Plymouth Industrial REIT Secures $500 Million Investment from Sixth Street

Strategic Insights -

Plymouth Industrial REIT, Inc., a full-service, vertically integrated real estate investment company, has announced a strategic agreement with Sixth Street, a leading global investment firm, to secure significant growth capital. The $500 million investment will enable Plymouth to pursue acquisitions and scale its platform in key industrial markets. The transaction involves a $250 million joint venture with Sixth Street, where Plymouth will contribute its Chicago-area properties to the joint venture at a 6.2% capitalization rate, and a non-convertible preferred equity investment into the Operating Partnership.

Key Takeaways:

  • The transaction provides Plymouth with approximately $500 million of capital to pursue acquisitions and scale its platform in key industrial markets.
  • Sixth Street intends to be a strategic partner in pursuing additional joint venture opportunities with Plymouth in both new and existing industrial markets.
  • Plymouth will contribute its Chicago-area properties to the joint venture with Sixth Street at a 6.2% capitalization rate for a total gross asset value of approximately $356 million.
  • The joint venture will generate approximately $294 million of gross proceeds to Plymouth, resulting in approximately $212 million of deployable proceeds after mortgage assumption, transaction costs, and capital expenditure escrows.
  • Plymouth will retain 35% ownership of the approximately 5.9 million-square-foot portfolio and will include the 4.0% cash pay portion of the Preferred Equity dividend in its Core FFO and AFFO calculations.
  • Sixth Street is entitled to the greater of its $140 million investment plus accrued but unpaid distributions or a preferred multiple of 1.35x the total closing amount of $140 million.

Statistics:

  • $500 million: Total capital provided by Sixth Street to Plymouth.
  • $250 million: Total capital from Sixth Street in the form of a 65% joint venture ownership of Plymouth's Chicago portfolio and a non-convertible preferred equity investment into the Operating Partnership.
  • $356 million: Gross asset value of Plymouth's Chicago-area properties contributed to the joint venture.
  • 5.9 million square feet: Total square footage of the portfolio contributed to the joint venture.
  • 35%: Plymouth's ownership percentage of the joint venture portfolio.
  • 6.2%: Capitalization rate of the Chicago-area properties.
  • $178 million: Secured mortgages used to finance the joint venture.
  • $67 million: Secured debt removed from Plymouth's balance sheet due to the joint venture.
  • $14 million: Initial closing amount of Preferred Equity on August 26, 2024.
  • $79 million: Additional Preferred Equity to be provided within nine months of the initial closing.

Sources:

  • BOSTON, Aug. 27, 2024 (GLOBE NEWSWIRE) -- Plymouth Industrial REIT, Inc. (NYSE: PLYM)
  • Plymouth Industrial REIT, Inc. (NYSE: PLYM) (the "Company")
  • Sixth Street is a leading global investment firm with over $75 billion in assets under management and committed capital.