What changed in this filing

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Item 1. Financial Statements

2023-11-01 compared with 2023-08-02 · 125 added, 92 removed, 451 unchanged (32% of the section changed)

3 unchanged sentences

(in thousands – except share and per share data)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Investments in real estate

6 unchanged sentences

Net investments in properties 3,560,054 3,075,143

Properties held for sale, net 7,266 —

Net investments in real estate 3,567,320 3,075,143

Cash and cash equivalents 96,196 26,393

14 unchanged sentences

Common stock:

$ 0.01 par value, 400,000,000 shares authorized, and 83,236,177 and 76,463,482 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively.

$ 0.01 par value, 400,000,000 shares authorized, and 84,871,366 and 76,463,482 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively.

Additional paid-in capital

2,691,181 2,167,276

Common stock held in deferred compensation plan, 514,539 and 417,665 shares at June 30, 2023 and December 31, 2022, respectively.

Common stock held in deferred compensation plan, 514,539 and 417,665 shares at September 30, 2023 and December 31, 2022, respectively.

( 32,134 ) ( 26,462 )

6 unchanged sentences

(in thousands – except share and per share data)

For the Three Months Ended June 30, For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2023 2022 2023 2022

11 unchanged sentences

Gain on sales of real estate investments — — 12,257 76,048

Total other income (expense) 7,330 71,116 1,918 66,156

Total other (expense) income ( 4,721 ) ( 6,090 ) ( 2,803 ) 60,066

Net income 30,315 22,439 93,900 139,134

10 unchanged sentences

(in thousands – except share data)

Six months ended June 30, 2023:

Nine months ended September 30, 2023:

Common Stock Additional

22 unchanged sentences

Balance as of June 30, 2023 83,236,177 $ 833 $ 2,594,382 514,539 $ ( 32,134 ) $ 85,183 $ 2,648,264

Six months ended June 30, 2022:

Net income — — — — — 30,315 30,315

Issuance of common stock, net of issuance costs of $ 1,438

1,575,173 17 94,292 — — — 94,309

Forfeiture of common stock related to employee awards ( 555 ) — — — — — —

Common shares acquired related to employee awards ( 12,499 ) — ( 773 ) — — — ( 773 )

Issuance of restricted stock 73,070 — — — — — —

Stock-based compensation — — 3,280 — — — 3,280

Common stock dividends ($ 0.45 per share)

— — — — — ( 38,425 ) ( 38,425 )

Balance as of September 30, 2023 84,871,366 $ 850 $ 2,691,181 514,539 $ ( 32,134 ) $ 77,073 $ 2,736,970

Nine months ended September 30, 2022:

Common Stock Additional

22 unchanged sentences

Deposits to deferred compensation plan ( 3,582 ) — 250 3,582 ( 250 ) — —

Other comprehensive income — — — — — — —

Balance as of June 30, 2022 75,120,374 $ 752 $ 2,087,682 426,594 $ ( 26,982 ) $ 68,133 $ 2,129,585

Net income — — — — — 22,439 22,439

Issuance of common stock, net of issuance costs of $ 548

444,512 5 28,330 — — — 28,335

Common shares acquired related to employee awards ( 8,367 ) — ( 518 ) — — — ( 518 )

Issuance of restricted stock 83,616 — — — — — —

Stock-based compensation — — 2,679 — — — 2,679

Common stock dividends ($ 0.40 per share)

— — — — — ( 30,427 ) ( 30,427 )

Balance as of September 30, 2022 75,640,135 $ 757 $ 2,118,173 426,594 $ ( 26,982 ) $ 60,145 $ 2,152,093

The accompanying condensed notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

11 unchanged sentences

Net cash provided by operating activities

140,626 109,019

CASH FLOWS FROM INVESTING ACTIVITIES

4 unchanged sentences

Net cash used in investing activities

( 479,637 ) ( 313,803 )

CASH FLOWS FROM FINANCING ACTIVITIES

4 unchanged sentences

Payments on credit facility ( 49,000 ) ( 152,000 )

Borrowings on term loans payable — 100,000

Payments on senior unsecured notes — ( 50,000 )

Payment of deferred financing costs ( 80 ) ( 1,498 )

Dividends paid to common stockholders ( 97,427 ) ( 76,984 )

Net cash provided by (used in) financing activities 351,066 ( 38,638 )

Net cash provided by financing activities

411,150 10,980

Net increase (decrease) in cash and cash equivalents and restricted cash

72,139 ( 193,804 )

Cash and cash equivalents and restricted cash at beginning of period

17 unchanged sentences

All square feet, acres, occupancy and number of properties disclosed in these condensed notes to the consolidated financial statements are unaudited.

As of June 30, 2023, the Company owned 257 buildings aggregating approximately 15.8 million square feet, 46 improved land parcels consisting of approximately 165.8 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development.

As of September 30, 2023, the Company owned 257 buildings aggregating approximately 15.8 million square feet, 46 improved land parcels (including one improved land parcel held for sale) consisting of approximately 165.8 acres, eight properties under development or redevelopment and approximately 62.7 acres of land entitled for future development.

The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2010.

25 unchanged sentences

If an asset is intended to be held for the long-term, the recoverability is based on the undiscounted future cash flows.

If the asset carrying value is not supported on an undiscounted future cash flow basis, then the asset carrying value is measured against the lower of cost or the present value of expected cash

flows over the expected hold period.

If the asset carrying value is not supported on an undiscounted

future cash flow basis, then the asset carrying value is measured against the lower of cost or the present value of expected cash flows over the expected hold period.

An impairment charge to earnings is recognized for the excess of the asset’s carrying value over the lower of cost or the present values of expected cash flows over the expected hold period.

7 unchanged sentences

The discount rates used in the fair value estimates represent a rate commensurate with the indicated holding period with a premium layered on for risk.

There were no impairment charges recorded to the carrying values of the Company’s properties during the three or six months ended June 30, 2023 or 2022.

There were no impairment charges recorded to the carrying values of the Company’s properties during the three or nine months ended September 30, 2023 or 2022.

Property Acquisitions.

12 unchanged sentences

The above and below-market lease values are amortized to rental revenues over the remaining initial term plus the term of any below-market fixed rate renewal options that are considered bargain renewal options of the respective leases.

The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 3.6 million and $ 3.5 million for the three months ended June 30, 2023 and 2022, respectively, and approximately $ 7.2 million and $ 6.6 million for the six months ended June 30, 2023 and 2022, respectively.

The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 3.5 million and $ 4.2 million for the three months ended September 30, 2023 and 2022, respectively, and approximately $ 10.7 million and $ 10.8 million for the nine months ended September 30, 2023 and 2022, respectively.

The origination value of in-place leases is based on costs to execute similar leases, including commissions and other related costs.

The origination value of in-place leases also includes real estate taxes, insurance and an estimate of lost rental revenue at market rates during the estimated time required to lease up the property from vacant to the occupancy level at the date of acquisition.

The remaining weighted average lease term related to these intangible assets and liabilities as of June 30, 2023 was 6.9 years.

As of June 30, 2023 and December 31, 2022, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands):

June 30, 2023 December 31, 2022

The remaining weighted average lease term related to these intangible assets and liabilities as of September 30, 2023 was 6.8 years.

As of September 30, 2023 and December 31, 2022, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands):

September 30, 2023 December 31, 2022

Gross Accumulated

7 unchanged sentences

Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the related assets or liabilities.

The following table reflects the standard

depreciable lives typically used to compute depreciation and amortization.

The following table reflects the standard depreciable lives typically used to compute depreciation and amortization.

However, such depreciable lives may be different based on the estimated useful life of such assets or liabilities.

17 unchanged sentences

The following summarizes the reconciliation of cash and cash equivalents and restricted cash as presented in the accompanying consolidated statements of cash flows (dollars in thousands):

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash and cash equivalents at beginning of period

3 unchanged sentences

Cash and cash equivalents at end of period

96,196 10,153

Restricted cash 4,026 844

4 unchanged sentences

If tenants fail to make contractual lease payments that are greater than the Company’s allowance for doubtful accounts, security deposits and letters of credit, then the Company may have to recognize additional doubtful account charges in future periods.

The Company monitors the liquidity and creditworthiness of its tenants on an on-going basis by reviewing their financial condition periodically as appropriate.

The Company monitors the liquidity and creditworthiness of its tenants on an ongoing basis by reviewing their financial condition periodically as appropriate.

Each period the Company reviews its outstanding accounts receivable, including straight-line rents, for doubtful accounts and provides allowances as needed.

2 unchanged sentences

Tenant expense reimbursement income includes payments and amounts due from tenants pursuant to their leases for real estate taxes, insurance and other recoverable property operating expenses and is recognized as revenues during the same period the related expenses are incurred.

As of June 30, 2023 and December 31, 2022, approximately $ 50.9 million and $ 48.0 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.2 million and $ 0.6 million as of June 30, 2023 and December 31, 2022, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

As of September 30, 2023 and December 31, 2022, approximately $ 53.6 million and $ 48.0 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.9 million and $ 0.6 million as of September 30, 2023 and December 31, 2022, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

Deferred Financing Costs.

1 unchanged sentence

Deferred financing costs associated with the Company’s revolving credit facility are classified as an asset, as a component of other assets in the accompanying consolidated balance sheets, and deferred financing costs associated with debt liabilities are reported as a direct deduction from the carrying amount of the debt liability in the accompanying consolidated balance sheets.

Deferred financing costs related to the revolving credit facility and debt liabilities are carried at cost, net of accumulated amortization in the aggregate of approximately $ 12.7 million and $ 11.9 million as of June 30, 2023 and December 31, 2022, respectively.

Deferred financing costs related to the revolving credit facility and debt liabilities are carried at cost, net of accumulated amortization in the aggregate of approximately $ 13.1 million and $ 11.9 million as of September 30, 2023 and December 31, 2022, respectively.

Income Taxes.

8 unchanged sentences

Tax benefits of positions not deemed to meet the more-likely-than-not threshold are recorded as a tax expense in the current year.

As of June 30, 2023 and December 31, 2022, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months.

The Company’s tax returns are subject to examination by federal, state and local tax jurisdictions, which as of June 30, 2023, include years 2019 to 2022 for federal purposes.

As of September 30, 2023 and December 31, 2022, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months.

The Company’s tax returns are subject to examination by federal, state and local tax jurisdictions, which as of September 30, 2023, include years 2019 to 2022 for federal purposes.

Stock-Based Compensation and Other Long-Term Incentive Compensation.

22 unchanged sentences

However, the Company’s management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

As of June 30, 2023, the Company owned 43 buildings aggregating approximately 2.6 million square feet and 13 improved land parcels consisting of approximately 68.0 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 23.9 % of its annualized base rent.

Such annualized base rent is based on contractual monthly base rent per the leases, for all buildings and improved land parcels, excluding any partial or full rent abatements as of June 30, 2023, multiplied by 12.

As of September 30, 2023, the Company owned 43 buildings aggregating approximately 2.6 million square feet and 13 improved land parcels consisting of approximately 68.0 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 24.3 % of its annualized base rent.

Other real estate companies compete with the Company in its real estate markets.

1 unchanged sentence

The existence of competing properties could have a material impact on the Company’s ability to lease space and on the level of rent that can be achieved.

The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of June 30, 2023.

The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of September 30, 2023.

Investments in Real Estate

During the three months ended June 30, 2023, the Company acquired one industrial property with a total initial investment, including acquisition costs, of approximately $ 13.8 million, of which $ 7.8 million was recorded to land, $ 4.9 million to buildings and improvements, and $ 1.1 million to intangible assets.

During the three months ended September 30, 2023, the Company acquired one industrial property with a total initial investment, including acquisition costs, of approximately $ 16.5 million, of which $ 13.7 million was recorded to land and $ 2.8 million to intangible assets.

Additionally, the Company assumed $ 2.1 million in liabilities.

During the six months ended June 30, 2023, the Company acquired four industrial properties with a total initial investment, including acquisition costs, of approximately $ 420.5 million, of which $ 253.7 million was recorded to land, $ 147.9 million to buildings and improvements, and $ 18.9 million to intangible assets.

Upon acquisition, the property was placed into redevelopment with a total expected investment of approximately $ 40.6 million.

During the nine months ended September 30, 2023, the Company acquired five industrial properties with a total initial investment, including acquisition costs, of approximately $ 437.0 million, of which $ 267.4 million was recorded to land, $ 147.9 million to buildings and improvements, and $ 21.7 million to intangible assets.

Additionally, the Company assumed $ 45.1 million in liabilities.

The Company recorded revenues and net income for the three months ended June 30, 2023 of approximately $ 3.9 million and $ 1.4 million, respectively, and recorded revenues and net income for the six months ended June 30, 2023 of approximately $ 4.2 million and $ 1.2 million, respectively, related to the 2023 acquisitions.

During the three months ended June 30, 2022, the Company acquired ten industrial properties with a total initial investment, including acquisition costs, of approximately $ 221.6 million, of which $ 169.5 million was recorded to land, $ 43.7 million to buildings and improvements, and $ 8.4 million to intangible assets.

The Company recorded revenues and net income for the three months ended September 30, 2023 of approximately $ 4.4 million and $ 1.5 million, respectively, and recorded revenues and net income for the nine months ended September 30, 2023 of approximately $ 8.6 million and $ 2.7 million, respectively, related to the 2023 acquisitions.

During the three months ended September 30, 2022, the Company acquired four industrial properties with a total initial investment, including acquisition costs, of approximately $ 68.9 million, of which $ 62.1 million was recorded to land, $ 5.5 million to buildings and improvements, and $ 1.3 million to intangible assets.

Additionally, the Company assumed $ 1.1 million in liabilities.

During the six months ended June 30, 2022, the Company acquired 12 industrial properties with a total initial investment, including acquisition costs, of approximately $ 291.9 million, of which $ 199.5 million was recorded to land, $ 82.8 million to buildings and improvements, and $ 9.6 million to intangible assets.

During the nine months ended September 30, 2022, the Company acquired 16 industrial properties with a total initial investment, including acquisition costs, of approximately $ 360.8 million, of which $ 261.6 million was recorded to land, $ 88.3 million to buildings and improvements, and $ 10.9 million to intangible assets.

Additionally, the Company assumed $ 16.1 million in liabilities.

The Company recorded revenues and net income for the three months ended June 30, 2022 of approximately $ 1.7 million and $ 0.7 million, respectively, and recorded revenues and net income for the six months ended June 30, 2022 of approximately $ 1.7 million and $ 0.7 million, respectively, related to the 2022 acquisitions.

The Company recorded revenues and net income for the three months ended September 30, 2022 of approximately $ 4.1 million and $ 1.0 million, respectively, and recorded revenues and net income for the nine months ended September 30, 2022 of approximately $ 5.8 million and $ 1.7 million, respectively, related to the 2022 acquisitions.

The above assets and liabilities were recorded at fair value, which uses Level 3 inputs.

The properties were acquired from unrelated third parties using existing cash on hand, proceeds from property sales and the issuance of common stock and borrowings on the revolving credit facility.

As of June 30, 2023, the Company had seven properties under development or redevelopment that, upon completion, will consist of six buildings aggregating approximately 1.1 million square feet and one approximately 2.8 acre improved land parcel.

The properties were acquired from unrelated third parties using existing cash on hand, proceeds from property sales, the issuance of common stock and borrowings on the revolving credit facility.

As of September 30, 2023, the Company had eight properties under development or redevelopment that, upon completion, will consist of seven buildings aggregating approximately 1.2 million square feet and one approximately 2.8 acre improved land parcel.

Additionally, the Company owned approximately 62.7 acres of land entitled for future development that, upon completion, will consist of six buildings aggregating approximately 1.1 million square feet.

The following table summarizes certain information with respect to the properties under development or redevelopment and the land entitled for future development as of June 30, 2023:

The following table summarizes certain information with respect to the properties under development or redevelopment and the land entitled for future development as of September 30, 2023:

Property Name Location Total Expected

11 unchanged sentences

Hialeah, FL 41,400 190,907 —

Hawthorne, CA 18,060 34,045 —

Rancho Dominguez, CA 26,980 — 2.8

Hawthorne, CA 18,095 31,378 —

East Garry Avenue

Santa Ana, CA 40,553 91,500 —

Paterson Plank III

10 unchanged sentences

Countyline Phase IV, a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75, is expected to contain ten LEED-certified industrial distribution buildings at completion.

During the six months ended June 30, 2023, the Company completed redevelopment of one improved land parcel consisting of approximately 6.3 acres.

The following table summarizes certain information with respect to the completed redevelopment property as of June 30, 2023:

During the nine months ended September 30, 2023, the Company completed redevelopment of one improved land parcel consisting of approximately 6.3 acres.

The following table summarizes certain information with respect to the completed redevelopment property as of September 30, 2023:

Property Name Location Total

3 unchanged sentences

1 Total investment for the property includes the initial purchase price, buyer’s due diligence and closing costs, redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.

The Company capitalized interest associated with development, redevelopment, renovation or expansion activities of approximately $ 2.3 million and $ 0.9 million during the three months ended June 30, 2023 and 2022, respectively, and approximately $ 2.9 million and $ 1.6 million during the six months ended June 30, 2023 and 2022, respectively.

The Company capitalized interest associated with development, redevelopment, renovation or expansion activities of approximately $ 2.6 million and $ 0.6 million during the three months ended September 30, 2023 and 2022, respectively, and approximately $ 5.5 million and $ 2.2 million during the nine months ended September 30, 2023 and 2022, respectively.

Held for Sale/Disposed Assets

The Company considers a property to be held for sale when it meets the criteria established under ASC 360, Property, Plant, and Equipment .

Properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale.

As of June 30, 2023, the Company did not have any properties held for sale.

During the six months ended June 30, 2023, the Company sold one property located in the Northern New Jersey/New York City market for a sales price of approximately $ 25.5 million, resulting in a gain of approximately $ 12.3 million.

During the six months ended June 30, 2022, the Company sold one property (consisting of 18 buildings) located in the Northern New Jersey/New York City market for a sales price of approximately $ 110.4 million, resulting in a gain of approximately $ 76.0 million.

As of both June 30, 2023 and December 31, 2022, the Company had $ 775.0 million of unsecured debt and no secured debt.

The following table summarizes the components of the Company’s indebtedness as of June 30, 2023 and December 31, 2022 (dollars in thousands):

June 30, 2023 December 31, 2022 Margin Above SOFR Interest Rate 1

As of September 30, 2023, the Company had entered into an agreement with a third-party purchaser to sell one property located in the Washington, D.C.

market for a sales price of approximately $ 18.0 million (net book value of approximately $ 7.3 million).

This property was sold on October 4, 2023.

During the nine months ended September 30, 2023, the Company sold one property located in the Northern New Jersey/New York City market for a sales price of approximately $ 25.5 million, resulting in a gain of approximately $ 12.3 million.

During the nine months ended September 30, 2022, the Company sold one property (consisting of 18 buildings) located in the Northern New Jersey/New York City market for a sales price of approximately $ 110.4 million, resulting in a gain of approximately $ 76.0 million.

As of both September 30, 2023 and December 31, 2022, the Company had $ 775.0 million of unsecured debt and no secured debt.

The following table summarizes the components of the Company’s indebtedness as of September 30, 2023 and December 31, 2022 (dollars in thousands):

September 30, 2023 December 31, 2022 Margin Above SOFR Interest Rate 1

Contractual Maturity Date

25 unchanged sentences

Total $ 771,355 $ 770,818

1 Reflects the contractual interest rate under the terms of each loan as of June 30, 2023.

1 Reflects the contractual interest rate under the terms of each loan as of September 30, 2023.

Excludes the effects of unamortized debt issuance costs.

2 The interest rates on these loans are comprised of the Secured Overnight Financing Rate (“SOFR”) plus a SOFR margin.

The SOFR margins will range from 1.10 % to 1.55 % ( 1.10 % as of June 30, 2023) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of June 30, 2023) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

The SOFR margins will range from 1.10 % to 1.55 % ( 1.10 % as of September 30, 2023) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of September 30, 2023) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

3 Collectively, the “Senior Unsecured Notes”.

The Company’s Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) consists of a $ 400.0 million revolving credit facility that matures in August 2025, a $ 100.0 million term loan that matures in January 2027 and a $ 100.0 million term loan that matures in January 2028.

As of both June 30, 2023 and December 31, 2022, there were no borrowings outstanding on the revolving credit facility and $ 200.0 million of borrowings outstanding on the term loans.

As of both September 30, 2023 and December 31, 2022, there were no borrowings outstanding on the revolving credit facility and $ 200.0 million of borrowings outstanding on the term loans.

The aggregate amount of the Amended Facility may be increased by up to an additional $ 500.0 million to a maximum amount not to exceed $ 1.1 billion, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts.

1 unchanged sentence

Interest on the Amended Facility, including the term loans, is generally to be paid based upon, at the Company’s option, either (i) SOFR plus the applicable SOFR margin or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50 % above the federal funds effective rate, thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25 %, or 1.25 % per annum.

The applicable SOFR margin will range from 1.10 % to 1.55 % ( 1.10 % as of June 30, 2023) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of June 30, 2023) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

The applicable SOFR margin will range from 1.10 % to 1.55 % ( 1.10 % as of September 30, 2023) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of September 30, 2023) for the term loans, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

The Amended Facility requires quarterly payments of an annual facility fee in an amount ranging from 0.15 % to 0.30 %, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

2 unchanged sentences

The Amended Facility and the Senior Unsecured Notes include a series of financial and other covenants with which the Company must comply.

The Company was in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of June 30, 2023 and December 31, 2022.

The scheduled principal payments of the Company’s debt as of June 30, 2023 were as follows (dollars in thousands):

The Company was in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of September 30, 2023 and December 31, 2022.

The scheduled principal payments of the Company’s debt as of September 30, 2023 were as follows (dollars in thousands):

Facility Term Loan Senior

9 unchanged sentences

Weighted average interest rate n/a 6.6 % 3.1 % 4.0 %

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of June 30, 2023.

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of September 30, 2023.

The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property operating expense reimbursements (dollars in thousands):

5 unchanged sentences

Financial Instruments Disclosed at Fair Value

As of June 30, 2023 and December 31, 2022, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these investments or liabilities based on Level 1 inputs.

As of September 30, 2023 and December 31, 2022, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these investments or liabilities based on Level 1 inputs.

The fair values of the Company’s Senior Unsecured Notes were estimated by calculating the present value of principal and interest payments, based on borrowing rates available to the Company, which are Level 2 inputs, adjusted with a credit spread, as applicable, and assuming the loans are outstanding through maturity.

The fair value of the Company’s Amended Facility approximated its carrying value because the variable interest rates approximate market borrowing rates available to the Company, which are Level 2 inputs.

The following table sets forth the carrying value and the estimated fair value of the Company’s debt as of June 30, 2023 and December 31, 2022 (dollars in thousands):

The following table sets forth the carrying value and the estimated fair value of the Company’s debt as of September 30, 2023 and December 31, 2022 (dollars in thousands):

Fair Value Measurement Using

5 unchanged sentences

(Level 3) Carrying Value

June 30, 2023 $ 703,855 $ — $ 703,855 $ — $ 771,148

September 30, 2023 $ 695,712 $ — $ 695,712 $ — $ 771,355

December 31, 2022 $ 700,926 $ — $ 700,926 $ — $ 770,818

1 unchanged sentence

The Company’s authorized capital stock consists of 400,000,000 shares of common stock, $ 0.01 par value per share, and 100,000,000 shares of preferred stock, $ 0.01 par value per share.

The Company has an at-the-market equity offering program (the “$ 300 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 300.0 million ($ 81.7 million remaining as of June 30, 2023) in amounts and at times to be determined by the Company from time to time.

The Company has an at-the-market equity offering program (the "$ 500 Million ATM Program") pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 500.0 million ($ 464.3 million remaining as of September 30, 2023) in amounts and at times to be determined by the Company from time to time.

Prior to the implementation of the $ 500 Million ATM Program, the Company had a previous at-the-market equity offering program (the "$ 300 Million ATM Program"), which was substantially utilized as of September 5, 2023 and is no longer active.

Actual sales under the $ 500 Million ATM Program, if any, will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock, determinations by the Company of the appropriate sources of funding for the Company and potential uses of funding available to the Company.

During the three and six months ended June 30, 2023, the Company issued an aggregate of 617,106 and 967,106 shares, respectively, of common stock at a weighted average offering price of $ 62.75 and $ 62.95 per share, respectively, under the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 38.2 million and $ 60.0 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 0.6 million and $ 0.9 million, respectively.

During both the three and six months ended June 30, 2022, the Company issued an aggregate of 27,087 shares of common stock at a weighted average offering price of $ 76.03 per share under the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 2.0 million and paying total compensation to the applicable sales agents of approximately $ 29,000 .

During the three and nine months ended September 30, 2023, the Company issued an aggregate of 1,575,173 and 2,542,279 shares, respectively, of common stock at a weighted average offering price of $ 60.78 and $ 61.61 per share, respectively, under the $ 300 Million ATM Program and the $ 500 Million ATM Program, resulting in net proceeds of approximately $ 94.4 million and $ 154.4 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 1.4 million and $ 2.3 million, respectively.

During the three and nine months ended September 30, 2022, the Company issued an aggregate of 444,512 and 471,599 shares, respectively, of common stock at a weighted average offering price of $ 64.97 and $ 65.61 per share, respectively, under the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 28.5 million and $ 30.5 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 0.4 million and $ 0.4 million, respectively.

On February 13, 2023, the Company completed a public offering of 5,750,000 shares of common stock at a price per share of $ 62.50 , which included the underwriters’ full exercise of their option to purchase an additional 750,000 shares.

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Purchases made pursuant to the program will be made in either the open market or in privately negotiated transactions as permitted by federal securities laws and other legal requirements.

The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors.

The program may be suspended

or discontinued at any time.

As of June 30, 2023, the Company had not repurchased any shares of common stock pursuant to its share repurchase program.

timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors.

The program may be suspended or discontinued at any time.

As of September 30, 2023, the Company had not repurchased any shares of common stock pursuant to its share repurchase program.

In connection with the Annual Meeting of Stockholders on May 2, 2023, the Company granted a total of 12,480 unrestricted shares of the Company's common stock to its independent directors under the 2019 Plan with a grant date fair value per share of $ 60.10 .

The grant date fair value of the common stock was determined using the closing price of the Company’s common stock on the date of the grant.

The Company recognized approximately $ 0.8 million in compensation costs for both the three and six months ended June 30, 2023 related to this issuance.

The Company recognized approximately $ 0.8 million in compensation costs for both the three and nine months ended September 30, 2023 related to this issuance.

The Company has a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) maintained for the benefit of select employees and members of the Company’s Board of Directors, in which certain of their cash and equity-based compensation may be deposited.

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Subsequent changes in the fair value of the shares are not recognized.

During the three and six months ended June 30, 2023, 2,080 and 96,874 shares of common stock, respectively, were deposited into the Deferred Compensation Plan, and no shares of common stock were withdrawn from the Deferred Compensation Plan.

During the three and six months ended June 30, 2022, 3,582 and 150,867 shares of common stock, respectively, were deposited into the Deferred Compensation Plan and no shares of common stock were withdrawn from the Deferred Compensation Plan.

As of June 30, 2023, there were 1,898,961 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2019 Plan, of which 573,005 were remaining and available for issuance.

The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to June 30, 2023 ranged from $ 14.20 to $ 78.33 .

The fair value of the restricted stock that was granted during the six months ended June 30, 2023 was approximately $ 3.9 million and the vesting period for the restricted stock is typically between one and five years .

As of June 30, 2023, the Company had approximately $ 13.7 million of total unrecognized compensation costs related to restricted stock issuances, which is expected to be recognized over a remaining weighted average period of approximately 2.8 years.

The Company recognized compensation costs of approximately $ 1.5 million and $ 2.9 million for the three and six months ended June 30, 2023, respectively, and approximately $ 0.8 million and $ 2.2 million for the three and six months ended June 30, 2022, respectively, related to the restricted stock issuances.

The following is a summary of the total restricted shares granted to the Company’s executive officers and employees with the related weighted average grant date fair value share prices for the six months ended June 30, 2023:

During both the three months ended September 30, 2023 and 2022, no shares of common stock were deposited into the Deferred Compensation Plan and during the nine months ended September 30, 2023 and 2022, 96,874 and 150,867 shares of common stock, respectively, were deposited into the Deferred Compensation Plan.

During each of the three and nine months ended September 30, 2023 and 2022, no shares of common stock were withdrawn from the Deferred Compensation Plan.

As of September 30, 2023, there were 1,898,961 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2019 Plan, of which 500,490 were remaining and available for issuance.

The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to September 30, 2023 ranged from $ 14.20 to $ 78.33 .

The fair value of the restricted stock that was granted during the nine months ended September 30, 2023 was approximately $ 8.2 million and the vesting period for the restricted stock is typically between one and five years .

As of September 30, 2023, the Company had approximately $ 16.3 million of total unrecognized compensation costs related to restricted stock issuances, which is expected to be recognized over a remaining weighted average period of approximately 3.2 years.

The Company recognized compensation costs of approximately $ 1.6 million and $ 4.6 million for the three and nine months ended September 30, 2023, respectively, and approximately $ 1.4 million and $ 3.6 million for the three and nine months ended September 30, 2022, respectively, related to the restricted stock issuances.

Restricted Stock Activity:

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Vested ( 62,717 ) 53.50

Non-vested shares outstanding as of June 30, 2023 373,897 $ 60.03

The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of June 30, 2023:

Non-vested shares outstanding as of September 30, 2023 419,500 $ 61.00

The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of September 30, 2023:

Non-vested Shares Vesting Schedule Number of Shares

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Long-Term Incentive Plan:

As of June 30, 2023, there were three open performance measurement periods for the Performance Share awards:

As of September 30, 2023, there were three open performance measurement periods for the Performance Share awards:

January 1, 2021 to December 31, 2023, January 1, 2022 to December 31, 2024, and January 1, 2023 to December 31, 2025.

During the six months ended June 30, 2023, the Company issued 97,825 shares of common stock at a price of $ 58.56 per share related to the Performance Share awards for the performance period from January 1, 2020 to December 31, 2022.

During the nine months ended September 30, 2023, the Company issued 97,825 shares of common stock at a price of $ 58.56 per share related to the Performance Share awards for the performance period from January 1, 2020 to December 31, 2022.

The following table summarizes certain information with respect to the Performance Share awards granted on or after January 1, 2019 and includes the forfeiture of certain of the Performance Share awards during 2022 (dollars in thousands):

Performance Share Period Fair Value on Date of Grant 1

Expense for the Three Months Ended June 30,

Expense for the Six Months Ended June 30,

Expense for the Three Months Ended September 30,

Expense for the Nine Months Ended September 30,

2023 2022 2023 2022

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Total $ 24,531 $ 1,637 $ 1,291 $ 4,911 $ 3,199

1 Reflects the fair value on date of grant for all performance shares outstanding at June 30, 2023.

The following table sets forth the cash dividends paid or payable per share during the six months ended June 30, 2023:

1 Reflects the fair value on date of grant for all performance shares outstanding at September 30, 2023.

The following table sets forth the cash dividends paid or payable per share during the nine months ended September 30, 2023:

For the Three Months Ended Security Dividend per Share Declaration Date Record Date Date Paid

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June 30, 2023 Common Stock $ 0.40 May 2, 2023 June 30, 2023 July 14, 2023

September 30, 2023 Common Stock $ 0.45 August 1, 2023 September 29, 2023 October 13, 2023

Net Income (Loss) Per Share

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The Company’s non-vested shares of restricted stock are considered participating securities since these share-based awards contain non-forfeitable rights to dividends irrespective of whether the awards ultimately vest or expire.

The Company had no antidilutive securities or dilutive restricted stock awards outstanding for the three and six months ended June 30, 2023 and 2022.

The Company had no antidilutive securities or dilutive restricted stock awards outstanding for the three and nine months ended September 30, 2023 and 2022.

In accordance with the Company’s policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the net income (loss) per common share is adjusted for earnings distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method.

Under this method, allocations were made to 374,514 and 295,247 of weighted average unvested restricted shares outstanding for the three months ended June 30, 2023 and 2022, respectively, and 374,251 and 299,433 of weighted average unvested restricted shares outstanding for the six months ended June 30, 2023 and 2022, respectively.

Under this method, allocations were made to 404,010 and 335,038 of weighted average unvested restricted shares outstanding for the three months ended September 30, 2023 and 2022, respectively, and 384,239 and 311,432 of weighted average unvested restricted shares outstanding for the nine months ended September 30, 2023 and 2022, respectively.

Performance Share awards which may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period are included as contingently issuable shares in the calculation of diluted weighted average common shares of stock outstanding assuming the reporting period is the end of the measurement period, and the effect is dilutive.

Diluted shares related to the Performance Share awards were 0 and 90,217 for the three months ended June 30, 2023 and 2022, respectively, and 246,239 and 85,110 for the six months ended June 30, 2023 and 2022, respectively.

Diluted shares related to the Performance Share awards were 225,327 and 93,518 for the three months ended September 30, 2023 and 2022, respectively, and 231,459 and 86,624 for the nine months ended September 30, 2023 and 2022, respectively.

Commitments and Contingencies

Contractual Commitments.

As of August 1, 2023, the Company had three outstanding contracts with third-party sellers to acquire three industrial properties for a total purchase price of approximately $ 67.4 million.

As of October 31, 2023, the Company had two outstanding contracts with third-party sellers to acquire two industrial properties for a total purchase price of approximately $ 9.6 million.

There is no assurance that the Company will acquire the properties under contract because the proposed acquisitions are subject to due diligence and various closing conditions.

As of August 1, 2023, the Company had one non-binding letter of intent with a third-party seller to acquire one industrial property for a total anticipated purchase price of approximately $ 27.5 million.

In the normal course of its business, the Company enters into non-binding letters of intent to purchase properties from third parties that may obligate the Company to make payments or perform other obligations upon the occurrence of certain events, including the execution of a purchase and sale agreement and satisfactory completion of various due diligence matters.

There can be no assurance that the Company will enter into a purchase and sale agreement with respect to this property or otherwise complete any such prospective purchases on the terms described or at all.

Subsequent Events

On August 1, 2023, the Company’s board of directors declared a cash dividend in the amount of $ 0.45 per share of its common stock payable on October 13, 2023 to the stockholders of record as of the close of business on September 29, 2023.

On October 4, 2023, the Company sold one industrial property in Hanover, MD, for a total sales price of approximately $ 18.0 million (net book value of approximately $ 7.3 million).

The property was held for sale as of September 30, 2023.

On October 10, 2023, the Company acquired one industrial property in Redondo Beach, CA, for a total purchase price of approximately $ 45.7 million.

The property was acquired from an unrelated third party using existing cash on hand.

On October 11, 2023, the Company acquired one industrial property in Brooklyn, NY, for a total purchase price of approximately $ 27.5 million.

The property was acquired from an unrelated third party using existing cash on hand and proceeds from dispositions.

On October 31, 2023, the Company’s board of directors declared a cash dividend in the amount of $ 0.45 per share of its common stock payable on January 5, 2024 to the stockholders of record as of the close of business on December 15, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements