Good morning, and welcome to Monmouth Real Estate Investment Corporation’s Second Quarter 2015 Earnings Conference Call. All participants will be in 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.

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 mreic.com. 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 2015 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; Kevin Miller, Chief Financial Officer; and Michael Landy, President and Chief Executive Officer. It is now my pleasure to turn turn the call over to Monmouth’s President and Chief Executive Officer, Michael Landy.

Thanks, Susan. Good morning, everyone and thank you for joining us. We are pleased to discuss our results for the second quarter ended March 31. Following last quarter’s 1.2 million square feet and new acquisitions at an aggregate cost of $68.3 million. This quarter saw continued growth with two acquisitions containing 530,000 square feet at an aggregate cost of $44.1 million. During the quarter, we acquired a brand new 298,000 square foot facility for $30.6 million leased to FedEx Ground for 15 years located in Jacksonville, Florida. We also acquired a brand new 232,000 square foot facility for $13.4 million leased for 15 years to UGN, Inc, a high-end automotive supplier in Monroe, Ohio, which is part of the Cincinnati, MSA. So far this fiscal year, we have increased our gross leasable area by 1.7 million square feet representing a 16% increase. We remain very excited about our best-in-class acquisition pipeline which is grown over the quarter to 9 development projects valued at $264.8 million comprising 2.7 million square feet scheduled to close over the next six quarters. In keeping with our business model all of the deals consist of brand new built-to-suit projects under construction with long-term leases to investment grade tenants. These properties are located near major airports, major transportation hubs, and manufacturing plants that are integral to our tenants operations. Approximately 73% of our acquisition pipeline consists of deals with FedEx while the remaining 27% includes a variety of other investment grade quality tenants. The cap rates on these deals average approximately 6.7% and weighted average lease maturity is 12.8 years. Subject to satisfactory due diligence we anticipate closing these transactions upon completion and occupancy. To take advantage of today’s attractive interest rate environment we have already locked in very favorable plans in for five of these acquisitions which represent an aggregate cost of $153 million and a total of 1.7 million square feet. The combined financing terms for these five acquisitions consists of $102.7 million in proceeds representing 67% of total cost and have weighted average interest rate of 3.75%. Each of these five financings are 15 year self amortizing moments. These five acquisitions will result in the weighted average levered return on equity of 15.4%. Our gross leasable area now stands at $13 million square feet and consists of 89 properties located across 28 states. Our weighted average building age is currently 10.8 years, representing among the youngest portfolios in the industrial REIT sector. At quarter end, our property portfolio was 97.5% occupied representing one of the highest occupancy rates in the industrial REIT sector. Our occupancy rate is up 120 basis points over the prior quarter. Our weighted average lease maturity at quarter end was 7.2 years, as compared with 6.8 years in the prior year period. In fiscal 2015, 6% of our gross leasable area representing six leases totaling approximately 780,000 square feet was schedule to expire. As reported last quarter, all six of these leases have been renewed giving Monmouth 100% tenant retention rate for fiscal 2015. These renewed leases have an average term of 3.8 years and an average GAAP lease rate of $5.06 per square foot and a cash lease rate at $4.95 per square foot. This represents an increase of 6.3% on a straight line GAAP basis and an increase of 1% on a cash basis. As a result of the rapid growth in e-commerce, we are currently working with our largest tenant FedEx on the expansion of three of our facilities totaling approximately 87,000 additional square feet. The total cost for these three expansions will be approximately $10 million. Upon completion these expansions will result in increased annual rent, totalling $1.1 million. In addition these expansions will result in a new tenure lease extension for each building being expanded. With regards to the overall U.S. industrial market outlook, following last year’s excellent performance, 2015 is off to a very good start with approximately 48 million square feet of positive net absorption during the first quarter marking the 20th consecutive quarter of expansion. New construction increased 5.5% over the prior year period, with 27 million square feet of industrial space added during the quarter. It is important to keep in mind that although, rising these levels of new construction are still well below the long-term quarterly average of approximately 50 million square feet of construction completions. The national average vacancy rate continues to come down and is currently 7.6%, representing a 20 basis points decline over the quarter and marking a new cyclical low. This increase demand is also driving rents higher to an average asking rent of $5.35 per square foot representing a 4% increase over the prior year period. Consumer spending and e-commerce activity continue to be the big demand drivers for industrial space. However, first quarter GDP came in at a sluggish 0.2% annual rate and after peaking in October the ISM Manufacturing Index has declined but it is still in expansion territory. The ISM Manufacturing Index is highly correlated with industrial space demand and it is now entered it’s seventh consecutive year of growth. The recent appreciation in the U.S. dollar as well as the labor disruption at our West Coast ports have contributed to this recent slowdown in domestic manufacturing. East coast and Gulf Coast ports are seeing increased traffic as a result of the disruptions that have been taken place at the West Coast ports. Given Monmuth geographic footprint we expect that our portfolio will benefit from this ongoing shift in the global supply chain. And now Kevin will provide you with greater detail on results for the second quarter of fiscal 2015.

Thank you, Michael. Core funds from operations for the second quarter of fiscal 2015 were $8.4 million or $0.14 per diluted share. This compares to core FFO for the same period 1 year ago of $7 million or $0.15 per diluted share. Adjusted funds from operations, or AFFO were $0.14 per diluted share for the recent quarter as compared to $0.14 per diluted share a year ago. We expect AFFO to grow as we continue to add high quality properties to our portfolio. Rental and reimbursement revenues for the quarter were $18.9 million compared to $16.3 million or an increase of 15% from the previous year. Net operating income was $15.9 million for the quarter, reflecting an 18% increase from the comparable period a year ago. The increase was due to the additional income related to eight industrial properties purchase since the prior year period. Same-store NOI for the quarter increased 3.7% on a U.S. GAAP basis and increase 2.6% on a cash basis. Occupancy at March 31, 2015 was 97.5% compare to 95.4% a year ago representing a 210 basis point improvement over the prior year period. Our average lease maturity as of the end of the quarter was 7.2 years as compared to 6.8 years a year ago. Our average annual rent per square foot was $5.44 as of the quarter end as compared to $5.55 a year ago representing a decrease of 2%. This average rent is inline with the current national average rent of $5.35 per square foot. As of the end of the quarter our capital structure consisted of approximately $412 million in debt of which $347 million was property level fixed rate mortgage debt and $65 million were loans payable. 85% of our total debt is fixed rate with the weighted average interest rate of 5% as compared to 5.3% in the prior year period. We also have $111 million in perpetual preferred equity at quarter end. Combined with an equity market capitalization of $655 million, our total market capitalization was approximately $1.2 billion at quarter end. From a credit standpoint, we continue to be conservatively capitalized with net debt to total market capitalization at 33%, net debt plus preferred equity to total market capitalization at 42%, fixed charge coverage at 2.3 times and our net debt-to-EBITDA at 6.3 times for the quarter. From a liquidity standpoint, we ended the quarter with $25.5 million in cash and cash equivalents. We also have $20 million available from the accordion feature of our line of credit. In addition, we held $52.5 million in marketable REIT securities at quarter end, representing 5.4% of our total undepreciated assets. At the end of the quarter, we have $1.3 million in unrealized gains on our securities investments in addition to the $377,000 in gains realized thus far in fiscal 2015. And now, let me turn it back to Michael before we open up the call for questions.

Thanks, Kevin. In summary, we continue to execute on our successful acquisition strategy. We achieved 100% tenant retention rate for 2015 and generated a 6.3% rental increase in doing so. Our 97.5% occupancy rate at quarter end reflects the high caliber of our properties and our excellent tenant base. And lastly, having recently locked in over $100 million in 15 year financing at a weighted average interest rate of 3.75% coupled with our strong balance sheet provides us with excellent growth capacity going forward. The company remains very strong focused and continuing to deliver positive long-term results and we look forward to building upon the substantial growth that has been achieved. We’d now be happy to take your questions.

We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Michael Wasserman of Moores and Cabot.

Good morning. Are you able to comment a bit, please, on your strategy in terms of risks going forward or saving capital, if you will, despite the currently attractive long-term interest rates in the event that the industrial real estate prices were to weaken significantly in coming years for whatever reason? Just try to give me an understanding of what you're doing now versus what might develop under certain negative scenarios going forward should that take place.

Sure, this is Michael Landy. I’m happy to answer that. First of all the environment for growing the company has never been better. We’ve been getting spreads close to 300 basis points spreads, levered returns on long-term leases to investment grade tenants of 15% or greater. So the ability to grow earnings per share over the last several years has been unprecedented. But if you look at the company over the long-term, this is very conservatively managed company that has performed extremely well during weak economic environments. If you going back to the recent great recession, one of – you’d be hard pressed to find a company whose operating metrics performed better than ours. We were 95% to 98% occupied throughout the recession. Our earnings were strong throughout the recession. Our dividend were sustained throughout the recession. So we’re very conservative and we’re very mindful that real estate is a cyclical asset class. And that there are distortions in the market as a result of tremendous monitory accommodation on a global basis. And when you see 4 trillion in sovereign debt, debt out there earning a negative interest rate. You have to understand that yields are going to be distorted. So we’re cognizant of that. We anticipate inflation and rising land cost, rising construction cost. We feel we’re purchasing properties at very good price per pound and very good yields. But we are managing a company that performs well in all the economic environments.

Okay. So you don't feel like you have increased the overall risk level given the healthy performance of the last few years?

Well, when you specialized in long-term leases to investment-grade tenants, you’re kind of mitigating the risks somewhat, the reason our occupancy was very stable and if you look at just our metrics over the recession, you wouldn’t even notice there was a recession. So there is not another REIT that I know of that focuses exclusively on long-term leases to investment-grade tenants. 85% of our revenue was secured by investment grade tenants, the other 15% you shouldn’t infer a speculative grade tenants, it’s just non-rated tenants that we underwrite as investment grade. So we’re very picky on the deals we do. When you have a cash flow secured by high caliber tenants even in recession, they need these warehouse facilities, they need these distribution facilities. So, the rank marches on, income marches on, occupancy marches on, even if the global economy is in a contraction mode.

Okay, thank you.

You’re welcome.

[Operator Instructions] And we do have a question from Michael Boulegeris of Boulegeris Investments.

Good morning. Looks like three yards in a cloud of dust, grinding in another strong quarter. Michael, could you maybe flesh out somewhat when you talk about growth capacity? Can you maybe detail that more specifically?

Yes, I think the fact that we just lost in very favorable financing terms on the large part of our pipeline, 3% and 3.25% interest rate, fully amortizing over 15 years, over a $100 million in proceeds and that was all locked in prior to this aggressive move in the treasury market. So it was very well timed, gives us good growth capacity going forward. The seven deals we consummated thus for generated close to 16% levered return. The five deals we’ve locked in going forward also were 15.5% levered return on equity. Our securities portfolio is unencumbered. We have over $50 million in liquid real estate securities that we could borrow against the 2% or sell down to execute our growth strategy. The dividend reinvestment plan generates between $36 million and $40 million in proceeds ratably over the year. And those are our main sources to continue to grow the portfolio going forward. We have a robust pipeline close to $270 million square feet of acquisitions, but that goes out over six quarters. So because it spread out, we feel we are well situated to continue to grow the portfolio without accessing the capital markets.

Extending that just a bit further looking at, let's say, a year from now, is it too much of a stretch to foresee adjusted from operations in the $0.16 to $0.17 range?

No. I think that’s a very conservative estimate. I’ll turn it over to Kevin. But looking at the past as prologue for the future was long ago, AFFO per share was in the high 40s. We've printed two quarters in a row close to the $0.15 dividend, $0.14. So to get the earnings where our payout ratio was around 90%, I think it’s certainly within the near term goal of ours. Kevin, you want to add to that?

Yes, I agree with Michael. Last year or year-to-date, AFFO for fiscal 2014 was $0.52, and the first two quarters of this year as Michael said is $0.14 and we feel that we will continue that if not even better as these recent acquisitions get the full run rate effect will be virtually covering the dividend by the end of fiscal 2015, and as though as all these acquisitions have a full year run of rate effect for fiscal 2016 will be able to exceed the dividend.

Very well. And just on one administrative note, it seems like you're just about flat out in terms of occupancy, which congratulations. I think you have one vacant property in Winston-Salem, not too big, I think what is that, about 100,000 square feet? Can you update us on the disposition of that?

Yes, sure. I’m going to get into the three vacant properties in a second, but getting back to the dividend in the goals. You’re right. Our vacancy factor of 250 basis points on 90 assets is virtually fully occupied. And that relates to the divided in that our goal is to be conservative and payout 90% of adjusted funds from operation. But we look at that 90% with the vacancy factor. We want to have a 10% cushion of recurring earnings versus the dividend, but that cushion has to be against conservative vacancy factor of 500 basis points at least. And we are approaching 100% occupancy and its better margin of error, margin of safety to payout 90% of AFFO based on 95% occupancy versus 100% occupancy. But we’re doing the great job leasing up our assets, we only have three vacant properties. The Winston-Salem asset – there is some proposals out on that it’s a 106,000 square feet has been vacant for a little over a year and good prospects, because as I said in my prepared remarks, the whole industrial sector is seeing rising occupancy rates and rising rents. We also have a North Carolina 115,000 square foot vacancy that’s a strong market, it was leased by Maidenform they got acquired by Hanes brands, and so they consolidated out of that facility. And then our third vacancy is in the Minneapolis-St. Paul market it’s a small building 60,000 square feet. And it’s interest in all three assets and we’re marketing them for lease or sale. And when you have 13 million square feet you’re going to have some vacancy. And right now on our 13 million square feet we have a mere 300,000 square feet of vacancy.

And lastly, and I'll jump back in the queue. In terms of your lease expirations, congratulations on your 100% retention, in terms of your lease expirations for fiscal year 2016, would you foresee a similar rent increase or might you comment on what your outlook there is?

Yes, we have very few leases coming do in 2016. We only have three properties coming do in 2016 so getting 100% retention should be eminently achievable, it’s 326,000 square feet, it is only 2% of our annual based rent. And the other metric that’s important to look at because in our 100% retention this year we’re really pleased to not only to achieve 100% retention, but also achieve a 6.3% increase in revenue in doing so. Those three buildings in 2016 representing only 2% of annual base rent or have a weighted average rent are $4.10 per square foot. So that’s a low rent relative to the national average rent. So our goal is to achieve 100% retention and a positive leasing spread in doing so. So we don’t have a lot of vacancies to talk about in the near-term.

Thank you.

You’re welcome.

And this concludes our question-and-answer session. I would like to turn the conference back over to Michael Landy for any closing remarks.

Yes, thank you Laura. I’d like to thank everyone for joining us on this call and for their continued support and interest in Monmouth. Kevin, Gene, I are available for any follow-up questions. As always we will be presently at NAREIT's REIT Week conference in June and hope to see everyone there. We look forward to reporting back to you after our third quarter. Gene was silent on the call. Is there anything you want to add?

We’re very, very bullish on the industrial sector. The demand for space, the country is growing and industrial production is growing. We are in a right sector with the right tenants and the company is proceeding very well and I’m very proud of Michael and his team for the growth in the company and the excellent results we’ve had over the past years. Thank you.

Thank you. Okay, Laura.

Okay. The conference is now concluded. Thank you for attending today’s presentation. The teleconference replay will be available in approximately in one hour. To access this replay, please dial U.S. toll free 877-344-7529 or international toll 1-412-317-0088. The conference ID number is 10061578. Thank you, and please disconnect your lines at this time.