Modiv Industrial's Q4 2024: Unraveling Contradictions on Costco Asset Sales, Lease Options, and Acquisition Strategy
Tuesday, Mar 4, 2025 5:02 pm ET
4min read These are the key contradictions discussed in Modiv Industrial's latest 2024Q4 earnings call, specifically including: Costco Asset Sale Timeline, Fujifilm Lease Option Exercise, Acquisition Strategy and the JV, and the Timing and Status of the Sale of the Costco Asset:
Earnings and Revenue Trends:
- Modiv Industrial reported revenue of $11.7 million for Q4 2024 and adjusted funds from operations (AFFO) of $4.1 million.
- The revenue was down from the previous quarter, reflecting the impact of two properties sold in the first quarter and the upcoming expiration of leases for some properties.
- The company's AFFO exceeded analyst estimates by $0.08 per share.
Investment and Acquisition Strategy:
- The company has been cautious with acquisitions, reducing its revolver size from $150 million to $30 million to focus on strategic timing and opportunities.
- This strategy is driven by the desire to avoid excessive leverage and to ensure that any acquisitions align with long-term growth objectives.
- Modiv Industrial is open to potential portfolio acquisitions but remains patient and selective, awaiting more favorable market conditions.
Portfolio Performance and Liquidity:
- Modiv Industrial's annualized base rent (ABR) from 43 properties totaled $39.6 million, with an attractive weighted average lease term of 13.8 years.
- The company maintained $11.5 million in cash and cash equivalents, alongside $280 million in debt outstanding.
- This balance includes a $30 million availability on its revolver, which has been reduced to focus on short-term liquidity needs rather than long-term growth.
Dividend and Financial Outlook:
- The company declared a cash dividend of $0.0975 per share for the months of January, February, and March 2025, representing an annualized dividend rate of $1.17 per share.
- This dividend represents a yield of 7.5% based on the closing price of the common stock as of March 3, 2025.
- The dividend reflects the company's continued focus on maintaining a strong financial position and returning value to shareholders.
Earnings and Revenue Trends:
- Modiv Industrial reported revenue of $11.7 million for Q4 2024 and adjusted funds from operations (AFFO) of $4.1 million.
- The revenue was down from the previous quarter, reflecting the impact of two properties sold in the first quarter and the upcoming expiration of leases for some properties.
- The company's AFFO exceeded analyst estimates by $0.08 per share.
Investment and Acquisition Strategy:
- The company has been cautious with acquisitions, reducing its revolver size from $150 million to $30 million to focus on strategic timing and opportunities.
- This strategy is driven by the desire to avoid excessive leverage and to ensure that any acquisitions align with long-term growth objectives.
- Modiv Industrial is open to potential portfolio acquisitions but remains patient and selective, awaiting more favorable market conditions.
Portfolio Performance and Liquidity:
- Modiv Industrial's annualized base rent (ABR) from 43 properties totaled $39.6 million, with an attractive weighted average lease term of 13.8 years.
- The company maintained $11.5 million in cash and cash equivalents, alongside $280 million in debt outstanding.
- This balance includes a $30 million availability on its revolver, which has been reduced to focus on short-term liquidity needs rather than long-term growth.
Dividend and Financial Outlook:
- The company declared a cash dividend of $0.0975 per share for the months of January, February, and March 2025, representing an annualized dividend rate of $1.17 per share.
- This dividend represents a yield of 7.5% based on the closing price of the common stock as of March 3, 2025.
- The dividend reflects the company's continued focus on maintaining a strong financial position and returning value to shareholders.
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