Steve Chick's questions to Modiv Industrial Inc (MDV) leadership • Q3 2024
Question
Steve Chick asked for more detail on the tabled JV transaction, questioning why the counterparty would walk away from a deal that appeared to be materially accretive and beneficial for both sides.
Answer
CEO Aaron Halfacre clarified that the obstacle was a lack of certainty regarding the acquisition terms for the second half of the JV portfolio. While the initial tranche was accretive, he was unwilling to risk being forced into unfavorable terms on the remainder, especially in a volatile rate environment. He explained the counterparty, an institutional fund, desired a rapid closing that would have forced Modiv to sell core assets at a potentially inopportune time. Mr. Halfacre stressed that he chose to prioritize long-term value preservation and avoid 'existential risk' over closing a deal simply to gain size.