Plymouth Industrial Closes Stock Sale, $97M Portfolio Purchase

The REIT sold $75 million worth of shares to Madison International Realty and used a portion of the proceeds to acquire a 1.1 million-square-foot group of assets in Jacksonville, Fla.
Salisbury Business Park

Plymouth Industrial REIT has a new partner and a new portfolio. The company has closed on a $75 million investment from Madison International Realty Holdings, which allowed for the simultaneous $97.1 million acquisition of the 1.1 million-square-foot Jacksonville Southside Business Park portfolio in Jacksonville, Fla.

Enhancing its capital structure, Plymouth sold 4,411,764 shares of its Series B Convertible Redeemable Preferred Stock to Madison, at $17.000 per share. The REIT utilized proceeds from the transaction—orchestrated by Sandler O’Neill and Partners—to repay a $31.2 million loan from KeyBank and fund a $5 million stock repurchase program. An additional $34 million was applied to the purchase price of the Jacksonville assets.

“The timing was right (for the strategic investment) because we required a large sum of equity to acquire the Jacksonville portfolio and our ability to access the public equity markets at the time was limited,” Jeff Witherell, chairman & CEO of Plymouth Industrial REIT, told Commercial Property Executive.

Plymouth financed the remaining cost of the Jacksonville portfolio with a short-term loan of $63 million through KeyBank. The collection of light industrial and flex facilities, located in the Southside submarket, consists of the three-building Salisbury Business Park, the six-structure Liberty Business Park and Center Point Business Park, an 11-building campus. The group of properties is 96 percent leased, with such leading businesses as Cardinal Health, Cintas, Comcast and Home Depot listed on the roster of 40 tenants.

Hitting targets

The acquisition of the Jacksonville portfolio gives Plymouth a million-square-foot presence in one of its core markets in one fell swoop.

“We’ve been looking at Jacksonville for some time now and saw this opportunity as a way to achieve critical mass in a high-growth market, with very limited downside,” Pendleton White, president & chief investment officer of Plymouth Industrial REIT, told CPE“We continue to assess other potential acquisitions in the Southeast. In addition to expanding our existing footprint in Atlanta, we’re also looking at Orlando, Savannah, Tampa and Charleston to name a few.”

Plymouth’s growth plan, however, extends beyond key southeastern markets—the Midwest is on its radar as well. In the third quarter of 2018, the REIT purchased a 400,000-square-foot industrial building in Cleveland and announced a definitive agreement to buy a 1.1 million-square-foot property in Cincinnati. Additionally, in two separate deals earlier this year, Plymouth expanded its holdings in metropolitan Chicago with the acquisition of a 75,000-square-foot light manufacturing building in Elgin and two manufacturing buildings totaling 270,000 square feet in Elgin and Arlington Heights

Image courtesy of Plymouth Industrial REIT