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Plymouth Industrial Updates on Operations, Cuts Dividend

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Plymouth Industrial REIT Inc. (PLYM - Free Report) recently announced that it has collected roughly 96% of its scheduled rent for April and about 92% of the scheduled rent for May. Further, the company noted that the rent collections for the current month are in pace with April and May.

Apart from these, the company apprised of its leasing activity, stating about the signing of 258,000 square feet of new leases since the beginning of the second quarter through Jun 12. Notably, 56,000 square foot of this total amount was associated with current-year lease expirations, while 202,000 square feet was related to leases slated for expiry beginning 2021. The company has been making efforts to efficiently address its 2020 initial lease expirations and has addressed a considerable part of such expirations so far.

Plymouth’s cash balance was $8.5 million, excluding operating expense escrows of $9.1 million as of Jun 10, 2020. The company has roughly $17 million of availability under its secured line of credit and senior equity secured term loan, indicating partial paydown of outstanding borrowings on line of credit since May 8. Apart from the company’s senior equity secured term loan, Plymouth has no other material debt maturities until 2023.

However, the company has lowered its quarterly dividend to 20 cents per share from the 37.5 cents paid earlier. It will be paid on Jul 31, to stockholders of record on Jun 30, 2020.

According to Jeff Witherell, chairman and chief executive officer of Plymouth Industrial, “The right-sizing of our dividend in line with our previous guidance provides us the flexibility to grow the company and take advantage of the strong fundamentals driving the demand for industrial space in our markets.”

Amid the e-commerce boom and supply-chain strategy transformations, demand for industrial real estate has been strong. In light of the coronavirus pandemic, warehouse operations have become more essential with increased e-commerce customers. Over the long term, apart from the fast adoption of e-commerce, the logistics real estate is expected to benefit from the likely increase in inventory levels post crisis.

This will open up prospects for Plymouth, and other industrial REITs like Duke Realty Corp. (DRE - Free Report) , Prologis (PLD - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) . However, the pandemic’s adverse impact on the economy will likely thwart demand for space in the near term. Rent relief and deferrals are added concerns.

Shares of this Zacks Rank #3 (Hold) company have depreciated 14.4%, over the past year, as against the 7.6% decline of its industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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