Sealy Industrial Partners IV, LP
Sealy Industrial Partners IV, LP filed its Q3 2026 10-Q, reporting a net loss of $2.0M ($0.48 per unit) on revenue of $9.7M, down 0.6% YoY. Operating income swung to a $0.6M loss from a $0.3M profit a year ago, as same-store revenues dropped 10% due to two large vacancies totaling over 400,000 square feet. For the nine months, the net loss widened to $6.4M ($1.56/unit) from $1.6M ($0.41/unit), with interest expense nearly doubling to $7.2M.
- Q3 2026 net loss of $2.0M ($0.48/unit) vs. $1.4M loss ($0.33/unit) in Q3 2025.
- Same-store revenues fell 10% YoY to $6.4M, driven by a 265,700 sq ft vacancy that contributed $0.6M in Q3 2025.
- Total operating expenses rose to $10.3M from $9.4M, pushing operating income to a $0.6M loss from a $0.3M profit.
- Interest expense jumped to $2.2M from $1.8M; nine-month interest expense nearly doubled to $7.2M from $4.1M.
- Nine-month net loss widened to $6.4M ($1.56/unit) from $1.6M ($0.41/unit) despite 12% revenue growth from acquired properties.
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A private industrial REIT partnership burning cash from operations while same-store vacancies gut legacy revenue is a red flag for limited partners expecting stable distributions.
The industrial REIT partnership model is showing strain as same-store vacancies erode the income base that supports distributions. Acquired-property growth (+22% in Q3) is being outpaced by legacy portfolio deterioration and rising financing costs.
Same-store portfolio faces significant vacancy pressure — a 265,700 sq ft and a 140,400 sq ft vacancy together stripped $0.8M from quarterly revenue. Rising interest expense ($7.2M YTD vs. $4.1M) on $152M in total debt could further compress cash flows if rates stay elevated.