Executive Summary

Core FFO per share declined to $0.44 vs $0.48 in Q2 and $0.46 in Q3’23 as tenant issues (two evictions in Cleveland), the July St. Louis vacancy, and higher interest expense offset Memphis NOI; management lowered FY24 Core FFO guidance to $1.83–$1.85 from $1.88–$1.90 and cut SS NOI growth to 5.0%–5.25% from 7.0%–7.5% .
Revenue grew 4.2% YoY to $51.9M, but GAAP EPS swung to a $(0.35) loss on a $14.7M “loss on financing transaction” tied to the Sixth Street preferred/warrants and elevated non-recoverable costs in Cleveland; AFFO per share fell to $0.40 .
Balance sheet/liquidity improved with a refinanced/upsized unsecured credit facility (revolver to $500M; aggregate capacity $1.5B) and a strategic Sixth Street partnership providing up to $500M for acquisitions; net debt/Adj. EBITDA was 6.6x (7.1x incl. preferred) at Q3-end .
2025 setup: Development now 100% leased; Memphis portfolio bought at 8.0% initial yield; leasing spreads solid (12.2% blended in Q3; 17.2% YTD on 2024 commencements through Nov. 4), with management focused on re-leasing St. Louis and Cleveland and deploying new capital—key stock catalysts into 2025 .

What Went Well and What Went Wrong

What Went Well
- Strategic capital and liquidity: Sixth Street JV/preferred provides ~$500M to pursue acquisitions; unsecured credit capacity lifted to $1.5B (revolver $500M; term loan recast) . Quote: “I view this as transformative…We…sourced capital for up to $500 million in acquisitions…[and] enhanced our borrowing capacity” .
- Growth investments and pipeline: Closed $100.5M Memphis portfolio at 8.0% initial NOI yield; development program (772.6K sf) reached 100% leased; pursuit pipeline exceeds 11M sf/$1B .
- Leasing economics: Q3 commenced leases showed +12.2% blended cash spreads (renewals +9.1%, new +15.7%); through Nov. 4, 2024 commencements reflect +17.2% blended cash spread .
What Went Wrong
- Tenant credit events and non-recurring costs: Two Cleveland evictions drove SS NOI pressure (cash +0.6% YoY; GAAP −1.2% YoY) and ~$(0.5)M cleanup; occupancy fell to 94.2% with St. Louis vacancy hitting −230 bps .
- Earnings deleverage near-term: Core FFO/share slipped to $0.44; AFFO/share to $0.40, with higher interest expense from Memphis funding and reduced GAAP rent adjustments; FY24 Core FFO guidance cut to $1.83–$1.85 .
- Financing mark-to-market hit to GAAP EPS: $(0.35) GAAP loss per share included $(14.7)M “loss on financing transaction” from accounting for the Sixth Street preferred/warrants/forward .

Financial Results

Metric	Q3 2023	Q2 2024	Q3 2024
Total Revenues ($M)	$49.8	$48.7	$51.9
Net Income (Loss) per Share (GAAP)	$0.17	$0.03	$(0.35)
Core FFO per Share	$0.46	$0.48	$0.44
AFFO per Share	$0.42	$0.49	$0.40
NOI ($M)	$34.0	$35.1	$34.1
EBITDAre ($M)	$30.7	$31.2	$30.9
Vs. S&P Global Consensus	N/A	N/A	N/A

Note: S&P Global consensus estimates were unavailable at the time of analysis, so “vs. estimates” is not shown.

KPIs

KPI	Q3 2023	Q2 2024	Q3 2024
Same-Store NOI YoY (GAAP, excl. term fees)	N/A	+3.3%	−1.2%
Same-Store NOI YoY (Cash, excl. term fees)	N/A	+9.7%	+0.6%
Total Portfolio Occupancy	N/A	97.0%	94.2%
Qtr. Leasing Cash Spread (Blended)	N/A	+18.8%	+12.2%
2024 Exec. Leases Cash Spread (through Nov. 4)	N/A	+15.7%	+17.2%
Net Debt / Annualized Adj. EBITDA	6.7x	6.4x	6.6x
Net Debt + Preferred / Annualized Adj. EBITDA	6.7x	6.4x	7.1x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core FFO / Share	FY 2024	$1.88–$1.90	$1.83–$1.85	Lowered (−$0.05 at midpoint)
Same-Store NOI Growth (Cash)	FY 2024	7.0%–7.5%	5.0%–5.25%	Lowered
Avg. Same-Store Occupancy	FY 2024	97.5%–98.0%	97.0%–97.5%	Lowered
G&A Expense	FY 2024	$15.4M–$15.0M	$15.0M–$14.6M	Slightly Lower
Net Interest Expense (net)	FY 2024	$40.25M–$39.75M	$38.25M–$37.75M	Lower (reflecting changes incl. JV)
Wtd. Avg. Shares & Units	FY 2024	45.88M	45.88M	Maintained
Net Income per Share	FY 2024	$0.10–$0.12	$2.99–$3.01 (incl. Chicago JV gain)	Raised (due to JV gain)
Dividend / Share (Quarterly)	Q3 2024	$0.24 (run-rate)	$0.24 declared	Maintained

Management cited delayed lease commencements (Chicago/Cleveland), non-recoverable vacancy charges, transitory vacancy across five buildings, and impacts from the Sixth Street transaction as drivers of the guidance reduction .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Capital & Liquidity	Fix >90% debt; operate ~6x net debt/EBITDA; consider accretive dispositions; active acquisition pipeline	Sixth Street JV/preferred “transformative”; unsecured capacity to $1.5B; focus on leasing/capital deployment	Strengthened capital stack; more dry powder
Tenant Health & Evictions	Watchlist tenants; fixed-rate renewals temper early-year spreads; St. Louis known move-out	Two Cleveland evictions (one abrupt); ~$0.5M cleanup; backfilling underway; St. Louis vacancy drove occupancy drop	Short-term earnings drag; remediation plans in place
Leasing & Spreads	Q1 blended +17.1%; Q2 +18.8%	Q3 blended +12.2%; 2024 executeds +17.2%; ~3% annual escalators; some election-related decision delays	Healthy spreads; timing noise
St. Louis Lease-up	Marketing to manufacturers/logistics; proposal structures discussed	One of two >500K sf viable options; confidence in landing a prospect; flexible structuring	Improving competitive position
Acquisitions & Markets	Early unlocking of transaction market; focus on accretive growth	Memphis at 8% yield; Cincinnati portfolio under contract; pipeline 11M sf/$1B; possible Texas entry	Active pipeline with capital to deploy
Tax/Local Incentives	—	Chicago “6B” status application to reduce taxes and aid lease-up at 16801 Exchange	Proactive value enhancement

Management Commentary

CEO tone and strategy: “I view this as transformative…we put a valuation marker on our largest portfolio…and sourced capital for up to $500 million in acquisitions…Our focus…is on our leasing opportunities and putting the capital to work” .
On tenant issues: “This was something that came up very swift…It’s not a portfolio-wide issue…we’re backfilling…very quickly” .
On 2025 growth: “I do believe that there is significant growth ahead…Memphis…8% yield…probably gets us to a 10% yield in 2–3 years…Cincinnati…similar metrics” .
From the release: “The one-time impact from two tenants we were forced to evict weighed heavily on same-store NOI, occupancy and earnings this quarter…we expect to exit 2024 with the right velocity” .

Q&A Highlights

Cleveland evictions: Details on two tenants (one abrupt shutdown; one non-viable business with ~$0.5M removal costs). Company pursuing legal remedies; backfill prospects identified .
St. Louis market dynamics: PLYM’s building is one of only two viable >500K sf options; confidence in winning a tenant; pricing and hazards narrowed competing options .
Memphis portfolio: Known Accredo Health space transition and asset repositioning (office-heavy asset under contract for sale); CTDI one-year extension likely to go longer based on customer contract .
Run-rate clarification: Analyst read Q4 Core FFO exit run-rate around $0.47–$0.48 implied by guidance bridge; management affirmed interpretation and called out $0.5M one-time cleanup impact .
Macro/Timing: Leasing decision-making slowed ahead of election; signs of pickup expected post-election; continued focus on transitory vacancy commencements in early Q1’25 .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2024 and forward was unavailable at time of analysis; as a result, “vs. estimates” comparisons are not shown. PLYM does not guide quarterly FFO/EPS; FY24 Core FFO guidance was reduced to $1.83–$1.85, implying analysts may trim 2H and 2025 run-rate assumptions moderately .
Focus areas for estimate revisions: near-term occupancy/SS NOI trajectory (Cleveland/St. Louis), interest expense post-JV, timing of lease commencements, and incremental NOI from Memphis/Cincinnati .

Key Takeaways for Investors

Near-term earnings drag is identifiable and transient: Q3 Core FFO dip reflects two Cleveland evictions, St. Louis vacancy, and funding costs; remediation and backfill plans are in motion .
2025 growth setup is improving: Development fully leased, Memphis at 8% initial yield with mark-to-market, Cincinnati under contract, and a robust pipeline backed by ~$500M Sixth Street capital .
Balance sheet flexibility enhanced: New $500M revolver and extended maturities increase liquidity; net debt/Adj. EBITDA at 6.6x (7.1x incl. preferred) leaves room to deploy capital prudently .
Leasing spreads remain healthy: Q3 blended +12.2% and YTD 2024 +17.2% should support SS NOI as transitory vacancy commences; watch timing cadence into early 2025 .
Key catalysts: Lease-up of St. Louis (>500K sf user), resolution/backfill of Cleveland spaces, closing of Chicago JV (gain realization), and incremental M&A (Memphis/Cincinnati, potential Texas) .
Dividend appears supported by AFFO, though sequential AFFO softness bears watching as re-leasing ramps; Q3 dividend of $0.24/share maintained .
Risk checks: Tenant credit (SMB exposure), timing of lease commencements (election/decision lags), and potential dilution from Sixth Street warrants (company has net-settlement option) .

Plymouth Industrial REIT, Inc. (PLYM)·Q3 2024 Earnings Summary