Good morning and welcome to Monmouth Real Estate Investment Corporation's Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. It is now my pleasure to introduce your host, Ms. Becky Coleridge, Vice President of Investor Relations. Thank you. Ms. Coleridge, you may begin.

Thank you very much, operator. In addition to the 10-Q that we filed with the SEC yesterday, we have filed an unaudited second quarter supplemental information presentation. This supplemental information presentation along with our 10-Q are available on the company's website. I would like to remind everyone that certain statements made during this conference call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements that we make on this call are based on our current expectations and involve various risks and uncertainties. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company's second quarter 2020 earnings release and filings with the Securities and Exchange Commission. The company disclaims any obligation to update its forward-looking statements. Having said that, I would like to introduce management with us today, Eugene Landy, Chairman; Michael Landy, President and Chief Executive Officer; Kevin Miller, Chief Financial Officer; and Richard Molke, Vice President of Asset Management. It is now my pleasure to turn the call over to Monmouth's President and Chief Executive Officer, Michael Landy.

Thank you, Becky. Good morning everyone and thank you for joining us. We hope you're all in good health and handling these difficult circumstances well. First and foremost, much gratitude and respect goes out to all of the medical practitioners, the doctors, the nurses, the technicians, the support teams, and everyone else out there working hard on the frontline. Your efforts and sacrifices do not go unnoticed and they are greatly appreciated. I'm pleased to report that our team is healthy and everyone has been doing an exceptional job keeping things on track while working remotely. I cannot be more proud of how well everyone has stepped up during this challenging environment. For decades, our business model has been and continues to be to provide consistent high-quality income streams by investing in industrial buildings on long-term leases to investment-grade tenants. At various points in the business cycle, this type of conservative business model is more highly favored than at others. For example, during the global financial crisis, our strong results allowed our investors to receive uninterrupted cash dividend payments. This is something that very few REITs were able to achieve. Monmouth represented one of the only safe harbors during the Great Recession and we are uniquely positioned to outperform once again. You should recall that prior to the COVID-19 Black Swan event, much more aggressive strategies were favored by the investment community. Companies in our sector were deliberately sacrificing occupancy rates for more aggressive leasing spreads. Same-store and ally growth was the biggest factor many looked to in ranking industrial REITs while focusing less on tenant quality, lease duration, and other important factors. Today, tenant quality, lease term safety, and stability are once again the predominant focus of the investment community at large. This is just the most recent of many examples illustrating why it is important to stick to strategies that have worked well over the long-term, as opposed to succumbing to short-term trends that may appear to work in any given moment until sooner or later the proverbial tide goes out, and business models truly get tested. Monmouth's assets are mission-critical as some of the strongest companies in the world. Many of our properties are currently seeing record throughput and are working extra shifts due to the stay-at-home environment we're dealing with today. Our consistently high occupancy rate has been over 98% for more than five years and it is currently 99.4%. Our weighted average lease maturity has exceeded seven years for more than six consecutive years and is currently averaging 7.4 years. At the intersection of quality versus growth, we have always favored quality and our strong results through this difficult period will bear this out. Rent collections have been the most prominent investor concern of late, so let's drill down on that. In March, 100% of our tenants' rent payments were received and for the month of April, 99% of rents have been received. While it's still early, thus far for May, 93% of rent payments have been received, which is normal given we are still in the first week of the month. To date, Monmouth has received very limited requests for rent deferment, representing only 200 basis points of our annual base rent. Of this amount, we've agreed to defer $320,000, which represents just 23 basis points of our annual base rent. This deferred amount is due to be paid by the end of the calendar year. From a portfolio standpoint, during the first two quarters of fiscal 2020, we grew our GLA by 769,000 square feet through the acquisition of two brand-new built-to-suit properties at a total cost of $99.4 million. The first acquisition consummated in the first quarter was a 616,000 square foot distribution center leased to Amazon for 15 years. This property acquired for $81.5 million is situated on 79 acres in the Indianapolis MSA. On March 30th, we acquired another property for $17.9 million, consisting of a newly constructed 153,000 square foot distribution center leased for 10 years to Magna Seating of America, the division of Magna International. This property is situated on over 24 acres in the Columbus, Ohio MSA. This acquisition did not contribute to our results this quarter, but we'll do so going forward. Our gross leasable area has now increased to approximately 23 million square feet, representing a 6% increase over the prior year period. As of the quarter end, our portfolio consisted of 116 properties geographically diversified across 30 states. Our acquisition pipeline grew during the quarter to $229.6 million. We now have four built-to-suit development projects, representing 1.5 million square feet currently under construction. Three of these projects have 15-year leases and one has a 20-year lease, resulting in a weighted average lease term of 17.2 years. In keeping with our business model, all of these projects are subject to long-term net leases to investment-grade tenants. Of these four properties, three properties comprising 844,000 square feet or 56% of our pipeline are leased to FedEx for 15 years. The remaining property, consisting of 658,000 square feet, is leased to Home Depot for 20 years. From a timing standpoint, we expect to close on two of these acquisitions for approximately $60.5 million, representing 356,000 total square feet or approximately 24% of our current pipeline during this fiscal year. The remaining two built-to-suit projects representing $169.1 million containing approximately 1.1 million square feet are expected to close in fiscal 2021. To take advantage of today's attractive interest rate environment, we have already locked in very favorable financing for three of these acquisitions. Combined financing terms for these three acquisitions consist of $85.7 million of proceeds, representing over 64% of the total cost. These financings have a weighted average interest rate of 3%. All three mortgages are 15-year self-amortizing loans. These built-to-suit acquisitions are all well-located state-of-the-art industrial assets that will represent excellent additions to our high-quality portfolio. As always, these future acquisitions are subject to satisfactory due diligence, and we anticipate closing these transactions upon completion and occupancy. We expect that the combination of our recent acquisitions, along with our increased acquisition pipeline, will contribute positively to earnings in the ensuing quarters. During the quarter, we raised approximately $8.6 million in equity capital through our dividend reinvestment plan. Of this amount, a total of $1.4 million in dividends were reinvested, representing an 8.6% participation rate. We also raised $37.1 million in net proceeds through our preferred stock ATM program with the sale of 1.5 million shares of 6.125% Series C preferred stock at a weighted average price of $25.12 per share. As we announced during our last earnings call this past February, we established a common stock ATM program that provides for the issuance of up to $150 million of our common stock at prevailing market prices. To date, we have not raised any equity through our common stock equity program. And based on current prevailing prices, we do not expect to utilize the common stock ATM program at this time. In March, as the result of the rapid and massive sell-off in the broad market, we repurchased 300,000 shares of our common stock for $3.2 million at an average price of $10.70 per share. Subsequent to the quarter end, we purchased an additional 100,000 shares of our common stock for $1.1 million at an average price of $10.66 per share. We ended the quarter with a strong balance sheet, completely unused bank line and ample liquidity which will allow us to continue to allocate capital opportunistically. With regards to the U.S. industrial market heading into this downturn, the vital signs regarding occupancy and rental rates were very strong, consistently registering at or near record levels. New industrial construction has historically been very responsive to shifts in the broad economy. And that has been the case thus far as new construction decreased by over 50% from 320 million square feet in the prior quarter to approximately 140 million square feet currently under construction. Initial reports for U.S. GDP in the first quarter came in at an annual rate of negative 4.8%, ending the longest expansion on record dating back to mid-2009. That's the result of much of the economy being shut down. Unemployment claims have eclipsed 30 million people in just one and a half months. ISM manufacturing readings are deepening contraction mode at 41.5 for the month of April due to the demand destruction that comes with a broad economic shutdown. It is too early to say to what extent the new normal will resemble the old. The global health crisis came on fast. And whether it plays out quickly or lingers longer will be the key determinant as to the depth of the destruction. And now let me turn it over to Rich so he can provide you with more detail on the property level, as well as our progress on the leasing front.

Thank you, Mike. With respect to our property portfolio, our occupancy stood at 99.4% at quarter end, representing a 50 basis point increase from a year ago and a 20 basis point increase sequentially. Our weighted average lease maturity is 7.4 years and our weighted average rent per square foot is $6.28 as of the quarter. Our weighted average rent is 3% below the national average asking rent of $6.41 per square foot, representing good embedded rent growth potential. From a leasing standpoint in fiscal 2020, five leases representing approximately 410,000 square feet or 2% of our gross leasable area were scheduled to expire. For the five expiring leases representing 355,000 square feet or 87% of the expiring GLA have been renewed before lease renewals, resulting in a 12% increase in rental rates on a GAAP basis and a 4.4% increase on a cash basis. The weighted average lease term for these four renewals was 4.2 years. The one property that did not renew its lease expired this past February and is a 55,000 square foot building in the Hartford, Connecticut MSA. As reported in the prior quarter, this property was under contract to sell for $4 million. However, given the recent uncertain market conditions created by COVID-19, the purchaser terminated the contract during the due diligence period, and this property is now currently being marketed for sale or lease. Out of our entire 116 properties in the portfolio, we currently have only two vacant buildings representing 60 basis points of our total GLA. Both buildings are being actively marketed, and we expect to have more information to share with you in the ensuing quarters. In this most challenging environment, I think it warrants repeating that to date, we have agreed to only $320,000 in deferred rent to be paid by the end of this calendar year. This amount is only 23 basis points of our annual base rent and handily represents the best rent collection figure reported thus far for the entire REIT sector. Looking ahead in 2021, only 4.4% of our annual base rent comes up for renewal with an all-star tenant base that includes FedEx, Amazon, Coca-Cola, Anheuser-Busch, Home Depot, Sherwin-Williams, Siemens, United Technologies, Toyota, International Paper, Beam Suntory, and many other great companies. We remain confident that we will continue to report excellent rent collection results. The supply chains and logistics companies are now more critical than ever. Our two largest tenants, FedEx and Amazon are seeing tremendous demand, and this demand is likely to continue for the foreseeable future. We look forward to reporting continued strong property-level results throughout the year and beyond. And now, Kevin will provide you with greater detail on our financial results.

Thank you, Rich. Funds from operations or FFO for the second quarter of fiscal 2020 were $20.2 million or $0.21 per diluted share. This compares to FFO for the same period one year ago of $19.6 million or $0.21 per diluted share, which is unchanged on a per share basis. Adjusted funds from operations or AFFO were $19.4 million or $0.20 per diluted share for the recent quarter as compared to $19.2 million or $0.21 per diluted share a year ago, representing a per share decrease of 4.8% from the prior year period. Sequentially, our FFO of $0.21 per diluted share for the second quarter of fiscal 2020 is $0.01 or 5% higher than our FFO of $0.20 per diluted share for the first quarter of fiscal 2020. And our AFFO of $0.20 per diluted share for the second quarter of fiscal 2020 is $0.01 or 4.8% lower than AFFO of $0.21 per diluted share for the first quarter of fiscal 2020. The quarterly year-over-year $0.01 decline in AFFO is primarily attributable to a $2.3 million increase in preferred dividend expense as a result of an increase in preferred shares outstanding. Rental and reimbursement revenues for the quarter were $41.7 million compared to $38.4 million, representing an increase of 8.7% from the previous year. Net operating income was $35 million for the quarter, reflecting a 7.7% increase from the comparable period a year ago. This increase was due to the additional income related to two of the three industrial properties purchased since the prior period. As mentioned, the third industrial property purchased since the prior year period was acquired on March 30. Therefore, it will not be contributing to our results until the upcoming third quarter. Net loss attributable to common shareholders was $75.1 million for the second quarter as compared to net income attributable to common shareholders of $23.8 million in the previous year's second quarter. This decrease in our net income was primarily driven by a $98.6 million variance from an unrealized gain on our securities portfolio of $15.6 million during the prior year's quarter to an unrealized loss on a securities portfolio of $83.1 million during the current year's quarter. Excluding the effect of this change in unrealized loss, net income attributable to common shareholders would have been $8 million for the current quarter as compared to $8.3 million for the prior year's quarter, representing a 3% decrease from the prior year's quarter. With regards to same property metrics, for the current three-month period, our same property NOI increased 2% on a GAAP basis and 2.1% on a cash basis. These increases in same property NOI are mostly due to a 50 basis point increase in same property occupancy to 99.4%. As of the quarter end, our capital structure consisted of approximately $854.7 million in debt, of which $779.7 million was property level fixed-rate mortgage debt and $75 million were loans payable. 91% of our debt is property level fixed rate mortgage debt with a weighted average interest rate of 4.04% as compared to 4.07% in the prior year periods. Our weighted average debt maturity for our property level fixed-rate debt was 11.3 years at quarter-end as compared to 11.6 years in the prior year period. Our loans payable consisted of a $75 million term loan that has a corresponding interest rate swap agreement to fix LIBOR at an all-in interest rate of 2.92%. Including the term loan, 100% of our debt is fixed rate with a weighted average interest rate of 3.94% along with a weighted average maturity of 10.7 years. This represents one of the longest debt maturity schedules in the entire REIT sector. Taking our maturities out even further, we also had $429.2 million outstanding on our Series C 6.125% perpetual preferred equity at quarter-end. Combined with an equity market capitalization of $1.2 billion, our total market capitalization was approximately $2.5 billion at quarter-end. From a credit standpoint, we continue to be conservatively capitalized with our net debt to total market capitalization at 33%. Our fixed charge coverage at 2.3 times, and our net debt to adjusted EBITDA improved to 5.7 times for the quarter as compared to 6.4 times in the prior year periods. From a liquidity standpoint, we ended the quarter with $35.9 million in cash and cash equivalents, and we do not have any borrowings drawn down on our $225 million revolver. In addition, we held $99 million in marketable REIT securities, representing 4.6% of our undepreciated assets with an unrealized loss of $136.1 million at quarter-end. Our securities portfolio currently generates approximately $11.1 million in annual dividends as compared to $14 million in the prior year period. And now, let me turn it back to Michael before we open up the call for questions.

Thanks, Kevin. Monmouth went into this downturn very well positioned with a strong balance sheet, a high-quality property portfolio, excellent operating fundamentals, and a well-covered dividend. Going forward, we are very well situated to not only endure but to prosper throughout this difficult period. The value of our properties has appreciated substantially over the past decade as e-commerce demand has increased and online shopping has become an integral part of the retail landscape. The current social distancing environment has created an even greater move towards online shopping. Because of this surge in e-commerce demand, some of our tenants are running seven-day work weeks and increasing their daily shifts, and their services are now more essential than ever. The COVID-19 pandemic is also forcing industries and entire nations to rethink their supply chains. Areas of focus going forward will be increasing domestic manufacturing output, greater stockpiling of inventories, and less dependence on foreign sources. As a result of these secular shifts, U.S. warehouse and logistics space will greatly benefit from increased demand, and continued value appreciation in the years ahead appears likely. We'd now be happy to take your questions.

And our first question comes from Jeremy Metz of BMO. Please go ahead.

Hey, guys. I guess to start, the build issue or deal pipeline changed here in composition. So can you just mention what happened to the deal that fell out? Do you see it coming back? And then along those same lines here, can you talk about just the pipeline today beyond what you have disclosed here, just so you're seeing, Mike, any increasing opportunities? Are you fielding more incoming calls today and in the process? Are serious buyers perhaps falling out?

Very good, Jeremy. Happy to take that question. Before I do, just a point of clarification, our press release went out last night, and it said our rent collections for this month, the month of May were 95%, and today, they're already over 95%. In the prepared remarks, which were recorded two days ago, the number I stated was 93%. So that's what happens when you report a number early in the month. It's 93% was a very respectable number relative to anyone else, but it's already above 95%. So I just want to let anybody who's trying to reconcile that discrepancy know it's just timing, and it's continuing to head towards the 100%, which we achieved in March and the 99% we achieved in April. As far as your questions, Jeremy, one deal fell out of the pipeline. It was in the Pittsburgh market. It was a 10-year lease to Komatsu, which is what we contemplated when we underwrote. For various reasons, they wanted to put a subsidiary on the lease. Monmouth only does long-term leases to investment-grade tenants, and so we said, cure this problem with the lease. Either get the parent company in Japan to guarantee it or we're passing. They're working on resolving that, and if they do resolve it, that will come back on the pipeline. But it's off the pipeline now, and we ended a 20-year lease with Home Depot under construction in Atlanta, which is where their headquarters is, and that's full steam ahead. So, it's rare that a deal falls off of our pipeline, but in this environment, things happen. I don't anticipate anything else falling off our pipeline; the construction is going forward and every deal on our pipeline currently, all these buildings are deemed essential constructions and construction activity has not slowed down at all. Then as far as opportunities, there's no question that the buyer pool has diminished substantially. Our deals come to us from an array of merchant builders that we have long-term relationships with. And I prefer to continue to do deals with them. It's just been a mutually satisfactory arrangement for decades in some cases, but we do have brokers calling us with deals that we were at the bottom of their list, and suddenly we are at the top of their list, and we're seeing way more deals because people are opting out of deals, and it's just fewer buyers, which in my mind means cap rates should probably increase. It was very unusual heading into this environment where the cap rates had compressed regardless of asset quality or tenant quality. So you had a long-term lease to invest in great tenants, not trading at significantly lower cap rates than a more challenged asset to a weaker credit, and the demand for the properties we do, long-term leases, with investment-grade tenants will continue to be strong. I suspect with the more challenging stuff, demand will be curtailed substantially, and the spread of cap rates will increase. But everybody is favoring sort of portfolio that we own today. Did I tackle everything, Jeremy, or did I forget anything?

Yes, that was great. You mentioned some of this in your opening statement, but I'm curious about the focus on redundant facilities and safety stock. Are you noticing any impact on demand in the secondary markets you're involved in? Has that begun to occur yet, or is it still too soon to tell?

I would say it's a little early, but in the medical supply sector, you're definitely seeing the need for expansion, and demand is off the charts. But it's too early to say what will be a secular shift going forward. But I do think the ports that we're reliant on, U.S. trade will probably see decreased container traffic and the ports that deal with South America will probably see an increase. That's been the trend even prior to the pandemic. So, I just think that trend will be exacerbated, and we have a lot of assets on the Gulf of Mexico and up the Eastern Seaboard, and they're already seeing the shift go from 60% shipping containers on the West Coast versus 40% on the East Coast to more equilibrium. I do think that trend will be more pronounced going forward.

All right. Great. And last one from us. And I know, as I look at the securities book here, not always the best topic to get onto here, but it obviously took a pretty significant shift in the first quarter, but is there a point where you just decide it's not worth it anymore and just bail on this aspect altogether? I guess I’m trying to understand what's the latest thinking here on continuing the holdings. Obviously, I did not want to crystallize the loss. But that was the case last year as well; you're looking at it even lower today. So just kind of how are you thinking about this taking it all in on a go-forward? I get you're not buying anymore, but at what point do you maybe just look to exit some of this and just reduce it that way. Thanks, Mike.

It's very good. I'll have Gene answer that, but just some broad comments on the topic before I turn it over to Gene. It's important to keep the securities portfolio in perspective of our overall capital stack. We announced over a year ago that we were going to decrease it from 10% of gross assets to 5%. At that time, we stopped buying securities. Of course, if we knew the pandemic was coming, we would have reacted accordingly. But our pipeline today is bigger than the whole portfolio at cost, not the current value, at cost. So you have to have some context of exactly what it means to the overall results of Monmouth. The logic of having liquid real estate on the balance sheet was liquidity, liquidity, liquidity, and the good news with the portfolio, the one silver lining, even though you have to look hard to find it, is that we used to borrow at 3% to get capital from our securities portfolio at 50% borrowing ability at 3%. That's come down to 75 basis points. So we have property expansions, and I do anticipate property expansions coming; it's very advantageous to fund them with a cost of capital of 75 basis points. Gene, I just wanted to get that out there, but please.

We still believe in the weak concept. And we've been fortunate enough to be in a sector that has survived the financial crisis and now a medical crisis. Some other REITs have not been as fortunate, but the weight in the long term will turn out to be valued depending on the value of their real estate. We have a lot of phases in the United States. We think we'll get to this crisis as soon as we get the vaccine, and even sooner if we get a cure. Then we'll be back to a growth area, and some of the stocks we have in the portfolio, which we know have really deteriorated because of the crisis. If you are losing top line, there isn't much management can do; the expenses are still there. So we're holding onto the portfolios, but they’ve diminished to the point that they’re not as significant as they were. We have a portfolio we think highly of. So we can take it a hold, we've held the same stocks for decades. We know the managements of most of the REITs, and it's something that we're going on. We don't like to cover the particular REITs individually because we don't have enough time for that.

Gene, Mike, thanks.

Our next question comes from Rob Stevenson of Janney. Please go ahead.

Good morning, guys. Mike, what's the expected cap rate on the four properties in the $230 million pipeline today?

I don't like to give out exact cap rates, and I know you're really good at triangulating in on them. Let's just say it's substantially above our current dividend rate of low fives, and I'll go even further and say it's in the low sixes.

Okay. So in line with historical norms?

Correct.

Okay. What sector does the 320,000 deferred rent operate in? Just curious as to where the pain is within your portfolio?

Yes, so I know. I'll turn it over to Rich for that. And if I need to chime in, I will. Go ahead, Rich.

So out of the twelve, we've had twelve tenants that asked for deferments of various industries, but the ones that really needed help were our entertainment and retail spots. Those are the ones that we agreed to assist, but we fully expect to get those paid back by the end of the calendar years, as we reported. But really not much pain; everything stayed pretty much essential. They were open to some degree, so that was really good to see.

So I could add to that; for all the industrial REITs, they're seeing the deferment requests come from smaller tenants and smaller buildings, and we're predominantly 200,000 square foot buildings with investment-grade tenants. Now we do have some smaller buildings where the legacy investment-grade tenant moved out, and we took on whoever would take the space. That's what we're seeing; the small amount of our portfolio includes the smaller tenants in older buildings that are requesting assistance. There's a mandate that businesses are shut down, and we're trying to work with them.

Okay. Kevin, you know, Mike talked about 95% of May rents paid. Where are you normally five to six days into the month? What level is sort of normal? Is it right around here? Are you basically getting 99% to 100% of your rents this early in the month typically?

Yes. We're right around normal as we normally would be. There are a few tenants whose leases, they pay in the middle of the month. So that's part of it. And then part of it is the rent deferment that we agreed to. So that's part of the adjustments. I'd say it's about half and half. So normally, we probably like around 97% or 98% at this point. So I'd say most of it is just half of it is from deferment and half is just the timing.

But I think that's normal; it would be sluggish. The whole world has slowed down, so checks are just not being cut as fast. Mail is not being delivered as fast as everything slowed down. I wouldn't expect it to be exactly like a quarter ago.

No, I mean, that's surprising. I mean, I guess the other question here is, what percentage of your tenants are paying electronically? Have you already gotten that higher percentage of rent, five days into the month versus the percentage of tenants that are old school, mailing you in a check?

That's a very granular question. I'll take it even further. Some tenants pay early. We probably have June rent for some of our tenants. But Kevin, do you have any idea as to the percentages?

I don't know the answer to that, but I would say most maybe 90% of the tenants pay via ACH, and then the rest still pay with checks. But yes, we've received a lot of checks. There are a couple of checks that we haven't received, and it's probably because the mail is slow. Some of the checks we haven't received are not tenants that have asked for deferments and haven’t felt any effects to their business. So it's probably just maybe the mail being slow, and there are some checks sitting out there right now in the office that we don't get a chance to come into the office as much as we used to. It takes a little while to see those checks.

What we will do is we'll update our presentation; we have two COVID slides. The second one speaks to rent collection, and just watch that bullet point. It was 93, and now it's over 95. We'll see where it ends up.

So Bezos and Fred Smith are paying by check? What you saying?

That's correct.

Okay. And then just lastly, for me, you mentioned most of this with Jeremy's question. But just to be clear, there weren't any purchases or sales in the securities portfolio in the quarter or thus far in this quarter other than the reinvestment of the UMH dividends?

That's correct. Other than the reinvestment of the UMH dividend, and there was one small preferred holding that got redeemed, but those are the changes. Thank you.

Our next question comes from Craig Kucera of B. Riley FBR. Please go ahead.

Hi. Good morning, guys. It's in the news that FedEx has requested to cut rents at some of the retail stores beginning in June. I'm curious about sort of your discussions with them. I know that these buildings are essential, but just sort of any color on those discussions would be useful on kind of where they're heading in that?

Yes. Sure, absolutely no discussions about deferment of rent with FedEx; in fact, just the opposite. It's all about how to accommodate the incredible demand flowing through our buildings. So it's really apples and oranges to compare Kinko's retail centers that by government mandate are forced to be closed versus essential businesses that are seeing greater than peak season demand at the moment. So two different sectors, two different types of real estate, and two completely different situations.

Okay. That's what I figured. I'd like to talk about the Home Depot that got added to the pipeline. Can you tell us when that was negotiated? Were you in discussion and kind of pulling that together mid-March, or was that kind of worked on earlier in the quarter?

Yes, that was all pre-pandemic.

Okay. And I guess, as you think about that and you mentioned that a lot of buyers had probably fallen out. Can you talk about any changes or shifts in maybe what the merchant builders are showing you today for the last month or so?

Yes, price discovery is uncertain, and everybody's out there trying to find out what the new normal is regarding cap rates. I think the sellers want to wait and see how everything shakes out, and we're certainly bidding a premium to pre-pandemic cap rates. The lenders have set interest rate floors above pre-pandemic pricing and that force has come down a little bit, already, so it's very uncertain, and a lot of people are in a wait-and-see mode.

Got it. One more for me. I mean, just kind of keeping in mind your general comments on buyers and potential buyers out there. Do you get a sense that there's been any sort of a percentage drop in buyers? I mean, are you thinking maybe half have been knocked out, more than that, less than that? Just kind of trying to handicap that?

Just listening to some of the other industrial recalls, I hear them say that they're not going forward and bidding on deals and backing out of deals. So clearly, the buyer pool has been curtailed. The anecdotal proof I have of that is people I never transact with calling me up to see if I'm interested in deals. I get plenty of deals from my usual sources. Thus far, I have no need to go down these new avenues. All our transactions are directly with merchant builders, not through the brokerage community, but in times like this, everyone's our friends suddenly.

Do you think you would answer that potentially accelerate your acquisition pipeline if a broker deal did come to you and was kind of fit all the boxes of being a long-term lease investment-grade property, etc.?

Yes, we're kind of hoping that would happen. Certainly, now's the time to be aggressive and buy. Historically, every portfolio we've seen just doesn't check our boxes. But this is precisely why we have the ATM program, so that we could match fund opportunities should they arise. I do think with FedEx and Amazon, we will be able to continue growth on the trajectory we've historically been on and perhaps even at a greater pace with those two names because they're just seeing demand to an extent that they just cannot even supply the demands. So there will be increased deal flow from those two customers, and we're certainly trying to offset that with Home Depot and other strong credits.

Okay, great. Thank you.

Thank you.

Our next question comes from Sarah Tan of JPMorgan. Please go ahead.

Hi, good morning. I’m just on for Mike Mueller. Just a quick question on funding the acquisition pipeline. I know you guys mentioned the debt capital costs. How can we think about also supplementing that with some equity issuance once you reach a price that you're comfortable issuing it?

Kevin, you want to take that?

Yes, sure. So before the pandemic happened, we raised about $37 million to $38 million in our preferred stock at a weighted average price of above par about $25.12. Luckily, we filled up the tank pre-pandemic. As you can see on our balance sheet, we have about $35 million in cash. We have a $225 million line of credit with nothing drawn down on it available to us. We have the full capacity to do so based on our unencumbered assets. But yes, it depends. We’ve funded three of the four acquisitions already with financing at a 65% loan to value. They're all 15-year self-amortizing loans with a weighted average interest rate of a little over 3%.

Okay. Thank you.

Thank you.

Our next question comes from Michael Carroll of RBC Capital Markets. Please go ahead.

Hi, this is Jason on for Mike. I had a question on some of the deferrals granted. So does the 23 basis points represent the final amount of deferred of the 200 basis points, or is there a portion of that that's still under review?

Well, I wouldn't say final. Every day you read the newspaper, you don't know which way the winds going to be going. So, I would not say final; we hope it's final. But months could become quarters and quarters could become years, but we will have to see. It is a very low immaterial number, so that's the good news.

Correct.

Okay. Got it. And then, have you guys seen a continuing flow of further deferral requests, or have those started to slow down as we've entered May?

That's a good question. Now that has come to a standstill. So yes, there was a point where we followed all the other REITs, and we were curious what would happen there, but now it kind of peaked weeks ago, and this week, no requests at all.

Got it? Okay. And then have tenants been more active pursuing renewal discussions? I know a few of the other industrial names have talked about retention potentially ticking higher. So I'm wondering how you guys think about this when you look at the 2021 expirations?

Yes. One tenant did ask to open up renewal discussions early, which is something we usually don't do. But we are talking to them about one of those blend and extends, but Rich that would be at a higher rent, if I remember correctly?

Correct.

Okay. And then one quick housekeeping question. So you mentioned that you had five expirations, and then obviously, you've completed the four renewals, and you have the one asset, The Kellogg asset, that you're looking to sell. So could you just remind me what the situation there is?

Could you clarify? Do you have any additional details on that expiration?

Yes, it looks like it's the 98,000 square foot asset. Let's see. It's the Autoneum North America in Augusta, Georgia.

Yes, okay. I know what that is. Okay. So that asset was their old building. It's a little complicated, but here's what happened. They moved into a brand new building, and the lease has a lot of term left, and it's a great asset and everything's fine. The old asset, they asked if they could use it instead of to rip it down. They were required to take it down, and we said sure. Then it was a very short amount of time we gave them authorization to use it. But then they wanted to use it for a whole another year, so we charged them for that year. But now it's time to rip it down. So that's something that is a temporary structure and we got rent from it, and we looked at achieving over 100% occupancy on that asset for a year. But now we got to lose that 90,000 square foot structure.

Yes, that's not a bad deal at all. So, alright, thank you, guys.

Thank you.

Our next question comes from Barry Oxford of D.A. Davidson. Please go ahead.

Great. Thanks, guys. Mike, you had alluded to when you were talking in your comments about the ATM not really looking to use that right now. How do you feel about the DRIP program, and would you change that?

Well, with the current stock price, we've curtailed both the ATM has not printed a share and the SIP we used to grant waivers and raised as much as $8 million a month, and we're not granting waivers. So all it is, is dividend reinvestment funds coming in right now, and it's a function of pricing. At a higher price, when we feel it's more accretive, it's a function of how big the pipeline is. Then we will open these things back up. The same goes for the preferred ATM. The preferred has worked really well; we raised over $430 million. That's permanent capital that never matures. The 6% may seem high in the current environment, but you know, the monetary policy is all in. They're throwing the kitchen sink and all the appliances at the pandemic issue. We will have to see when we get through this deflationary period what inflation looks like. On the other hand, if we were in a protected low-interest rate environment, that perpetual instrument is redeemable in September of '21. If we could refinance that with a lower cost of capital, we will do so. We have a lot of options at our disposal, a lot of sources of capital. Gene, Kevin, you want to add to that?

Basically, the DRIP and SIP work well, the ATM, and the new developments worked well. So a well-capitalized company has sources of new capital. What we've been trying to tell everyone on this call is the demand for warehouse space is really extreme. We're going in a country where 85% of consumer buying was through retail outlets and 15% on the internet, and all of a sudden, I've shut down the 85%. The warehouses that are needed are either in existence or are right now. The people who sell on the internet are very anxious to build additional warehouses. We think they're going to deal with the people they've dealt with for 20, 30 years. We're going to need a lot of capital, and we'll raise that capital when we get these opportunities.

Great. Thanks. Mike, one more question. When you look, I know you don't have a lot of assets out on the West Coast, but when you look at your East Coast assets that are bumping up against the ports, are there any concerns there of some slowing of port container traffic, etc.?

No, it’s too short-term worried. Long term, we will get past this. We will get the economy growing again, the population growing again. Those are great assets. In fact, I'd be concerned if I was in a highly congested area with a different property type. I think people are going to be less desirous of living on top of each other and wanting to move to more rural areas, warmer climates, and more business-friendly environments. I really like the way our portfolio is positioned for demographic trends going forward.

Great. Thanks, guys.

Thank you, Barry.

This concludes our question-and-answer session. I would like to turn the conference back over to Becky Coleridge for any closing remarks.

Thank you, operator. I would like to thank everyone for joining us on this call and for their continued support and interest in Monmouth. As always, we are available for any follow-up questions. We will be presenting at NAREIT REIT’s week conference next month, which will be a virtual online conference this year. We hope that you will participate as well. We look forward to reporting back to you after our third quarter. Stay healthy everyone and thank you.

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