MODIV INDUSTRIAL, INC. Q1 FY2025 earnings call

• Weighted average lease term is roughly 14 years, with the manufacturing portfolio having a term over 20 years. - Declared a cash dividend of $0.0975 per share for April, May, and June 2025, annualizing to $1.17 per share. - Delevered by retiring preferred shares, saving over $400,000 annually in preferred dividends. - Focused on expense controls, with general and administrative expenses expected to decrease in future quarters. - Engaged in conversations with mid-market tenants, discussing supply chain impacts and geopolitical uncertainties. - Identified potential property development opportunities, particularly in certain industrial assets.

Modiv Industrial's 43-property portfolio had rental income of $11.7 million in Q1 2025, a 2% decrease from $11.9 million in Q1 2024. Adjusted funds from operations (AFFO) was $3.9 million in Q1 2025, up 18% from $3.3 million in Q1 2024. Annualized base rent totaled $39.4 million as of March 31, 2025. The portfolio includes 39 industrial properties (80% of ABR) and 4 non-core properties (20% of ABR). Approximately 30% of tenants have investment-grade credit ratings.

• Management is patient with acquisitions due to market volatility, seeking only compelling opportunities. - Considering recycling capital from non-core properties through redevelopment or development. - Preferred share repurchases were opportunistic and aimed at deleveraging, with a focus on long-term shareholder value.

• Market volatility affecting REIT share prices. - Geopolitical uncertainties, including tariffs and trade policies, impacting supply chains. - Supply chain volatility causing stress for tenants. - Interest rate fluctuations affecting cost of capital and acquisition decisions.

Q: Any update on Costco property sale?

A: Talks with KB Homes are ongoing, with city meetings progressing, and no issues suggesting delay.

Q: Development opportunities on land footprints?

A: There are redevelopment/development opportunities on some assets, with active consideration but early stages.

Q: Santa Clara tenant distribution yields?

A: Distribution yields will continue, but there'll be a slowdown for a few months to pay lease commission, then resume.