Item 7.01 Regulation FD Disclosure
On January 6, 2022 INDUS Realty Trust, Inc. (“INDUS” or the “Company”) issued a
press release announcing the following updates on leasing, its acquisition and
development pipeline, its potential dispositions and Corporate updates.
Industrial/Logistics Leasing Activity
During the three months ended December 31, 2021 (the “2021 fourth quarter”),
INDUS entered into two first generation leases totaling approximately 224,000
square feet. These leases include approximately 27,000 square feet in Orlando,
Florida at a property that was repositioned by INDUS during late 2020 and early
2021 and approximately 197,000 square feet at a value-add property in the
Charlotte market which was purchased 50% vacant at the end of the 2021 second
quarter. The lease in Orlando commenced in the 2021 fourth quarter and the lease
in Charlotte is expected to commence by the end of the 2022 first quarter.
Also during the 2021 fourth quarter, two full-building tenants totaling
approximately 256,000 square feet exercised their fixed renewal options for
leases expiring in 2022. The buildings were acquired in 2021 with in-place
leases that had near-term expirations. The buildings comprise approximately
128,000 square feet in Charlotte, North Carolina (see Township Acquisition under
“Acquisition Pipeline” below) and approximately 128,000 square feet in the
Lehigh Valley, Pennsylvania market. The fixed renewal options were for five-year
terms with no leasing costs and generated weighted average rent growth on a cash
basis1 of 2.9%, which is significantly lower than what the Company would expect
to realize if the spaces were leased to new tenants.
As of December 31, 2021, INDUS’s 35 industrial/logistics buildings aggregated
approximately 5.2 million square feet. INDUS’s industrial/logistics portfolio’s
percentage leased and percentage leased of stabilized properties2 were as
Dec. 31, Sept. 30, June 30, Mar. 31, 2021 2021 2021 2021 Percentage Leased 98.4% 95.4% 95.3% 99.2%
Percentage Leased – Stabilized Properties 100.0% 99.4% 99.4% 99.2%
As of December 31, 2021, INDUS’s only industrial/logistics vacancy reflects
approximately 84,000 square feet in a Charleston, South Carolina property
acquired on November 12, 2021 (see Charleston Acquisition under “Acquisition
On October 12, 2021, INDUS completed the acquisition of a fully leased,
approximately 128,000 square foot industrial/logistics building in Charlotte,
North Carolina (the “Township Acquisition”). The Company used cash on hand to
pay the $14.6 million purchase price, before transaction costs, which equates to
an in-place cash capitalization rate of approximately 4.6%.
On November 12, 2021, INDUS completed the acquisition of a 57%-leased,
approximately 197,000 square foot industrial/logistics building in Charleston,
South Carolina (the “Charleston Acquisition”), the Company’s first property in
the Charleston market. The Company used cash on hand to pay the $28.6 million
purchase price, before transaction costs, and the Company expects that the
Charleston Acquisition will stabilize at an approximately 4.6% cash
During the 2021 fourth quarter, INDUS entered into three separate agreements to
acquire, for a combined purchase price of $72.8 million, before transaction
costs, two industrial/logistics buildings in the Charlotte, North Carolina
market and one industrial/logistics building in the Charleston, South Carolina
The first agreement is for an approximately 217,000 square foot, recently
constructed industrial/logistics building (the “Charlotte Acquisition”) for a
? purchase price of $23.6 million, before transaction costs. The Charlotte
Acquisition has a short-term lease in-place and INDUS expects to close on the
purchase during the first quarter of 2022.
The second agreement is for a to-be-constructed, approximately 231,000 square
foot industrial/logistics building (the “Charlotte Forward Acquisition”) which
is being developed on speculation by the seller. The Charlotte Forward
? Acquisition is expected to be delivered vacant upon completion in the first
quarter of 2023. The purchase price for the Charlotte Forward Acquisition is
approximately $21.2 million, before transaction costs, and INDUS expects to
acquire the land in 2022, and to fund portions of the building’s development
during 2022 and into the first quarter of 2023.
The third agreement is for a to-be-constructed, approximately 263,000 square
foot industrial/logistics building in the Charleston, South Carolina market
(the “Charleston Forward Acquisition”) for a purchase price of $28.0 million,
? before transaction costs. The Charleston Forward Acquisition is being developed
on speculation by the seller and the building is expected to be completed in
the 2022 fourth quarter, at which time INDUS expects to complete the
Also during the 2021 fourth quarter, a full building pre-lease was executed for
one of the two buildings that comprise the Nashville Acquisition (see below).
This lease totals approximately 79,000 square feet and is expected to commence
in the 2022 second quarter.
The following is a summary of INDUS’s acquisition pipeline for its
industrial/logistics portfolio as of December 31, 2021:
Building Size Purchase Price Expected Acquisition Market (SF) Type (in millions) Closing Acquisitions Under Contract Nashville Acquisition (two Nashville, TN 184,000 Forward $31.5 Q1 2022 buildings) Charlotte Acquisition (one Charlotte, NC 217,000 Value-Add $23.6 Q1 2022 building) Charleston Forward Acquisition Charleston, SC 263,000 Forward $28.0 Q4 2022 (one building) Charlotte Forward Acquisition Charlotte, NC 231,000 Forward $21.2 Q1 2023 (one building) Total Acquisition Pipeline Under Contract 895,000 $104.3
The acquisitions in INDUS’s pipeline are each subject to the satisfactory
completion of due diligence and other contingencies. There can be no guarantee
that these transactions will be completed under their current terms, anticipated
timelines, or at all.
On October 8, 2021, INDUS completed and placed in service its approximately
141,000 square foot build-to-suit in Charlotte for Amazon.
On December 10, 2021, INDUS completed the acquisition of two previously
announced abutting parcels of land in Allentown, PA totaling approximately 23
acres (the “Allentown Land”) for a combined purchase price of approximately $3.9
million, before transaction costs. The Company plans to develop a 206,000 square
foot industrial/logistics building on the acquired land parcels.
On December 24, 2021, INDUS entered into a first-generation lease for
approximately 68,000 square feet at its Chapmans Road speculative development
property (see below). This lease is expected to commence by the end of the 2022
The following is a summary of INDUS’s development pipeline for its
industrial/logistics portfolio as of December 31, 2021:
Building Expected Name Market Size (SF) Type Delivery Owned Land Chapmans Road (one building) Lehigh Valley, PA 103,000 66% Pre-leased Q2 2022 110 Tradeport Drive (one Hartford, CT 234,000 67% Pre-leased Q3 2022 building) Landstar Logistics (two Orlando, FL 195,000 Speculative Q3 2022 buildings) Allentown Land (one building) Lehigh Valley, PA 206,000 Speculative Q2 2023 Land Under Purchase & Sale Agreement Lehigh Valley Land parcel (one Lehigh Valley, PA 90,000 Speculative Q2 2023 building) Total Development Pipeline 828,000
INDUS expects that the total development and stabilization costs of developments
in its pipeline will total approximately $92.8 million (including all amounts
previously spent). The Company estimates that the underwritten weighted average
stabilized Cash NOI yield on its development pipeline is between 5.8% – 6.3%.3
Actual initial full year stabilized Cash NOI yields may vary from INDUS’s
estimated underwritten stabilized Cash NOI yield range based on the actual total
cost to complete a project or acquire a property and its actual initial full
year stabilized Cash NOI.
Closing on the purchase of the Lehigh Valley Land parcel, in addition to the
completion and stabilization of the development pipeline, are each subject to a
number of contingencies including the satisfactory completion of due diligence
by INDUS. There can be no guarantee that these transactions and developments
will be completed under their current terms, anticipated timelines, at the
Company’s estimated underwritten yields, or at all.
During the 2021 fourth quarter, INDUS completed four separate, previously
announced disposition transactions that generated approximately $34.5 million in
aggregate gross proceeds before transactions costs. INDUS utilized $14.1 million
of these proceeds to extinguish three mortgages with a weighted average interest
rate of approximately 5.0%. Dispositions completed during the quarter included:
? approximately 1,066 acres of undeveloped land in Quincy, Florida for $1.0
million in gross proceeds;
? approximately 209,000 square feet across three office/flex properties and 8
acres of land in Windsor, Connecticut for $5.2 million in gross proceeds;
approximately 165,000 square feet across one industrial/logistics property and
? 39 acres of land in Windsor, Connecticut for $18.0 million in gross proceeds;
? approximately 670 acres of undeveloped land in East Granby and Granby,
Connecticut for $10.3 million in gross proceeds.
Also during the 2021 fourth quarter, the buyer under the previously announced
East Granby/Windsor Option Agreement elected not to proceed with the purchase.
On October 8, 2021, INDUS completed an underwritten public offering of 2,150,000
shares of its Common Stock at a public offering price of $66.00 per share. On
October 22, 2021, the underwriters exercised their option to purchase an
additional 293,228 shares of Common Stock from INDUS at the same price. INDUS
received proceeds of $152.8 million, after expenses, from the aggregate of
2,443,228 shares issued on October 8, 2021, and October 22, 2021. The Company
intends to use the proceeds from the October 8, 2021 and October 22, 2021 sales
of its Common Stock to finance its acquisition and development pipeline and for
other corporate purposes.
A copy of the Company’s January 6, 2022 press release is attached hereto as
Exhibit 99.1. The press release attached as Exhibit 99.1 is being “furnished”
and shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to
the liabilities of Section 18 of the Exchange Act.
1.Weighted average rent growth reflects the percentage change of annualized rental rates between the previous leases and the current leases. The rental rate change on a straight-line basis represents average annual base rental payments on a straight-line basis for the term of each lease including free rent periods. Cash basis rent growth represents the change in starting rental rates per the lease agreement on new and renewed leases signed during the period, as compared to the previous ending rental rates for that same space. The cash rent growth calculation excludes free rent periods. 2.Stabilized Properties reflect buildings that have reached 90% leased or have been in service for at least one year since development completion or acquisition date, whichever is earlier. 7700 Palmetto Commerce Parkway, an approximately 197,000 square foot industrial/logistics building in Charleston, South Carolina, which was 57.1% leased as of December 31, 2021, was acquired on November 12, 2021, and is not included in the Stabilized Properties pool for the 2021 fourth quarter. 3.As a part of INDUS's standard development and acquisition underwriting process, INDUS analyzes the targeted initial full year stabilized Cash NOI yield for each development project and acquisition target and establishes a range of initial full year stabilized Cash NOI yields, which it refers to as "underwritten stabilized Cash NOI yields." Underwritten stabilized Cash NOI yields are calculated as a development project's or acquisition's initial full year stabilized Cash NOI as a percentage of its estimated total investment, including costs to stabilize the buildings to 95% occupancy (other than in connection with build-to-suit development projects and single tenant properties). INDUS calculates initial full year stabilized Cash NOI for a development project or acquisition by subtracting its estimate of the development project's or acquisition's initial full year stabilized operating expenses, real estate taxes and non-cash rental revenue, including straight-line rents (before interest, income taxes, if any, and depreciation and amortization), from its estimate of its initial full year stabilized rental revenue. Forward-Looking Statements:
This Current Report on Form 8-K includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These forward-looking
statements include INDUS’s beliefs and expectations regarding future events or
conditions including, without limitation, statements regarding the completion of
acquisitions under agreements, pre-leasing agreements, construction and
development plans and timelines, expected total development and stabilization
costs of developments in INDUS’s pipeline, the estimated underwritten stabilized
Cash NOI yield of the Company’s development pipeline, and expected capital
availability and liquidity. Although INDUS believes that its plans, intentions
and expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such plans, intentions or expectations will be
. . .
Item 9.01 Financial Statements and Exhibits.
99.1 The Company’s Press Release dated January 6, 2022 (attached hereto)
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded
within the Inline XBRL document)
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