating partnership and its subsidiaries.
We are a holding company and conduct substantially all of our operations through our operating partnership. We do not have, apart from an interest in our operating partnership, any independent operations. As a result, we will rely on distributions from our operating partnership to pay any distributions we might declare on our stock. We will also rely on distributions from our operating partnership to meet any of our obligations, including any tax liability on taxable income allocated to us from our operating partnership. In addition, because we are a holding company, your claims as stockholders will be structurally subordinated to all existing and future liabilities and obligations (whether or not for borrowed money) of our operating partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our operating partnership and its subsidiaries will be available to satisfy the claims of our stockholders only after all of our and our operating partnership’s and its subsidiaries’ liabilities and obligations have been paid in full.
Our operating partnership may issue additional OP units to third parties without the consent of our stockholders, which would reduce our ownership percentage in our operating partnership and would have a dilutive effect on the amount of distributions made to us by our operating partnership and, therefore, the amount of distributions we can make to our stockholders.
As of December 31, 2023, we have 490,299 OP units outstanding, which were issued in connection with the acquisition of certain properties in our portfolio, and we may in the future, in connection with our acquisition of properties or otherwise, cause our operating partnership to issue additional OP units to third parties. Such issuances would reduce our ownership percentage in our operating partnership and affect the amount of distributions made to us by our operating partnership and, therefore, the amount of distributions we can make to our stockholders. Because you will not directly own OP units, you will not have any voting rights with respect to any such issuances or other partnership level activities of our operating partnership.
Risks Related to Our Status as a REIT
Failure to maintain our qualification as a REIT would have significant adverse consequences to us and the per share trading price of our stock.
We have elected to be taxed as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2012, and have operated in a manner that we believe will allow us to maintain our qualification as a REIT. We cannot assure you that we will remain qualified as a REIT in the future. If we lose our REIT qualification, we will face serious tax consequences that would substantially reduce the funds available for distribution to you for each of the years involved because:
• we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates;
• we also could be subject to the federal alternative minimum tax (for taxable years prior to 2018) and possibly increased state and local taxes; and
Any such corporate tax liability could be substantial and would reduce our cash available for, among other things, our operations and distributions to stockholders. In addition, if we fail to maintain our qualification as a REIT, we will not be required to make distributions to our stockholders. As a result of all these factors, our failure to maintain our qualification as a REIT also could impair our ability to expand our business and raise capital and could materially and adversely affect the per share trading price of our stock.
Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The complexity of these provisions and of the applicable Treasury regulations that have been promulgated under the Code, or the Treasury regulations, is greater in the case of a REIT that, like us, holds its assets through a partnership. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. In order to maintain our qualification as a REIT, we must satisfy a number of requirements, including requirements regarding the ownership of our stock, requirements regarding the composition of our assets and a requirement that at least 95% of our gross income in any year must be derived from qualifying sources, such as “rents from real property.” Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains and losses. In addition, legislation, new regulations, administrative interpretations, or court decisions may materially adversely affect our investors, our ability to maintain our qualification as a REIT for federal income tax purposes or the desirability of an investment in a REIT relative to other investments. Even if we maintain our qualification as a REIT for federal income tax purposes, we may be subject to some federal, state and local income, property and excise taxes on our income or property and, in certain cases, a 100% penalty tax, in the event we sell property as a dealer. In addition, any taxable REIT subsidiaries that we own will be subject to tax as regular C corporations in the jurisdictions in which they operate.
If our operating partnership failed to qualify as a partnership or a disregarded entity for federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences.
We believe that our operating partnership will be treated as a partnership or a disregarded entity for federal income tax purposes. During periods in which our operating partnership is treated as a disregarded entity, our operating partnership will not be subject to federal income tax on its income. Rather, its income will be attributed to us as the sole owner for federal income tax purposes of the operating partnership. During periods in which our operating partnership has limited partners other than Plymouth OP Limited, LLC, the operating partnership will be treated as a partnership for federal income tax purposes. As a partnership, our operating partnership would not be subject to federal income tax on its income. Instead, each of its partners would be allocated, and may be required to pay tax with respect to, its share of our operating partnership’s income. We cannot assure you, however, that the Internal Revenue Service, or the IRS, will not challenge the status of our operating partnership or any other subsidiary partnership in which we own an interest as a partnership for federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our operating partnership or any such other subsidiary partnership as an entity taxable as a corporation for federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to maintain our qualification as a REIT. Also, if our operating partnership or any subsidiary partnerships were treated as entities taxable as corporations, such entities could become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.
Our taxable REIT subsidiaries will be subject to federal income tax, and we will be required to pay a 100% penalty tax on certain income or deductions if our transactions with our taxable REIT subsidiaries are not conducted on arm’s length terms.
We own interests in one taxable REIT subsidiary and may acquire interests in more taxable REIT subsidiaries in the future. A taxable REIT subsidiary is a corporation other than a REIT in which a REIT directly or indirectly holds stock, and that has made a joint election with such REIT to be treated as a taxable REIT subsidiary. If a taxable REIT subsidiary owns more than 35% of the total voting power or value of the outstanding securities of another corporation, such other corporation will also be treated as a taxable REIT subsidiary. Other than some activities relating to lodging and health care facilities, a taxable REIT subsidiary may generally engage in any business, including the provision of customary or non-customary services to tenants of its parent REIT. A taxable REIT subsidiary is subject to federal income tax as a regular C corporation. In addition, a 100% excise tax will be imposed on certain transactions between a taxable REIT subsidiary and its parent REIT that are not conducted on an arm’s length basis.
To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions.
To maintain our qualification as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each year, determined without regard to the dividends paid deduction and excluding net capital gains, and we will be subject to regular corporate income taxes to the extent that we distribute less than 100% of our REIT taxable income each year. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. Accordingly, we may not be able to retain sufficient cash flow from operations to meet our debt service requirements and repay our debt. Therefore, we may need to raise additional capital for these purposes, and we cannot assure you that a sufficient amount of capital will be available to us on favorable terms, or at all, when needed, which would materially adversely affect our financial condition, results of operations, cash flows and ability to pay distributions on, and the per share trading price of, our stock. Further, in order to maintain our REIT qualification and avoid the payment of income and excise taxes, we may need to borrow funds to meet the REIT distribution requirements even if the then prevailing market conditions are not favorable for these borrowings. These borrowing needs could result from, among other things, differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of reserves or required debt or amortization payments. These sources, however, may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of factors, including the market’s perception of our growth potential, our current debt levels, the per share trading price of our stock, and our current and potential future earnings. We cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, and could adversely affect our financial condition, results of operations, cash flows and our ability to pay distributions on, and the per share trading price of, our stock.
Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
The maximum tax rate applicable to “qualified dividend income” payable to U.S. stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, generally are not eligible for such reduced tax rates. Instead, our ordinary dividends generally are taxed at the higher tax rates applicable to ordinary income, the current maximum rate of which is 37%. Although these rules do not adversely affect the taxation of REITs or dividends payable by REITs, investors who are individuals, trusts and estates may perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including the per share trading price of our stock. However, for taxable years prior to 2026, individual stockholders are generally allowed to deduct 20% of the aggregate amount of ordinary dividends distributed by us, subject to certain limitations, which would reduce the maximum marginal effective federal income tax rate for individuals on the receipt of such ordinary dividends to 29.6%.
The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes.
A REIT’s net income from prohibited transactions is subject to a 100% penalty tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, unless a sale or disposition qualifies under certain statutory safe harbors, such characterization is a factual determination, and no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors.
Complying with REIT requirements may affect our profitability and may force us to liquidate or forgo otherwise attractive investments.
To maintain our qualification as a REIT, we must continually satisfy tests concerning, among other things, the nature and diversification of our assets, the sources of our income and the amounts we distribute to our stockholders. We may be required to liquidate or forgo otherwise attractive investments in order to satisfy the asset and income tests or to qualify under certain statutory relief provisions. We also may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. As a result, having to comply with the distribution requirement could cause us to: (1) sell assets in adverse market conditions; (2) borrow on unfavorable terms; or (3) distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt. Accordingly, satisfying the REIT requirements could have an adverse effect on our business results, profitability and ability to execute our business plan. Moreover, if we are compelled to liquidate our investments to meet any of these asset, income or distribution tests, or to repay obligations to our lenders, we may be unable to comply with one or more of the requirements applicable to REITs or may be subject to a 100% tax on any resulting gain if such sales constitute prohibited transactions.
Legislative, regulatory, or administrative changes could adversely affect us or our security holders.
The tax laws or regulations governing REITs, or the administrative interpretations thereof, may be amended at any time. We cannot predict if or when any new or amended law, regulation, or administrative interpretation will be adopted, promulgated, or become effective, and any such change may apply retroactively. New or amended laws, regulations, or administrative interpretations, could significantly and negatively affect our ability to qualify as a REIT or the federal income consequences of such qualification or may reduce the relative attractiveness of an investment in a REIT compared to other corporations not qualified as a REIT.
The Tax Cuts and Jobs Act made significant changes to the U.S. federal tax rules related to the taxation of individuals and corporations, including REITs and their stockholders. Additional technical corrections, amendments, or administrative guidance with respect to the Tax Cut and Jobs Act may be issued at any time, and we cannot predict the long-term impact of any future changes on REITs and their stockholders.
Other General Risks
We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology systems.
Our IT related systems are essential to the operation of our business and our ability to perform day-to-day operations. We face risks associated with security breaches, whether through cyber-attacks, computer viruses, attachments to e-mails, phishing schemes, persons inside our organization or persons with access to systems inside of our organization, and other significant disruptions of our IT related systems. The risk of a cybersecurity breach or disruption, particularly through a cyber-incident, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
Although we employ a number of measures to prevent, detect and mitigate these threats, which include password protection, frequent password change events, firewall detection systems, frequent backups, and a redundant data system for core applications, even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches continuously evolve and generally are not recognized until launched against a target, and in some cases are designed to not be detected and, in fact, may not be detected.
Moreover, we also depend on third parties to provide key information technology services such as payroll administration, financial information, lease and portfolio administration and electronic communications. The security measures employed by such third-party providers may prove to be ineffective at preventing breaches of their systems. A security breach or other significant disruption involving our IT related systems could disrupt the proper functioning of our systems; compromise the confidential information of our employees, tenants and vendors; result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines; result in our inability to monitor our compliance with the rules and regulations regarding our qualification as a REIT; result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes; require significant management attention and resources to remedy any damages that result; subject us to claims for breach of contract or failure to safeguard personal information, damages, credits, penalties or termination of leases or other agreements; or damage our reputation among our tenants and investors generally.
An increased focus on metrics and reporting related to corporate responsibility, specifically related to ESG factors, may impose additional costs, and expose us to new risks.
Investors and other stakeholders have focused on how companies address a variety of environmental, social and governance ("ESG") matters and look to rating systems developed by third party groups to allow comparisons between companies. Although we participate in some of these rating systems, we do not participate, and may not score well, in all of them. Further, the criteria used in these rating systems change frequently, and our scores may drop as criteria changes. We supplement our participation in these rating systems with public disclosures regarding our ESG activities, but investors and stakeholders may look for specific disclosures that we do not provide. Our failure to participate, or score well, in certain ratings systems or to provide certain ESG disclosures and engage in certain ESG initiatives could result in reputational harm and could cause certain investors to be unwilling to invest in our stock, which could impair our ability to raise capital.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

---

ITEM 2. PROPERTIES
Item 2. Properties
The following table provides certain information with respect to the Company Portfolio, as of December 31, 2023.
Market
Property (1)
City
State
Property Type
Year Built/
Renovated (2)
Square
Footage
Occupancy
Annualized
Rent (3)
Percent of
Total
Annualized
Rent (4)
Annualized
Rent/
Square
Footage (5)
Atlanta
1099 Dodds Avenue
Adairsville
GA
Warehouse/Distribution
150,000
100%
$ 637,500
0.4%
$ 4.25
11236 Harland Drive
Covington
GA
Warehouse/Distribution
32,361
100%
$ 137,534
0.1%
$ 4.25
1413 Lovers Lane
Augusta
GA
Warehouse/Distribution
200,000
100%
$ 721,527
0.5%
$ 3.61
1665 Dogwood Drive SW
Conyers
GA
Warehouse/Distribution
198,000
100%
$ 723,987
0.5%
$ 3.66
1715 Dogwood Drive
Conyers
GA
Warehouse/Distribution
100,000
100%
$ 233,431
0.2%
$ 2.33
32 Dart Road
Newnan
GA
Warehouse/Light Manufacturing
1988/2014
194,800
100%
$ 873,000
0.6%
$ 4.48
40 Pinyon Road
Covington
GA
Warehouse/Distribution
60,148
100%
$ 360,648
0.2%
$ 6.00
6739 New Calhoun Highway NE
Rome
GA
Warehouse/Distribution
1981/1996 & 2017
320,000
100%
$ 998,400
0.7%
$ 3.12
6777-6785 New Calhoun Highway NE
Rome
GA
Warehouse/Distribution
416,600
100%
$ 2,386,950
1.6%
$ 5.73
Peachtree City
Peachtree City
GA
Small Bay Industrial
1979-2013
297,926
100%
$ 1,743,901
1.2%
$ 5.86
Peachtree City II
Peachtree City
GA
Small Bay Industrial
117,000
99%
$ 937,516
0.6%
$ 8.08
Boston
54-56 Milliken
Portland
ME
Warehouse/Light Manufacturing
1966-2022/1995, 2005, 2013, 2022
268,713
100%
$ 2,118,916
1.4%
$ 7.89
Charlotte
1570 East P Street Extension
Newton
NC
Warehouse/Light Manufacturing
155,220
100%
$ 1,229,184
0.8%
$ 7.92
Chicago
11351 W. 183rd
Orland Park
IL
Warehouse/Distribution
18,768
100%
$ 211,970
0.1%
$ 11.29
11601 Central
Alsip
IL
Warehouse/Distribution
260,000
100%
$ 780,000
0.5%
$ 3.00
11746 Austin Ave
Alsip
IL
Warehouse/Light Manufacturing
162,714
100%
$ 727,808
0.5%
$ 4.47
1301 Ridgeview Drive
McHenry
IL
Warehouse/Light Manufacturing
1995/2020
218,064
100%
$ 931,994
0.6%
$ 4.27
13040 South Pulaski
Alsip
IL
Warehouse/Distribution
388,403
100%
$ 1,971,174
1.3%
$ 5.08
1355 Holmes
Elgin
IL
Warehouse/Light Manufacturing
1976/1998
82,456
100%
$ 463,723
0.3%
$ 5.62
13970 West Laurel
Lake Forest
IL
Small Bay Industrial
70,196
100%
$ 356,423
0.2%
$ 5.08
144 Tower Drive
Burr Ridge
IL
Warehouse/Distribution
1971/1988 & 2015
73,785
97%
$ 494,762
0.3%
$ 6.90
1445 Greenleaf
Elk Grove Village
IL
Warehouse/Light Manufacturing
150,000
100%
$ 981,007
0.7%
$ 6.54
1600 Fleetwood
Elgin
IL
Warehouse/Distribution
1968/2016
247,000
100%
$ 1,421,086
0.9%
$ 5.75
16801 Exchange Avenue
Lansing
IL
Warehouse/Light Manufacturing
455,886
100%
$ 1,684,577
1.1%
$ 3.70
1717 West Harvester Road
Chicago
IL
Warehouse/Distribution
465,940
100%
$ 1,757,411
1.2%
$ 3.77
1750 South Lincoln
Freeport
IL
Warehouse/Distribution
499,200
100%
$ 1,638,144
1.1%
$ 3.28
1796 Sherwin
Des Plaines
IL
Warehouse/Distribution
98,879
100%
$ 639,508
0.4%
$ 6.47
1875 Holmes
Elgin
IL
Warehouse/Light Manufacturing
134,415
100%
$ 643,383
0.4%
$ 4.79
189 Seeger Ave
Elk Grove
IL
Small Bay Industrial
25,245
100%
$ 155,860
0.1%
$ 6.17
1900 S. Batavia Ave
Geneva
IL
Warehouse/Distribution
1958/1989 & 2010
513,512
100%
$ 2,341,615
1.6%
$ 4.56
2401 Commerce
Libertyville
IL
Small Bay Industrial
1994/2009
78,574
100%
$ 659,505
0.4%
$ 8.39
2600-2620 Commerce Drive
Libertyville
IL
Warehouse/Distribution
78,743
100%
$ 556,961
0.4%
$ 7.07
28160 North Keith
Lake Forest
IL
Small Bay Industrial
77,924
100%
$ 395,662
0.3%
$ 5.08
3 West College
Arlington Heights
IL
Warehouse/Light Manufacturing
1978/2016
33,263
100%
$ 291,218
0.2%
$ 8.76
350 Armory Drive
South Holland
IL
Warehouse/Light Manufacturing
64,310
100%
$ 395,691
0.3%
$ 6.15
3841 Swanson
Gurnee
IL
Small Bay Industrial
99,625
74%
$ 359,458
0.2%
$ 4.88
3940 Stern
St. Charles
IL
Warehouse/Light Manufacturing
146,959
100%
$ 677,676
0.4%
$ 4.61
4491 Mayflower Road
South Bend
IN
Warehouse/Distribution
77,000
100%
$ 295,680
0.2%
$ 3.84
4915 W 122nd
Alsip
IL
Small Bay Industrial
153,368
100%
$ 889,407
0.6%
$ 5.80
4955 Ameritech Drive
South Bend
IN
Warehouse/Distribution
228,000
100%
$ 1,073,100
0.7%
$ 4.71
5110 South 6th
Milwaukee
WI
Warehouse/Distribution
58,500
100%
$ 234,000
0.2%
$ 4.00
5502 W. Brick Road
South Bend
IN
Warehouse/Distribution
101,450
100%
$ 361,162
0.2%
$ 3.56
5681 Cleveland Road
South Bend
IN
Warehouse/Distribution
62,550
100%
$ 222,678
0.1%
$ 3.56
5855 Carbonmill Road
South Bend
IN
Warehouse/Distribution
198,000
100%
$ 900,900
0.6%
$ 4.55
6000 West 73rd
Bedford Park
IL
Warehouse/Distribution
148,091
100%
$ 628,318
0.4%
$ 4.24
6035 West Gross Point Road
Niles
IL
Warehouse/Light Manufacturing
1956/1985
149,474
100%
$ 631,233
0.4%
$ 4.22
6558 West 73rd
Bedford Park
IL
Warehouse/Light Manufacturing
301,000
100%
$ 1,622,729
1.1%
$ 5.39
6751 Sayre
Bedford Park
IL
Warehouse/Light Manufacturing
242,690
100%
$ 839,707
0.6%
$ 3.46
7200 Mason Avenue
Bedford Park
IL
Warehouse/Light Manufacturing
207,345
100%
$ 879,720
0.6%
$ 4.24
7207 Mason Avenue
Bedford Park
IL
Warehouse/Light Manufacturing
84,195
100%
$ 323,564
0.2%
$ 3.84
7420 Meade Avenue
Bedford Park
IL
Warehouse/Light Manufacturing
52,344
100%
$ 302,025
0.2%
$ 5.77
800 Church Street
Lake Zurich
IL
Warehouse/Distribution
1974/2020
116,467
100%
$ 538,398
0.4%
$ 4.62
Market
Property (1)
City
State
Property Type
Year Built/
Renovated (2)
Square
Footage
Occupancy
Annualized
Rent (3)
Percent of
Total
Annualized
Rent (4)
Annualized
Rent/
Square
Footage (5)
Cincinnati
11540-11630 Mosteller
Sharonville
OH
Warehouse/Light Manufacturing
358,386
100%
$ 1,216,271
0.8%
$ 3.39
2700 Kemper Road
Sharonville
OH
Small Bay Industrial
85,718
100%
$ 609,756
0.4%
$ 7.12
2800 Kemper Road
Sharonville
OH
Small Bay Industrial
82,832
100%
$ 673,622
0.4%
$ 8.13
3741 Port Union Rd
Fairfield
OH
Warehouse/Distribution
1995/2001
53,602
100%
$ 229,288
0.2%
$ 4.28
4115 Thunderbird
Fairfield
OH
Warehouse/Distribution
70,000
100%
$ 273,105
0.2%
$ 3.90
4225-4331 Dues Drive
Cincinnati
OH
Warehouse/Distribution
303,000
100%
$ 1,400,169
0.9%
$ 4.62
7585 Empire Drive
Florence
KY
Warehouse/Light Manufacturing
148,415
100%
$ 578,577
0.4%
$ 3.90
Cornell Commerce Center
Blue Ash
OH
Small Bay Industrial
165,521
95%
$ 1,062,369
0.7%
$ 6.75
Fairfield Business Center
Fairfield
OH
Small Bay Industrial
39,558
100%
$ 243,282
0.2%
$ 6.15
Fisher Industrial Park
Fairfield
OH
Warehouse/Light Manufacturing
1946, 2023
1,403,932
91%
$ 4,530,062
3.1%
$ 3.55
Cleveland
1120 West 130th St
Brunswick
OH
Warehouse/Distribution
100,301
100%
$ 524,362
0.3%
$ 5.23
1200 Chester Industrial Parkway N
Avon
OH
Warehouse/Distribution
2007/2009
207,160
100%
$ 942,578
0.6%
$ 4.55
1200 Chester Industrial Parkway S
Avon
OH
Warehouse/Light Manufacturing
90,628
100%
$ 447,720
0.3%
$ 4.94
1350 Moore Road
Avon
OH
Warehouse/Distribution
109,075
100%
$ 559,009
0.4%
$ 5.12
1366 Commerce Drive
Stow
OH
Warehouse/Distribution
216,000
93%
$ 750,000
0.5%
$ 3.75
14801 County Rd 212
Findlay
OH
Warehouse/Distribution
405,000
100%
$ 1,530,200
1.0%
$ 3.78
1755 Enterprise
Twinsburg
OH
Warehouse/Light Manufacturing
1978/2005
255,570
98%
$ 1,351,880
0.9%
$ 5.40
2100 International Parkway
Canton
OH
Warehouse/Light Manufacturing
274,464
100%
$ 1,356,374
0.9%
$ 4.94
2210 International Parkway
Canton
OH
Warehouse/Distribution
350,000
100%
$ 1,491,000
1.0%
$ 4.26
22209 Rockside Road
Bedford
OH
Warehouse/Distribution
2008/2021
197,518
100%
$ 1,088,324
0.7%
$ 5.51
30339 Diamond Parkway
Glenwillow
OH
Warehouse/Distribution
400,184
100%
$ 2,674,630
1.8%
$ 6.68
31000 Viking Parkway
Westlake
OH
Small Bay Industrial
100,150
93%
$ 561,634
0.4%
$ 6.01
4211 Shuffel Street NW
Canton
OH
Warehouse/Light Manufacturing
255,000
100%
$ 1,437,563
1.0%
$ 5.64
Gilchrist Road I
Mogadore
OH
Warehouse/Distribution
1961-1978
209,592
100%
$ 860,933
0.6%
$ 4.11
Gilchrist Road II
Mogadore
OH
Warehouse/Distribution
1991-1994
473,046
100%
$ 1,720,216
1.1%
$ 3.64
Gilchrist Road III
Mogadore
OH
Warehouse/Distribution
1994/1998
335,521
92%
$ 1,258,500
0.8%
$ 4.08
Columbus
100 Paragon Parkway
Mansfield
OH
Warehouse/Distribution
314,736
100%
$ 975,000
0.6%
$ 3.10
1520 Experiment Farm Road
Troy
OH
Warehouse/Light Manufacturing
160,000
100%
$ 740,765
0.5%
$ 4.63
1650-1654 Williams Road
Columbus
OH
Warehouse/Distribution
1973/1974 & 1975
772,450
100%
$ 2,312,163
1.5%
$ 2.99
2120-2138 New World
Columbus
OH
Warehouse/Distribution
121,200
100%
$ 428,861
0.3%
$ 3.54
2180 Corporate Drive
Troy
OH
Warehouse/Light Manufacturing
160,000
100%
$ 725,663
0.5%
$ 4.54
2626 Port Road
Columbus
OH
Warehouse/Distribution
156,641
100%
$ 518,398
0.3%
$ 3.31
2800 Howard Street
Sidney
OH
Warehouse/Distribution
480,000
100%
$ 1,640,807
1.1%
$ 3.42
3100 Creekside
Lockbourne
OH
Warehouse/Distribution
340,000
100%
$ 1,434,800
1.0%
$ 4.22
3500 Southwest
Grove City
OH
Warehouse/Distribution
1992/2018
527,127
100%
$ 1,535,584
1.0%
$ 2.91
7001 Americana
Reynoldsburg
OH
Warehouse/Distribution
1986/2007 & 2012
54,100
100%
$ 267,795
0.2%
$ 4.95
8273 Green Meadows
Lewis Center
OH
Warehouse/Distribution
1996/2007
77,271
100%
$ 407,741
0.3%
$ 5.28
8288 Green Meadows
Lewis Center
OH
Warehouse/Distribution
300,000
100%
$ 1,067,912
0.7%
$ 3.56
952 Dorset Road
Troy
OH
Small Bay Industrial
1988/1999
76,800
100%
$ 296,841
0.2%
$ 3.87
Graphics Way
Lewis Center
OH
Small Bay Industrial
73,426
100%
$ 464,699
0.3%
$ 6.33
Orange Point
Lewis Center
OH
Small Bay Industrial
143,863
100%
$ 811,879
0.5%
$ 5.64
Indianapolis
2900 Shadeland
Indianapolis
IN
Warehouse/Distribution
1957/1992
933,439
87%
$ 2,458,329
1.6%
$ 3.04
3035 North Shadeland
Indianapolis
IN
Warehouse/Distribution
1962/2001 & 2004
562,497
91%
$ 1,761,689
1.2%
$ 3.45
3169 North Shadeland
Indianapolis
IN
Warehouse/Distribution
1979/1993
44,374
95%
$ 217,668
0.1%
$ 5.19
3333 N. Franklin Road
Indianapolis
IN
Warehouse/Distribution
276,240
100%
$ 856,344
0.6%
$ 3.10
3525 S. Arlington
Indianapolis
IN
Warehouse/Distribution
219,104
100%
$ 769,691
0.5%
$ 3.51
3701 David Howarth Drive
Lafayette
IN
Warehouse/Distribution
2008/2019
294,730
100%
$ 1,795,934
1.2%
$ 6.09
6555 E 30th Street
Indianapolis
IN
Warehouse/Distribution
1969/1997
314,775
100%
$ 1,486,940
1.0%
$ 4.72
6575 E 30th Street
Indianapolis
IN
Warehouse/Distribution
60,000
100%
$ 324,600
0.2%
$ 5.41
6585 E 30th Street
Indianapolis
IN
Warehouse/Distribution
100,000
100%
$ 399,139
0.3%
$ 3.99
6635 E 30th Street
Indianapolis
IN
Warehouse/Distribution
99,877
100%
$ 464,428
0.3%
$ 4.65
6701 E 30th Street
Indianapolis
IN
Warehouse/Distribution
7,820
100%
$ 88,139
0.1%
$ 11.27
6737 E 30th Street
Indianapolis
IN
Warehouse/Distribution
87,500
100%
$ 460,250
0.3%
$ 5.26
6751 E 30th Street
Indianapolis
IN
Warehouse/Distribution
100,000
100%
$ 460,439
0.3%
$ 4.60
6951 E 30th Street
Indianapolis
IN
Warehouse/Distribution
44,000
100%
$ 217,247
0.1%
$ 4.94
7750 Georgetown Road
Indianapolis
IN
Warehouse/Distribution
102,934
100%
$ 694,805
0.5%
$ 6.75
7901 W. 21st Street
Indianapolis
IN
Warehouse/Distribution
1985/1994
353,000
100%
$ 1,284,774
0.9%
$ 3.64
Sam Jones
Indianapolis
IN
Warehouse/Light Manufacturing
484,879
100%
$ 1,399,951
0.9%
$ 2.89
Jacksonville
265 Industrial Boulevard
Midway
GA
Warehouse/Distribution
1988/1999
187,205
100%
$ 334,350
0.2%
$ 1.79
338 Industrial Boulevard
Midway
GA
Warehouse/Distribution
1996/2001
309,084
100%
$ 970,231
0.6%
$ 3.14
430 Industrial Boulevard
Midway
GA
Warehouse/Distribution
47,599
100%
$ 168,825
0.1%
$ 3.55
8000-8001 Belfort Parkway
Jacksonville
FL
Small bay Industrial
85,920
90%
$ 811,763
0.5%
$ 10.55
8451 Western Way
Jacksonville
FL
Warehouse/Light Manufacturing
1968/1975& 1986-1987
288,750
100%
$ 2,104,112
1.4%
$ 7.29
Center Point Business Park
Jacksonville
FL
Small Bay Industrial
1990-1997
537,800
100%
$ 4,320,700
3.0%
$ 8.03
Liberty Business Park
Jacksonville
FL
Small Bay Industrial
1996-2023
466,666
100%
$ 4,722,609
3.2%
$ 10.12
Salisbury Business Park
Jacksonville
FL
Small Bay Industrial
2001-2023
209,372
100%
$ 2,163,558
1.4%
$ 10.33
Market
Property (1)
City
State
Property Type
Year Built/
Renovated (2)
Square
Footage
Occupancy
Annualized
Rent (3)
Percent of
Total
Annualized
Rent (4)
Annualized
Rent/
Square
Footage (5)
Kansas City
5450 Deramus Avenue
Kansas City
MO
Warehouse/Light Manufacturing
1976/1986 & 1994
221,911
69%
$ 557,666
0.4%
$ 3.64
Memphis
1700-1710 Dunn Avenue
Memphis
TN
Warehouse/Distribution
1957-1959/1963/1973
316,935
100%
$ 902,295
0.6%
$ 2.85
210 American
Jackson
TN
Warehouse/Distribution
1967/1981 & 2012
638,400
100%
$ 1,489,872
1.0%
$ 2.33
2950 Brother Boulevard
Bartlett
TN
Warehouse/Distribution
1987/2019
232,375
87%
$ 884,313
0.6%
$ 4.39
6290 Shelby View Drive
Memphis
TN
Warehouse/Distribution
1999/2003
74,665
100%
$ 427,333
0.3%
$ 5.72
7585 AE Beaty Drive/2995 Appling Road
Barlett
TN
Warehouse/Distribution
67,557
89%
$ 598,439
0.4%
$ 9.96
Airport Business Park
Memphis
TN
Small Bay Industrial
1985-1989
235,071
93%
$ 2,653,705
1.8%
$ 12.14
Knight Road
Memphis
TN
Warehouse/Distribution
131,904
100%
$ 213,782
0.1%
$ 1.62
Shelby Distribution
Memphis
TN
Warehouse/Distribution
202,303
100%
$ 659,891
0.4%
$ 3.26
South Park
Memphis
TN
Warehouse/Distribution
1991/2005
566,281
100%
$ 1,892,967
1.3%
$ 3.34
10455 Marina Drive
Olive Branch
MS
Warehouse/Light Manufacturing
161,200
100%
$ 533,804
0.4%
$ 3.31
10682 Ridgewood Road
Olive Branch
MS
Warehouse/Distribution
90,000
100%
$ 333,720
0.2%
$ 3.71
1814 S Third Street
Memphis
TN
Warehouse/Distribution
88,950
100%
$ 180,569
0.1%
$ 2.03
3650 Distriplex Drive
Memphis
TN
Warehouse/Distribution
330,253
100%
$ 1,370,550
0.9%
$ 4.15
3670 South Perkins Road
Memphis
TN
Warehouse/Light Manufacturing
74,582
100%
$ 198,388
0.1%
$ 2.66
3980 Premier Avenue
Memphis
TN
Warehouse/Distribution
141,256
98%
$ 343,895
0.2%
$ 2.49
5846 Distribution Drive
Memphis
TN
Warehouse/Distribution
34,560
100%
$ 159,322
0.1%
$ 4.61
7560 Priority Lane
Olive Branch
MS
Warehouse/Distribution
48,750
100%
$ 187,688
0.1%
$ 3.85
8970 Deerfield Drive
Olive Branch
MS
Warehouse/Distribution
51,320
100%
$ 196,488
0.1%
$ 3.83
Collins Industrial Memphis
Memphis
TN
Small Bay Industrial
1989-2001
247,217
95%
$ 1,160,136
0.8%
$ 4.93
Outland/Burbank Industrial
Memphis
TN
Warehouse/Distribution
1969-1996
367,416
81%
$ 818,100
0.5%
$ 2.75
Outland Center Memphis I
Memphis
TN
Warehouse/Distribution
1988-1989
175,337
92%
$ 751,395
0.5%
$ 4.66
Outland Center Memphis II
Memphis
TN
Warehouse/Distribution
232,200
100%
$ 795,611
0.5%
$ 3.43
Place Industrial Memphis
Memphis
TN
Warehouse/Distribution
1980-1988
85,631
88%
$ 326,920
0.2%
$ 4.32
Shelby Distribution II
Memphis
TN
Warehouse/Distribution
113,240
100%
$ 429,571
0.3%
$ 3.79
Willow Lake Industrial
Memphis
TN
Warehouse/Distribution
75,643
100%
$ 349,429
0.2%
$ 4.62
St. Louis
11646 Lakeside Crossing
St. Louis
MO
Warehouse/Distribution
100,021
100%
$ 748,492
0.5%
$ 7.48
160-275 Corporate Woods Place
Bridgeton
MO
Warehouse/Distribution
155,434
100%
$ 625,772
0.4%
$ 4.03
1901-1939 Beltway Dr
Overland
MO
Warehouse/Light Manufacturing
76,485
81%
$ 605,910
0.4%
$ 9.84
3051 Gateway
Edwardsville
IL
Warehouse/Light Manufacturing
521,171
100%
$ 2,549,828
1.7%
$ 4.89
349 Gateway
Edwardsville
IL
Warehouse/Light Manufacturing
624,159
100%
$ 2,718,992
1.8%
$ 4.36
3919 Lakeview Corporate Drive
Edwardsville
IL
Warehouse/Distribution
769,500
100%
$ 3,539,875
2.3%
$ 4.60
4848 Park 370 Boulevard
Hazelwood
MO
Warehouse/Light Manufacturing
76,092
100%
$ 487,650
0.3%
$ 6.41
9150 Latty Avenue
Berkeley
MO
Warehouse/Distribution
1965/2018
142,364
100%
$ 640,638
0.4%
$ 4.50
Grissom Drive
St. Louis
MO
Warehouse/Light Manufacturing
79,258
100%
$ 309,899
0.2%
$ 3.91
Metro St Louis
Maryland Heights
MO
Warehouse/Light Manufacturing
59,055
100%
$ 322,509
0.2%
$ 5.46
Phantom Drive
Hazelwood
MO
Warehouse/Distribution
129,000
97%
$ 546,002
0.4%
$ 4.36
St. Louis Commerce Center
St. Louis
MO
Warehouse/Distribution
1999-2001
487,150
100%
$ 2,117,316
1.4%
$ 4.35
Existing Portfolio - Industrial Properties
34,025,101
98.1%
$ 150,747,310 100%
$ 4.52
_______________
(1) Property listing includes all wholly owned properties as of December 31, 2023.
(2) Renovation means significant upgrades, alterations, or additions to building areas, interiors, exteriors and/or systems.
(3) Annualized rent is calculated by multiplying rental payments (defined as cash rents before abatements) for the month ended December 31, 2023, by 12.
(4) Represents the percentage of total annualized rent for properties owned as of December 31, 2023.
(5) Calculated by multiplying rental payments (defined as cash rents before abatements) for the month ended December 31, 2023, by 12, and then dividing by leased square feet for such property as of December 31, 2023.
As of December 31, 2023, 51 of our 156 properties were encumbered by mortgage indebtedness totaling $267,964, excluding unamortized deferred financing fees and debt issuance costs. See Note 7 in the accompanying Notes to the Consolidated Financial Statements for additional information.
Functionality Diversification
The following tables set forth information relating to functionality diversification by building type based on total square footage and annualized rent as of December 31, 2023.
Property Type
Number of Properties
Occupancy
Total Rentable
Square Feet
Percentage of
Rentable
Square Feet
Annualized
Base Rent
Percentage of
Annualized
Base Rent
Annualized
Base Rent per
Square Foot
Warehouse/Distribution
98.3%
21,677,544
63.7%
$ 84,902,285
56.3%
$ 3.98
Warehouse/Light Manufacturing
97.6%
8,877,785
26.1%
39,790,739
26.4%
4.59
Small Bay Industrial (1)
97.7%
3,469,772
10.2%
26,054,286
17.3%
7.69
Total Company Portfolio
98.1%
34,025,101
100%
$ 150,747,310
100%
$ 4.52
______________
(1) Small bay industrial is inclusive of flex space totaling 606,799 rentable square feet and annualized base rent of $6,930,211.
Geographic Diversification
The following tables set forth information relating to geographic diversification of the Company Portfolio by market based on total annualized rent as of December 31, 2023.
Market
Number of
Properties
Occupancy
Total Rentable
Square Feet
Percentage of
Rentable
Square Feet
Annualized
Base Rent
Percentage of Annualized
Base Rent
Chicago
99.6%
6,624,335
19.5%
$ 30,279,237
20.1%
Memphis
96.6%
4,783,046
14.1%
17,858,182
11.8%
Indianapolis
95.6%
4,085,169
12.0%
15,140,367
10.0%
Cleveland
98.6%
3,979,209
11.7%
18,554,921
12.3%
Columbus
100.0%
3,757,614
11.0%
13,628,907
9.0%
St. Louis
99.4%
3,219,689
9.4%
15,212,883
10.1%
Atlanta
99.9%
2,086,835
6.1%
9,754,395
6.5%
Cincinnati
95.0%
2,710,964
8.0%
10,816,501
7.2%
Jacksonville
99.6%
2,132,396
6.3%
15,596,150
10.4%
Kansas City
69.1%
221,911
0.6%
557,666
0.4%
Boston
100.0%
268,713
0.8%
2,118,917
1.4%
Charlotte
100.0%
155,220
0.5%
1,229,184
0.8%
Total Company Portfolio
98.1%
34,025,101
100%
$ 150,747,310
100%
Industry Diversification
The following tables set forth information relating to tenant diversification of the Company Leased Portfolio by industry based on total square feet occupied and annualized rent as of December 31, 2023.
Industry
Total Leased
Square Feet
Number of
Leases
Percentage of
Leased
Square Feet
Annualized
Base Rent
Percentage of
Annualized
Base Rent
Annualized
Base Rent per
Square Foot
Logistics & Transportation
9,856,430
29.5%
$ 40,658,335
27.0%
$ 4.13
Wholesale/Retail
2,239,538
6.7%
11,418,223
7.6%
5.10
Automotive
2,192,860
6.6%
9,884,416
6.6%
4.51
Printing & Paper
1,935,478
5.8%
7,332,446
4.9%
3.79
Home & Garden
1,972,186
5.9%
6,813,922
4.5%
3.46
Construction
1,784,318
5.3%
8,072,615
5.4%
4.52
Cardboard and Packaging
1,630,027
4.9%
6,688,586
4.4%
4.10
Food & Beverage
1,568,810
4.7%
7,956,872
5.3%
5.07
Light Manufacturing
1,234,493
3.7%
4,490,559
3.0%
3.64
Healthcare
1,017,495
3.0%
6,146,387
4.1%
6.04
Other Industries
7,934,042
23.9%
41,284,949
27.2%
5.20
Total Company Portfolio
33,365,677
100%
$ 150,747,310
100%
$ 4.52
Tenants
The following table sets forth information about the ten largest tenants in our Company Portfolio based on total annualized rent as of December 31, 2023.
Tenant
Market
Industry
# of
Leases
Total Leased
Square Feet
Expiration
Annualized
Base Rent/SF
Annualized
Base Rent
Percent of Total Annualized Rent
FedEx Supply Chain, Inc.
St. Louis
Logistics & Transportation
769,500
7/31/2024
$ 4.60
$ 3,539,875
2.3%
Geodis Logistics, LLC
St. Louis
Logistics & Transportation
624,159
8/31/2025
4.36
2,718,993
1.8%
Royal Canin U.S.A, Inc.
St. Louis
Wholesale/Retail
521,171
12/31/2025
4.89
2,549,829
1.7%
Houghton Mifflin Harcourt Company
Chicago
Education
513,512
3/31/2026
4.56
2,341,615
1.6%
ODW Logistics, Inc.
Columbus
Logistics & Transportation
772,450
6/30/2025
2.99
2,312,163
1.5%
Archway Marketing Holdings, Inc.
Chicago
Logistics & Transportation
503,000
3/31/2026
4.51
2,268,180
1.5%
ASW Supply Chain Services, LLC
Cleveland
Logistics & Transportation
577,237
11/30/2027
3.67
2,118,373
1.4%
Balta US, Inc.
Jacksonville
Home & Garden
629,084
10/31/2029
3.13
1,968,631
1.3%
Communications Test Design, Inc.
Memphis
Logistics & Transportation
566,281
12/31/2024
3.34
1,892,967
1.3%
Winston Products, LLC
Cleveland
Wholesale/Retail
266,803
4/30/2032
6.94
1,852,295
1.2%
Ten Largest Tenants by Annualized Rent
5,743,197
$ 4.10
$ 23,562,921
15.6%
All Other
27,622,480
4.60
127,184,389
84.4%
Total Company Portfolio
33,365,677
$ 4.52
$ 150,747,310
100%
Lease Overview
Triple-net lease: In our triple-net leases, the tenant is responsible for all aspects of, and costs related to, the property and its operation during the lease term. The landlord may have responsibility under the lease to perform or pay for certain capital repairs or replacements to the roof, structure, or certain building systems, such as heating and air conditioning and fire suppression. As of December 31, 2023, there were 402 triple-net leases in the Company Portfolio, representing approximately 81.0% of our total annualized base rent.
Modified net lease: In our modified net leases, the landlord is responsible for some property related expenses during the lease term, but the cost of most of the expenses is passed through to the tenant. As of December 31, 2023, there were 63 modified net leases in the Company Portfolio, representing approximately 12.6% of our total annualized base rent.
Gross lease: In our gross leases, the landlord is responsible for all aspects of and costs related to the property and its operation during the lease term. As of December 31, 2023, there were 45 gross leases in the Company Portfolio, representing approximately 6.4% of the annualized base rent.
Lease Expirations
As of December 31, 2023, the weighted average in-place remaining lease term of the Company Portfolio was 3.3 years. The following table sets forth a summary schedule of lease expirations for leases in place as of December 31, 2023, plus available space, for each of the ten full calendar years commencing December 31, 2023, and thereafter. The information set forth in the table assumes that tenants exercise no renewal options and no early termination rights.
Year of Expiration
Total
Rentable
Square Feet
Percentage
of Rentable
Square Feet
Annualized
Base Rent (1)
Percentage
of Annualized
Base Rent (2)
Annualized
Base Rent per
Square Foot (3)
Available
659,424
1.9%
$ -
-
$ -
4,580,860
13.5%
20,209,067
13.4%
4.41
7,914,431
23.3%
35,008,462
23.2%
4.42
5,310,169
15.6%
25,270,933
16.7%
4.76
4,422,175
13.0%
20,397,378
13.5%
4.61
3,638,154
10.7%
16,117,289
10.7%
4.43
3,319,346
9.8%
13,876,537
9.2%
4.18
1,046,115
3.1%
4,935,476
3.3%
4.72
1,202,167
3.5%
4,621,662
3.1%
3.84
1,341,397
3.9%
6,790,894
4.5%
5.06
206,055
0.6%
1,008,234
0.7%
4.89
Thereafter
384,808
1.1%
2,511,378
1.7%
6.53
Total Company Portfolio
34,025,101
100%
$ 150,747,310
100%
$ 4.52
____________________
(1) Annualized rent is calculated by multiplying rental payments (defined as cash rents before abatements) for the month ended December 31, 2023, by 12.
(2) Calculated as annualized base rent set forth in this table divided by total annualized base rent for the Company Portfolio as of December 31, 2023.
(3) Calculated as annualized base rent for such leases divided by leased square feet for such leases at each of the properties so impacted by the lease expirations as of December 31, 2023.

---

ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business, we could become party to legal actions and proceedings involving matters that are generally incidental to our business. While it will likely not be possible to ascertain the ultimate outcome of such matters, management expects that the resolution of any such legal actions and proceedings would not have a material adverse effect on our consolidated financial statements.
There are no legal proceedings at this time.

---

ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Stockholder Information
As of February 19, 2024, we had 45,382,076 shares of common stock outstanding held of record by a total of approximately 134 stockholders; however, because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we believe there are substantially more beneficial holders of our common stock than record holders. The number of stockholders is based on the records of Continental Stock Transfer & Trust, which serves as our transfer agent.
Market Information
Our common stock is traded on the NYSE under the symbol “PLYM.” On December 31, 2023, the closing price of our common stock, as reported on the NYSE, was $24.07.
Distribution Policy
It is our policy to declare quarterly dividends to the stockholders so as to comply with applicable provisions of the Code governing REITs. The declaration and payment of quarterly dividends remains subject to the review and approval of the board of directors. To satisfy the requirements to qualify as a REIT, and to avoid paying tax on our income, we have paid and intend to continue to pay regular quarterly cash dividends of all or substantially all of our REIT taxable income (excluding net capital gains) to holders of our common stock.
We intend to distribute at least 90% of our taxable income each year (subject to certain adjustments as described below) to our stockholders in order to qualify as a REIT under the Code and generally expect to distribute 100% of our REIT taxable income so as to avoid the excise tax on undistributed REIT taxable income.
Distributions to our common stockholders are authorized by our board of directors in its sole discretion and declared by us out of funds legally available therefor. We expect that our board of directors, in authorizing the amounts of distributions, will consider a variety of factors, including:
• actual results of operations and our cash available for distribution;
• the timing of the investment of the net proceeds from our offerings;
• debt service requirements and any restrictive covenants in our loan agreements;
• capital expenditure requirements for our properties;
• our taxable income;
• the annual distribution requirement under the REIT provisions of the Code;
• our operating expenses;
• requirements under applicable law; and
• other factors that our board of directors may deem relevant.
Our distributions may exceed our earnings and profits as determined for U.S. federal income tax purposes primarily due to depreciation and amortization. Any distributions in excess of our earnings and profits may represent a return of capital for U.S. federal income tax purposes, subject to the extent that such distributions do not exceed the stockholder's adjusted tax basis in their shares of common or preferred stock, but rather will reduce the adjusted basis of the shares of common or preferred stock. Therefore, the gain (or loss) recognized on the sale of the common stock or preferred stock or upon our liquidation will be increased (or decreased) accordingly. To the extent those distributions exceed a taxable U.S. stockholder's adjusted tax basis in their shares of common or preferred stock, they generally will be treated as a capital gain realized from the taxable disposition of those shares. The percentage of our stockholder distributions that exceeds our earnings and profits may vary substantially from year to year.
Although we have no current intention to do so, we may in the future also choose to pay distributions in the form of our own shares.
Issuer Purchases of Equity Securities
Performance Graph
The following graph provides a comparison of the cumulative total return on our common stock with the cumulative total return on the Standard & Poor’s 500 Index and the MSCI US REIT Index. The MSCI US REIT Index represents performance of publicly-traded REITs. Returns over the indicated period are based on historical data and should not be considered indicative of future returns. The graph covers the period from December 31, 2018 to December 31, 2023 and assumes that $100 was invested in our common stock and in each index on December 31, 2018 and that all dividends were reinvested.
This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing by us under the Securities Act, except as shall be expressly set forth by specific reference in such filing.

---

ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. [Reserved]

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is based on, and should be read in conjunction with our audited historical financial statements and related notes thereto as of and for the years ended December 31, 2023 and 2022.
Overview
We are a full service, vertically integrated, self-administered and self-managed REIT 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. The Company Portfolio consists of 156 industrial properties located in twelve states with an aggregate of approximately 34.0 million rentable square feet leased to 465 different tenants.
Our strategy is to acquire, own and manage single and multi-tenant industrial properties located in primary and secondary markets, as well as select sub-markets, with access to large pools of skilled labor in the main industrial, distribution and logistics corridors of the United States. We seek to generate attractive risk-adjusted returns for our stockholders through a combination of dividends and capital appreciation.
Factors That May Influence Future Results of Operations
Business and Strategy
Our core investment strategy is to acquire industrial properties located in primary and secondary markets, as well as select sub-markets across the U.S. We expect to acquire these properties through third-party purchases and structured sale-leasebacks where we believe we can achieve high initial yields and strong ongoing cash-on-cash returns.
Our target markets are located in primary and secondary markets, as well as select sub-markets, because we believe these markets tend to have less occupancy and rental rate volatility and less buyer competition relative to gateway markets. We also believe that the systematic aggregation of such properties will result in a diversified portfolio that will produce sustainable risk-adjusted returns. Future results of operations may be affected, either positively or negatively, by our ability to effectively execute this strategy.
We also intend to continue pursuing joint venture arrangements with institutional partners which could provide management fee income as well as residual profit-sharing income. Such joint ventures may involve investing in industrial assets that would be characterized as opportunistic or value-add investments. These may involve development or redevelopment strategies that may require significant up-front capital expenditures, lengthy lease-up periods and result in inconsistent cash flows. As such, these properties’ risk profiles and return metrics would likely differ from the non-joint venture properties that we target for acquisition.
Rental Revenue and Tenant Recoveries
We receive income primarily from rental revenue from our properties. The amount of rental revenue generated by the Company Portfolio depends principally on the occupancy levels and lease rates at our properties, our ability to lease currently available space and space that becomes available as a result of lease expirations and on the rental rates at our properties. The Company Portfolio was approximately 98.1% and 99.0% occupied as of December 31, 2023, and 2022, respectively. Our occupancy rate is impacted by general market conditions in the geographic areas which our properties are located and the financial condition of tenants in our target markets.
Scheduled Lease Expirations
Our ability to re-lease space subject to expiring leases will impact our results of operations and will be affected by economic and competitive conditions in the markets in which we operate and by the desirability of our individual properties. During the period from January 1, 2024, through to December 31, 2025, an aggregate of 36.6% of the annualized base rent leases in the Company Portfolio are scheduled to expire, which we believe will provide us an opportunity to adjust below market leases to reflect current market conditions.
The table below reflects certain data about our new and renewed leases with terms of greater than six months executed in the year ended December 31, 2023.
Year
Type
Square
Footage
% of Total Square Footage
Expiring Rent
New
Rent
%
Change
Tenant Improvements $/SF/YR
Lease Commissions $/SF/YR
Year Ended December 31, 2023
Renewals	
3,945,024
70.4%
$ 3.75
$ 4.36
16.3%
$ 0.14
$ 0.15
New Leases	
1,654,919
29.6%
$ 3.82
$ 5.03
31.7%
$ 0.35
$ 0.35
Total	
5,599,943
100%
$ 3.77
$ 4.56
21.0%
$ 0.21
$ 0.21
Conditions in Our Markets
The Company Portfolio is located in various primary and secondary markets within the main industrial distribution and logistics corridors of the United States. Positive or negative changes in economic or other conditions, adverse weather conditions and natural disasters in these markets are likely to affect our overall performance.
Property Expenses
Our rental expenses generally consist of utilities, real estate taxes, insurance and repair and maintenance costs. For the majority of the Company Portfolio, property expenses are controlled, in part, by either the triple net provisions or modified gross lease expense reimbursement provisions in tenant leases. However, the terms of our tenant leases vary and in some instances the leases may provide that we are responsible for certain property expenses. Accordingly, our overall financial results will be impacted by the extent to which we are able to pass-through property expenses to our tenants.
General and Administrative Expenses
We expect to incur increased general and administrative expenses, including legal, accounting, and other expenses related to corporate governance and public reporting and compliance. In addition, we anticipate that our staffing levels will increase from current levels as of December 31, 2023, during the subsequent 12 to 24 months and, as a result, our general and administrative expenses will increase further.
Critical Accounting Estimates
The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Certain estimates, judgments and assumptions are inherently subjective and based on the existing business and market conditions and are therefore continually evaluated based upon available information and experience. The following item requires significant estimation or judgement.
Purchase Price Accounting
We have determined that judgments regarding the allocation of the purchase price of acquired real estate properties based upon the fair value of the assets acquired and liabilities assumed to be a critical accounting estimate. As discussed below in “Critical Accounting Policies,” we allocate the purchase price of acquired real estate properties based upon the fair value of the assets acquired and liabilities assumed, which generally consist of land, buildings, tenant improvements, mortgage debt assumed, if applicable, and deferred leasing intangibles, which includes in-place leases, above market and below market leases, and tenant relationships, and is therefore subject to subjective analysis and uncertainty. The purchase price is allocated to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. The determination of fair value includes the use of significant assumptions such as rental rates, land value, discount rates, and exit capitalization rates. Acquired above and below market lease intangibles are valued based on the present value of the difference between prevailing market rental rates and the in-place rental rates measured over a period equal to the remaining term of the lease for above market leases or the remaining term of the lease plus the term of any below market fixed rate renewal options for below market leases. The purchase price is further allocated to in-place lease values based on an estimate of the lease revenue received during a reasonable lease-up period as if the property was vacant on the date of acquisition. The allocation of the purchase price to mortgage debt assumed, if applicable, is determined by comparing the net present value of remaining debt payments at the stated rate per the mortgage agreement to the net present value of the remaining debt payments using the prevailing market borrowing rates. We do not believe that the conclusions we reached regarding the allocation of the purchase price of acquired real estate properties, in the current economic and operating environment, would result in a materially different conclusion within any reasonable range of assumptions that could have been applied.
Impairment of Long-Lived Assets
The Company assesses the carrying values of our respective long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Long-lived assets are primarily comprised of real estate properties.
On a quarterly basis, management assesses whether there are any indicators, including changes in the anticipated holding period, general market conditions, and property operating performance, that may indicate an impairment exists. Recoverability of real estate properties is measured by comparison of the carrying amount of the property to the estimated future undiscounted cash flows to be generated from the use and eventual disposition of that property. If our analysis indicates that the carrying value of the real estate property is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. Fair value is determined through various valuation techniques, including discounted cash flow models, applying a capitalization rate to estimated net operating income of a property and quoted market values and third-party appraisals, where considered necessary. The Company determined there was no impairment of value of real estate properties as of December 31, 2023 and 2022.
Critical Accounting Policies
Our discussion and analysis of our company’s historical financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses in the reporting period. Actual amounts may differ from these estimates and assumptions.
We believe our most critical accounting policies are the regular evaluation of whether the value of a real estate asset has been impaired and accounting for acquisitions. Each of these items involves estimates that require management to make judgments that are subjective in nature. We collect historical data and current market data, and based on our experience we analyze these assumptions in order to arrive at what we believe to be reasonable estimates. Under different conditions or assumptions, materially different amounts could be reported related to the accounting policies described below. In addition, application of these accounting policies involves the exercise of judgments on the use of assumptions as to future uncertainties and, as a result, actual results could materially differ from these estimates.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management makes significant estimates regarding the allocation of tangible and intangible assets and liabilities for real estate acquisitions, impairments of long-lived assets, stock-based compensation and its common stock warrants liability. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from those estimates and assumptions.
Derivative Instruments and Hedging Activities
We record all derivatives on the accompanying consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply, or we elect not to apply hedge accounting.
In accordance with fair value measurement guidance, we made an accounting policy election to measure the credit risk of our derivative financial instruments that are subject to master netting arrangements on a net basis by counterparty portfolio. Credit risk is the risk of failure of the counterparty to perform under the terms of the contract. We minimize the credit risk in our derivative financial instruments by entering into transactions with various high-quality counterparties. Our exposure to credit risk at any point is generally limited to amounts recorded as assets on the accompanying consolidated balance sheets.
Real Estate Property Acquisitions
The Company accounts for its real estate property acquisitions in accordance with Financial Accounting Standards Board (“FASB”) ASC 805. The Company has concluded that the acquisition of real estate properties will generally be accounted for as an asset acquisition as opposed to a business combination. The significant difference between the two accounting models is that within an acquisition of assets, acquisition costs are capitalized as a cost of the assets, whereas in a business combination acquisition costs are expensed and not included as part of the consideration transferred.
The accounting for real estate property acquisitions requires estimates and judgment as to expectations for future cash flows of the acquired property, the allocation of those cash flows to identifiable intangible assets and liabilities, and in determining the estimated fair value for assets acquired and liabilities assumed. The amounts allocated to lease intangibles (leases in place, leasing commissions, tenant relationships, and above and below market leases) are based on management’s estimates and assumptions, as well as other information compiled by management, including independent third party analysis and market data, and are generally amortized over the remaining life of the related leases excluding renewal options, except in the case of below market fixed rate rent amounts, which are amortized over the applicable renewal period. Such inputs are Level 3 in the fair value hierarchy. The process for determining the allocation to these components requires management to make estimates and assumptions, including rental rates, land value, discount rates, and exit capitalization rates.
Revenue Recognition
Minimum rental revenue from real estate operations is recognized on a straight-line basis. The straight-line rent calculation on leases includes the effects of rent concessions and scheduled rent increases, and the calculated straight-line rent income is recognized over the term of the individual leases. In accordance to ASC 842, we assess the collectability of lease receivables (including future minimum rental payments) both at commencement and throughout the lease term. If our assessment of collectability changes during the lease term, any difference between the revenue that would have been received under the straight-line method and the lease payments that have been collected will be recognized as a current period adjustment to rental revenue. Rental revenue associated with leases where collectability has been deemed less than probable is recognized on a cash basis in accordance with ASC 842.
Results of Operations (dollars in thousands)
Our consolidated results of operations are often not comparable from period to period due to the effect of property acquisitions and dispositions completed during the comparative reporting periods. Our Total Portfolio represents all of the properties owned during the reported periods. To eliminate the effect of changes in our Total Portfolio due to acquisitions, dispositions and other and to highlight the operating results of our on-going business, we have separately presented the results of our Same Store Portfolio and Acquisitions, Dispositions and Other.
For the years ended December 31, 2023, and 2022, we define the Same Store Portfolio as a subset of our Total Portfolio and includes properties that were wholly owned by us for the entire period presented. We define Acquisitions, Dispositions and Other as any properties that were acquired, sold, or held for development or repurposing during the period from January 1, 2022 through December 31, 2023.
The discussion of our Same Store Portfolio and our total portfolio for the comparison of the years ended December 31, 2022 and 2021 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 23, 2023.
Year Ended December 31, 2023, Compared to Year Ended December 31, 2022
The following table summarizes the results of operations for our Same Store Portfolio, our acquisitions, dispositions and other and total portfolio for the years ended December 31, 2023 and 2022 (dollars in thousands):
Same Store Portfolio
Acquisitions, Dispositions and Other
Total Portfolio
Year Ended December 31,
Change
Year Ended December 31,
Change
Year Ended December 31,
Change
$
%
$
%
$
%
Revenue:
Rental revenue
$ 166,405
$ 160,391
$ 6,014
3.7%
$ 33,355
$ 23,051
$ 10,304
44.7%
$ 199,760
$ 183,442
$ 16,318
8.9%
Management fee revenue and other income
-
-
-
-
(6 )
(6.4% )
(6 )
(6.4% )
Total revenues
166,405
160,391
6,014
3.7%
33,443
23,145
10,298
44.5%
199,848
183,536
16,312
8.9%
Property expenses
51,705
48,577
3,128
6.4%
10,837
8,024
2,813
35.1%
62,542
56,601
5,941
10.5%
Depreciation and amortization
92,891
95,312
(2,421 )
(2.5% )
General and administrative
14,904
15,939
(1,035 )
(6.5% )
Total operating expenses
170,337
167,852
2,485
1.5%
Other income (expense):
Interest expense
(38,278 )
(32,217 )
(6,061 )
18.8%
Earnings (loss) in investment of unconsolidated joint venture
-
(147 )
(100.0% )
Loss on extinguishment of debt
(72 )
(2,176 )
2,104
(96.7% )
Gain on sale of real estate
22,646
-
22,646
0%
(Appreciation) depreciation of warrants
-
1,760
(1,760 )
(100.0% )
Total other income (expense)
(15,704 )
(32,780 )
17,076
52.1%
Net income (loss)
$ 13,807
$ (17,096 )
$ 30,903
180.8%
Rental revenue: Rental revenue increased $16,318 to $199,760 for the year ended December 31, 2023 as compared to $183,442 for the year ended December 31, 2022. The increase was primarily related to a net increase in rental revenue from Acquisitions, Dispositions and Other of $10,304 and an increase of $6,014 from Same Store Portfolio primarily from an increase in rent income of $6,814 due to scheduled rent steps and leasing activities, an increase of $3,307 in tenant reimbursements, partially offset by a decrease in non-cash rent adjustments of $4,107 for the year ended December 31, 2023.
Property expenses: Property expenses increased $5,941 for the year ended December 31, 2023 to $62,542 as compared to $56,601 for the year ended December 31, 2022 primarily due to a net increase in expenses related to Acquisitions, Dispositions and Other of $2,813 and an increase of $3,128 from the Same Store Portfolio driven primarily by an increase in real estate taxes and operating expenses.
Depreciation and amortization: Depreciation and amortization expense decreased by $2,421 to $92,891 for the year ended December 31, 2023 as compared to $95,312 for the year ended December 31, 2022, primarily due to a net increase from Acquisitions, Dispositions and Other of $3,083, offset by a decrease of $5,504 for the Same Store Portfolio due to the full depreciation and amortization of certain assets during the year ended December 31, 2023.
General and administrative: General and administrative expenses decreased approximately $1,035 to $14,904 for the year ended December 31, 2023 as compared to $15,939 for the year ended December 31, 2022. The decrease is attributable primarily to decreased compensation and professional expenses of $1,099, a decrease in acquisition expenses of $120, partially offset by an increase in non-cash stock compensation of $362.
Interest expense: Interest expense increased by approximately $6,061 to $38,278 for the year ended December 31, 2023 as compared to $32,217 for the year ended December 31, 2022. The increase is primarily due to increased interest rates and outstanding borrowings under the KeyBank unsecured line of credit for the year ended December 31, 2023 compared to the year ended December 31, 2022. The schedule below is a comparative analysis of the components of interest expense for the years ended December 31, 2023 and 2022.
(In thousands)
Year Ended December 31,
Changes in accrued interest	
$
$ 2,248
Amortization of debt related costs	
2,184
2,163
Total change in accrued interest and amortization of debt related costs 	
3,168
4,411
Cash interest paid	
36,212
28,931
Capitalized interest	
(1,102 )
(1,125 )
Total interest expense	
$ 38,278
$ 32,217
Earnings (loss) in investment of unconsolidated joint venture: Earnings (loss) in investment of unconsolidated joint venture represents the Company’s pro-rata share of the net loss recognized by the former MIR JV, which was consolidated into the Company’s consolidated financial statements following the Company’s acquisition of the remaining 80% interest in the MIR JV from the MIR JV Partner on March 11, 2022.
Loss on extinguishment of debt: Loss on extinguishment of debt of $72 for the year ended December 31, 2023 was due to the partial repayment of the Transamerica Loan. Loss on extinguishment of debt of $2,176 for the year ended December 31, 2022 was due to the repayment of the JPMorgan Chase Loan.
Gain on sale of real estate: Gain on sale of real estate of $22,646 represents the gain realized on the sale of real estate for the year ended December 31, 2023. No sales of real estate occurred during the year ended December 31, 2022.
(Appreciation) depreciation of warrants: (Appreciation) depreciation of warrants represents the change in the fair market value of our common stock warrants. For the year ended December 31, 2022, the Company recorded depreciation of warrants of $1,760. During Q1 2022, all common stock warrants were fully exercised on a cash-less basis and no warrants remained outstanding as of December 31, 2023.
Supplemental Earnings Measures
Investors in and industry analysts following the real estate industry utilize supplemental earnings measures such as net operating income (“NOI”), earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”), funds from operations (“FFO”), core funds from operations (“Core FFO”) and adjusted funds from operations (“AFFO”) as supplemental operating performance measures of an equity REIT. Historical cost accounting for real estate assets in accordance with accounting principles generally accepted in the United States of America ("GAAP") implicitly assumes that the value of real estate assets diminishes predictably over time through depreciation. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors prefer to supplement operating results that use historical cost accounting with measures such as NOI, EBITDAre, FFO, Core FFO and AFFO, among others. We provide information related to NOI, EBITDAre, FFO, Core FFO and AFFO both because such industry analysts are interested in such information, and because our management believes NOI, EBITDAre, FFO, Core FFO and AFFO are important performance measures. NOI, EBITDAre, FFO, Core FFO and AFFO are factors used by management in measuring our performance. Neither NOI, EBITDAre, FFO, Core FFO or AFFO should be considered as a substitute for net income, or any other measures derived in accordance with GAAP. Neither NOI, EBITDAre, FFO, Core FFO or AFFO represents cash generated from operating activities in accordance with GAAP and neither should be considered as an alternative to cash flow from operating activities as a measure of our liquidity, nor is either indicative of funds available for our cash needs, including our ability to make cash distributions.
NOI
We consider net operating income, or NOI, to be an appropriate supplemental measure to net income in that it helps both investors and management understand the core operations of our properties. We define NOI as total revenue (including rental revenue and tenant reimbursements) less property-level operating expenses. NOI excludes depreciation and amortization, general and administrative expenses, impairments, gain/loss on sale of real estate, interest expense, and other non-operating items.
The following is a reconciliation from historical reported net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to NOI:
(In thousands) Year Ended December 31,
NOI:
Net income (loss)	 $ 13,807
$ (17,096 )
$ (15,267 )
General and administrative	
14,904
15,939
12,920
Depreciation and amortization	
92,891
95,312
70,642
Interest expense	
38,278
32,217
19,968
(Earnings) loss in investment of unconsolidated joint venture	
-
Loss on extinguishment of debt	
2,176
Gain on sale of real estate	
(22,646 )
-
(1,775 )
Appreciation (depreciation) of warrants	
-
(1,760 )
5,121
Management fee revenue and other income	
(88 )
(94 )
(348 )
NOI $ 137,218
$ 126,841
$ 92,634
EBITDAre
We define earnings before interest, taxes, depreciation and amortization for real estate in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). EBITDAre represents net income (loss), computed in accordance with GAAP, before interest expense, tax, depreciation and amortization, gains or losses on the sale of rental property, appreciation (depreciation) of warrants, loss on impairments, and loss on extinguishment of debt. We believe that EBITDAre is helpful to investors as a supplemental measure of our operating performance as a real estate company as it is a direct measure of the actual operating results of our industrial properties. The following table sets forth a reconciliation of our historical net income (loss) to EBITDAre for the periods presented:
(In thousands) Year Ended December 31,
EBITDAre:
Net income (loss)	 $ 13,807
$ (17,096 )
$ (15,267 )
Depreciation and amortization	
92,891
95,312
70,642
Interest expense	
38,278
32,217
19,968
Loss on extinguishment of debt	
2,176
Gain on sale of real estate	
(22,646 )
-
(1,775 )
Appreciation (depreciation) of warrants	
-
(1,760 )
5,121
EBITDAre $ 122,402
$ 110,849
$ 79,212
FFO and Core FFO
Funds from operations, or FFO, is a non-GAAP financial measure that is widely recognized as a measure of an REIT’s operating performance, thereby, providing investors the potential to compare our operating performance with that of other REITs. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. In December 2018, NAREIT issued a white paper restating the definition of FFO. The purpose of the restatement was not to change the fundamental definition of FFO, but to clarify existing NAREIT guidance. The restated definition of FFO is as follows: Net Income (calculated in accordance with GAAP), excluding: (i) Depreciation and amortization related to real estate, (ii) Gains and losses from the sale of certain real estate assets, (iii) Gain and losses from change in control, and (iv) 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. We define FFO, consistent with the NAREIT definition. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. Other equity REITs may not calculate FFO as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity and is not indicative of funds available for our cash needs, including our ability to pay dividends.
We calculate Core FFO by adjusting FFO for non-comparable items such as dividends paid (or declared) to holders of our preferred stock, acquisition and transaction related expenses for transactions not completed, and certain non-cash operating expenses such as impairment on real estate lease, appreciation/(depreciation) of warrants and loss on extinguishment of debt. We believe that Core FFO is a useful supplemental measure in addition to FFO by adjusting for items that are not considered by us to be part of the period-over-period operating performance of our property portfolio, thereby, providing a more meaningful and consistent comparison of our operating and financial performance during the periods presented below. As with FFO, our reported Core FFO may not be comparable to other REITs’ Core FFO, should not be used as a measure of our liquidity, and is not indicative of our funds available for our cash needs, including our ability to pay dividends.
The following table sets forth a reconciliation of our historical net income (loss) to FFO and Core FFO for the periods presented:
(In thousands)
Year Ended December 31,
FFO:
Net income (loss)	
$ 13,807
$ (17,096 )
$ (15,267 )
Gain on sale of real estate	
(22,646 )
-
(1,775 )
Depreciation and amortization	
92,891
95,312
70,642
Depreciation and amortization from unconsolidated joint venture	
-
1,539
FFO
$ 84,052
$ 78,484
$ 55,139
Preferred stock dividends	
(2,509 )
(4,866 )
(6,608 )
Acquisition expenses	
-
Appreciation (depreciation) of warrants	
-
(1,760 )
5,121
Loss on extinguishment of debt	
2,176
Core FFO
$ 81,700
$ 74,235
$ 54,175
AFFO
Adjusted funds from operations, or AFFO, is presented in addition to Core FFO. AFFO is defined as Core FFO, excluding certain non-cash operating revenues and expenses, capitalized interest and recurring capitalized expenditures. Recurring capitalized expenditures include expenditures required to maintain and re-tenant our properties, tenant improvements and leasing commissions. AFFO further adjusts Core FFO for certain other non-cash items, including the amortization or accretion of above or below market rents included in revenues, straight line rent adjustments, non-cash equity compensation and non-cash interest expense.
We believe AFFO provides a useful supplemental measure of our operating performance because it provides a consistent comparison of our operating performance across time periods that is comparable for each type of real estate investment and is consistent with management’s analysis of the operating performance of our properties. As a result, we believe that the use of AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance.
As with Core FFO, our reported AFFO may not be comparable to other REITs’ AFFO, should not be used as a measure of our liquidity, and is not indicative of our funds available for our cash needs, including our ability to pay dividends.
The following table sets forth a reconciliation of FFO attributable to common stockholders and unit holders to AFFO.
(In thousands)
Year Ended December 31,
AFFO:
Core FFO	
$ 81,700
$ 74,235
$ 54,175
Amortization of debt related costs	
2,184
2,163
1,605
Non-cash interest expense	
2,248
Stock compensation	
2,966
2,603
1,559
Capitalized interest	
(1,102 )
(1,125 )
-
Straight line rent	
(1,944 )
(3,682 )
(3,700 )
Above/below market lease rents	
(2,221 )
(3,151 )
(2,096 )
Recurring capital expenditures (1)
(5,743 )
(6,793 )
(8,767 )
AFFO
$ 76,824
$ 66,498
$ 42,967
_______________
(1) Excludes non-recurring capital expenditures of $30,366, $60,350 and $22,547 for the years ended December 31, 2023, 2022 and 2021, respectively.
Cash Flow
A summary of our cash flows for the years ended December 31, 2023 and 2022 are as follows:
(In thousands)
Year Ended December 31,
Net cash provided by operating activities	
$ 81,872
$ 72,228
Net cash used in investing activities	
$ (79 )
(252,357 )
Net cash (used in) provided by financing activities	
$ (86,802 )
$ 167,968
Operating activities: Net cash provided by operating activities for the year ended December 31, 2023 increased approximately $9,644 compared to the year ended December 31, 2022. The increase was primarily attributable to incremental operating cash flows from developments placed in service between Q1 2023 and Q4 2023 and Same Store properties.
Investing activities: Net cash used in investing activities for the year ended December 31, 2023 decreased approximately $252,278 compared to the year ended December 31, 2022 primarily due to a decrease in property acquisitions completed during the year ended December 31, 2023 totaling $0 as opposed to $197,085 during the year ended December 31, 2022, a decrease in capital expenditures of $20,743, partially offset by an increase in net proceeds from the sale of real estate of $34,450.
Financing activities: Net cash (used in) provided by financing activities for the year ended December 31, 2023 decreased $254,770 compared to the year ended December 31, 2023. The change was predominantly driven by a decrease of $8,714 in net proceeds from the issuance of common stock, a decrease in debt issuance costs of $1,743, a decrease of $1,685 in repurchase and extinguishment of Series A Preferred Stock, a decrease of $213,678 in net proceeds from secured and unsecured debt and the line of credit, offset by an increase of $1,963 in dividends paid, and an increase of $33,843 in redemption of preferred stock.
Liquidity and Capital Resources
We intend to make reserve allocations as necessary to aid our objective of preserving capital for our investors by supporting the maintenance and viability of properties we acquire in the future. If reserves and any other available income become insufficient to cover our operating expenses and liabilities, it may be necessary to obtain additional funds by borrowing, refinancing properties or liquidating our investments.
Our short-term liquidity requirements consist primarily of funds to pay for operating expenses and other expenditures directly associated with our properties, including:
• property expenses that are not borne by our tenants under our leases;
• principal and interest expense on outstanding indebtedness;
• general and administrative expenses; and
• capital expenditures for tenant improvements and leasing commissions.
We intend to satisfy our short-term liquidity requirements through our existing cash, cash flow from operating activities and the net proceeds of any potential future offerings.
Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions, recurring and non-recurring capital expenditures and scheduled debt maturities. We intend to satisfy our long-term liquidity needs through cash flow from operations, long-term secured and unsecured borrowings, future issuances of equity and debt securities, property dispositions and joint venture transactions, and, in connection with acquisitions of additional properties, the issuance of OP units.
As of December 31, 2023, we had available liquidity of approximately $220.8 million, comprised of $26.2 million in cash and cash equivalents and $194.6 million of borrowing capacity on our KeyBank unsecured line of credit. The Company anticipates it will have sufficient liquidity and access to capital resources to meet its current obligations and to meet any scheduled debt maturities.
Variable Interest Rates ($ in thousands)
We are exposed to market risk from changes in interest rates. Interest rate exposure relates primarily to the effect of interest rate changes on borrowings outstanding under our KeyBank line of credit and unsecured KeyBank Term Loans, which bear interest at a variable rate.
At December 31, 2023, we had $605,400 of outstanding variable rate debt. As of December 31, 2023, all our outstanding variable debt was fixed with interest rate swaps through maturity, with the exception of the KeyBank unsecured line of credit which had only $100,000 of its $155,400 balance fixed with interest rate swaps through maturity. The KeyBank unsecured line of credit was subject to a weighted average interest rate of 6.67% during the year ended December 31, 2023. Based on the variable rate borrowings for our KeyBank unsecured line of credit outstanding during the year ended December 31, 2023, we estimate that had the average interest rate on our weighted average borrowings increased by 25 basis points for the year ended December 31, 2023, our interest expense for the year would have increased by approximately $214. This estimate assumes the interest rate of each borrowing is raised by 25 basis points. The impact on future interest expense as a result of future changes in interest rates will depend largely on the gross amount of our borrowings at that time.
Existing Indebtedness as of December 31, 2023
The following is a schedule of our indebtedness as of December 31, 2023 ($ in thousands):
Loan
Outstanding
Balance
Interest rate at
December 31, 2023
Maturity Date
Secured debt:
Ohio National Life Mortgage	
$ 18,409
4.14%
August 1, 2024
Allianz Loan	
61,260
4.07%
April 10, 2026
Nationwide Loan	
14,948
2.97%
October 1, 2027
Minnesota Life Memphis Industrial Loan	
54,956
3.15%
January 1, 2028
Lincoln Life Gateway Mortgage	
28,800
3.43%
January 1, 2028
Midland National Life Insurance Mortgage	
10,665
3.50%
March 10, 2028
Minnesota Life Loan	
19,569
3.78%
May 1, 2028
Transamerica Loan	
59,357
4.35%
August 1, 2028
Total secured debt
$ 267,964
Unamortized debt issuance costs, net	
(1,174 )
Unamortized premium/(discount), net	
Secured debt, net
$ 266,887
Unsecured debt:
$100m KeyBank Term Loan	
100,000
3.10%(1)(2)
August 11, 2026
$200m KeyBank Term Loan	
200,000
3.13%(1)(2)
February 11, 2027
$150m KeyBank Term Loan	
150,000
4.50%(1)(2)
May 2, 2027
Total unsecured debt
$ 450,000
Unamortized debt issuance costs, net	
(2,010 )
Unsecured debt, net
$ 447,990
Borrowings under line of credit:
KeyBank unsecured line of credit	
155,400
6.62%(1)(3)
August 11, 2025
Total borrowings under line of credit
$ 155,400
________________________
(1) For the month of December 2023, the one-month term SOFR for our unsecured debt was 5.345% and the one-month term SOFR for our borrowings under line of credit was at a weighted average of 5.350%. The spread over the applicable rate for the $100m, $150m, and $200m KeyBank Term Loans and KeyBank unsecured line of credit is based on the Company’s total leverage ratio plus the 0.1% SOFR index adjustment.
(2) As of December 31, 2023, the one-month term SOFR for the $100m, $150m and $200m KeyBank Term Loans was swapped to a fixed rate of 1.504%, 2.904%, 1.527% respectively.
(3) As of December 31, 2023, $100m of the outstanding borrowings under the KeyBank unsecured line of credit was swapped to a fixed USD-SOFR rate at a weighted average of 4.754%.
2023 Debt Activity
On November 1, 2023, the Company repaid in full, the outstanding principal and interest balance of approximately $110,019 on the AIG Loan using proceeds from the KeyBank unsecured line of credit.
Stock Issuances ($ in thousands)
Universal Shelf S-3 Registration Statement
On June 11, 2021, the Company and Operating Partnership filed a shelf registration statement on Form S-3 (“2021 $750 Million S-3 Filing”) with the U.S. Securities and Exchange Commission (“SEC”) registering an aggregate of $750,000 of securities, consisting of an indeterminate amount of common stock, preferred stock, depository shares, warrants, rights to purchase our common stock and debt securities. As of December 31, 2023, the Company has $532,693 available for issuance under the 2021 $750 Million S-3 Filing.
ATM Program
On February 28, 2023, the Company entered into a distribution agreement with certain sales agents pursuant to which the Company may issue and sell, from time to time, shares of its common stock, with aggregate gross proceeds of $200,000 through an “at-the-market” equity offering program (the “2023 $200 Million ATM Program”). The 2023 $200 Million ATM Program replaced the previous $200 Million ATM program, which was entered on November 9, 2021 (“2021 $200 Million ATM Program”).
For the year ended December 31, 2023, the Company issued 2,200,600 shares of its common stock under the 2023 $200 Million ATM Program for aggregate net proceeds of approximately $49,465. The Company has approximately $149,292 available for issuance under the 2023 $200 Million ATM Program. No shares were issued under the 2021 $200 Million ATM Program for the year ended December 31, 2023.
Contractual Obligations and Commitments
The following table sets forth our obligations and commitments as of December 31, 2023:
(in thousands)
Payments Due by Period
Total
Thereafter
Principal payments - secured debt	
$ 267,964
$ 23,041
$ 4,810
$ 62,582
$ 17,486
$ 160,045
$ -
Principal payments - unsecured debt	
450,000
-
-
100,000
350,000
-
-
Principal payments - borrowings under line of credit	
155,400
-
155,400
-
-
-
-
Interest payments - secured debt	
34,651
9,774
9,093
7,332
6,328
2,124
-
Interest payments - unsecured debt	
65,920
16,110
16,110
16,110
14,818
2,772
-
Interest payments - borrowings under line of credit (1)
17,441
10,282
7,159
-
-
-
-
Office Leases	
5,934
1,243
1,497
Ground Leases (2)
8,382
7,356
Total Contractual Obligations
$ 1,005,692
$ 60,642
$ 193,636
$ 186,997
$ 389,620
$ 165,944
$ 8,853
____________________
(1) Interest payments for the $100m, $150m and $200m KeyBank Term Loans are calculated using a fixed rate of 1.504%, 2.904%, and 1.527%, respectively. Interest payments for the borrowings under line of credit for the balance that is swapped to a fixed rate is calculated using an interest rate of 4.754%. Interest payments for the borrowings under line of credit for the balance that is not swapped to a fixed rate is calculated using an interest rate of 7.000%.
(2) Includes two ground subleases with a lease term through the end of December 31, 2055. Lease term includes one, twenty year renewal option at a stated rent.
In addition to the contractual obligations set forth in the table above, we have entered into employment agreements with certain of our executive officers. As approved by the compensation committee of the Board of Directors the agreements provide for base salaries ranging from $300 to $600 annually with discretionary cash and stock performance awards. The agreements contain provisions for equity awards, general benefits, and termination and severance provisions, consistent with similar positions and companies.
We also enter into contracts for maintenance and other services at certain properties from time to time.
Off-Balance Sheet Arrangements
As of December 31, 2023, we have no off-balance sheet arrangements.
Inflation
Prior to 2021, the rate of inflation was low and had minimal impact on the performance of our industrial properties in the markets in which we operate, however, inflation has significantly increased during 2021 through 2023 and may remain at an elevated level or increase further. The majority of our leases are either triple net or provide for tenant reimbursement for costs related to real estate taxes and operating expenses. In addition, most of the leases provide for fixed rent increases. We believe that inflationary increases may be at least partially offset by the contractual rent increases and tenant payment of taxes and expenses described above. We do not believe that inflation has had a material impact on our historical financial position or results of operations.
Interest Rate Risk ($ in thousands)
The Company uses interest rate swap agreements as a derivative instrument to manage interest rate risk and is recognized on the consolidated balance sheets at fair value. As of December 31, 2023, all our outstanding variable rate debt was fixed with interest rate swaps through maturity with the exception of the balance of $55,400 under the KeyBank unsecured line of credit. We recognize all derivatives within the consolidated balance sheets at fair value. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income, which is a component of stockholders’ equity. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. As of December 31, 2023, the Company had entered into eight interest rate swap agreements.
The following table details our outstanding interest rate swaps as of December 31, 2023:
Interest Rate
SOFR Interest
Notional Value(1)
Fair Value(2)
Swap Counterparty
Trade Date
Effective Date
Maturity Date
Strike Rate
December 31, 2023
Capital One, N.A.
July 13, 2022
July 1, 2022
February 11, 2027
1.527%
$ 200,000
$ 12,539
JPMorgan Chase Bank, N.A.
July 13, 2022
July 1, 2022
August 8, 2026
1.504%
$ 100,000
$ 5,692
JPMorgan Chase Bank, N.A.
August 19, 2022
September 1, 2022
May 2, 2027
2.904%
$ 75,000
$ 1,723
Wells Fargo Bank, N.A.
August 19, 2022
September 1, 2022
May 2, 2027
2.904%
$ 37,500
$
Capital One, N.A.
August 19, 2022
September 1, 2022
May 2, 2027
2.904%
$ 37,500
$
Wells Fargo Bank, N.A.
November 10, 2023
November 10, 2023
November 1, 2025
4.750%
$ 50,000
$ (577)
JPMorgan Chase Bank, N.A.
November 10, 2023
November 10, 2023
November 1, 2025
4.758%
$ 25,000
$ (292)
Capital One, N.A.
November 10, 2023
November 10, 2023
November 1, 2025
4.758%
$ 25,000
$ (292)
_______________
(1) Represents the notional value of interest rate swaps effective as of December 31, 2023.
(2) As of December 31, 2023, the fair value of five of our interest rate swaps were in an asset position of approximately $21.7 million and the remaining three interest rate swaps were in a liability position of approximately $1.2 million.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2023, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
During the next twelve months, the Company estimates that an additional $15,368 will be reclassified as a decrease to interest expense. No assurance can be given that any future hedging activities by us will have the desired beneficial effect on our results of operations or financial condition.
Recently Issued Accounting Standards
We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 2 to our consolidated financial statements appearing in this annual report on Form 10-K, such standards will not have a material impact on our consolidated financial statements or do not otherwise apply to our operations.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
Response to this item is included in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information with respect to this Item 8 is hereby incorporated by reference from our Consolidated Financial Statements beginning on page of this Annual Report on Form 10-K.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

---

ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the forms and rules of the SEC and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
In connection with the preparation of this annual report on Form 10-K, our management, including the CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023. As a result of this evaluation, the CEO and CFO have concluded that our disclosure controls and procedures were effective as of December 31, 2023 to provide the reasonable assurance described above.
(b) Management’s Report on Internal Control Over Financial Reporting
The management of Plymouth Industrial REIT, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 using the criteria described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2023.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

---

ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
(a) None.
(b) None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarter ended December 31, 2023.

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information with respect to this Item 10 is incorporated by reference from our proxy statement, which we intend to file on or before April 29, 2024, in connection with our 2024 annual meeting of stockholders.

---

ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to this Item 11 is incorporated by reference from our proxy statement, which we intend to file on or before April 29, 2024, in connection with our 2024 annual meeting of stockholders.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
Information with respect to this Item 12 is incorporated by reference from our proxy statement, which we intend to file on or before April 29, 2024, in connection with our 2024 annual meeting of stockholders.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Information with respect to this Item 13 is incorporated by reference from our proxy statement, which we intend to file on or before April 29, 2024, in connection with our 2024 annual meeting of stockholders.

---

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTING FEES AND EXPENSES
Information with respect to this Item 14 is incorporated by reference from our proxy statement, which we intend to file on or before April 29, 2024, in connection with our 2024 annual meeting of stockholders.
PART IV

---

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
See Index to Consolidated Financial Statements set forth on page of this Form 10-K as filed as part of this Annual Report on Form 10-K.
(b) Financial Statement Schedule
Financial Statement Schedule III as listed in the accompanying Index to Consolidated Financial Statements is filed as part of this Annual Report on Form 10-K.
(c) Exhibits
The exhibits listed in the Exhibit Index are filed as part of this Annual Report on Form 10-K.
EXHIBIT INDEX
Exhibit
Number
Description
3.1
Second Articles of Amendment and Restatement of Plymouth Industrial REIT, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 (File No. 333-196798) filed on September 11, 2014)
3.2
Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 333-173048) filed on September 10, 2014)
3.3
Articles of Amendment of Plymouth Industrial REIT, Inc. (incorporated by reference to Exhibit 3.3 to Amendment No. 8 to the Company’s Registration Statement on Form S-11 (File No. 333-19748) filed on June 1, 2017)
4.1
Description of Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K (File No. 001-38106) filed on February 27, 2020)
4.2
Third Amended and Restated 2014 Incentive Award Plan*†
4.3
Restricted Stock Agreement (Employee) (incorporated by reference to Exhibit 4.3 to the Company's Registration Statement on Form S-8 (File No. 333-251104) filed on December 3, 2020)†
4.4
Restricted Stock Agreement (Director) (incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 (File No. 333-251104) filed on December 3, 2020)†
10.1
Amended and Restated Agreement of Limited Partnership of Plymouth Industrial OP, LP (incorporated by reference to Exhibit 10.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 (File No. 333-196798) filed on September 11, 2014)
10.2
Amended and Restated Employment Agreement with Jeffrey E. Witherell, dated as of June 19, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-381061) filed on June 24, 2019)†
10.3
Form of Indemnification Agreement between Plymouth Industrial REIT, Inc. and its directors and officers (incorporated by reference to Exhibit 10.6 to Amendment No. 6 to the Company’s Registration Statement on Form S-11 (File No. 333-196798) filed on May 22, 2017)†
10.4
Limited Liability Company Agreement of Plymouth Industrial 20 LLC (incorporated by reference to Exhibit 10.7 to Amendment No. 4 to the Company’s Registration Statement on Form S-11 (File No. 333-196798) filed on March 29, 2017)
10.5
Loan Agreement, dated as of July 10, 2018, by and among Transamerica Life Insurance Company and the Borrowers named therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-38106) filed on July 17, 2018)
10.6
Second Amended and Restated Credit Agreement, dated as of October 8, 2020, by and among Plymouth Industrial OP, LP, the Guarantors from time to time party thereto, KeyBank National Association and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-38106) filed on October 9, 2020
10.7
First Amendment to Second Amended and Restated Credit Agreement, dated as of August 11, 2021, by and among Plymouth Industrial OP, LP, the Guarantors, KeyBank National Association and the other Lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-38106) filed on August 17, 2021
10.8
Term Loan Agreement, dated as of August 11, 2021, by and among Plymouth Industrial OP, LP, the Guarantors from time to time party thereto, KeyBank National Association and the other Lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-38106) filed on August 17, 2021
10.9
Distribution Agreement, dated as of February 28, 2023, by and among Plymouth Industrial REIT, Inc., Plymouth Industrial OP, LP and the Agents party thereto (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K (File No. 001-38106) filed on February 28, 2023)
10.10
Employment Agreement with Anthony Saladino, dated as of February 23, 2022 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-381061) filed on February 23, 2022)†
10.11
Second Amendment, Increase and Joinder Agreement to Second Amended and Restated Credit Agreement, dated as of May 2, 2022, by and among Plymouth Industrial OP, LP, the Guarantors from time-to-time party thereto, KeyBank National Association and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-381061) filed on May 4, 2022)
10.12
First Amendment and Joinder to Term Loan Credit Agreement, dated as of May 2, 2022, by and among Plymouth Industrial OP, LP, the Guarantors from time-to-time party thereto, KeyBank National Association and the other Lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (File No. 001-381061) filed on May 4, 2022)
10.13
Amendment No. 1 to Distribution Agreement, dated as of May 9, 2023, by and among Plymouth Industrial REIT, Inc., Plymouth Industrial OP, LP and the Agents party thereto (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K (File No. 001-38106) filed on May 9, 2023).
19.1
Plymouth Industrial REIT, Inc. Insider Trading Policy*
21.1
List of Subsidiaries*
23.1
Consent of Pricewaterhouse Coopers LLP*
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002*
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002*
97.1
Plymouth Industrial REIT, Inc. Incentive Based Compensation Recoupment Policy*
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.*
101.XSD
Inline XBRL Taxonomy Extension Schema Document*
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document*
Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit
________________
* Filed herewith.
† Management contract or compensation plan or arrangement.