Plymouth Industrial REIT, Inc. PLYM recently announced its activity update for the fourth quarter of 2024, highlighting strong rental growth, strategic portfolio expansion and closing of the Sixth Street Joint Venture.
Plymouth’s Leasing and Portfolio Performance
Plymouth’s leasing activity during the fourth quarter totaled 1,467,245 square feet, comprising 1,042,732 square feet of renewal leases and 424,513 square feet of new leases. Rental rates soared, with a 19.5% increase on a cash basis, showcasing the strength of Plymouth’s portfolio and tenant demand. New leases achieved a staggering 33% increase in rental rates, while renewals grew by 12.4%.
For 2024 as a whole, Plymouth executed leases totaling 5.8 million square feet, representing 71.4% of 2024 expiring leases. Cash rental rates increased 17.3%, driven by a 28.2% rise in new leases. These results underline Plymouth’s ability to capture higher rents. While same-store occupancy came in at 95.7% as of Dec 31, 2024, total portfolio occupancy was 92.5% by year-end and reflected a 110-basis-point (bps) negative impact from prior disclosed tenancy issues in Cleveland.
Plymouth has reached an agreement on a two-year lease for its 769,500-square-foot Class A industrial facility in the Metro East submarket of St. Louis, MO. The lease covers 600,000 square feet in the first year and 450,000 square feet in the second year with a leading global logistics service provider. The company anticipates signing the lease in January, with commencement slated to follow upon execution.
PLYM: Strategic Acquisitions and Sixth Street Joint Venture
In a strategic move, Plymouth expanded its portfolio with the acquisition of a nine-building industrial property portfolio in Cincinnati, OH, for $20.1 million, equating to an expected initial NOI yield of 6.8%. The properties, currently 96.9% leased to 23 tenants, align with Plymouth’s focus on small-bay industrial properties that cater to diverse tenant needs. A second tranche of this portfolio, under contract for $17.9 million with an anticipated yield of 7.3%, is expected to close in the first quarter of 2025. These acquisitions bolster Plymouth’s presence in high-demand markets and contribute to stable income streams.
Moreover, in November, Plymouth completed the contribution of 100% of its equity stake in directly and indirectly wholly owned subsidiaries owning 34 properties in and around the Chicago MSA to Isosceles JV, LLC, an affiliate of Sixth Street Partners, LLC. This was done for a total purchase price of $356.6 million.
Final Thoughts on PLYM Stock
Plymouth, with its opportunistic acquisitions and healthy leasing activity, is well-positioned to benefit over the long term. However, broader market concerns and the elevated supply of industrial real estate are key concerns.
Shares of Plymouth, currently carrying a Zacks Rank #4 (Sell), have plunged 12.6% in the past month compared with the industry’s decline of 7.7%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Cousins Properties CUZ and SL Green Realty SLG, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cousins Properties’ 2024 FFO per share has been raised marginally over the past two months to $2.68.
The Zacks Consensus Estimate for SL Green’s 2024 FFO per share has risen marginally over the past month to $7.83.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
