Re: PLYM
I did buy more yesterday but did a deep dive on their debt. It concerned me as it was pretty high compared to others in the sector. I decided to not add in size because of that.
COLD has a similar value Price/FFO but it too has high debt similar to PLYM. Both covered their div and was just at the higher end of their peers. Nothing like NXRT.
As you pointed out NXRT is extremely leveraged but that is part of their business. Buy multi-unit apartments, fix them up and sell them once they get them rented. So, they are vurnerable to a debt/leverage blow up and I will not be adding to my small position. They do keep the other units where rents are rising and they have a potential to increase. For them, it's a real estate play rather than an income generator. At least that was my conclusion.
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I am noticing LXP +5.3% another REIT I have been building a position in.
LXP Industrial Trust (NYSE: LXP) is a real estate investment trust (REIT) that specializes in the ownership, operation, and management of industrial properties across the United States.
Here's a breakdown of their business:
Are they an industrial REIT? Yes, LXP Industrial Trust is a pure-play industrial REIT. They focus on acquiring, developing, and operating Class A warehouse and distribution facilities in key U.S. logistics markets, particularly in the Sunbelt and lower Midwest regions. Their portfolio primarily consists of properties used for warehousing, distribution, and light manufacturing.
What is the Price/FFO now and looking forward? Based on their Q2 2025 earnings report and recent analyst estimates:
- Current FFO (Q2 2025): LXP generated Adjusted Company FFO of $0.16 per diluted share for the quarter ended June 30, 2025.
- Forward FFO (2025 Guidance): LXP tightened its estimated Adjusted Company FFO for the full year ending December 31, 2025, to be within an expected range of $0.62 to $0.64 per diluted common share.
- Forward FFO (2026 and 2027 Estimates): Analysts estimate FFO of $0.68 for 2026 and $0.77 for 2027.
As of August 15, 2025, LXP's stock price was $8.23.
Using the current stock price and the forward FFO estimates:
- Price/FFO (2025 FWD, using midpoint of guidance): $8.23 / $0.63 = 13.06x
- Price/FFO (2026 FWD): $8.23 / $0.68 = 12.10x
- Price/FFO (2027 FWD): $8.23 / $0.77 = 10.69x
Note: Price/FFO is a common valuation metric for REITs, similar to a P/E ratio for other companies.
Do they have triple net leases? Yes, a majority of LXP's properties are subject to net or similar leases, where the tenant bears all or substantially all of the costs, including increases, for real estate taxes, utilities, insurance, and ordinary repairs. This structure is characteristic of triple net leases, which typically provide more stable and predictable cash flows for the landlord.
How is their debt profile and compare it to others in the sector? As of June 30, 2025, LXP's debt profile shows:
- Net debt to adjusted EBITDA: 5.8x at quarter end, which is down 0.4 turns over the last 12 months. Reducing leverage remains a key focus for the company.
- Fixed-rate debt: LXP has increased its hedged and fixed-rate debt to 99% of debt outstanding in 2025 and 2026, with a weighted average interest rate of 3.9%. This high percentage of fixed-rate debt is a positive, as it minimizes exposure to rising interest rates.
- Cash on balance sheet: Approximately $71 million at quarter end.
- Total Debt: TTM (Trailing Twelve Months) Total Debt as of June 30, 2025 was approximately $1.406 billion.
Comparison to others in the sector: While a direct, real-time comparison to all industrial REITs' debt profiles is complex without specific current data for each, here are some general considerations for industrial REITs:
- Leverage (Net Debt/EBITDA): A leverage ratio of around 5-6x is generally considered moderate for industrial REITs. LXP's 5.8x is within a reasonable range for the sector. Many industrial REITs have been focused on deleveraging or maintaining conservative balance sheets in recent years to withstand economic uncertainties.
- Fixed vs. Floating Rate Debt: A high percentage of fixed-rate debt (like LXP's 99% for 2025/2026) is a strong positive, especially in a rising interest rate environment. This is a common strategy among well-managed REITs to mitigate interest rate risk.
- Weighted Average Interest Rate: LXP's 3.9% weighted average interest rate is competitive, reflecting favorable borrowing terms or effective hedging strategies.
- Debt Maturities: While specific maturity schedules for LXP were not detailed in the provided snippets, a well-managed REIT will have a staggered maturity schedule to avoid large lump-sum repayments in any single year, which provides financial flexibility.
In summary, LXP Industrial Trust appears to have a well-managed debt profile, characterized by a focus on reducing leverage, a high proportion of fixed-rate debt, and a competitive weighted average interest rate, which are generally favorable characteristics when compared to peers in the industrial REIT sector.
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