PLYM is a Boston-based vertically-integrated, self-administered and self-managed real estate investment trust. The company specializes in acquisitions, ownership, and management of single and multi-tenant Class B industrial properties. Class B refers to buildings that are older than Class A, and are not as well located. However, Class B buildings still have good quality management and tenants.
Properties owned by Plymouth REIT include distribution centers, warehouses, and light industrial properties, located in secondary and select primary markets across the United States.
The company intends to maintain its focus on acquiring Class B properties with a bias towards secondary markets and properties with net rentable square footage ranging from 100 million to 300 million square feet. The company believes these properties offer better cash flows at lower acquisition costs when compared to industrial properties in primary markets. Furthermore, the company sees a greater potential for higher rates of appreciation for properties in its target market as opposed to properties in primary markets.
When searching for new properties, Plymouth favors single-tenant industrial properties with below-market rents and near-term lease expirations that have a high likelihood of renewal at market rates. The company also focuses on multi-tenant industrial properties that could benefit from value-added management.
Financials & Distribution
For the quarter ended March 31, 2017, the company reported a pro forma operating loss of $127,000, up from a loss of $2.11 million in 2016. Adjusted funds from operations grew to $76,000 from a loss of $29.82 million in 2016.
For full-year 2016, Plymouth reported an operating loss of $1.46 million after an operating loss of $5.37 million in 2015. In 2016, the company generated $220,000 from operating activities after using $4.35 million in 2015.
The company intends to pay a regular quarterly cash dividend of all or substantially all of its REIT taxable income excluding net capital gains. It expected its dividend to represent a yield of approximately 7.5%, based on the midpoint price of $20, but it will now be slightly higher than that based on the $19/share pricing. Plymouth plans to maintain the distribution rate for 12 months after the IPO. The company doesn’t plan to reduce the expected dividend per share if underwriters exercise their option to purchase additional shares, but it may be required to borrow funds to pay dividends in that situation.
Plymouth’s dividend estimate is based on pro forma operating results, meaning actual distributions may differ from the initial distribution rate.