Griffin Announces Fiscal 2020 Fourth Quarter Leasing and Update on Rent Collection
15 Diciembre 2020 - 7:29AM
Griffin Industrial Realty, Inc. (Nasdaq: GRIF) (“Griffin”
or the “Company”) announced the following updates on
leasing and the impact of the COVID-19 pandemic on rent
collections:
Leasing
Griffin reported the following for its industrial/warehouse
portfolio for the three months ended November 30, 2020 (the “2020
fourth quarter”):
|
Number of Leases1 |
Square Feet |
Weighted Avg. LeaseTerm in Years |
Weighted Avg. Lease CostsPSF per Year2 |
Weighted Avg.Rent Growth3 |
Straight-line Basis |
Cash Basis |
New Leases |
1 |
8,400 |
3.0 |
$1.15 |
2.5 |
% |
(0.5 |
%) |
Renewals |
5 |
489,984 |
5.0 |
$0.51 |
13.6 |
% |
0.5 |
% |
Total / Avg. |
6 |
498,384 |
5.0 |
$0.52 |
13.3 |
% |
0.5 |
% |
Griffin’s industrial/warehouse portfolio’s percentage leased was
as follows:
|
Nov 30,2020 |
Aug 31,2020 |
May 31,2020 |
Feb 29,2020 |
Percentage Leased |
94.3 |
% |
94.3 |
% |
94.3 |
% |
94.9 |
% |
Percentage Leased – Stabilized Properties4 |
95.4 |
% |
99.7 |
% |
99.7 |
% |
99.1 |
% |
Approximately 411,000 square feet of the 498,000 square feet
renewed or leased during this quarter related to two lease renewals
of existing tenants in the Lehigh Valley of Pennsylvania. One of
these leases was an early 5-year renewal of 131,000 square feet
leased to the subsidiary of a Fortune 500 company, increasing the
remaining lease term to nearly 7 years, and the other was a 5-year
renewal of 280,000 square feet leased to the North American
subsidiary of a multi-national provider of workplace equipment and
technologies.
The renewal for 131,000 square feet was an early 5-year renewal,
negotiated with the tenant as part of a response to their request
for rent relief in the second fiscal quarter of 2020, during the
early days of the COVID-19 pandemic in the United States. Griffin
agreed to provide a 50% rent abatement to the tenant for four
months, in exchange for this renewal with no tenant
improvements.
The renewal for 280,000 square feet was with the tenant who
pre-leased a new building that Griffin constructed in the Lehigh
Valley approximately five years ago. In connection with the
original lease, the tenant required above standard improvements
which Griffin provided as a turn-key service. The cost of these
improvements was reflected in the base rental rate for the initial
term of the original lease, resulting in that lease’s initial base
rental rate being approximately 17% above market at the time it was
signed. The Lehigh Valley industrial market has experienced strong
rental growth over the last five years, however, due to the
comparison of the renewal rate to the higher initial rent that was
set in the original lease, Griffin’s weighted average rent growth
on a cash basis only shows modest growth.
As of November 30, 2020, Griffin’s thirty industrial/warehouse
buildings aggregated approximately 4,206,000 square feet and
represented 91.5% of Griffin’s total real estate portfolio.
Subsequent to the end of the 2020 fourth quarter, Griffin signed a
one-year extension for a tenant in the Lehigh Valley whose lease
was originally set to expire on September 30, 2021, leaving only
two leases of industrial/warehouse space scheduled to expire next
year. Those two leases aggregate approximately 166,000 square feet
and, if not renewed, are scheduled to expire in the 2021 fourth
quarter.
For Griffin’s office/flex portfolio, one vacant building of
approximately 40,000 square feet was sold during the quarter for
gross proceeds of $1.4 million. No new office/flex leasing was
completed during the quarter. Griffin’s remaining eleven
office/flex buildings, which aggregate approximately 393,000 square
feet and represent 8.5% of Griffin’s total real estate portfolio,
were 71.3% leased as of November 30, 2020, as compared to 64.7%
leased for the twelve office/flex properties that were in the
portfolio as of August 31, 2020.
Griffin’s total real estate portfolio of approximately 4,598,000
square feet was 92.3% leased as of November 30, 2020 (93.3% leased
for the stabilized, in-service portfolio4) as compared to a
portfolio of 4,639,000 square feet that was 91.5% leased as of
August 31, 2020.
Rent Collections/COVID-19 Impact
COVID-19 has not had a material impact on the Company’s rent
collection during the 2020 fourth quarter and as of the date of
this press release. Griffin collected 99.8% of rent in each of
September, October and November, accounting for both rent relief
and deferrals. As previously disclosed, since the onset of
COVID-19, Griffin entered into a total of two agreements with
tenants that granted rent relief aggregating approximately 0.5% of
Griffin’s anticipated total annual rental revenue for fiscal year
2020. The much larger of these two tenants is a subsidiary of a
Fortune 500 company who completed an early 5-year renewal, as
mentioned above. This early 5-year renewal is counted in the
renewal leasing statistics for the 2020 fourth quarter and the
amount of rent relief that was given to the tenant is included in
the calculation of weighted average lease costs per square foot per
year. The only other deferral agreement in place is with a 20,000
square foot tenant for a three month deferral that took place
during the second quarter of fiscal 2020. This tenant is currently
meeting its obligations and Griffin did not receive any new
requests for rent relief during the quarter and no previous
requests remain outstanding.
About Griffin
Griffin Industrial Realty, Inc. is a real estate business
principally engaged in developing, acquiring, managing and leasing
industrial/warehouse properties. Griffin owns 41 buildings totaling
approximately 4.6 million square feet (4.2 million of which is
industrial/warehouse space) in Connecticut, Pennsylvania, North
Carolina and Florida in addition to over 3,400 acres of undeveloped
land.
1 Excludes new leases and renewals with an initial term of
twelve months or less.2 Weighted average lease costs per square
foot per year reflects total lease costs (tenant improvements,
leasing commissions and legal costs) per square foot per year of
the lease term.3 Weighted average rent growth reflects the
percentage change of annualized rental rates between the previous
leases and the current leases. The rental rate change on a
straight-line basis represents average annual base rental payments
on a straight-line basis for the term of each lease including free
rent periods. Cash basis rent growth represents the change in
starting rental rates per the lease agreement on new and renewed
leases signed during the period, as compared to the previous ending
rental rates for that same space. The cash rent growth calculation
excludes free rent periods. The change in rental rate calculations
excludes leases for first generation space on properties acquired
or developed by Griffin.4 Stabilized properties reflect buildings
that have reached 90% leased or have been in-service for at least
one year since development completion or acquisition date,
whichever is earlier. Stabilized properties exclude 170 Sunport
Lane, which was 25.9% leased as of November 30, 2020. As of
November 30, 2020, stabilized properties include 160 & 180
International Drive as they have been in service for at least one
year.
CONTACT:Anthony
GaliciChief Financial
Officer(860) 286-1307
agalici@griffinindustrial.com
Ashley PizzoDirector, IR & Capital
Markets(212) 218-7914
apizzo@griffinindustrial.com
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