Plymouth Industrial REIT's $24.10 Takeover Offer: A Value-Unlocking Opportunity Amid Strategic Growth

Plymouth Industrial REIT (PLYM) has long been a poster child for disciplined capital allocation in the industrial real estate sector. With its recent $24.10 takeover offer, the company now stands at a crossroads: Is this a fair valuation of its undervalued asset base and growth potential, or does it represent a missed opportunity to capitalize on its scalable platform? Let's dissect the numbers, the strategy, and the market's current sentiment to determine whether shareholders should accept the bid or push for a higher price—or even a standalone growth narrative.

The Asset Base: A Strong Foundation Underappreciated

PLYM's industrial portfolio is a fortress of stability. As of June 30, 2025, the company owns 148 properties across 11 states, totaling 32.1 million rentable square feet. Its recent acquisitions—$204.7 million spent on 22 buildings with an average 6.7% net operating income (NOI) yield—underscore its focus on high-quality, cash-generative assets. The $1,685.32 million gross real estate value, net of $291.87 million in depreciation, leaves a $1,393.45 million asset base that's already producing 94.6% occupancy.

But here's the kicker: The takeover offer of $24.10 implies a share price that's 64% above PLYM's current trading level of $14.64 (as of August 18, 2025). Yet, the company's 2025 guidance for Core FFO per share ($1.85–$1.89) and same-store NOI growth of 6.0–6.5% suggests a forward yield of just 7.8–8.0% at the offer price. That's a stark contrast to the 6.7% average yield on its recent acquisitions. In other words, the market is valuing PLYM's existing assets at a discount to the returns it's generating today.

Re-Leasing Potential: A Hidden Catalyst

PLYM's leasing activity in Q2 2025 was nothing short of robust. It secured 1,453,757 square feet of new leases with a 10.0% cash rent increase, driven by 9.0% spreads on renewals and 14.0% on new leases. Through August 4, 2025, it had already locked in 5.9 million square feet of 2025 commencements with a 13.6% rent hike. These figures highlight a powerful re-leasing story: As tenants roll over, PLYM can push higher rents, directly boosting NOI and asset value.

Consider this: If the company's 26.1 million square feet of same-store space achieves even a 5% annual rent increase, that would add $13 million to annual NOI. At a 6.7% cap rate, that translates to a $194 million re-rating of the asset base—enough to justify a $26–$27 share price. Yet the takeover offer sits at $24.10, leaving room for upside if the market underestimates PLYM's ability to monetize its re-leasing power.

The Strategic Rationale: Why a Higher Bid Makes Sense

The $24.10 offer may seem generous at first glance, but it fails to account for PLYM's disciplined capital deployment. The company's $278.1 million credit line and $11.7 million cash balance give it flexibility to fund further acquisitions or return capital to shareholders. Its recent repurchase of 1.26 million shares at $16.23—well below the offer price—shows management's confidence in the stock's undervaluation.

Moreover, PLYM's enterprise value of $1.48 billion (including $822 million in net debt) implies a leverage ratio of 56% of total assets. That's conservative for a REIT, suggesting the company could take on more debt to fund growth without overleveraging. A strategic buyer might pay a premium to access PLYM's scalable platform and its ability to deploy capital at 6.7% yields—a rarity in today's high-interest-rate environment.

The Verdict: Push for a Higher Bid or Bet on Standalone Growth?

For shareholders, the decision hinges on two questions: Is the $24.10 offer a floor or a ceiling? And does PLYM have the staying power to outperform as a standalone entity?

The answer to both is a resounding “yes.” The company's 94.6% occupancy, 6.7% same-store NOI growth, and 13.6% re-leasing rent spreads paint a picture of a REIT that's not just surviving but thriving in a competitive market. Its disciplined approach—focusing on high-yield acquisitions, tenant retention, and capital efficiency—positions it to outperform in a sector where cap rates are tightening.

If I were a shareholder, I'd be pushing for a higher bid. The $24.10 offer is a 64% premium to the current price, but it's still a 20% discount to the intrinsic value implied by PLYM's asset base and growth trajectory. A standalone story is also compelling: With $278 million in credit capacity and a 1.13 beta (slightly more volatile than the market), PLYM has the tools to drive long-term value creation.

In the end, this isn't just about the numbers—it's about recognizing a company that's built a fortress of industrial assets in a sector where demand is only going up. Whether through a higher bid or a standalone play, Plymouth Industrial REIT is a name worth watching.