\nModiv Industrial, Inc. (\u201cModiv\u201d or the \u201cCompany\u201d) (NYSE: MDV), the only public REIT exclusively focused on acquiring industrial manufacturing real estate properties, today announced its latest independent, third-party appraisal of its assets resulting in an updated Net Asset Value (\u201cNAV\u201d) of $24.11 per share as of December 31, 2024.<\/p>\n
\nThe following is a statement from Aaron Halfacre, CEO of Modiv Industrial:<\/p>\n
\n\u201cThis year we engaged Cushman & Wakefield to conduct an appraisal of our 43 properties and to value our three fixed rate mortgages. Their estimates of value were then used to calculate our net asset value (NAV) per share as delineated in the table further below and in our accompanying 8-K filing. Our latest NAV represents the 12th<\/sup> independent, third-party appraisal of our portfolio of assets in the past eight years.<\/p>\n \nThis latest appraisal, like the other forms of valuation of Modiv (e.g. discounted cash flow models, analysts\u2019 consensus targets, cap rate analysis and P\/AFFO metrics), highlights that our prevailing stock price represents a tremendous opportunity relative to fair value. This mispricing opportunity isn\u2019t so surprising given the nearly three-year rate-spooked, risk-off environment that REITs have been suffering from. That said, it is hard for me to contain my enthusiasm at the chance to own mighty American manufacturing at nearly half off, during a pro-American Trump presidency no less. When you include our fully covered $1.17 per share annual dividend, there is so much shimmer one might begin to feel they are getting both a dessert topping and a floor wax.<\/p>\n \nI can already hear it being asked\u2026 \u2018Halfacre (or, if you prefer, any of my past monikers*), why bother with an appraisal in the first place?\u2019\u2026the primary answer is simple \u2013 transparency. As we have stated before, we believe that data informs decision-making, and transparency empowers awareness. However, there is a secondary answer to that question, and it relates to some recent marketplace speculation (i.e. SeekingAlpha) that we are looking to sell the company. If it pleases you, let\u2019s take the red pill and slide down that rabbit hole.<\/p>\n Wonderland<\/span> \u2013<\/b><\/p>\n I wish to caveat this next section by stating that my words below are not intended as guidance but simply me sharing my transparent thoughts and opinions \u2013 both historical and hypothetical. Ok, here it goes.<\/i><\/p>\n \nI believe every publicly listed company is de facto \u2018for sale\u2019 either in the open market by individual sellers, by the corporation itself issuing shares via an ATM or other offering, or, as has been speculated on SeekingAlpha \u2013 by selling to another suitor (e.g. M&A). By that definition, Modiv is technically always available to be sold. However, as of this writing, I have no knowledge of any potential takeover transactions and if someone else knows something I don\u2019t, then our NAV serves as a valuable prophylactic against low ball bids. For example, absent our published NAV of $24.11 per share, an unassuming investor might perceive an unsolicited offer to acquire Modiv at a traditional M&A market premium of 20% to our current share price as a great deal when, in fact, such an offer could be leaving +30% of potential value on the table.<\/p>\n \nAs we all know, the decision to sell to, or merge with, another company is at the discretion of voting shareholders and a company\u2019s board of directors. As both a CEO and a large individual shareholder, I believe we can systematically close the value gap over time, thereby bringing our share price closer and closer to our NAV. At the same time<\/i>, I also believe that there is a real benefit of closing that value gap sooner through M&A. I have said it in the past, and I will say it again, if an external party can close the value gap of a company and offer investors something that truly reflects fair value far sooner than the alternative, then any credible M&A offer should be taken seriously.<\/p>\n \nPersonally, I love M&A and I have been lucky enough to have been involved with four REIT M&A deals in my career (including the merger that initially created Modiv). In fact, I love to think about M&A so much that I have spent weekends creating, for fun, hypothetical pro forma merger models of REITs that I affectionately call \u2018REITmanteaus\u2019. For example, imagine the accretion from G&A synergies and cost of capital benefits if a net lease juggernaut were created by combining Realty Income (NYSE: O), W.P. Carey (NYSE: WPC) and NNN REIT (NYSE: NNN). Think about how much more interesting the distressed office play would be if you merged Net Lease Office Properties (NYSE: NLOP), City Office REIT (NYSE: CIO), Office Properties Income Trust (NASDAQ: OPI) and Orion Office REIT (NYSE: ONL). Or perhaps, the combo of equally sized FrontView (NYSE: FVR) and Alpine Income Property Trust (NYSE: PINE). Or what about the no-brainer of combining Farmland Partners (NYSE: FPI) and Gladstone Land Corp (NASDAQ: LAND) into a better sized farmland REIT. I know\u2026#REITNerd.<\/p>\n \nAlas, no matter how creative a \u2018REITmanteau\u2019 may be, an actual REIT combination is not unlike guessing the combination of a random high school locker. Twisting back and forth, to this number and that, then yanking down on the lock to see if it opens. Unless you can get the combo just right, nothing happens. Even though portfolios, balance sheets and management teams are fungible, there are so many variables that need to line up to have a successful merger. Often price is the most common deterrent, but other times it can be ego or financing or differing visions of the future. There is nothing wrong in trying to figure out a combination lock \u2013 you never know when it might just work. I can attest that Modiv has previously been approached by bankers to initiate communications with Plymouth Industrial (NYSE: PLYM), Gladstone Commercial Corp (NASDAQ: GOOD), and also a private non-traded REIT (all different than the previously mentioned battleships), but the combo to unlock value remains elusive.<\/p>\n \nIf you look at REIT history, particularly as it relates to some of the largest REITs, you clearly see that M&A is a very natural element of this industry. It would take a paragraph to just write about all the transactions ProLogis (NYSE: PLD) made to become the size it is today. Same goes for many other large REITs. M&A can be transformational and rewarding \u2013 the key is to be ready for, and creative about, the opportunities.<\/p>\n \nAs I previously stated, I have no knowledge today of any potential takeover transactions, but I can tell you that we do not fear it and, in fact, view any potential M&A opportunities as a valuable tool to grow a company and a tool we hope to use ourselves. Uniquely, our management team has a fair amount of career experience with M&A, such that it is a skillset that naturally combines with our innate creativity. Even though we are striving to be an acquirer, we don\u2019t have any preconceived notion that we are immune from acquisition, nor do we have an ego that will get in the way of a good combination. If a potential merger partner will only merge with us if we rename the company Persistent Industrial Manufacturing Properties in order to use the ticker PIMP, then let\u2019s do that if it means our investors can increase their net worth and strengthen their cash flow. Even better, though technically not a merger or a takeover, if @elonmusk ultimately decides he wants to make a 721 contribution of a Tesla (NASDAQ: TSLA) Gigafactory and\/or a SpaceX manufacturing facility to turn MDV into the X REIT, then by all means \u2013 we\u2019re ready.<\/p>\n \nUntil then, we will keep leaning our shoulder into the hard work necessary to take Modiv along the journey from good to great. Patiently. Intelligently. Strategically.<\/p>\n \nGrit, grind, get it done!\u201d Aaron Halfacre, CEO of Modiv Industrial.<\/p>\n \n*Monikers: Having the last name Halfacre seems like a no-brainer for the real estate industry but for whatever reason the pronunciation of my surname has been routinely butchered. When I was in high school in Hawaii as a non-military haole, I remember running at a track and field event in Waipahu when my name was pronounced (over the loudspeaker) with a thick Tagalog accent as \u201cHal FUHker\u201d. I carried that lucky nickname for the remainder of the school semester. Or how about when I was at USAF basic training and my drill sergeant mispronounced my last name as \u2018Hal Face\u2019 and I stupidly corrected him with an unaware scowl, which in turn led him to yelling \u201cFROM NOW ON YOUR NAME IS HELLFACE!!\u201d. It wasn\u2019t until I became a residential real estate agent (way before I went to college) and put on my business card \u201clike a \u00bd acre of land\u201d did people finally figure out how to pronounce my last name.<\/p>\n \n$<\/p>\n<\/td>\n \n566,365,000<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n50.63<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n569,465,000<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n50.06<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n23,180,751<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2.08<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n19,735,103<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1.74<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n11,530,381<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1.03<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n10,306,887<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.91<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2,848,024<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.25<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2,588,485<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.23<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,555,655<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.31<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n603,664,617<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n53.97<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n605,910,669<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n53.27<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n27,964,226<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n2.50<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n28,117,749<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n2.47<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n250,000,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n22.35<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n250,000,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n21.98<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n1,993,839<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.18<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,005,397<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.09<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n–<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n271,283<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.02<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n4,061,129<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.36<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4,278,158<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n0.38<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n284,019,194<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n25.39<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n283,672,587<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n24.94<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n50,000,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4.47<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n50,000,000<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4.40<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n269,645,423<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n24.11<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n272,238,082<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n23.93<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n11,186,101<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n11,375,344<\/p>\n<\/td>\n\n
\n MODIV INDUSTRIAL, INC.<\/b><\/td>\n<\/tr>\n \n Non-GAAP Measures – Net Asset Value Per Share<\/b><\/td>\n<\/tr>\n \n Estimated as of December 31, 2024 and January 31, 2024<\/b><\/td>\n<\/tr>\n \n (Unaudited)<\/b><\/td>\n<\/tr>\n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n The table below sets forth the calculation of our estimated NAV per share (unaudited) as of December 31, 2024 and January 31, 2024:<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n December 31, 2024<\/b><\/td>\n \n January 31, 2024<\/b><\/td>\n<\/tr>\n \n \n \n \n Estimated<\/b><\/td>\n \n Estimated<\/b><\/td>\n \n Estimated<\/b><\/td>\n \n Estimated<\/b><\/td>\n<\/tr>\n \n \n \n \n Value<\/b><\/td>\n \n NAV Per Share<\/b><\/td>\n \n Value<\/b><\/td>\n \n NAV Per Share<\/b><\/td>\n<\/tr>\n \n Assets<\/span><\/b><\/td>\n \n \n \n \n \n \n <\/tr>\n \n Real estate properties<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Investment in unconsolidated entity: tenant-in-common interest (a)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Interest rate swap derivative<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Other assets<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Total Assets<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Liabilities<\/span><\/b><\/td>\n \n \n \n \n \n \n <\/tr>\n \n Mortgage notes payable<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Credit facility (at face value)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Accrued dividends and distributions payable<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Interest rate swap derivative<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Other liabilities<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Total Liabilities<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Series A preferred stock<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Total estimated net asset value (b)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Fully-diluted shares outstanding (c)<\/td>\n \n \n \n \n \n \n \n \n <\/tr>\n<\/table>\n
![\"Logo\"](\"https:\/\/mms.businesswire.com\/media\/20250204763493\/en\/2371197\/3\/Modiv_Logo_Gear.jpg\"){kind=logo}
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