As we have written about in the last two quarters and as you have seen in your monthly distributions, we are executing our 2022 strategy to sell a handful of key assets while the market remains a seller’s market.  We have two remaining properties (Faurecia/Industrial Momentum & Trilogy Plastics/Fleet Ohio) under contract as part of our sale strategy and expect both sales to close later in the 2nd quarter.  You will read of a few additional sales in this writeup, but those are a product of specific property circumstances (leases expiring, tenant options to purchase, etc..) rather than a part of our sale strategy for the year.

The real estate development industry continues to face many headwinds (interest rates rising rapidly, construction pricing continuing to escalate, lead time on construction materials and cap rates remaining at all-time lows), sourcing and winning new quality projects remains very difficult.  However, Team Agracel is slowly but surely piecing together our first LLC of 2022 and anticipate having the investor packet ready early/mid-summer.

Historically, when new development slows down, expansions for tenants in our existing portfolio takes off and we are seeing just that!  We have signed a couple lease amendments for expansions already this year and are in early stages of expansion discussions with a few more tenants as most manufacturers are having a very successful start to 2022!  An expansion leads to many positives, including additional investment for us, increased rent and extended lease term and additional tenant investment in machinery and equipment (bolt down costs!).

Sincerely-

Ryan C. Witges

COO