UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 7, 2015
Carter Validus Mission Critical REIT II, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Maryland | 000-55435 | 46-1854011 | ||
|
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
4890 West Kennedy Blvd.
Suite 650
Tampa, Florida 33609
(Address of principal executive offices)
(813) 287-0101
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement. |
First Amendment to Management Agreement
On May 7, 2015, Carter Validus Mission Critical REIT II, Inc. (the “Company”) entered into an amendment (the “First Amendment”) to the Management Agreement (as amended and renewed, the “Management Agreement”), by and among the Company, Carter Validus Operating Partnership II, LP (the “Operating Partnership”) and Carter Validus Real Estate Management Services II, LLC (the “Property Manager”), dated May 19, 2014. The purpose of the First Amendment, which is attached as Exhibit 10.1 hereto, is to clarify certain fees payable to the Property Manager in connection with leasing properties and to conform certain terms of the compensation the Company is required to pay the Property Manager with the disclosure contained in the prospectus that is part of the Company’s registration statement on Form S-11, as declared effective by the Securities and Exchange Commission (the “SEC”) on May 29, 2014 (File No. 333-191706) (the “Registration Statement”), as amended and supplemented from time to time.
Pursuant to the terms of the First Amendment, the Property Manager shall be entitled to receive a separate fee in connection with leasing properties to new tenants or renewals or expansions of existing leases with existing tenants in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area.
Further, to make the terms of the Management Agreement consistent with the Company’s prospectus, the First Amendment provides that (i) in the event the Company contracts directly with third parties for property management and leasing services, the Company, in its sole discretion, may pay the Property Manager an oversight fee in the aggregate amount of up to 1.0% of the gross revenues of the property managed; provided, however, that in no event shall the Company pay both a property management fee and an oversight fee with respect to any particular property; and (ii) in the event the Property Manager assists with planning and coordinating the construction of any tenant improvements or capital improvements, the Property Manager shall be entitled to receive from the Company an amount equal to not greater than 5.0% of the cost of such improvements.
The material terms of the First Amendment are qualified in their entirety by the First Amendment filed as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated herein by reference.
| Item 8.01 | Other Events. |
Distributions
On May 7, 2015, the board of directors of the Company approved and authorized a daily distribution to the Company’s stockholders of record as of the close of business on each day of the period commencing on June 1, 2015 and ending August 31, 2015. The distributions will be calculated based on 365 days in the calendar year and will be equal to $0.001753425 per share of Class A common stock, which is equal to an annualized distribution rate of 6.40%, assuming a purchase price of $10.00 per share of Class A common stock. The distributions for each record date in June 2015, July 2015 and August 2015 will be paid in July 2015, August 2015 and September 2015, respectively. The distributions will be payable to stockholders from legally available funds therefor.
Renewal of Advisory Agreement
On May 7, 2015, the Company, along with the Operating Partnership and Carter Validus Advisors II, LLC (the “Advisor”), executed a mutual consent to renew the Amended and Restated Advisory Agreement (as amended, the “Advisory Agreement”), by and among the Company, the Operating Partnership and the Advisor, dated June 10, 2014. As a result of the renewal, the Advisory Agreement was extended through June 9, 2016.
The material terms of the Advisory Agreement are qualified in their entirety by the terms of the agreement attached as Exhibit 10.2 to Post-Effective Amendment No. 1 to the Company’s Registration Statement filed with the SEC on June 12, 2014, and incorporated herein by reference.
Renewal of Management Agreement
On May 7, 2015, the Company, along with the Operating Partnership and the Property Manager, executed a mutual consent to renew the Management Agreement, as amended by that certain First Amendment. As a result of the renewal, the Management Agreement was extended through May 18, 2016.
The material terms of the Management Agreement are qualified in their entirety by the terms of the agreement attached as Exhibit 10.3 to Pre-Effective Amendment No. 4 to the Company’s Registration Statement filed with the SEC on May 20, 2014, and incorporated herein by reference. Also, the material terms of the First Amendment are qualified in their entirety by the terms of the agreement filed as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| 10.1 | First Amendment to Management Agreement by and between Carter Validus Mission Critical REIT II, Inc., Carter Validus Operating Partnership II, LP and Carter Validus Real Estate Management Services II, LLC, dated May 7, 2015. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Carter Validus Mission Critical REIT II, Inc. | ||||||
| Dated: May 13, 2015 | By: |
/s/ Todd M. Sakow |
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| Name: | Todd M. Sakow | |||||
| Title: | Chief Financial Officer | |||||
Exhibit 10.1
FIRST AMENDMENT TO MANAGEMENT AGREEMENT
This FIRST AMENDMENT TO THE MANAGEMENT AGREEMENT (this “ First Amendment ”), effective as of May 7, 2015, is entered into by and between CARTER VALIDUS MISSION CRITICAL REIT II, INC., a Maryland corporation (the “ Company ”), CARTER VALIDUS OPERATING PARTNERSHIP II, LP, a Delaware limited partnership (the “ Partnership ”) and CARTER VALIDUS REAL ESTATE MANAGEMENT SERVICES II, LLC, a Delaware limited liability company (the “ Property Manager ”). Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Management Agreement (defined below).
WHEREAS , the Company, the Partnership and the Property Manager are parties to that certain Management Agreement, dated May 19, 2014 (the “ Management Agreement ”); and
WHEREAS , the Company, the Partnership and the Property Manager desire to amend the Management Agreement as set forth herein in order to clarify certain leasing fees payable to the Property Manager.
NOW, THEREFORE , in consideration of the foregoing and of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
| 1. | Amendment to Section 4.1 |
Section 4.1 of the Management Agreement is hereby amended and restated in its entirety as follows:
4.1 Management Fees .
| (a) | The Owner shall pay the Manager or any of its Affiliates property management and leasing fees (the “ Management Fees ”), on a monthly basis, equal to: three percent (3.0%) of gross revenues from the Properties managed. Except as otherwise set forth herein, the Owner shall also reimburse the Manager for any costs and expenses incurred by the Manager in connection with managing the Properties. In addition, in the event that the Owner contracts, directly, with a third-party property manager in respect of a property, the Owner, in its sole discretion, may pay Manager an oversight fee in an aggregate amount of up to one percent (1.0%) of the Gross Revenues of the property managed (the “ Oversight Fee ”); provided, however, that in no event shall the Owner pay both Management Fees and an Oversight Fee to Manager with respect to the same property. |
| (b) |
Notwithstanding the foregoing, the Manager may be entitled to receive higher fees in the event the Manager can demonstrate to the satisfaction of the board of directors of the Company (including a majority of the Independent Directors) through empirical data that a higher competitive fee is justified for the services rendered and the type of Property managed. As described in Section 2.6 above, in the event that the Manager properly engages one or more third parties to perform |
| the services described herein, the fees payable to such parties for such services will be deducted from the Management Fees, or paid directly by the Manager, at the Manager’s option. The Manager’s compensation under this Section 4.1 shall apply to all renewals, extensions or expansions of leases which the Manager originally negotiated. |
| (c) | In the event Manager assists with planning and coordinating the construction of any tenant improvements or capital improvements, Manager shall be entitled to receive from the Owner for any such tenant improvement an amount equal to not greater than five percent (5.0%) of the cost of such improvements. |
| 2 . | Addition of Section 4.4 |
The following is hereby inserted into the Management Agreement as Section 4.4:
4.4 Leasing Fees . In addition to the compensation paid to Manager under Section 5.1 above, Manager shall be entitled to receive a separate fee for the Leases of new tenants and renewals or expansions of existing Leases with existing tenants in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area (the “ Leasing Fees ”).
| 3. | Governing Law . |
The provisions of this First Amendment shall be construed and interpreted in accordance with the laws of the State of Florida, and venue for any action brought with respect to any claims arising out of this First Amendment shall be brought exclusively in Hillsborough County, Tampa.
| 4. | Counterparts . |
This First Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument.
Except as expressly set forth herein, the Management Agreement remains unmodified and unchanged and the parties hereto ratify and confirm the Management Agreement as amended hereby.
[ Signature Pages Follow ]
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment effective as of the date first set forth above.
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CARTER VALIDUS MISSION CRITICAL REIT II, INC. |
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| By: | /s/ John E. Carter | |
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John E. Carter Chief Executive Officer |
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| CARTER VALIDUS REAL ESTATE MANAGEMENT SERVICES II, LLC | ||
| By: | /s/ Lisa Drummond | |
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Lisa Drummond Chief Operating Officer and Secretary |
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CARTER VALIDUS OPERATING PARTNERSHIP II, LP |
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| By: |
Carter Validus Mission Critical REIT II, Inc., its General Partner |
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| By: | /s/ John E. Carter | |
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John E. Carter Chief Executive Officer |
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