Good morning, and welcome to Monmouth Real Estate Investment Corporation’s Third Quarter 2013 Earnings Conference Call. All participants will be in a listen-only mode. (Operator Instructions). Please note this event is being recorded. It is now my pleasure to introduce your host, Ms. Susan Jordan, Director of Investor Relations. Thank you. Ms. Jordan, you may begin. Susan Jordan Thank you very much, operator. In addition to the 10-Q that we filed with the SEC yesterday, we have filed an unaudited quarterly supplemental information presentation. This supplemental information presentation, along with the 10-Q are available on the company’s website at www.mreic.com. I would like to remind everyone that certain statements made during this the 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 third quarter 2013 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’d like to introduce management with us today, Eugene Landy, Chairman; Kevin Miller, Chief Financial Officer and Michael Landy, President and Chief Executive Officer. It is now my pleasure to turn the call over to Monmouth’s President and Chief Executive Officer, Michael Landy. Michael Landy Thank you very much, Susan. Good morning, everyone, and thanks for joining us. Monmouth continued to make substantial progress across several fronts during our third quarter of fiscal 2013. Through the first three quarters we have grown our portfolio by 10% by acquiring three industrial properties, totaling approximately 891,000 square feet for $51.9 million. Our gross leasable area at quarter end contained 9.4 million square feet consisting of 73 industrial properties and one shopping center located across 26 states. With regards to our one acquisition this quarter on June 18th we announced the closing of a new 103,402 square foot distribution center leased for 10 years to FedEx Ground located in Roanoke, Virginia for $10.2 million. Our acquisition pipeline remains strong and currently consists of approximately 2 million square feet representing over $130 million in total acquisitions. We expect significant amount of deal closings throughout the remainder of fiscal 2013 and into 2014. In keeping with the business model all of the deals in our current pipeline contain leases of 10 years or longer and are all leased to investment grade tenants. The cap rates on these transactions average in a low 7% range and compare favorably to the 5% to 6% cap rates that we are seeing today for similar assets in the market. Subject to satisfactory due diligence we anticipate closing these transactions upon completion and occupancy. In addition we now have five FedEx Ground building expansions in our pipeline. These expansions total 275,000 square feet and represent approximately $26.4 million in total cost. Two of these expansions are expected to be completed in fiscal 2013 and the other three are expected to be completed in fiscal 2014. These expansions will result in a new tenure lease extension for each entire building being expanded. We ended the second quarter with our occupancy rising 100 basis points to 94.9%. July 1st we entered into a six year lease with Holland 1916 at a 96,000 square foot building in Liberty, Missouri. Therefore, today I am pleased to report an occupancy rate of 95.9%. This represents the highest occupancy rate in the industrial sector and as we have proven over many cycles our consistently high occupancy rates are a testament to the strength of our assets, the caliber of our tenant base and high quality of our income streams. With regards to leasing activity as reported last quarter of our 11 properties totaling approximately 900,000 square feet whose leases were originally set to expire this fiscal year 10 lease renewals representing 840,000 square feet or approximately 93% of such lease expirations have been consummated. These 10 leases were renewed for a weighted average term of 4.7 years and at an average lease rate or $4.70 per square foot as compared to $4.84 per square foot formally or a reduction of 2.7%. We are very pleased with our 93% tenant retention rate this year. In fiscal 2014 we have six properties totaling 440,000 square feet set to expire. While it is too early to report the status of next year’s leasing activity all indications at this time are very positive. And we will be targeting a 100% tenant retention rate for fiscal 2014. Looking at the overall U.S. industrial market our property type remains the strongest of all property types and possesses very favorable demand drivers that are only going to strengthen with time. Positive net absorption is now showing for 13 consecutive quarters with approximately 27 million square feet absorbed over the most recent quarter. Demand for industrial space has pushed the national vacancy rate to 8.5%, its lowest level in 4 years. Rental rates are improving and are expected to continue to increase. The primary demand drivers fueling our property types growth remain e-commerce, the automotive sector, housing and manufacturing. New industrial construction remains at very low levels with approximately 65 million square feet of new construction forecasted for 2013. This will mark the fifth consecutive year with below 100 million square feet in new construction and therefore provides for a very favorable imbalance in demand over supply assuming a growing economy. And now, Kevin will provide you with greater detail on our results for the third quarter of fiscal 2013. Kevin Miller Thank you, Michael. Core funds from operations for the third quarter of fiscal 2013 were $5.7 million or $0.13 per diluted share. This compares to core FFO for the same period one year ago of $4.2 million or $0.10 per diluted share. Excluding the $965,000 one-time severance expense million incurred in the previous year’s third quarter core FFO was $5.1 million or $0.13 per diluted share. Adjusted funds from operations, or AFFO, which excludes securities gains or losses were $0.11 per diluted share for the recent quarter, compared to $0.9 per diluted share a year ago. Rental and reimbursement revenues for the quarter were $14.1 million, compared to $12.5 million or an increase of 12% from the previous year. Net operating income increased $1.1 million to $11.4 million for the quarter, reflecting an 11% increase from the comparable period a year ago. This increase was due to the additional income related to seven properties purchased during fiscal 2012 and three properties purchased thus far in fiscal 2013. Net income was $4.2 million for the third quarter compared to $3.2 million in the previous year’s third quarter, which excludes the one-time severance expense income in the prior year period. This represents an increase in net income of 31% over the previous year’s third quarter. Again this improvement was driven largely by the substantial acquisition activity that has occurred over the past year. With respect to our properties, end-of-period occupancy increased 110 basis points from 93.8% in the prior year period to 94.9% at quarter end. As Michael noted subsequent to quarter end as a result of leasing off of our Liberty, Missouri property our occupancy rate is now 95.9%. Our weighted average lease maturity continues to increase and as of the end of the quarter was 6.2 years as compared to 5.3 years in the prior year period. Our weighted average annual rent per square foot was $5.54 as of the quarter end as compared to $5.67 a year ago, representing a decrease of 2.3%. With regard to our capital market activity we are very pleased to have recently closed our expanded credit facility. Renewed facility has been increased to $40 million with an accordion feature up to $60 million. The renewed facility matures in June 2016 and has a one year extension option. Borrowings under the facility will bear interest at LIBOR plus 175 basis points to 250 basis points depending on the company’s leverage ratio. Based on the company’s current leverage ratio, borrowings under the facility bear interest at LIBOR plus 185 basis points. This new facility has effectively doubled our capacity with the ability to increase it further and has lowered our interest expense, thus reducing our cost of capital. Going forward we expect to continue to expand our portfolio of unencumbered properties over time to further enhance our financing flexibility. As of the quarter end, our capital structure consisted of approximately $265 million in debt, of which $248 million was property-level, fixed-rate mortgage debt and $17 million were loans payable. 94% of our total debt is fixed rate with a weighted average interest rate of 5.7%, as compared to 6.1% in the prior year period. We also had a total of $111 million in perpetual preferred equity at quarter end. Combined with an equity market capitalization of approximately $426 million, net of our cash position of $13 million our total enterprise value was approximately $789 million at quarter end. From a credit standpoint, our net debt-to-total market capitalization was 31%. Our net debt plus preferred equity to total market capitalization was 45%. For the three months ended June 30, 2013 our fixed charge coverage was1.8 times and our total debt to EBITDA was 6.1 times. From a liquidity standpoint we ended the quarter with $13 million in cash and cash equivalents. As at the end of the quarter we had $28 million available from our recently expanded credit facility. In addition we have $46.8 million in marketable REIT securities, representing 6.7% of our un-depreciated assets. At the end of the quarter we had $4.1 million in unrealized gains on our securities investments, in addition to the $1.1 million in gains realized during the third quarter and $7 million gains realized thus far through the current quarter of the fiscal year. And now let me turn it back to Michael before we open up the call for questions. Michael Landy Thank you, Kevin. I am very proud of the progress that has been ongoing at Monmouth. Our industry leading 95.9% occupancy rate combined with our substantial acquisition pipeline containing two million square feet of high quality single tenant net leased industrial properties, all secured by long term leases to investment grade tenants as well as several building expansions now underway are all very clear indications of the value that has been built and continues to be built. Consumer spending the driving force of the U.S. economy is now taking place online in cyber space. It is simply a more efficient and cost effective way of doing business. We have positioned Monmouth to benefit from this migration from brick and mortar retail to e-commerce and anticipate that we are still in the very early stages of this technological revolution. We’d now be happy to take your questions.

(Operator Instructions). Our first question is from Jon Petersen of MLV & Co.

Great, thank you. Good morning, in your $130 million pipeline, first of all congratulations, good to see that continued increase. In the near term can you give us some guidance on, when you expect, how much I guess you expect to close in the fourth quarter and when about it will close and then, maybe to the extent if we go in to 2014. I guess how far out this $130 million go? Are we going out to 2015 or is all closing by the end of 2014? Michael Landy Okay, thanks Jon, appreciate that. Right now we are going out as far the summer of ‘14. We expect to close this month two properties. We will close in fiscal, before the end of this fiscal year anywhere from two to five properties. Some properties may slide into early fiscal 2014 which begins October 1st for us. So 10 individual deals in our pipeline representing two million square feet, approximately $134 million in value and do as much as 30 million to 40 million in fiscal ‘13 and another 90 million to 100 million in fiscal ‘14. So the bulk is ‘14. We are looking at deals in ‘15 but I don’t have any deals under contract for fiscal ‘15 at this point.

Okay, and then in terms of the cap rate, I think last quarter on your $99 pipeline at that time, you told us the cap rate was about 7.3%. Are we still around there or has it gone up or down? Michael Landy Have gone down a bit. It’s 7.15 right now.

Okay. And then in terms of the financing the acquisitions you got some of your securities and some of your line of credit. How do you think about financing $130 million? Michael Landy I am going to turn you over to Kevin but just to give you more color on the pipeline I do want to point out that there are all new built-to-suits deals, they are minimum of 10 year leases. I have some large 15 and 20 year leases. So good improvement in our metrics, as the weighted average lease maturity has gone from 5.3 years a year ago to 6.2 years currently. And as we execute our pipeline our weighted average maturity is going to go well over seven years. So that’s definitely a good progress on that front. Kevin, regarding the financing?

Right, regarding the financing of the 10 deals we have in the pipeline we have 1, 2, 3, 4, 5 we have six deals that we have already secured financing on with rates ranging from 3.45 up to 4.17%. And so we plan on financing those deals with our fixed rates debt. And as far as the – as far as the, with LTVs ranging between 65% up to 75% and the remainder of the purchase is going to be funded with either the cash on hand or borrowings on our new secured line of credit.

Okay, do you think you can get the $130 million without raising equity? Michael Landy We do, I mean we are factoring in the run rate of our dividend re-investment plan which generates $25 million-$30 million annually. So given that, our REIT securities portfolio, cash on hand, our expanded credit facility and as Kevin mentioned the secured mortgages that we have already have terms for, yes, but the pipeline is growing so, if it grows substantially, then and I am looking at deals in 2015 we have to think about accessing the capital markets at that point.

Got you. And just one more question. Both your real estate taxes and your GLA, they both seem to jump around a lot from quarter-to-quarter. Can you give us any guidance on any sort of seasonality we should look for going forward in terms of those two items and maybe what the sequential increases were in both those numbers?

The main reason for the jump around is just the new acquisitions. And when we get new acquisitions of course we incur more pay real estate taxes on those acquisitions. But they are mostly offset with the reimbursement revenues anyway. So it really doesn’t have that much of an effect on the net income.

Okay, and in terms of the GLA?

This quarter was unusually high just because we happened to file our tax returns for September 30, 2012. We filed it this quarter, it is on extension. So that’s the bulk of it. Also we had two Board of Directors’ meeting this quarter which usually we have one a quarter, it was just the timing of it. That’s pretty much the main reason for the GLA just jumping up a little bit this quarter.

Okay, great thanks for the color guys.

Thank you.

And our next question is from Paul Adornato of BMO Capital Markets.

Hi, good morning. Michael Landy Good morning.

In talking to some of the industrial peers, they are noticing a lot of capital and much more competitive environment especially in the build-to-suit markets. I was wondering if you could comment on what you are seeing and also let us know are your build-to-suit projects generally put out to bids so to speak, is it a competitive process? Michael Landy I will let Eugene start on that and then I will jump in. Thank you Paul.

We see very substantial competition for deals but Monmouth I believe is in the fortunate positive of having excellent relationships with merchant builders who in turn have excellent relationships with the net leased industrial companies in the U.S. that are expanding. So we have somewhat of a preferred position. That doesn’t mean it’s not highly competitive. It is, and we tell our merchant builders when they bid to buy the project, when they bid to build the project they get input from us at what cap rates we are going to buy the deals and cap rates are falling and we are competitive with our merchant builders. But as long as we are competitive, the merchant builders we have a relationship with will continue to send us deals. So we are confident that we can continue the excellent pipeline that we have. Michael Landy The only thing I’ll add, Paul, you saw Brookfield buying IDI yesterday and Prologis and I forget who else are buying the Lehman industrial portfolio. There’s just a lot of money chasing limited amount of deals, new constructions has been so limited for the last five years under our 100 million square feet. You have e-commerce, you have energy sector creating reassuring return of domestic manufacturing jobs. So a lot of long term catalysts. You have the Panama Canal coming online in 2015 where 15% of the ships cannot make it through the Canal currently and that will create a 8,000 mile 20 day shortcut through the Canal. So things are really lining up favorably for industrial and people see that and so the amount of money coming into the property sector continues to grow.

Okay great, thanks. And in the last quarter obviously we saw some volatility on the interest rate front. Was wondering if you could give us a sense of the sensitivity of pricing, how quickly does it react to changes in the general interest rate environment? Michael Landy It is interesting Paul, because we look at our REIT securities portfolio as somewhat of a leading indicator and at the very top of the market, February 7, 2007, REIT Index was at 1233 yielding 6.3% roughly what it’s yielding today at only 935 on the Index and the treasury back then at 4.75. So it’s inverted, REITs were yielding less than the risk free rate back then. Things were admittedly very frothy. Today you have uncharted waters where the risk free rate is artificially priced and that’s not sustainable and one day there will be a true price discovery and spreads will have to react accordingly. So I do think you look at the REIT index as the leading indicator. And certainly cap rates have, in the private market stopped coming down aggressively. They have plateaued. But the amount of money chasing such limited amount of deals may drive things higher prices and even lower cap rates. But it’s in flux and we are in uncharted territories due to all the money printing that has been going on.

If I can answer to that out cap rates spread is excellent. Historically we have operated at 1.5 to 2% spread, so that if we do deals at 7% we used to borrow the money at 5.5 and even higher. And today as Kevin gave you the numbers our spread as high as 3%. So the rise in interest rates may decrease the spreads but historically they will still be excellent.

Okay, thanks very much for the color. Michael Landy Welcome Paul.

(Operator’s Instructions). And our next question will come in from Michael Boulegeris of Boulegeris Investment Incorporated

Good morning. Can you update us as to the progress the company is making in terms of achieving the investment grade rating? I know that is a little ways off but perhaps you can give us an update there. Michael Landy Sure Mike, that’s going to take some time given that we are still under $1 billion in total market cap. We have had discussions with one of the pre-eminent rating agencies and they love our long term track record as a public company. Our income streams are secured by investment grade tenants. So it’s a natural fit for Monmouth to with its strong balance sheet become investment grade. Our coverage ratios are all within investment grade parameters. So the main factors are increasing the size of the company to over $1 billion and we will be there by the end of the next fiscal year and also having a larger pool of unencumbered assets. So we have been borrowing historically using secure financing. Kevin has done a great job in increasing our encumbered asset pool. By the end of 2016 we will have close to $200 million in assets unencumbered. So it is a goal of ours but realistically we are looking at 2015 and 2016 before we can achieve that.

And you mentioned that, thank you, you mentioned in 2015 the expansion of Panama Canal completion. How will Monmouth position itself? I know you have a lot of business activity in Florida. But how will you position yourself perhaps to take advantage of that strategic opportunity?

Well, I will answer that question, but first broadly speaking when you improve the global supply chain as dramatically as that’s going to do, the whole industrial sector will benefit. Given that our assets are on the Gulf of Mexico and up to Eastern Seaboard, I think, from a strategic standpoint we are positioned to benefit even more so. Right now 70% of imports and exports flow through the West Coast. It’s very costly. We ship them around the country from the West Coast. It is very inefficient and it doesn’t give certainty as to timing of delivery. So by having a broader array of ports accepting the imports and exports to and fro from this company you will have a much more efficient supply chain. We are in Florida, we are up the Eastern Seaboard, we are in the Chicago market, we are in the Memphis market, and all over Houston and Texas. So this people say, I think Bill Gates had in ‘98 when he wrote his book, the road ahead that people will tend to overestimate the changes that will occur in the next two years and underestimate the changes that will occur in the next 10 years. So when I think of that I think of the changes of the Panama Canal and e-Commerce and fracking are going to bring to the industrial sector. So we take a long term view here and we have been positioning our portfolio accordingly.

And I noted that fairly recently the leadership at Monmouth, as the insiders have exercised and retained part or all of their underlying shares with the options, without being too invasive to anyone’s personal situation maybe could you comment on it. Seems like you are a very bullish leadership looking out ahead by retaining these shares. I don’t know Gene if you want to comment at all.

What I have to say that REITs means investing in real estate you get you get liquid marketable investment, you get real estate yielding currently what is that yield now?

Our yields over 6%.

Yields over 6% and so I had a 65,000 share option and I exercised it and I held all the shares and to the extent financially that’s always a little bit of a burden but we think it is an excellent investment and as you know the family does have a very substantial holdings and continues to hold a substantial block of shares in Monmouth REIT and it’s been an excellent investment over the years and we expect it to continue to be so.

Fair enough, and lastly Mike, you mentioned the fracking technology I noted that yesterday MarkWest Energy and Kinder Morgan signed a joint venture commitment deepening their commitment to Marcellus and Utica with expansion of a cryogenic facility and establishment 200 mile NGL pipeline. Can you, I know, you have a major holding of Monmouth in your REIT portfolio, might you comment on what you see in the long term at UMH, with you see positive trends?

Sure I would be happy to but first, energy revolution’s benefiting Monmouth as well. The tenant we just leased up in Liberty, Missouri, builds RFID chips that go on in fracking equipment and due to the energy renaissance they grew into our building. So we are benefiting there. We have a property outside of Pittsburgh that is benefiting as a result of what’s going on in the Marcellus Shale. Now UMH is the REIT. It is one of the smallest REITs but it has more acreage in the Marcellus Shale and Utica shale than any other public REIT. So UMH, looking out long term, tremendous operating leverage to fill 18% vacancy factor that is exposed to the shale region. This administration is not really embracing the potential for domestic resources but it is in the country’s national interest to become energy independent. We are talking about millions of jobs. So eventually the power of these resources will be unleashed and so again like Monmouth, UMH takes a long term view and is poised to benefit from the energy revolution. Now if I can just get back to the Monmouth for a second, your question on us being bullish on Monmouth, I do want to point out that small cap REITs often trade at a discount. The market these days is dominated by short term speculators as opposed to long term investors and ETFs and other index funds are driving fund flows. So here you have the situation where the REIT in the industrial sector with highest occupancy and the highest quality earnings is giving you two years of dividend income. We are over 6%, the average REIT is 3.6%. So you can get two years of income on the best quality of earnings, the highest occupancy and you are getting the lowest multiples. So relative to where other REITs are trading Monmouth’s is great opportunity so of course we are very bullish on the long term prospects for the company.

Thank you.

You are welcome.

And does conclude our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Well, I just want to thank everybody for joining us and we look forward to reporting back to you after our fourth quarter.