UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 2, 2024
Modiv Industrial, Inc.
(Exact name of registrant as specified in its charter)
Maryland
|
|
001-40814
|
|
47-4156046
|
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer Identification No.)
|
|
200 S. Virginia Street, Suite 800
|
|
|
|
Reno, Nevada
|
|
89501
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Registrant’s telephone number, including area code: (888)
686-6348
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
|
Class C Common Stock, $0.001 par value per share
|
|
MDV
|
|
New York Stock Exchange
|
| |
|
|
|
|
|
7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share
|
|
MDV.PA
|
|
New York Stock Exchange
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. |
Results of Operations and Financial Condition
|
On May 2, 2024, Modiv Industrial, Inc., a Maryland corporation (the “Company”), issued an earnings press release relating to the Company’s financial
results for the first quarter ended March 31, 2024. A copy of the press release is available on the Company’s website, is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The Company also released supplemental data on the
Company’s website relating to the Company’s portfolio information as of March 31, 2024 and its financial results for the first quarter ended March 31, 2024. A copy of the supplemental data is attached hereto as Exhibit 99.2 and is incorporated
herein by reference.
The information in Item 2.02 of this Current Report, including Exhibits 99.1and 99.2 are being furnished and shall not be deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration
statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless it is specifically incorporated by reference therein. References to the Company’s website in this Current Report on
Form 8-K and in the attached Exhibits 99.1and 99.2 to this Current Report on Form 8-K do not incorporate by reference the information on such website into this Current Report on Form 8-K and the Company disclaims any such incorporation by
reference.
| Item 7.01. |
Regulation FD Disclosure
|
Earnings Release and Supplemental Data
On May 2, 2024, the Company issued an earnings press release relating to the Company’s financial results for the first quarter ended March 31, 2024. A
copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The Company also released supplemental data on the Company’s website relating to the Company’s portfolio information as of March 31, 2024 and its
financial results for the first quarter ended March 31, 2024. A copy of the supplemental data is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The furnishing of this earnings press release and supplemental data are not intended to constitute a representation that such furnishing is required by
Regulation FD or other securities laws, or that the earnings release and supplemental data include material investor information that is not otherwise publicly available. In addition, the Company does not assume any obligation to update such
information in the future.
The information in Item 7.01 of this Current Report, including the section “Estimated Net Asset Value Per Share” below and Exhibits 99.1and 99.2 are
being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any
registration statement or other document pursuant to the Securities Act or the Exchange Act, unless it is specifically incorporated by reference therein.
Estimated Net Asset Value Per Share
Estimated Net Asset Value (“NAV”) Per Share and Valuation Procedures
In order to provide additional insight into the value of our real estate portfolio, we engaged Cushman & Wakefield (“Cushman”) and CBRE, Inc.
(“CBRE”), two independent valuation firms, to appraise our properties and provide estimated fair values for our fixed-rate mortgages as of January 31, 2024. We then used their estimated fair values of our assets and debt, along with our balance
sheet as of January 31, 2024 to calculate our estimated net asset value (“NAV”) per share (unaudited).
As a public company, we are required to issue financial statements generally based on historical cost in accordance with GAAP as applicable to our
financial statements. To calculate NAV, we have adopted a model, as explained below, which adjusts the value of certain of our assets from their historical cost to fair value. As a result, our NAV differs from the amount reported as stockholders’
equity on the face of our financial statements prepared in accordance with GAAP. When the fair value of our assets is calculated for the purposes of determining our NAV per share, the calculation is done generally in accordance with the fair value
methodologies detailed within the FASB Accounting Standards Codification under Topic 820, Fair Value Measurements and Disclosures. Because these fair value calculations involve significant professional judgment in the application of both observable
and unobservable inputs, the calculated fair value of our assets may differ from their actual realizable value or future fair value. In addition, our valuation procedures and our NAV are not subject to GAAP and are not subject to independent audit.
Our NAV may differ from equity reflected on our consolidated financial statements, even if we are required to adopt a fair value basis of accounting for our GAAP financial statements in the future. Furthermore, no rule or regulation requires that
we calculate NAV in a certain way. While we believe our NAV calculation methodologies are consistent with standard industry practices, there is no rule or regulation that requires we calculate NAV in a certain way and there is no established
practice among public REITs, whether listed or not. As a result, other public REITs may use different methodologies or assumptions to determine NAV. In addition, NAV is not a measure used under GAAP and the valuations of and certain adjustments
made to our assets and liabilities used in the determination of NAV will differ from GAAP. You should not consider NAV to be equivalent to stockholders’ equity or any other GAAP measure.
Independent Valuation Firms
We engaged Cushman and CBRE to serve as our independent valuation firms with respect to the valuation of the assets and fixed-rate debt associated with
our wholly-owned real estate portfolio and an approximate 72.7% tenant-in-common interest in a Santa Clara, California industrial property (the “TIC Interest”), all of which are held, directly or indirectly, by Modiv Operating Partnership, LP (the
“Operating Partnership”). Cushman and CBRE are multidisciplinary providers of independent, commercial real estate consulting and advisory services in multiple offices around the world. Cushman and CBRE are engaged in the business of valuing
commercial real estate properties and are not affiliated with us. The compensation we paid to the independent valuation firms is not based on the estimated values of our real estate properties. The independent valuation firms discharge their
responsibilities in accordance with our real property valuation procedures described below.
Cushman and CBRE and their affiliates may from time to time in the future perform other commercial real estate and financial advisory services for us,
or in transactions related to the properties that are the subjects of valuations being performed for us, or otherwise, so long as such other services do not adversely affect the independence of the applicable appraiser as certified in the
applicable valuation report.
Real Property Valuation
The real property valuation, which is the largest component of our NAV calculation, has been provided to us by Cushman and CBRE. Both Cushman and CBRE
provided restricted appraisal reports for our 43 properties owned as of January 31, 2024, including the property held in our TIC Interest. The value of our properties was estimated on an unencumbered basis. The effect of property-level debt on our
NAV is discussed further below.
Cushman and CBRE rely in part on property-level information provided by management, including (i) physical property attributes such as size, year
built, and construction quality and type; (ii) historical and projected operating revenues and expenses of the property; (iii) lease agreements on the property; and (iv) information regarding recent or planned capital expenditures.
Cushman and CBRE utilize standard and accepted appraisal methodology in arriving at their opinions of fair value, and apply only the most appropriate
valuation techniques amongst the income capitalization, sales comparison, and cost approaches to value. The reliability of each approach depends on the availability and comparability of market data as well as the motivation and thinking of
purchasers. In estimating the fair value of the properties, Cushman and CBRE utilize the income capitalization approach as the primary method. A second limited scope sales comparison approach is employed to test the reasonableness of the income
capitalization approach.
Because the estimated property valuations involve significant professional judgment in the application of both observable and unobservable attributes,
the calculated value of our real property may not reflect the liquidation value or net realizable value of our properties because the valuations performed by Cushman and CBRE involve subjective judgments and do not reflect transaction costs
associated with property dispositions. However, as discussed below, in some circumstances such as when an asset is anticipated to be acquired or disposed, we may apply a probability-weighted analysis to factor in a portion of potential transaction
costs in our NAV calculation.
Cushman’s and CBRE’s valuation reports are not addressed to the public and may not be relied upon by any other person to establish an estimated value
of our common stock and do not and will not constitute a recommendation to any person to purchase or sell any shares of our common stock. In preparing their valuation reports, Cushman and CBRE did not solicit third-party indications of interest for
our common stock in connection with possible purchases thereof, or the acquisition of all or any part of our Company. The valuation reports of Cushman and CBRE are subject to certain assumptions and limiting conditions, which are set forth therein,
and must be read in their entirety for a full understanding of each appraiser’s analysis and basis for its conclusions. Note that each valuation report is only an estimate of value, as of the specific date stated in such report, and that changes
since the date of the report can significantly affect the conclusions therein.
In conducting their investigation and analyses, Cushman and CBRE take into account customary and accepted financial and commercial procedures and
considerations as they deem relevant, which may include, without limitation, the review of documents, materials and information relevant to valuing the property that are provided by us. Although Cushman and CBRE may review information supplied or
otherwise made available by us for reasonableness, they assume and rely upon the accuracy and completeness of all such information and all information supplied or otherwise made available to them by any other party and do not undertake any duty or
responsibility to verify independently any such information. With respect to operating or financial forecasts and other information and data to be provided to or otherwise to be reviewed or discussed with Cushman and CBRE, they assume such
forecasts and other information and data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of our management and rely upon us to advise them promptly if any material information
previously provided becomes inaccurate or was required to be updated during the period of their review.
In performing their analyses, Cushman and CBRE are expected to make numerous assumptions with respect to industry performance, general business,
economic and regulatory conditions and other matters, many of which are beyond their control and our control, as well as with respect to certain factual matters. Such assumptions, some of which may be unstated, may or may not prove to have been or
be, or may no longer be, accurate. For example, unless specifically informed to the contrary, Cushman and CBRE assume that we have clear and marketable title to each real estate property valued, that no title defects exist, that improvements were
made in accordance with law, that no hazardous materials are present or were present previously, that no deed restrictions exist, and that no changes to zoning ordinances or regulations governing use, density or shape are pending or being
considered. Furthermore, Cushman’s and CBRE’s analysis, opinions and conclusions are necessarily based upon market, economic, financial and other circumstances and conditions existing at or prior to the valuation, and any material change in such
circumstances and conditions may affect their analysis and conclusions. Cushman’s and CBRE’s valuation reports may contain other assumptions, qualifications and limitations set forth in their respective reports that qualify the analysis, opinions
and conclusions set forth therein.
The overarching principle is to produce valuations that represent fair and reasonable estimates of the unencumbered values of our real estate or the
prices that would be received for our real properties in arm’s length transactions between market participants before considering underlying debt. The valuation of our real properties estimated by Cushman and CBRE may not always reflect the value
at which we would agree to buy or sell assets and the value at which we would buy or sell such assets could materially differ from their estimates of fair value. Further, we do not undertake to disclose the value at which we would be willing to buy
or sell our real properties to any prospective or existing investor.
The valuations are performed in accordance with the Code of Ethics and the Uniform Standards of Professional Appraisal Practices, or USPAP, the real
estate appraisal industry standards created by The Appraisal Foundation. Each valuation must be reviewed, approved and signed by an individual with the Member of Appraisal Institute (“MAI”) professional designation. Real estate valuations are
reported on a free-and-clear basis (for example, without factoring in any applicable mortgage(s)), irrespective of any property-level financing that may be in place. Such property-level financings ultimately are factored in and do reduce our NAV in
a manner described below.
The analyses performed by Cushman and CBRE do not address the market value of our common stock. Furthermore, the prices at which our real estate
properties may actually be sold could differ from their estimated valuations of such properties.
Valuation of Real Estate-Related Liabilities
Our real estate-related liabilities consist of financing for our real estate assets. Depending on the relationship of a loan’s interest rate and other
terms to current market interest rates and other terms, Cushman and CBRE may conclude that the estimated value of a loan is more or less than our current loan balance.
Cushman’s and CBRE’s scope of work was conducted in conformity with the requirements of the Code of Professional Ethics and Standards of Professional
Practice of the Appraisal Institute. Several members of the Cushman and CBRE engagement teams who certified the methodologies and assumptions applied by us hold a MAI designation.
Other than (i) its engagement as described herein, (ii) its previous engagements with our Company in connection with the determination of the estimated
NAV per share (unaudited) of our common stock as of December 31, 2017, December 31, 2018, December 31, 2019, April 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, January 31, 2022 and December 31, 2022, and (iii) its
previous engagements with Rich uncles Real Estate Investment Trust I (“REIT I”) in connection with the determination of the estimated NAV per share (unaudited) of REIT I common stock as of December 31, 2017 and December 31, 2018, Cushman does not
have any direct interests in any transaction with us and has not performed any services for us other than Asset Allocation services pursuant to Accounting Standards Update (“ASU”) No. 2017-01, Clarifying the Definition of a Business (ASU No.
2017-01) and FASB Accounting Standards Codification Topic 805, Business Combinations (ASC Topic 805) and the real estate financial advisor services it provided on behalf of REIT I in connection with the REIT I Merger with our Company on December
31, 2019.
Valuation Methodology
In preparing their valuation materials and in reaching their conclusions as to the reasonableness of the methodologies and assumptions used by our
Company to value our assets, Cushman and CBRE, among other things:
| • |
investigated sales in the properties’ relevant markets, analyzed rental data and considered the available input of buyers, sellers, brokers, property developers and public officials;
|
| • |
reviewed and relied upon our Company-provided data regarding the size, year built, construction quality and construction type of the properties in order to understand the characteristics of the existing
improvements and underlying land;
|
| • |
researched the market by means of publications, public and private databases and other resources to measure current market conditions, supply and demand factors, and growth patterns and their effect on the
properties; and
|
| • |
performed such other analyses and studies, and considered such other factors, as they considered appropriate.
|
Cushman and CBRE utilized two approaches in estimating the value of our real estate assets that are commonly used in the commercial real estate
industry. The following is a summary of the valuation approaches used by Cushman and CBRE.
Determination of Estimated Fair Value of Our Real Estate Assets
Cushman’s and CBRE’s estimated fair values of our real estate properties as of January 31, 2024 were as follows.
| |
|
Cushman
|
|
|
CBRE
|
|
|
• Estimated fair value of our 42 wholly-owned real estate properties
|
|
$
|
569,465,000
|
|
|
$
|
563,280,000
|
|
|
• Estimated fair value of the property held in our TIC Interest
|
|
$
|
38,580,000
|
|
|
$
|
38,400,000
|
|
Income Capitalization Approach – The income capitalization approach first estimates the income-producing capacity of a property by using contract rents on existing leases, or expected rents for leases that are scheduled to expire within
the next 12 months if not extended by the tenant, and by estimating market rent from rental activity at competing properties for any vacant space. Deductions are then made for vacancy and collection loss and operating expenses. The net operating
income (“NOI”) developed in Cushman’s and CBRE’s analysis is the balance of potential income remaining after vacancy and collection loss and operating expenses. This NOI was then capitalized at an appropriate rate to derive an estimate of value
(the “Direct Capitalization Method”) or discounted by an appropriate yield rate over a typical projection period in a discounted cash flow analysis. Thus, two key steps were involved: (1) estimating the NOI applicable to the subject property and
(2) choosing appropriate capitalization rates and discount rates.
The following summarizes the range of capitalization rates used to arrive at the estimated fair values of our properties valued using the Direct
Capitalization Method:
| |
Cushman
|
|
CBRE
|
|
Capitalization Rate – Estimated fair value as of January 31, 2024
|
5.25% to 15.70%
|
|
5.75% to 9.50%
|
Sales Comparison Approach – The sales comparison approach estimates value based on what other purchasers and sellers in the market have agreed to as the price for comparable improved properties. This approach is based upon the principle of
substitution, which states that the limits of prices, rents, and rates tend to be set by the prevailing prices, rents, and rates of equally desirable substitutes.
Determination of Estimated Fair Value of Our Mortgages
Cushman’s and CBRE’s estimated fair values of our fixed-rate real estate-related liabilities as of January 31, 2024 were as follows.
| |
|
Cushman
|
|
|
CBRE
|
|
|
• Estimated fair value of our two consolidated real estate mortgages
|
|
$
|
28,117,749
|
|
|
$
|
28,650,200
|
|
|
• Estimated fair value of the mortgage on property in our TIC Interest
|
|
$
|
11,857,833
|
|
|
$
|
11,788,128
|
|
Calculation of Our Estimated NAV Per Share (Unaudited) as of January 31, 2024
We used Cushman’s and CBRE’s estimated fair values of our real estate assets and mortgages on our properties, along with our balance sheet to calculate
estimated NAV per share.
We added the non-real estate related tangible assets, including cash and cash equivalents, and subtracted non-real estate related liabilities,
including interest rate swap derivatives and other liabilities. Our liabilities are included as part of our NAV calculation generally based on GAAP, except for property-level mortgages and interest rate swaps, which are included based on their fair
values. Our other liabilities include, without limitation, accounts payable, accrued operating expenses, accrued interest, dividends and distributions payable, and other liabilities.
The resulting amount, which is our estimated NAV of the portfolio, is divided by the number of fully-diluted shares of common stock outstanding to
determine the estimated NAV per share.
The table below sets forth Modiv’s calculation of our estimated NAV per share (unaudited) as of January 31, 2024:
| |
|
Management Calculation
|
|
|
Management Calculation
|
|
| |
|
Using Cushman Appraisals
|
|
|
Using CBRE Appraisals
|
|
| |
|
Estimated
Value
|
|
|
Estimated
NAV Per Share
|
|
|
Pro Forma
Value
|
|
|
Pro Forma
NAV Per Share
|
|
|
Real estate properties
|
|
$
|
569,465,000
|
|
|
$
|
50.06
|
|
|
$
|
563,280,000
|
|
|
$
|
49.52
|
|
|
Investment in unconsolidated entity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Santa Clara, CA property tenant-in-common interest (b)
|
|
|
19,735,103
|
|
|
|
1.74
|
|
|
|
19,654,908
|
|
|
|
1.73
|
|
|
Cash, cash equivalents and restricted cash
|
|
|
10,306,887
|
|
|
|
0.91
|
|
|
|
10,306,887
|
|
|
|
0.91
|
|
|
Interest rate swap derivative
|
|
|
2,848,024
|
|
|
|
0.25
|
|
|
|
2,848,024
|
|
|
|
0.25
|
|
|
Other assets
|
|
|
3,555,655
|
|
|
|
0.31
|
|
|
|
3,555,655
|
|
|
|
0.31
|
|
|
Total assets
|
|
|
605,910,669
|
|
|
|
53.27
|
|
|
|
599,645,474
|
|
|
|
52.72
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage notes payable
|
|
|
28,117,749
|
|
|
|
2.47
|
|
|
|
28,650,200
|
|
|
|
2.52
|
|
|
Credit facility (at face value)
|
|
|
250,000,000
|
|
|
|
21.98
|
|
|
|
250,000,000
|
|
|
|
21.98
|
|
|
Accrued interest payable
|
|
|
196,451
|
|
|
|
0.02
|
|
|
|
196,451
|
|
|
|
0.02
|
|
|
Accrued dividends and distributions payable
|
|
|
1,005,397
|
|
|
|
0.09
|
|
|
|
1,005,397
|
|
|
|
0.09
|
|
|
Interest rate swap derivative
|
|
|
271,283
|
|
|
|
0.02
|
|
|
|
271,283
|
|
|
|
0.02
|
|
|
Other liabilities
|
|
|
4,081,707
|
|
|
|
0.36
|
|
|
|
4,081,707
|
|
|
|
0.36
|
|
|
Total liabilities
|
|
|
283,672,587
|
|
|
|
24.94
|
|
|
|
284,205,038
|
|
|
|
24.99
|
|
|
Series A Preferred Stock
|
|
|
50,000,000
|
|
|
|
4.40
|
|
|
|
50,000,000
|
|
|
|
4.40
|
|
|
Total estimated net asset value (b) and (c)
|
|
$
|
272,238,082
|
|
|
$
|
23.93
|
|
|
$
|
265,440,436
|
|
|
$
|
23.33
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully-diluted shares outstanding (d)
|
|
|
11,375,344
|
|
|
|
|
|
|
|
11,375,344
|
|
|
|
|
|
| (a) |
Reflects our approximate 72.7% interest in the Santa Clara property which includes real estate valued at $38,580,000 and $38,400,000 by Cushman and CBRE, respectively, and a mortgage with estimated fair value of $11,857,833 and
$11,788,128 by Cushman and CBRE, respectively, along with non-real estate related tangible assets and other liabilities.
|
| (b) |
The implied cap rate of Cushman’s real estate appraised values is 6.93% and the implied cap rate of CBRE’s real estate appraised values is 6.81%
|
| (c) |
Book value per share was $15.77 as of January 31, 2024
|
| (d) |
Fully-diluted shares outstanding as of January 31, 2024 includes all outstanding units of limited partnership interest as described in our Annual Report on Form 10-K for the year ended December 31, 2023.
|
Exclusions from Estimated NAV
The estimated share value does not reflect any “portfolio premium,” nor does it reflect an enterprise value of our Company, which may include a premium
or discount to NAV for:
| • |
the size of our Company’s portfolio, as some buyers may pay more for a portfolio compared to prices for individual investments;
|
| • |
the overall geographic and tenant diversity of the portfolio as a whole;
|
| • |
the characteristics of our Company’s working capital, leverage, credit facilities and other financial structures where some buyers may ascribe different values based on synergies, cost savings or other
attributes; or
|
| • |
certain third-party transaction or other expenses that would be necessary to realize the value.
|
Limitations of the Estimated Share Value
As with any valuation methodology, the NAV Methodology used in reaching an estimate of the value of our shares is based upon a number of estimates,
assumptions, judgments and opinions that may, or may not, prove to be correct, and are calculated as of a particular point in time. The use of different valuation methods, estimates, assumptions, judgments or opinions may have resulted in
significantly different estimates of the value of our shares. In addition, our estimate of share value is not based on the book values of our real estate, as determined by GAAP, as our book value for most real estate is based on the amortized cost
of the property, subject to certain adjustments.
Furthermore, in reaching an estimate of the value of our shares, we did not include a discount for debt that may include a prepayment obligation or a
provision precluding assumption of the debt by a third party. In addition, selling costs were not considered by Cushman or CBRE in estimating the valuation of the properties.
Additional Information Regarding Engagement of Cushman and CBRE
Cushman’s and CBRE’s valuation materials provided to our Company do not constitute a recommendation to purchase or sell any shares of our common stock
or other securities. The estimated value of our common stock may vary depending on numerous factors that generally impact the price of securities, the financial condition of our Company and the state of the real estate industry more generally, such
as changes in economic or market conditions, changes in interest rates, changes in the supply of and demand for commercial real estate properties and changes in tenants’ financial condition.
In connection with their reviews, while Cushman and CBRE reviewed the information supplied or otherwise made available to them by our Company for
reasonableness, Cushman and CBRE assumed and relied upon the accuracy and completeness of all such information and of all information supplied or otherwise made available to them by any other party, and did not undertake any duty or responsibility
to verify independently any of such information. With respect to financial forecasts and other information and data provided to or otherwise reviewed by or discussed with Cushman and CBRE, they assumed that such forecasts and other information and
data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of our Company, and relied upon our Company to advise them promptly if any information previously provided became
inaccurate or was required to be updated during the period of their review.
In preparing their valuation materials, Cushman and CBRE did not, and were not requested to, solicit third party indications of interest for our
Company in connection with possible purchases of our securities or the acquisition of all or any part of our Company.
In performing their analyses, Cushman and CBRE made numerous assumptions with respect to industry performance, general business, economic and
regulatory conditions and other matters, many of which are beyond their control and the control of our Company. The analyses performed by Cushman and CBRE are not necessarily indicative of actual values, trading values or actual future results of
our Company’s common stock that might be achieved, all of which may be significantly more or less favorable than suggested by such analyses. The analyses do not reflect the prices at which properties may actually be sold, and such estimates are
inherently subject to uncertainty.
Cushman’s and CBRE’s materials were necessarily based upon market, economic, financial and other circumstances and conditions existing as of January
31, 2024, and any material change in such circumstances and conditions may have affected their analysis, but they do not have, and have disclaimed, any obligation to update, revise or reaffirm their materials as of any date subsequent to January
31, 2024. The intended use and users of each valuation report are specifically identified in each valuation report. No other use or user of any valuation report is permitted by any other party for any other purpose. Dissemination of any valuation
report by any party to any non-client, non-intended users does not extend reliance to any other such party and Cushman and CBRE will not be responsible for unauthorized use of any valuation report, its conclusions, or contents, whether used in part
or in whole.
For services rendered in connection with and upon the delivery of their valuation materials, we paid Cushman and CBRE a customary fee. The compensation
Cushman and CBRE received was based on the scope of work and was not contingent on an action or event resulting from analyses, opinions, or conclusions in their valuation materials or from their use. In addition, Cushman’s and CBRE’s compensation
for completing the valuation was not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of our Company, the amount of the estimated value, the attainment of a stipulated result, or the
occurrence of a subsequent event directly related to the intended use of the valuation materials. We also agreed to reimburse Cushman and CBRE for their expenses incurred in connection with their services and will indemnify Cushman and CBRE against
certain liabilities arising out of their engagements.
Safe Harbor Statement
There is no guarantee that the Company’s Board will authorize, or that the Company will declare, additional dividends in the future, and the amount of
future dividends, if any, and the authorization and payment thereof, will be determined by the Board based on the Company’s financial condition and such other factors as the Board deems relevant. Certain
statements contained in this Current Report on Form 8-K, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements
include, but are not limited to, statements related to the Company’s expectations regarding the performance of its business and the estimated net asset value per share of the Company’s common stock. Cushman and CBRE relied on forward-looking
information, some of which was provided by or on behalf of the Company, in preparing its valuation materials. Therefore, neither such statements nor Cushman’s nor CBRE’s valuation materials are intended to, nor shall they, serve as a guarantee of
the Company’s performance in future periods. These forward-looking statements can be identified by the use of words such as “believes,” “potential,” “may,” “will,” “should,” “intends,” “estimates,” “anticipates” or the negative version of these
words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”). Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These
factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Current Report on Form 8-K and in the Company’s other filings with the SEC. The Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Actual events may cause the valuation and returns on the Company’s investments to be less than that used
for purposes of the Company’s estimated per share NAV.
| Item 9.01. |
Financial Statements and Exhibits.
|
(d) Exhibits
|
Exhibit No.
|
Description
|
|
|
Modiv Industrial, Inc. Press Release dated May 2, 2024
|
|
|
Modiv Industrial, Inc. Supplemental Data For The Quarter Ended March 31, 2024
|
|
104
|
Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
MODIV INDUSTRIAL, INC.
(Registrant)
|
|
|
|
By:
|
/s/ RAYMOND J. PACINI
|
|
|
Name:
|
Raymond J. Pacini
|
|
|
Title:
|
Chief Financial Officer
|
|
Date: May 2, 2024
|
|
|
|