☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
OR
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from _________ to __________
|
VEREIT, Inc.
|
VEREIT Operating Partnership, L.P.
|
(Exact name of registrant as specified in its charter)
|
Maryland
|
(VEREIT, Inc.)
|
|
45-2482685
|
|
Delaware
|
(VEREIT Operating Partnership, L.P.)
|
|
45-1255683
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
||
|
|
|
|
|
2325 E. Camelback Road, 9th Floor
|
Phoenix
|
AZ
|
|
85016
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(800)
|
606-3610
|
(Registrant’s telephone number, including area code)
|
|
|
|
|
|
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
|
||||
Title of each class:
|
Trading Symbol(s):
|
Name of each exchange on which registered:
|
||
Common Stock
|
$0.01 par value per share (VEREIT, Inc.)
|
VER
|
New York Stock Exchange
|
|
6.70% Series F Cumulative Redeemable Preferred Stock
|
$0.01 par value per share (VEREIT, Inc.)
|
VER PRF
|
New York Stock Exchange
|
VEREIT, Inc.
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
|
|
|
|
|
|
|
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|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
|
|
VEREIT Operating Partnership, L.P.
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☒
|
|
|
|
|
|
|
|
|
|
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
|
|
•
|
enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
|
•
|
eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and
|
•
|
creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.
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Page
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|
|
|
|
||||
Real estate investments, at cost:
|
|
|
|
|
||||
Land
|
|
$
|
2,715,625
|
|
|
$
|
2,738,679
|
|
Buildings, fixtures and improvements
|
|
10,135,933
|
|
|
10,200,550
|
|
||
Intangible lease assets
|
|
1,899,900
|
|
|
1,904,641
|
|
||
Total real estate investments, at cost
|
|
14,751,458
|
|
|
14,843,870
|
|
||
Less: accumulated depreciation and amortization
|
|
3,659,980
|
|
|
3,594,247
|
|
||
Total real estate investments, net
|
|
11,091,478
|
|
|
11,249,623
|
|
||
Operating lease right-of-use assets
|
|
211,187
|
|
|
215,227
|
|
||
Investment in unconsolidated entities
|
|
78,718
|
|
|
68,825
|
|
||
Cash and cash equivalents
|
|
600,945
|
|
|
12,921
|
|
||
Restricted cash
|
|
18,720
|
|
|
20,959
|
|
||
Rent and tenant receivables and other assets, net
|
|
345,103
|
|
|
348,395
|
|
||
Goodwill
|
|
1,337,773
|
|
|
1,337,773
|
|
||
Real estate assets held for sale, net
|
|
88,513
|
|
|
26,957
|
|
||
Total assets
|
|
$
|
13,772,437
|
|
|
$
|
13,280,680
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Mortgage notes payable, net
|
|
$
|
1,405,701
|
|
|
$
|
1,528,134
|
|
Corporate bonds, net
|
|
2,814,474
|
|
|
2,813,739
|
|
||
Convertible debt, net
|
|
319,120
|
|
|
318,183
|
|
||
Credit facility, net
|
|
1,767,306
|
|
|
1,045,669
|
|
||
Below-market lease liabilities, net
|
|
134,410
|
|
|
143,583
|
|
||
Accounts payable and accrued expenses
|
|
125,358
|
|
|
126,320
|
|
||
Derivative, deferred rent and other liabilities
|
|
146,893
|
|
|
90,349
|
|
||
Distributions payable
|
|
150,493
|
|
|
150,364
|
|
||
Operating lease liabilities
|
|
217,567
|
|
|
221,061
|
|
||
Total liabilities
|
|
7,081,322
|
|
|
6,437,402
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
|||
Preferred stock, $0.01 par value, 100,000,000 shares authorized and 30,871,246 issued and outstanding as of each of March 31, 2020 and December 31, 2019, respectively
|
|
309
|
|
|
309
|
|
||
Common stock, $0.01 par value, 1,500,000,000 shares authorized and 1,077,781,479 and 1,076,845,984 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
|
|
10,778
|
|
|
10,768
|
|
||
Additional paid-in capital
|
|
13,252,447
|
|
|
13,251,962
|
|
||
Accumulated other comprehensive loss
|
|
(104,217
|
)
|
|
(27,670
|
)
|
||
Accumulated deficit
|
|
(6,475,568
|
)
|
|
(6,399,626
|
)
|
||
Total stockholders’ equity
|
|
6,683,749
|
|
|
6,835,743
|
|
||
Non-controlling interests
|
|
7,366
|
|
|
7,535
|
|
||
Total equity
|
|
6,691,115
|
|
|
6,843,278
|
|
||
Total liabilities and equity
|
|
$
|
13,772,437
|
|
|
$
|
13,280,680
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
|
||||
Rental
|
|
$
|
298,586
|
|
|
$
|
316,843
|
|
Fees from managed partnerships
|
|
596
|
|
|
37
|
|
||
Total revenues
|
|
299,182
|
|
|
316,880
|
|
||
Operating expenses:
|
|
|
|
|
||||
Acquisition-related
|
|
1,523
|
|
|
985
|
|
||
Litigation and non-routine costs, net
|
|
(8,564
|
)
|
|
(21,492
|
)
|
||
Property operating
|
|
30,490
|
|
|
32,378
|
|
||
General and administrative
|
|
15,056
|
|
|
14,846
|
|
||
Depreciation and amortization
|
|
124,080
|
|
|
136,555
|
|
||
Impairments
|
|
8,380
|
|
|
11,988
|
|
||
Restructuring
|
|
—
|
|
|
9,076
|
|
||
Total operating expenses
|
|
170,965
|
|
|
184,336
|
|
||
Other (expenses) income:
|
|
|
|
|
||||
Interest expense
|
|
(64,696
|
)
|
|
(71,254
|
)
|
||
Loss on extinguishment and forgiveness of debt, net
|
|
(1,280
|
)
|
|
—
|
|
||
Other income (loss), net
|
|
175
|
|
|
(439
|
)
|
||
Equity in income of unconsolidated entities
|
|
246
|
|
|
500
|
|
||
Gain on disposition of real estate and real estate assets held for sale, net
|
|
25,249
|
|
|
10,831
|
|
||
Total other expenses, net
|
|
(40,306
|
)
|
|
(60,362
|
)
|
||
Income before taxes
|
|
87,911
|
|
|
72,182
|
|
||
Provision for income taxes
|
|
(1,048
|
)
|
|
(1,211
|
)
|
||
Net income
|
|
86,863
|
|
|
70,971
|
|
||
Net income attributable to non-controlling interests (1)
|
|
(55
|
)
|
|
(1,667
|
)
|
||
Net income attributable to the General Partner
|
|
$
|
86,808
|
|
|
$
|
69,304
|
|
|
|
|
|
|
||||
Basic and diluted net income per share attributable to common stockholders
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
(1)
|
Represents net income attributable to limited partners and a consolidated joint venture partner.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net income
|
|
$
|
86,863
|
|
|
$
|
70,971
|
|
Total other comprehensive loss
|
|
|
|
|
||||
Unrealized loss on interest rate derivatives
|
|
(78,550
|
)
|
|
(11,286
|
)
|
||
Reclassification of previous unrealized loss on interest rate derivatives into net income
|
|
1,948
|
|
|
97
|
|
||
Total other comprehensive loss
|
|
(76,602
|
)
|
|
(11,189
|
)
|
||
|
|
|
|
|
||||
Total comprehensive income
|
|
10,261
|
|
|
59,782
|
|
||
Comprehensive income attributable to non-controlling interests(1)
|
|
—
|
|
|
(1,400
|
)
|
||
Total comprehensive income attributable to the General Partner
|
|
$
|
10,261
|
|
|
$
|
58,382
|
|
(1)
|
Represents comprehensive income attributable to limited partners and a consolidated joint venture partner.
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Number
of Shares |
|
Par
Value |
|
Number
of Shares |
|
Par
Value |
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive
Income |
|
Accumulated
Deficit |
|
Total Stock-holders’ Equity
|
|
Non-Controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance, January 1, 2020
|
|
30,871,246
|
|
|
$
|
309
|
|
|
1,076,845,984
|
|
|
$
|
10,768
|
|
|
$
|
13,251,962
|
|
|
$
|
(27,670
|
)
|
|
$
|
(6,399,626
|
)
|
|
$
|
6,835,743
|
|
|
$
|
7,535
|
|
|
$
|
6,843,278
|
|
Conversion of OP Units to Common Stock
|
|
—
|
|
|
—
|
|
|
4,549
|
|
|
1
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
(45
|
)
|
|
—
|
|
||||||||
Redemption of Series F Preferred Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
||||||||
Repurchases of Common Stock to settle tax obligation
|
|
—
|
|
|
—
|
|
|
(241,092
|
)
|
|
(2
|
)
|
|
(2,376
|
)
|
|
—
|
|
|
—
|
|
|
(2,378
|
)
|
|
—
|
|
|
(2,378
|
)
|
||||||||
Equity-based compensation, net
|
|
—
|
|
|
—
|
|
|
1,172,038
|
|
|
11
|
|
|
2,844
|
|
|
—
|
|
|
—
|
|
|
2,855
|
|
|
—
|
|
|
2,855
|
|
||||||||
Distributions declared on Common Stock —
$0.1375 per common share |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(148,194
|
)
|
|
(148,194
|
)
|
|
—
|
|
|
(148,194
|
)
|
||||||||
Distributions to non-controlling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105
|
)
|
|
(105
|
)
|
||||||||
Dividend equivalents on awards granted under the Equity Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,628
|
)
|
|
(1,628
|
)
|
|
—
|
|
|
(1,628
|
)
|
||||||||
Distributions to preferred shareholders and unitholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,928
|
)
|
|
(12,928
|
)
|
|
(19
|
)
|
|
(12,947
|
)
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,808
|
|
|
86,808
|
|
|
55
|
|
|
86,863
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76,547
|
)
|
|
—
|
|
|
(76,547
|
)
|
|
(55
|
)
|
|
(76,602
|
)
|
||||||||
Balance, March 31, 2020
|
|
30,871,246
|
|
|
$
|
309
|
|
|
1,077,781,479
|
|
|
$
|
10,778
|
|
|
$
|
13,252,447
|
|
|
$
|
(104,217
|
)
|
|
$
|
(6,475,568
|
)
|
|
$
|
6,683,749
|
|
|
$
|
7,366
|
|
|
$
|
6,691,115
|
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Number
of Shares |
|
Par
Value |
|
Number
of Shares |
|
Par
Value |
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive
Income
|
|
Accumulated
Deficit |
|
Total Stock-holders’ Equity
|
|
Non-Controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance, January 1, 2019
|
|
42,834,138
|
|
|
$
|
428
|
|
|
967,515,165
|
|
|
$
|
9,675
|
|
|
$
|
12,615,472
|
|
|
$
|
(1,280
|
)
|
|
$
|
(5,467,236
|
)
|
|
$
|
7,157,059
|
|
|
$
|
143,085
|
|
|
$
|
7,300,144
|
|
Issuance of Common Stock, net
|
|
—
|
|
|
—
|
|
|
3,309,808
|
|
|
33
|
|
|
27,511
|
|
|
—
|
|
|
—
|
|
|
27,544
|
|
|
—
|
|
|
27,544
|
|
||||||||
Conversion of OP Units to Common Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
26
|
|
|
—
|
|
||||||||
Conversion of Series F Preferred Units to Series F Preferred Stock
|
|
37,108
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
922
|
|
|
—
|
|
|
—
|
|
|
923
|
|
|
(923
|
)
|
|
—
|
|
||||||||
Repurchases of Common Stock to settle tax obligation
|
|
—
|
|
|
—
|
|
|
(199,083
|
)
|
|
(2
|
)
|
|
(1,593
|
)
|
|
—
|
|
|
—
|
|
|
(1,595
|
)
|
|
—
|
|
|
(1,595
|
)
|
||||||||
Equity-based compensation, net
|
|
—
|
|
|
—
|
|
|
950,487
|
|
|
10
|
|
|
2,862
|
|
|
—
|
|
|
—
|
|
|
2,872
|
|
|
—
|
|
|
2,872
|
|
||||||||
Contributions from non-controlling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
64
|
|
||||||||
Distributions declared on Common Stock —
$0.1375 per common share |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(133,480
|
)
|
|
(133,480
|
)
|
|
—
|
|
|
(133,480
|
)
|
||||||||
Distributions to non-controlling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,262
|
)
|
|
(3,262
|
)
|
||||||||
Dividend equivalents on awards granted under the Equity Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,222
|
)
|
|
(1,222
|
)
|
|
—
|
|
|
(1,222
|
)
|
||||||||
Distributions to preferred shareholders and unitholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,940
|
)
|
|
(17,940
|
)
|
|
(33
|
)
|
|
(17,973
|
)
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,304
|
|
|
69,304
|
|
|
1,667
|
|
|
70,971
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,922
|
)
|
|
—
|
|
|
(10,922
|
)
|
|
(267
|
)
|
|
(11,189
|
)
|
||||||||
Balance, March 31, 2019
|
|
42,871,246
|
|
|
$
|
429
|
|
|
971,576,377
|
|
|
$
|
9,716
|
|
|
$
|
12,645,148
|
|
|
$
|
(12,202
|
)
|
|
$
|
(5,550,574
|
)
|
|
$
|
7,092,517
|
|
|
$
|
140,357
|
|
|
$
|
7,232,874
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|||
Net income
|
|
$
|
86,863
|
|
|
$
|
70,971
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
126,980
|
|
|
139,394
|
|
||
Gain on real estate assets, net
|
|
(25,508
|
)
|
|
(10,831
|
)
|
||
Impairments
|
|
8,380
|
|
|
11,988
|
|
||
Equity-based compensation
|
|
2,855
|
|
|
2,872
|
|
||
Equity in income of unconsolidated entities
|
|
(246
|
)
|
|
(500
|
)
|
||
Distributions from unconsolidated entities
|
|
259
|
|
|
—
|
|
||
Loss on investments
|
|
541
|
|
|
470
|
|
||
Loss on derivative instruments
|
|
—
|
|
|
34
|
|
||
Non-cash restructuring expense
|
|
—
|
|
|
4,018
|
|
||
Loss on extinguishment and forgiveness of debt, net
|
|
1,280
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Investment in direct financing leases
|
|
364
|
|
|
409
|
|
||
Rent and tenant receivables, operating lease right-of-use and other assets, net
|
|
(4,462
|
)
|
|
(7,160
|
)
|
||
Accounts payable and accrued expenses
|
|
(2,749
|
)
|
|
(2,415
|
)
|
||
Deferred rent, operating lease and other liabilities
|
|
(22,546
|
)
|
|
(15,216
|
)
|
||
Net cash provided by operating activities
|
|
172,011
|
|
|
194,034
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Investments in real estate assets
|
|
(147,121
|
)
|
|
(81,065
|
)
|
||
Capital expenditures and leasing costs
|
|
(9,502
|
)
|
|
(7,498
|
)
|
||
Real estate developments
|
|
(3,231
|
)
|
|
(3,232
|
)
|
||
Principal repayments received on mortgage notes receivable
|
|
—
|
|
|
62
|
|
||
Investments in unconsolidated entities
|
|
(2,669
|
)
|
|
—
|
|
||
Return of investment from unconsolidated entities
|
|
257
|
|
|
—
|
|
||
Proceeds from disposition of real estate
|
|
140,428
|
|
|
60,496
|
|
||
Investment in leasehold improvements and other assets
|
|
(87
|
)
|
|
(177
|
)
|
||
Deposits for real estate assets
|
|
(895
|
)
|
|
(900
|
)
|
||
Proceeds from sale of investments and other assets
|
|
—
|
|
|
8,199
|
|
||
Uses and refunds of deposits for real estate assets
|
|
3,130
|
|
|
1,240
|
|
||
Proceeds from the settlement of property-related insurance claims
|
|
38
|
|
|
32
|
|
||
Net cash used in investing activities
|
|
(19,652
|
)
|
|
(22,843
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from mortgage notes payable
|
|
913
|
|
|
—
|
|
||
Payments on mortgage notes payable and other debt, including debt extinguishment costs
|
|
(123,574
|
)
|
|
(2,426
|
)
|
||
Proceeds from credit facility
|
|
831,313
|
|
|
899,000
|
|
||
Payments on credit facility
|
|
(110,000
|
)
|
|
(207,000
|
)
|
||
Redemptions of corporate bonds, including extinguishment costs
|
|
(26
|
)
|
|
(750,000
|
)
|
||
Extinguishment costs related to the repurchases of convertible notes
|
|
(13
|
)
|
|
—
|
|
||
Payments of deferred financing costs
|
|
(35
|
)
|
|
(172
|
)
|
||
Repurchases of Common Stock to settle tax obligations
|
|
(2,378
|
)
|
|
(1,595
|
)
|
||
Proceeds from the issuance of Common Stock, net of underwriters’ discount and offering expenses
|
|
—
|
|
|
20,894
|
|
||
Series F Preferred Stock redemption expenses
|
|
(27
|
)
|
|
—
|
|
||
Contributions from non-controlling interest holders
|
|
—
|
|
|
64
|
|
||
Distributions paid
|
|
(162,747
|
)
|
|
(152,314
|
)
|
||
Net cash provided by (used in) financing activities
|
|
433,426
|
|
|
(193,549
|
)
|
||
Net change in cash and cash equivalents and restricted cash
|
|
$
|
585,785
|
|
|
$
|
(22,358
|
)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Cash and cash equivalents and restricted cash, beginning of period
|
|
$
|
33,880
|
|
|
$
|
53,663
|
|
|
|
|
|
|
||||
Cash and cash equivalents and restricted cash, end of period
|
|
$
|
619,665
|
|
|
$
|
31,305
|
|
|
|
|
|
|
||||
Reconciliation of Cash and Cash Equivalents and Restricted Cash
|
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
|
$
|
12,921
|
|
|
$
|
30,758
|
|
Restricted cash at beginning of period
|
|
20,959
|
|
|
22,905
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
|
33,880
|
|
|
53,663
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
|
600,945
|
|
|
12,788
|
|
||
Restricted cash at end of period
|
|
18,720
|
|
|
18,517
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
|
$
|
619,665
|
|
|
$
|
31,305
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|
|
|
|
||||
Real estate investments, at cost:
|
|
|
|
|
||||
Land
|
|
$
|
2,715,625
|
|
|
$
|
2,738,679
|
|
Buildings, fixtures and improvements
|
|
10,135,933
|
|
|
10,200,550
|
|
||
Intangible lease assets
|
|
1,899,900
|
|
|
1,904,641
|
|
||
Total real estate investments, at cost
|
|
14,751,458
|
|
|
14,843,870
|
|
||
Less: accumulated depreciation and amortization
|
|
3,659,980
|
|
|
3,594,247
|
|
||
Total real estate investments, net
|
|
11,091,478
|
|
|
11,249,623
|
|
||
Operating lease right-of-use assets
|
|
211,187
|
|
|
215,227
|
|
||
Investment in unconsolidated entities
|
|
78,718
|
|
|
68,825
|
|
||
Cash and cash equivalents
|
|
600,945
|
|
|
12,921
|
|
||
Restricted cash
|
|
18,720
|
|
|
20,959
|
|
||
Rent and tenant receivables and other assets, net
|
|
345,103
|
|
|
348,395
|
|
||
Goodwill
|
|
1,337,773
|
|
|
1,337,773
|
|
||
Real estate assets held for sale, net
|
|
88,513
|
|
|
26,957
|
|
||
Total assets
|
|
$
|
13,772,437
|
|
|
$
|
13,280,680
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|||
Mortgage notes payable, net
|
|
$
|
1,405,701
|
|
|
$
|
1,528,134
|
|
Corporate bonds, net
|
|
2,814,474
|
|
|
2,813,739
|
|
||
Convertible debt, net
|
|
319,120
|
|
|
318,183
|
|
||
Credit facility, net
|
|
1,767,306
|
|
|
1,045,669
|
|
||
Below-market lease liabilities, net
|
|
134,410
|
|
|
143,583
|
|
||
Accounts payable and accrued expenses
|
|
125,358
|
|
|
126,320
|
|
||
Derivative, deferred rent and other liabilities
|
|
146,893
|
|
|
90,349
|
|
||
Distributions payable
|
|
150,493
|
|
|
150,364
|
|
||
Operating lease liabilities
|
|
217,567
|
|
|
221,061
|
|
||
Total liabilities
|
|
7,081,322
|
|
|
6,437,402
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
|
||
General Partner's preferred equity, 30,871,246 General Partner Series F Preferred Units issued and outstanding as of each of March 31, 2020 and December 31, 2019, respectively
|
|
447,549
|
|
|
460,504
|
|
||
General Partner's common equity, 1,077,781,479 and 1,076,845,984 General Partner OP Units issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
|
|
6,236,200
|
|
|
6,375,239
|
|
||
Limited Partner's preferred equity, 49,766 Limited Partner Series F Preferred Units issued and outstanding as of each of March 31, 2020 and December 31, 2019, respectively
|
|
1,850
|
|
|
1,869
|
|
||
Limited Partner's common equity, 782,170 and 786,719 Limited Partner OP Units issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
|
|
4,290
|
|
|
4,433
|
|
||
Total partners’ equity
|
|
6,689,889
|
|
|
6,842,045
|
|
||
Non-controlling interests
|
|
1,226
|
|
|
1,233
|
|
||
Total equity
|
|
6,691,115
|
|
|
6,843,278
|
|
||
Total liabilities and equity
|
|
$
|
13,772,437
|
|
|
$
|
13,280,680
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
|
||||
Rental
|
|
$
|
298,586
|
|
|
$
|
316,843
|
|
Fees from managed partnerships
|
|
596
|
|
|
37
|
|
||
Total revenues
|
|
299,182
|
|
|
316,880
|
|
||
Operating expenses:
|
|
|
|
|
||||
Acquisition-related
|
|
1,523
|
|
|
985
|
|
||
Litigation and non-routine costs, net
|
|
(8,564
|
)
|
|
(21,492
|
)
|
||
Property operating
|
|
30,490
|
|
|
32,378
|
|
||
General and administrative
|
|
15,056
|
|
|
14,846
|
|
||
Depreciation and amortization
|
|
124,080
|
|
|
136,555
|
|
||
Impairments
|
|
8,380
|
|
|
11,988
|
|
||
Restructuring
|
|
—
|
|
|
9,076
|
|
||
Total operating expenses
|
|
170,965
|
|
|
184,336
|
|
||
Other (expenses) income:
|
|
|
|
|
||||
Interest expense
|
|
(64,696
|
)
|
|
(71,254
|
)
|
||
Loss on extinguishment and forgiveness of debt, net
|
|
(1,280
|
)
|
|
—
|
|
||
Other income (loss), net
|
|
175
|
|
|
(439
|
)
|
||
Equity in income of unconsolidated entities
|
|
246
|
|
|
500
|
|
||
Gain on disposition of real estate and real estate assets held for sale, net
|
|
25,249
|
|
|
10,831
|
|
||
Total other expenses, net
|
|
(40,306
|
)
|
|
(60,362
|
)
|
||
Income before taxes
|
|
87,911
|
|
|
72,182
|
|
||
Provision for income taxes
|
|
(1,048
|
)
|
|
(1,211
|
)
|
||
Net income
|
|
86,863
|
|
|
70,971
|
|
||
Net loss attributable to non-controlling interests (1)
|
|
7
|
|
|
28
|
|
||
Net income attributable to the OP
|
|
$
|
86,870
|
|
|
$
|
70,999
|
|
|
|
|
|
|
||||
Basic and diluted net income per unit attributable to common unitholders
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
(1)
|
Represents net loss attributable to a consolidated joint venture partner.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net income
|
|
$
|
86,863
|
|
|
$
|
70,971
|
|
Total other comprehensive loss
|
|
|
|
|
||||
Unrealized loss on interest rate derivatives
|
|
(78,550
|
)
|
|
(11,286
|
)
|
||
Reclassification of previous unrealized loss on interest rate derivatives into net income
|
|
1,948
|
|
|
97
|
|
||
Total other comprehensive loss
|
|
(76,602
|
)
|
|
(11,189
|
)
|
||
|
|
|
|
|
||||
Total comprehensive income
|
|
10,261
|
|
|
59,782
|
|
||
Comprehensive loss attributable to non-controlling interests(1)
|
|
7
|
|
|
28
|
|
||
Total comprehensive income attributable to the OP
|
|
$
|
10,268
|
|
|
$
|
59,810
|
|
(1)
|
Represents comprehensive loss attributable to a consolidated joint venture partner.
|
|
|
Preferred Units
|
|
Common Units
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
General Partner
|
|
Limited Partner
|
|
General Partner
|
|
Limited Partner
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Total Partners' Capital
|
|
Non-Controlling Interests
|
|
Total Capital
|
||||||||||||||||||
Balance, January 1, 2020
|
|
30,871,246
|
|
|
$
|
460,504
|
|
|
49,766
|
|
|
$
|
1,869
|
|
|
1,076,845,984
|
|
|
$
|
6,375,239
|
|
|
786,719
|
|
|
$
|
4,433
|
|
|
$
|
6,842,045
|
|
|
$
|
1,233
|
|
|
$
|
6,843,278
|
|
Conversion of Limited Partners' Common OP Units to General Partner's Common OP Units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,549
|
|
|
45
|
|
|
(4,549
|
)
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Redemption of Series F Preferred Stock
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|||||||
Repurchases of common OP Units to settle tax obligation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(241,092
|
)
|
|
(2,378
|
)
|
|
—
|
|
|
—
|
|
|
(2,378
|
)
|
|
—
|
|
|
(2,378
|
)
|
|||||||
Equity-based compensation, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,172,038
|
|
|
2,855
|
|
|
—
|
|
|
—
|
|
|
2,855
|
|
|
—
|
|
|
2,855
|
|
|||||||
Distributions to Common OP Units and non-controlling interests —$0.1375 per common unit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(148,194
|
)
|
|
—
|
|
|
(105
|
)
|
|
(148,299
|
)
|
|
—
|
|
|
(148,299
|
)
|
|||||||
Dividend equivalents on awards granted under the Equity Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,628
|
)
|
|
—
|
|
|
—
|
|
|
(1,628
|
)
|
|
—
|
|
|
(1,628
|
)
|
|||||||
Distributions to Series F Preferred Units
|
|
—
|
|
|
(12,928
|
)
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,947
|
)
|
|
—
|
|
|
(12,947
|
)
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,808
|
|
|
—
|
|
|
62
|
|
|
86,870
|
|
|
(7
|
)
|
|
86,863
|
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76,547
|
)
|
|
—
|
|
|
(55
|
)
|
|
(76,602
|
)
|
|
—
|
|
|
(76,602
|
)
|
|||||||
Balance, March 31, 2020
|
|
30,871,246
|
|
|
$
|
447,549
|
|
|
49,766
|
|
|
$
|
1,850
|
|
|
1,077,781,479
|
|
|
$
|
6,236,200
|
|
|
782,170
|
|
|
$
|
4,290
|
|
|
$
|
6,689,889
|
|
|
$
|
1,226
|
|
|
$
|
6,691,115
|
|
|
|
Preferred Units
|
|
Common Units
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
|
General Partner
|
|
Limited Partner
|
|
General Partner
|
|
Limited Partner
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Number of Units
|
|
Capital
|
|
Total Partners' Capital
|
|
Non-Controlling Interests
|
|
Total Capital
|
||||||||||||||||||
Balance, January 1, 2019
|
|
42,834,138
|
|
|
$
|
710,325
|
|
|
86,874
|
|
|
$
|
2,883
|
|
|
967,515,165
|
|
|
$
|
6,446,734
|
|
|
23,715,908
|
|
|
$
|
138,931
|
|
|
$
|
7,298,873
|
|
|
$
|
1,271
|
|
|
$
|
7,300,144
|
|
Issuance of common OP Units, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,309,808
|
|
|
27,544
|
|
|
—
|
|
|
—
|
|
|
27,544
|
|
|
—
|
|
|
27,544
|
|
|||||||
Conversion of Limited Partners' Common OP Units to General Partner's Common OP Units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Conversion of Limited Partner Series F Preferred Units to Series F Preferred Stock
|
|
37,108
|
|
|
923
|
|
|
(37,108
|
)
|
|
(923
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchases of common OP Units to settle tax obligation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(199,083
|
)
|
|
(1,595
|
)
|
|
—
|
|
|
—
|
|
|
(1,595
|
)
|
|
—
|
|
|
(1,595
|
)
|
|||||||
Equity-based compensation, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
950,487
|
|
|
2,872
|
|
|
—
|
|
|
—
|
|
|
2,872
|
|
|
—
|
|
|
2,872
|
|
|||||||
Contributions from non-controlling interest holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
64
|
|
|||||||
Distributions to Common OP Units and non-controlling interests —$0.1375 per common unit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(133,480
|
)
|
|
—
|
|
|
(3,262
|
)
|
|
(136,742
|
)
|
|
—
|
|
|
(136,742
|
)
|
|||||||
Dividend equivalents on awards granted under the Equity Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,222
|
)
|
|
—
|
|
|
—
|
|
|
(1,222
|
)
|
|
—
|
|
|
(1,222
|
)
|
|||||||
Distributions to Series F Preferred Units
|
|
—
|
|
|
(17,940
|
)
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,973
|
)
|
|
—
|
|
|
(17,973
|
)
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,304
|
|
|
—
|
|
|
1,695
|
|
|
70,999
|
|
|
(28
|
)
|
|
70,971
|
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,922
|
)
|
|
—
|
|
|
(267
|
)
|
|
(11,189
|
)
|
|
—
|
|
|
(11,189
|
)
|
|||||||
Balance, March 31, 2019
|
|
42,871,246
|
|
|
$
|
693,308
|
|
|
49,766
|
|
|
$
|
1,927
|
|
|
971,576,377
|
|
|
$
|
6,399,209
|
|
|
23,715,908
|
|
|
$
|
137,123
|
|
|
$
|
7,231,567
|
|
|
$
|
1,307
|
|
|
$
|
7,232,874
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
86,863
|
|
|
$
|
70,971
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
126,980
|
|
|
139,394
|
|
||
Gain on real estate assets, net
|
|
(25,508
|
)
|
|
(10,831
|
)
|
||
Impairments
|
|
8,380
|
|
|
11,988
|
|
||
Equity based compensation
|
|
2,855
|
|
|
2,872
|
|
||
Equity in income of unconsolidated entities
|
|
(246
|
)
|
|
(500
|
)
|
||
Distributions from unconsolidated entities
|
|
259
|
|
|
—
|
|
||
Loss on investments
|
|
541
|
|
|
470
|
|
||
Loss on derivative instruments
|
|
—
|
|
|
34
|
|
||
Non-cash restructuring expense
|
|
—
|
|
|
4,018
|
|
||
Loss on extinguishment and forgiveness of debt, net
|
|
1,280
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Investment in direct financing leases
|
|
364
|
|
|
409
|
|
||
Rent and tenant receivables, operating lease right-of-use and other assets, net
|
|
(4,462
|
)
|
|
(7,160
|
)
|
||
Accounts payable and accrued expenses
|
|
(2,749
|
)
|
|
(2,415
|
)
|
||
Deferred rent, operating lease and other liabilities
|
|
(22,546
|
)
|
|
(15,216
|
)
|
||
Net cash provided by operating activities
|
|
172,011
|
|
|
194,034
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Investments in real estate assets
|
|
(147,121
|
)
|
|
(81,065
|
)
|
||
Capital expenditures and leasing costs
|
|
(9,502
|
)
|
|
(7,498
|
)
|
||
Real estate developments
|
|
(3,231
|
)
|
|
(3,232
|
)
|
||
Principal repayments received on mortgage notes receivable
|
|
—
|
|
|
62
|
|
||
Investments in unconsolidated entities
|
|
(2,669
|
)
|
|
—
|
|
||
Return of investment from unconsolidated entities
|
|
257
|
|
|
—
|
|
||
Proceeds from disposition of real estate
|
|
140,428
|
|
|
60,496
|
|
||
Investment in leasehold improvements and other assets
|
|
(87
|
)
|
|
(177
|
)
|
||
Deposits for real estate assets
|
|
(895
|
)
|
|
(900
|
)
|
||
Proceeds from sale of investments and other assets
|
|
—
|
|
|
8,199
|
|
||
Uses and refunds of deposits for real estate assets
|
|
3,130
|
|
|
1,240
|
|
||
Proceeds from the settlement of property-related insurance claims
|
|
38
|
|
|
32
|
|
||
Net cash used in investing activities
|
|
(19,652
|
)
|
|
(22,843
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from mortgage notes payable
|
|
913
|
|
|
—
|
|
||
Payments on mortgage notes payable and other debt, including debt extinguishment costs
|
|
(123,574
|
)
|
|
(2,426
|
)
|
||
Proceeds from credit facility
|
|
831,313
|
|
|
899,000
|
|
||
Payments on credit facility
|
|
(110,000
|
)
|
|
(207,000
|
)
|
||
Redemptions of corporate bonds, including extinguishment costs
|
|
(26
|
)
|
|
(750,000
|
)
|
||
Extinguishment costs related to the repurchases of convertible notes
|
|
(13
|
)
|
|
—
|
|
||
Payments of deferred financing costs
|
|
(35
|
)
|
|
(172
|
)
|
||
Repurchases of Common Stock to settle tax obligations
|
|
(2,378
|
)
|
|
(1,595
|
)
|
||
Proceeds from the issuance of Common Stock, net of underwriters’ discount and offering expenses
|
|
—
|
|
|
20,894
|
|
||
Series F Preferred Stock redemption expenses
|
|
(27
|
)
|
|
—
|
|
||
Contributions from non-controlling interest holders
|
|
—
|
|
|
64
|
|
||
Distributions paid
|
|
(162,747
|
)
|
|
(152,314
|
)
|
||
Net cash provided by (used in) financing activities
|
|
433,426
|
|
|
(193,549
|
)
|
||
Net change in cash and cash equivalents and restricted cash
|
|
$
|
585,785
|
|
|
$
|
(22,358
|
)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Cash and cash equivalents and restricted cash, beginning of period
|
|
$
|
33,880
|
|
|
$
|
53,663
|
|
|
|
|
|
|
||||
Cash and cash equivalents and restricted cash, end of period
|
|
$
|
619,665
|
|
|
$
|
31,305
|
|
|
|
|
|
|
||||
Reconciliation of Cash and Cash Equivalents and Restricted Cash
|
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
|
$
|
12,921
|
|
|
$
|
30,758
|
|
Restricted cash at beginning of period
|
|
20,959
|
|
|
22,905
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
|
33,880
|
|
|
53,663
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
|
600,945
|
|
|
12,788
|
|
||
Restricted cash at end of period
|
|
18,720
|
|
|
18,517
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
|
$
|
619,665
|
|
|
$
|
31,305
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Litigation and non-routine costs, net:
|
|
|
|
|
||||
Audit Committee Investigation and related matters (1) (2)
|
|
$
|
(6,093
|
)
|
|
$
|
14,691
|
|
Legal fees and expenses
|
|
—
|
|
|
2
|
|
||
Litigation settlements
|
|
—
|
|
|
12,235
|
|
||
Total costs
|
|
(6,093
|
)
|
|
26,928
|
|
||
Insurance recoveries
|
|
(2,471
|
)
|
|
(48,420
|
)
|
||
Total
|
|
$
|
(8,564
|
)
|
|
$
|
(21,492
|
)
|
(1)
|
Includes all fees and costs associated with various litigations and investigations prompted by the results of the 2014 investigation conducted by the audit committee (the “Audit Committee”) of the Company’s Board of Directors (the “Audit Committee Investigation”), including fees and costs incurred pursuant to the Company’s advancement obligations, litigation related thereto and in connection with related insurance recovery matters, net of accrual reversals.
|
(2)
|
The negative balance for the three months ended March 31, 2020 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Restricted Shares
|
|
$
|
—
|
|
|
$
|
77
|
|
Time-Based Restricted Stock Units (1)
|
|
1,386
|
|
|
1,249
|
|
||
Long-Term Incentive-Based Restricted Stock Units
|
|
1,098
|
|
|
1,229
|
|
||
Deferred Stock Units
|
|
72
|
|
|
72
|
|
||
Stock Options
|
|
299
|
|
|
245
|
|
||
Total
|
|
$
|
2,855
|
|
|
$
|
2,872
|
|
(1)
|
Includes stock compensation expense attributable to awards for which the requisite service period begins prior to the assumed future grant date.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Real estate investments, at cost:
|
|
|
|
|
||||
Land
|
|
$
|
19,953
|
|
|
$
|
17,716
|
|
Buildings, fixtures and improvements
|
|
95,728
|
|
|
53,923
|
|
||
Total tangible assets
|
|
115,681
|
|
|
71,639
|
|
||
Acquired intangible assets:
|
|
|
|
|
||||
In-place leases and other intangibles (1)
|
|
15,739
|
|
|
9,445
|
|
||
Above-market leases (2)
|
|
15,701
|
|
|
—
|
|
||
Total purchase price of assets acquired
|
|
$
|
147,121
|
|
|
$
|
81,084
|
|
(1)
|
The weighted average amortization period for acquired in-place leases and other intangibles is 18.1 years and 12.5 years for 2020 Acquisitions and 2019 Acquisitions, respectively.
|
(2)
|
The weighted average amortization period for acquired above-market leases is 20.1 years for 2020 Acquisitions.
|
|
|
Weighted-Average Useful Life
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Intangible lease assets:
|
|
|
|
|
|
|
||||
In-place leases and other intangibles, net of accumulated amortization of $765,649 and $748,689, respectively
|
|
16.0
|
|
$
|
818,815
|
|
|
$
|
854,196
|
|
Leasing commissions, net of accumulated amortization of $6,093 and $6,027, respectively
|
|
7.8
|
|
17,524
|
|
|
17,808
|
|
||
Above-market lease assets and deferred lease incentives, net of accumulated amortization of $116,628 and $112,438, respectively
|
|
16.7
|
|
175,191
|
|
|
165,483
|
|
||
Total intangible lease assets, net
|
|
|
|
$
|
1,011,530
|
|
|
$
|
1,037,487
|
|
|
|
|
|
|
|
|
||||
Intangible lease liabilities:
|
|
|
|
|
|
|
||||
Below-market leases, net of accumulated amortization of $101,968 and $99,315, respectively
|
|
18.3
|
|
$
|
134,410
|
|
|
$
|
143,583
|
|
|
|
Remainder of 2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
||||||||||
In-place leases and other intangibles:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total projected to be included in amortization expense
|
|
$
|
86,460
|
|
|
$
|
107,728
|
|
|
$
|
94,017
|
|
|
$
|
83,827
|
|
|
$
|
73,528
|
|
Leasing commissions:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total projected to be included in amortization expense
|
|
1,896
|
|
|
2,341
|
|
|
2,239
|
|
|
1,964
|
|
|
1,747
|
|
|||||
Above-market lease assets and deferred lease incentives:
|
|
|
|
|
|
|
|
|
||||||||||||
Total projected to be deducted from rental revenue
|
|
14,943
|
|
|
19,519
|
|
|
18,708
|
|
|
17,764
|
|
|
16,393
|
|
|||||
Below-market lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total projected to be included in rental revenue
|
|
12,481
|
|
|
14,950
|
|
|
13,258
|
|
|
12,535
|
|
|
10,688
|
|
|
|
|
|
|
|
Carrying Amount of
Investment
|
|
Equity in Income
|
||||||||||||
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
Investment
|
|
Ownership % (1)
|
|
Number of Properties
|
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2020
|
|
March 31, 2019
|
||||||||
Faison JV Bethlehem GA (2)
|
|
90%
|
|
1
|
|
$
|
40,178
|
|
|
$
|
40,416
|
|
|
$
|
(7
|
)
|
|
$
|
500
|
|
Industrial Partnership
|
|
20%
|
|
6
|
|
28,365
|
|
|
28,409
|
|
|
180
|
|
|
—
|
|
||||
Office Partnership (3)
|
|
20%
|
|
3
|
|
10,175
|
|
|
—
|
|
|
73
|
|
|
—
|
|
(1)
|
The Company’s ownership interest reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed properties because of various provisions in certain joint venture agreements regarding capital contributions, distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests.
|
(2)
|
The total carrying amount of the investments was greater than the underlying equity in net assets by $4.6 million and $4.7 million as of March 31, 2020 and December 31, 2019, respectively. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with mergers. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy.
|
(3)
|
During the three months ended March 31, 2020, the Office Partnership acquired one property from a third party for a purchase price of $33.1 million.
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Straight-line rent receivable
|
|
$
|
262,799
|
|
|
$
|
266,195
|
|
Accounts receivable
|
|
39,562
|
|
|
41,556
|
|
||
Deferred costs, net (1)
|
|
6,516
|
|
|
7,208
|
|
||
Investment in direct financing leases, net
|
|
8,951
|
|
|
9,341
|
|
||
Investment in Cole REITs (2)
|
|
7,009
|
|
|
7,552
|
|
||
Prepaid expenses
|
|
8,477
|
|
|
3,453
|
|
||
Leasehold improvements, property and equipment, net (3)
|
|
4,480
|
|
|
4,809
|
|
||
Other assets, net
|
|
7,309
|
|
|
8,281
|
|
||
Total
|
|
$
|
345,103
|
|
|
$
|
348,395
|
|
(1)
|
Amortization expense for deferred costs related to the revolving credit facilities totaled $0.7 million and $1.1 million for the three months ended March 31, 2020 and 2019, respectively. Accumulated amortization for deferred costs related to the revolving credit facilities was $50.5 million and $49.8 million as of March 31, 2020 and December 31, 2019, respectively.
|
(2)
|
The Company has interests in CCIT II, CCIT III and CCPT V (collectively, the “Cole REITs”) and carries these investments at fair value. During the three months ended March 31, 2020, the Company recognized a loss of $0.5 million related to the change in fair value, which is included in other income (loss), net in the accompanying consolidated statements of operations.
|
(3)
|
Amortization expense for leasehold improvements totaled $0.1 million and $0.3 million for the three months ended March 31, 2020 and 2019, respectively, with no related write-offs. Accumulated amortization was $3.0 million and $2.8 million as of March 31, 2020 and December 31, 2019, respectively. Depreciation expense for property and equipment totaled $0.3 million and $0.4 million for the three months ended March 31, 2020 and 2019, respectively, inclusive of write-offs of less than $0.1 million for three months ended March 31, 2019. Accumulated depreciation was $5.7 million and $5.4 million as of March 31, 2020 and December 31, 2019, respectively.
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of March 31, 2020
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Investment in Cole REITs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,009
|
|
|
$
|
7,009
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
$
|
—
|
|
|
$
|
(104,530
|
)
|
|
$
|
—
|
|
|
$
|
(104,530
|
)
|
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of December 31, 2019
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
250
|
|
Investment in Cole REITs
|
|
—
|
|
|
—
|
|
|
7,552
|
|
|
7,552
|
|
||||
Total assets
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
7,552
|
|
|
$
|
7,802
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
$
|
—
|
|
|
$
|
(28,081
|
)
|
|
$
|
—
|
|
|
$
|
(28,081
|
)
|
|
|
Investment in Cole REITs
|
||
Beginning balance, January 1, 2020
|
|
$
|
7,552
|
|
Unrealized loss included in other income, net
|
|
(543
|
)
|
|
Ending Balance, March 31, 2020
|
|
$
|
7,009
|
|
|
|
|
||
Beginning balance, January 1, 2019
|
|
$
|
7,844
|
|
Unrealized loss included in other income, net
|
|
(292
|
)
|
|
Ending Balance, March 31, 2019
|
|
$
|
7,552
|
|
|
|
Level
|
|
Carrying Amount at March 31, 2020
|
|
Fair Value at March 31, 2020
|
|
Carrying Amount at December 31, 2019
|
|
Fair Value at December 31, 2019
|
||||||||
Liabilities (1):
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mortgage notes payable and other debt, net
|
|
2
|
|
$
|
1,412,894
|
|
|
$
|
1,459,616
|
|
|
$
|
1,535,918
|
|
|
$
|
1,590,915
|
|
Corporate bonds, net
|
|
2
|
|
2,839,865
|
|
|
2,717,813
|
|
|
2,839,581
|
|
|
3,022,087
|
|
||||
Convertible debt, net
|
|
2
|
|
320,425
|
|
|
319,341
|
|
|
319,947
|
|
|
327,237
|
|
||||
Credit facility
|
|
2
|
|
1,771,313
|
|
|
1,771,313
|
|
|
1,050,000
|
|
|
1,050,000
|
|
||||
Total liabilities
|
|
|
|
$
|
6,344,497
|
|
|
$
|
6,268,083
|
|
|
$
|
5,745,446
|
|
|
$
|
5,990,239
|
|
(1)
|
Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs.
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
|
|
||||||||||||||
|
|
|
Balance as of December 31, 2019
|
|
Debt Issuances
|
|
Repayments, Extinguishment and Assumptions
|
|
Accretion and Amortization
|
|
Balance as of March 31, 2020
|
||||||||||
Mortgage notes payable:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Outstanding balance
|
|
$
|
1,529,057
|
|
|
$
|
913
|
|
|
$
|
(122,199
|
)
|
|
$
|
—
|
|
|
$
|
1,407,771
|
|
|
Net premiums (1)
|
|
6,861
|
|
|
—
|
|
|
(202
|
)
|
|
(1,536
|
)
|
|
5,123
|
|
|||||
|
Deferred costs
|
|
(7,784
|
)
|
|
—
|
|
|
64
|
|
|
527
|
|
|
(7,193
|
)
|
|||||
Mortgages notes payable, net
|
|
1,528,134
|
|
|
913
|
|
|
(122,337
|
)
|
|
(1,009
|
)
|
|
1,405,701
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Corporate bonds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Outstanding balance
|
|
2,850,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,850,000
|
|
|||||
|
Discount (2)
|
|
(10,419
|
)
|
|
—
|
|
|
—
|
|
|
284
|
|
|
(10,135
|
)
|
|||||
|
Deferred costs
|
|
(25,842
|
)
|
|
(380
|
)
|
|
—
|
|
|
831
|
|
|
(25,391
|
)
|
|||||
Corporate bonds, net
|
|
2,813,739
|
|
|
(380
|
)
|
|
—
|
|
|
1,115
|
|
|
2,814,474
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Convertible debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Outstanding balance
|
|
321,802
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
321,802
|
|
|||||
|
Discount (2)
|
|
(1,855
|
)
|
|
—
|
|
|
—
|
|
|
478
|
|
|
(1,377
|
)
|
|||||
|
Deferred costs
|
|
(1,764
|
)
|
|
—
|
|
|
—
|
|
|
459
|
|
|
(1,305
|
)
|
|||||
Convertible debt, net
|
|
318,183
|
|
|
—
|
|
|
—
|
|
|
937
|
|
|
319,120
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit facility:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Outstanding balance
|
|
1,050,000
|
|
|
831,313
|
|
|
(110,000
|
)
|
|
—
|
|
|
1,771,313
|
|
|||||
|
Deferred costs (3)
|
|
(4,331
|
)
|
|
—
|
|
|
—
|
|
|
324
|
|
|
(4,007
|
)
|
|||||
Credit facility, net
|
|
1,045,669
|
|
|
831,313
|
|
|
(110,000
|
)
|
|
324
|
|
|
1,767,306
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total debt
|
|
$
|
5,705,725
|
|
|
$
|
831,846
|
|
|
$
|
(232,337
|
)
|
|
$
|
1,367
|
|
|
$
|
6,306,601
|
|
(1)
|
Net premiums on mortgage notes payable were recorded upon the assumption of the respective mortgage notes in relation to the various mergers and acquisitions. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective mortgage notes using the effective-interest method.
|
(2)
|
Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method.
|
(3)
|
Deferred costs relate to the Credit Facility Term Loan, as defined in the “Credit Facility” section below.
|
|
|
Encumbered Properties
|
|
Net Carrying Value of Collateralized Properties (1)
|
|
Outstanding Balance
|
|
Weighted-Average
Interest Rate (2)
|
|
Weighted-Average Years to Maturity (3)
|
||||||
Fixed-rate debt
|
|
316
|
|
|
$
|
1,918,151
|
|
|
$
|
1,392,555
|
|
|
5.02
|
%
|
|
2.7
|
Variable-rate debt
|
|
1
|
|
|
30,171
|
|
|
15,216
|
|
|
4.95
|
%
|
(4)
|
0.4
|
||
Total (5)
|
|
317
|
|
|
$
|
1,948,322
|
|
|
$
|
1,407,771
|
|
|
5.02
|
%
|
|
2.7
|
(1)
|
Net carrying value is real estate assets, including investment in direct financing leases, net of real estate liabilities.
|
(2)
|
Weighted average interest rate is computed using the interest rate in effect until the anticipated repayment date. Should the loan not be repaid at the anticipated repayment date, the applicable interest rate will increase as specified in the respective loan agreement until the extended maturity date.
|
(3)
|
Weighted average years remaining to maturity is computed using the anticipated repayment date as specified in each loan agreement, where applicable.
|
(4)
|
Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of March 31, 2020.
|
(5)
|
The table above does not include mortgage notes associated with unconsolidated joint ventures of $341.8 million, which are non-recourse to the Company.
|
|
|
Total
|
||
April 1, 2020 - December 31, 2020
|
|
$
|
89,602
|
|
2021
|
|
299,015
|
|
|
2022
|
|
266,951
|
|
|
2023
|
|
124,217
|
|
|
2024
|
|
621,021
|
|
|
Thereafter
|
|
6,965
|
|
|
Total
|
|
$
|
1,407,771
|
|
|
|
Outstanding Balance March 31, 2020
|
|
Interest Rate
|
|
Maturity Date
|
|||
2024 Senior Notes
|
|
$
|
500,000
|
|
|
4.600
|
%
|
|
February 6, 2024
|
2025 Senior Notes
|
|
550,000
|
|
|
4.625
|
%
|
|
November 1, 2025
|
|
2026 Senior Notes
|
|
600,000
|
|
|
4.875
|
%
|
|
June 1, 2026
|
|
2027 Senior Notes
|
|
600,000
|
|
|
3.950
|
%
|
|
August 15, 2027
|
|
2029 Senior Notes
|
|
600,000
|
|
|
3.100
|
%
|
|
December 15, 2029
|
|
Total balance and weighted-average interest rate
|
|
$
|
2,850,000
|
|
|
4.210
|
%
|
|
|
Derivatives Designated as Hedging Instruments
|
|
Balance Sheet Location
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Interest rate swaps
|
|
Rent and tenant receivables and other assets, net
|
|
$
|
—
|
|
|
$
|
250
|
|
Interest rate swaps
|
|
Derivative, deferred rent and other liabilities
|
|
$
|
(104,530
|
)
|
|
$
|
(28,081
|
)
|
|
|
Offsetting of Derivative Assets and Liabilities
|
||||||||||||||||||||||||||||||
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts of Assets Presented in the Consolidated Balance Sheets
|
|
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||||||
March 31, 2020
|
|
$
|
—
|
|
|
$
|
(104,530
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(104,530
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(104,530
|
)
|
December 31, 2019
|
|
$
|
250
|
|
|
$
|
(28,081
|
)
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
(28,081
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(27,831
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Supplemental disclosures:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
50,638
|
|
|
$
|
67,588
|
|
Cash paid for income taxes
|
|
$
|
1,404
|
|
|
$
|
384
|
|
Non-cash investing and financing activities:
|
|
|
|
|
||||
Unsettled share issuances
|
|
$
|
—
|
|
|
$
|
6,650
|
|
Accrued capital expenditures, tenant improvements and real estate developments
|
|
$
|
14,856
|
|
|
$
|
10,903
|
|
Accrued deferred financing costs
|
|
$
|
345
|
|
|
$
|
—
|
|
Real estate contributions to Office Partnership
|
|
$
|
7,494
|
|
|
$
|
—
|
|
Distributions declared and unpaid
|
|
$
|
150,493
|
|
|
$
|
139,764
|
|
Real estate investments received from lease related transactions
|
|
$
|
259
|
|
|
$
|
—
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Accrued interest
|
|
$
|
44,164
|
|
|
$
|
31,925
|
|
Accrued other
|
|
37,166
|
|
|
41,725
|
|
||
Accrued real estate and other taxes
|
|
25,285
|
|
|
25,320
|
|
||
Accrued legal fees and litigation settlements
|
|
17,169
|
|
|
25,571
|
|
||
Accounts payable
|
|
1,574
|
|
|
1,779
|
|
||
Total
|
|
$
|
125,358
|
|
|
$
|
126,320
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Fixed:
|
|
|
|
|
||||
Cash rent
|
|
$
|
269,583
|
|
|
$
|
282,575
|
|
Straight-line rent
|
|
2,055
|
|
|
7,412
|
|
||
Lease intangible amortization
|
|
(748
|
)
|
|
(731
|
)
|
||
Property operating cost reimbursements
|
|
1,428
|
|
|
1,464
|
|
||
Sub-lease (1)
|
|
5,263
|
|
|
5,489
|
|
||
Total fixed
|
|
277,581
|
|
|
296,209
|
|
||
|
|
|
|
|
||||
Variable (2)
|
|
20,815
|
|
|
20,417
|
|
||
Income from direct financing leases
|
|
190
|
|
|
217
|
|
||
Total rental revenue
|
|
$
|
298,586
|
|
|
$
|
316,843
|
|
(1)
|
The Company’s tenants are generally sub-tenants under certain ground leases and are responsible for paying the rent under these leases.
|
(2)
|
Includes costs reimbursed related to property operating expenses, common area maintenance and percentage rent, including these costs reimbursed by ground lease sub-tenants.
|
|
|
Future Minimum Operating Lease Payments
|
|
Future Minimum
Direct Financing Lease Payments (1) |
||||
April 1, 2020 - December 31, 2020
|
|
$
|
795,563
|
|
|
$
|
1,601
|
|
2021
|
|
1,043,693
|
|
|
2,014
|
|
||
2022
|
|
974,602
|
|
|
1,925
|
|
||
2023
|
|
906,989
|
|
|
1,565
|
|
||
2024
|
|
829,484
|
|
|
510
|
|
||
Thereafter
|
|
4,900,832
|
|
|
824
|
|
||
Total
|
|
$
|
9,451,163
|
|
|
$
|
8,439
|
|
(1)
|
Related to 19 properties which are subject to direct financing leases and, therefore, revenue is recognized as rental income on the discounted cash flows of the lease payments. Amounts reflect undiscounted cash flows to be received by the Company under the lease agreements on these respective properties.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Operating lease cost (1)
|
|
$
|
7,575
|
|
|
$
|
6,978
|
|
Sublease income (2)
|
|
$
|
(5,263
|
)
|
|
$
|
(5,489
|
)
|
(1)
|
No cash paid for operating lease liabilities was capitalized.
|
(2)
|
The Company’s tenants are generally sub-tenants under certain ground leases and are responsible for paying the rent under these leases.
|
|
|
Future Minimum Lease Payments
|
||
April 1, 2020 - December 31, 2020
|
|
$
|
16,568
|
|
2021
|
|
22,099
|
|
|
2022
|
|
21,938
|
|
|
2023
|
|
21,591
|
|
|
2024
|
|
21,037
|
|
|
Thereafter
|
|
225,460
|
|
|
Total
|
|
328,693
|
|
|
Less: imputed interest
|
|
111,126
|
|
|
Total
|
|
$
|
217,567
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net income
|
|
$
|
86,863
|
|
|
$
|
70,971
|
|
Net income attributable to non-controlling interests
|
|
(55
|
)
|
|
(1,667
|
)
|
||
Net income attributable to the General Partner
|
|
86,808
|
|
|
69,304
|
|
||
Dividends to preferred shares and units
|
|
(12,948
|
)
|
|
(17,973
|
)
|
||
Net income available to common stockholders used in basic net income per share
|
|
73,860
|
|
|
51,331
|
|
||
Income attributable to limited partners
|
|
62
|
|
|
1,695
|
|
||
Net income used in diluted net income per share
|
|
$
|
73,922
|
|
|
$
|
53,026
|
|
|
|
|
|
|
||||
Weighted average number of Common Stock outstanding - basic
|
|
1,077,937,799
|
|
|
968,460,296
|
|
||
Effect of Limited Partner OP Units and dilutive securities
|
|
1,813,441
|
|
|
24,838,018
|
|
||
Weighted average number of common shares - diluted
|
|
1,079,751,240
|
|
|
993,298,314
|
|
||
|
|
|
|
|
||||
Basic and diluted net income per share attributable to common stockholders
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net income
|
|
$
|
86,863
|
|
|
$
|
70,971
|
|
Net loss attributable to non-controlling interests
|
|
7
|
|
|
28
|
|
||
Net income attributable to the Operating Partnership
|
|
86,870
|
|
|
70,999
|
|
||
Dividends to preferred units
|
|
(12,948
|
)
|
|
(17,973
|
)
|
||
Net income used in basic and diluted net income per unit
|
|
$
|
73,922
|
|
|
$
|
53,026
|
|
|
|
|
|
|
||||
Weighted average number of common units outstanding - basic
|
|
1,078,721,119
|
|
|
992,176,204
|
|
||
Effect of dilutive securities
|
|
1,030,122
|
|
|
1,122,110
|
|
||
Weighted average number of common units - diluted
|
|
1,079,751,241
|
|
|
993,298,314
|
|
||
|
|
|
|
|
||||
Basic and diluted net income per unit attributable to common unitholders
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
Period
|
|
Record Date
|
|
Payment Date
|
June 15, 2020 - July 14, 2020
|
|
July 1, 2020
|
|
July 15, 2020
|
July 15, 2020 - August 14, 2020
|
|
August 1, 2020
|
|
August 17, 2020
|
August 15, 2020 - September 14, 2020
|
|
September 1, 2020
|
|
September 15, 2020
|
•
|
The duration and extent of the impact of the coronavirus (COVID-19) on our business and the businesses of our tenants (including their ability to timely make rental payments) and the economy generally.
|
•
|
Federal or state legislation or regulation that could impact the timely payment of rent by tenants in light of COVID-19.
|
•
|
Our plans, market and other expectations, objectives, intentions and other statements that are not historical facts.
|
•
|
We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.
|
•
|
We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties.
|
•
|
We may be subject to risks accompanying the management of our industrial and office partnerships.
|
•
|
Our properties may be subject to impairment charges.
|
•
|
We could be subject to unexpected costs or liabilities that may arise from potential dispositions, including related to limited partnership, tenant-in-common and Delaware statutory trust real estate programs (“1031 real estate programs”) and VEREIT’s management with respect to such programs.
|
•
|
We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties including that we may be unable to acquire, dispose of, or lease properties on advantageous terms or at all.
|
•
|
We could be subject to risks associated with bankruptcies or insolvencies of tenants, from tenant defaults generally or from the unpredictability of the business plans and financial condition of our tenants, which are heightened as a result of the coronavirus (COVID-19) pandemic.
|
•
|
We have substantial indebtedness, which may affect our ability to pay dividends, and expose us to interest rate fluctuation risk and the risk of default under our debt obligations.
|
•
|
We may be subject to increases in our borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of London Inter-Bank Offer Rate (“LIBOR”) after 2021.
|
•
|
Our overall borrowing and operating flexibility may be adversely affected by the terms and restrictions within the indenture governing the senior unsecured notes (the “Senior Notes”), and the Credit Agreement governing the terms of the Credit Facility (as both terms are defined in Liquidity and Capital Resources), and compliance with such covenants may be more difficult as a result of the impact of COVID-19.
|
•
|
Our access to capital and terms of future financings may be affected by adverse changes to our credit rating.
|
•
|
We may be affected by the incurrence of additional secured or unsecured debt.
|
•
|
We may not be able to achieve and maintain profitability.
|
•
|
We may not generate cash flows sufficient to pay our dividends to stockholders or meet our debt service obligations.
|
•
|
We may be affected by risks resulting from losses in excess of insured limits.
|
•
|
We may fail to remain qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.
|
•
|
We are subject to risks associated with our joint ventures including their management.
|
•
|
Compliance with the REIT annual distribution requirements may limit our operating flexibility.
|
•
|
We may be unable to retain or hire key personnel.
|
•
|
Acquired controlling financial interests in 25 commercial properties for an aggregate purchase price of $147.1 million, which includes one land parcel for build-to-suit development and $0.9 million of external acquisition-related expenses that were capitalized.
|
•
|
Disposed of 30 properties, including the sale of two consolidated properties to a newly-formed joint venture (the “Office Partnership”), for an aggregate gross sales price of $152.2 million, of which our share was $150.5 million, resulting in proceeds of $140.4 million after closing costs and contributions to the Office Partnership. The Company recorded a gain of $25.2 million related to the sales.
|
•
|
Initiated an additional draw, in excess of normal operating requirements, of $600.0 million on our Revolving Credit Facility to enhance cash position.
|
•
|
Total secured debt decreased by $121.3 million, from $1.5 billion to $1.4 billion.
|
•
|
Declared a quarterly dividend of $0.1375 per share of Common Stock for the first quarter of 2020, representing an annualized dividend rate of $0.55 per share.
|
(1)
|
Includes redevelopment property, billboards, construction in progress, land and parking lots.
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Portfolio Metrics
|
|
|
|
|
Operating properties
|
|
3,853
|
|
3,980
|
Rentable square feet (in millions) (1)
|
|
89.5
|
|
94.7
|
Economic occupancy rate (1)(2)
|
|
99.1%
|
|
98.9%
|
Investment-grade tenants (1)(3)
|
|
36.7%
|
|
41.3%
|
(1)
|
As of March 31, 2020, rentable square feet, economic occupancy rate and annualized rental income include the Company’s pro rata share of square feet and annualized rental income from the Company’s unconsolidated joint ventures. As of March 31, 2020, rentable square feet and economic occupancy rate exclude one redevelopment property. As of March 31, 2019, rentable square feet and economic occupancy rate exclude one redevelopment property.
|
(2)
|
Economic occupancy rate equals the sum of square feet leased (including space subject to month-to-month agreements) divided by rentable square feet.
|
(3)
|
Based on annualized rental income of our real estate portfolio as of March 31, 2020 and 2019, respectively. Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Financial Services LLC or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. The ratings may reflect those assigned by Standard & Poor’s Financial Services LLC or Moody’s Investor Service, Inc. to the lease guarantor or the parent company, as applicable.
|
|
|
March 31, 2020
|
|
March 31, 2019
|
Economic Metrics
|
|
|
|
|
Weighted-average lease term (in years)
|
|
8.3
|
|
8.7
|
Lease rollover: (1)
|
|
|
|
|
Annual average
|
|
6.6%
|
|
5.7%
|
Maximum for a single year
|
|
10.9%
|
|
7.7%
|
(1)
|
Through the end of the next five years as of the respective reporting date.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Financial Metrics
|
|
|
|
|
||||
Total revenues
|
|
$
|
299,182
|
|
|
$
|
316,880
|
|
|
|
|
|
|
||||
Net income
|
|
$
|
86,863
|
|
|
$
|
70,971
|
|
Basic and diluted net income per share attributable to common stockholders
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
|
|
|
|
||||
FFO attributable to common stockholders and limited partners (1)
|
|
$
|
181,822
|
|
|
$
|
190,304
|
|
AFFO attributable to common stockholders and limited partners (1)
|
|
$
|
180,974
|
|
|
$
|
178,403
|
|
AFFO attributable to common stockholders and limited partners per diluted share (1)
|
|
$
|
0.17
|
|
|
$
|
0.18
|
|
(1)
|
See the Non-GAAP Measures section below for descriptions of our non-GAAP measures and reconciliations to the most comparable measure in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
2020
|
|
2019
|
|
2020 vs 2019
Increase/(Decrease) |
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Rental
|
|
$
|
298,586
|
|
|
$
|
316,843
|
|
|
$
|
(18,257
|
)
|
Fees from managed partnerships
|
|
596
|
|
|
37
|
|
|
559
|
|
|||
Total revenues
|
|
$
|
299,182
|
|
|
$
|
316,880
|
|
|
$
|
(17,698
|
)
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
2020
|
|
2019
|
|
2020 vs 2019
Increase/(Decrease) |
||||||
Acquisition-related
|
|
$
|
1,523
|
|
|
$
|
985
|
|
|
$
|
538
|
|
Litigation and non-routine costs, net
|
|
(8,564
|
)
|
|
(21,492
|
)
|
|
12,928
|
|
|||
Property operating
|
|
30,490
|
|
|
32,378
|
|
|
(1,888
|
)
|
|||
General and administrative
|
|
15,056
|
|
|
14,846
|
|
|
210
|
|
|||
Depreciation and amortization
|
|
124,080
|
|
|
136,555
|
|
|
(12,475
|
)
|
|||
Impairments
|
|
8,380
|
|
|
11,988
|
|
|
(3,608
|
)
|
|||
Restructuring
|
|
—
|
|
|
9,076
|
|
|
(9,076
|
)
|
|||
Total operating expenses
|
|
$
|
170,965
|
|
|
$
|
184,336
|
|
|
$
|
(13,371
|
)
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
2020
|
|
2019
|
|
2020 vs 2019
Increase/(Decrease) |
||||||
Interest expense
|
|
$
|
(64,696
|
)
|
|
$
|
(71,254
|
)
|
|
$
|
(6,558
|
)
|
Loss on extinguishment and forgiveness of debt, net
|
|
$
|
(1,280
|
)
|
|
$
|
—
|
|
|
$
|
1,280
|
|
Other income (loss), net
|
|
$
|
175
|
|
|
$
|
(439
|
)
|
|
$
|
614
|
|
Equity in income of unconsolidated entities
|
|
$
|
246
|
|
|
$
|
500
|
|
|
$
|
(254
|
)
|
Gain on disposition of real estate and real estate assets held for sale, net
|
|
$
|
25,249
|
|
|
$
|
10,831
|
|
|
$
|
14,418
|
|
Provision for income taxes
|
|
$
|
(1,048
|
)
|
|
$
|
(1,211
|
)
|
|
$
|
(163
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net income
|
|
$
|
86,863
|
|
|
$
|
70,971
|
|
Dividends on non-convertible preferred stock
|
|
(12,948
|
)
|
|
(17,973
|
)
|
||
Gain on disposition of real estate assets and interests in unconsolidated joint ventures, net
|
|
(25,249
|
)
|
|
(10,831
|
)
|
||
Depreciation and amortization of real estate assets
|
|
123,645
|
|
|
135,861
|
|
||
Impairment of real estate
|
|
8,380
|
|
|
11,988
|
|
||
Proportionate share of adjustments for unconsolidated entities
|
|
1,131
|
|
|
288
|
|
||
FFO attributable to common stockholders and limited partners
|
|
181,822
|
|
|
190,304
|
|
||
Acquisition-related expenses
|
|
1,523
|
|
|
985
|
|
||
Litigation and non-routine costs, net
|
|
(8,564
|
)
|
|
(21,492
|
)
|
||
Loss on investments
|
|
541
|
|
|
470
|
|
||
Loss on derivative instruments, net
|
|
—
|
|
|
34
|
|
||
Amortization of premiums and discounts on debt and investments, net
|
|
(689
|
)
|
|
(1,264
|
)
|
||
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities
|
|
748
|
|
|
731
|
|
||
Net direct financing lease adjustments
|
|
365
|
|
|
409
|
|
||
Amortization and write-off of deferred financing costs
|
|
2,841
|
|
|
3,494
|
|
||
Loss on extinguishment and forgiveness of debt, net
|
|
1,280
|
|
|
—
|
|
||
Straight-line rent
|
|
(2,054
|
)
|
|
(7,412
|
)
|
||
Equity-based compensation
|
|
2,602
|
|
|
2,687
|
|
||
Restructuring expenses
|
|
—
|
|
|
9,076
|
|
||
Other adjustments, net
|
|
228
|
|
|
569
|
|
||
Proportionate share of adjustments for unconsolidated entities
|
|
331
|
|
|
(188
|
)
|
||
AFFO attributable to common stockholders and limited partners
|
|
$
|
180,974
|
|
|
$
|
178,403
|
|
|
|
|
|
|
||||
Weighted-average shares of Common Stock outstanding - basic
|
|
1,077,937,799
|
|
|
968,460,296
|
|
||
Effect of weighted-average Limited Partner OP Units and dilutive securities (1)
|
|
1,813,441
|
|
|
24,838,018
|
|
||
Weighted-average shares of Common Stock outstanding - diluted (2)
|
|
1,079,751,240
|
|
|
993,298,314
|
|
||
|
|
|
|
|
||||
AFFO attributable to common stockholders and limited partners per diluted share
|
|
$
|
0.17
|
|
|
$
|
0.18
|
|
(1)
|
Dilutive securities include unvested restricted share awards (“Restricted Shares”), unvested restricted stock units (“Restricted Stock Units”) and stock options (“Stock Options”). During the three months ended March 31, 2019, all Restricted Shares vested.
|
(2)
|
Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt with cash and any shares underlying Restricted Stock Units that are not issuable based on the Company’s level of achievement of certain performance targets through the respective reporting period.
|
•
|
fund normal operating expenses;
|
•
|
fund potential capital expenditures, tenant improvements and leasing costs;
|
•
|
meet debt service and principal repayment obligations, including balloon payments on maturing debt;
|
•
|
pay dividends; and
|
•
|
fund property acquisitions.
|
•
|
cash flow from operations;
|
•
|
proceeds from real estate dispositions;
|
•
|
utilization of the existing Revolving Credit Facility;
|
•
|
cash and cash equivalents balance; and
|
•
|
issuance of VEREIT debt and equity securities.
|
Unsecured Credit Facility Key Covenants
|
|
Required
|
Ratio of total indebtedness to total asset value
|
|
≤ 60%
|
Ratio of adjusted EBITDA to fixed charges
|
|
≥ 1.5x
|
Ratio of secured indebtedness to total asset value
|
|
≤ 45%
|
Ratio of unsecured indebtedness to unencumbered asset value
|
|
≤ 60%
|
Ratio of unencumbered adjusted NOI to unsecured interest expense
|
|
≥ 1.75x
|
Corporate Bond Key Covenants
|
|
Required
|
Limitation on incurrence of total debt
|
|
≤ 65%
|
Limitation on incurrence of secured debt
|
|
≤ 40%
|
Debt service coverage ratio
|
|
≥ 1.5x
|
Maintenance of total unencumbered assets
|
|
≥ 150%
|
|
|
|
|
Payments due by period
|
||||||||||||||||
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
4-5 years
|
|
More than 5 years
|
||||||||||
Principal payments - mortgage notes
|
|
$
|
1,407,771
|
|
|
$
|
89,602
|
|
|
$
|
565,966
|
|
|
$
|
745,238
|
|
|
$
|
6,965
|
|
Interest payments - mortgage notes (1)
|
|
187,836
|
|
|
53,010
|
|
|
100,545
|
|
|
33,154
|
|
|
1,127
|
|
|||||
Principal payments - Credit Facility
|
|
1,771,313
|
|
|
—
|
|
|
871,313
|
|
|
900,000
|
|
|
—
|
|
|||||
Interest payments - Credit Facility (1) (2)
|
|
120,496
|
|
|
33,519
|
|
|
80,357
|
|
|
6,620
|
|
|
—
|
|
|||||
Principal payments - corporate bonds
|
|
2,850,000
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
|
2,350,000
|
|
|||||
Interest payments - corporate bonds
|
|
766,201
|
|
|
89,991
|
|
|
239,976
|
|
|
219,212
|
|
|
217,022
|
|
|||||
Principal payments - convertible debt
|
|
321,802
|
|
|
321,802
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest payments - convertible debt
|
|
8,514
|
|
|
8,514
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating and ground lease commitments
|
|
328,693
|
|
|
16,568
|
|
|
44,037
|
|
|
42,628
|
|
|
225,460
|
|
|||||
Build-to-suit and other commitments (3)
|
|
25,543
|
|
|
25,543
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
7,788,169
|
|
|
$
|
638,549
|
|
|
$
|
1,902,194
|
|
|
$
|
2,446,852
|
|
|
$
|
2,800,574
|
|
(1)
|
Interest payments due in future periods on the $886.5 million of variable rate debt were calculated using a forward LIBOR curve.
|
(2)
|
As of March 31, 2020, we had $900.0 million of variable rate debt on the Credit Facility Term Loan effectively fixed through the use of interest rate swap agreements. We used the interest rates effectively fixed under our swap agreements to calculate the debt payment obligations in future periods.
|
(3)
|
Includes one build-to-suit development project, the Company’s share of capital expenditures related to an expansion project of the property held within an unconsolidated joint venture and letters of credit outstanding.
|
Exhibit No.
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
3.5
|
|
|
3.6
|
|
|
3.7
|
|
|
3.8
|
|
|
3.9
|
|
|
3.10
|
|
|
3.11
|
|
|
3.12
|
|
|
3.13
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
Exhibit No.
|
|
Description
|
4.9
|
|
|
4.10
|
|
|
4.11
|
|
|
4.12
|
|
|
4.13
|
|
|
4.14
|
|
|
4.15
|
|
|
4.16
|
|
|
4.17
|
|
|
4.18
|
|
|
4.19
|
|
|
31.1*
|
|
|
31.2*
|
|
|
31.3*
|
|
|
31.4*
|
|
|
32.1**
|
|
|
32.2**
|
|
|
32.3**
|
|
|
32.4**
|
|
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
101.CAL*
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB*
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE*
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
104*
|
|
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*).
|
*
|
Filed herewith
|
**
|
In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
|
VEREIT, INC.
|
|
|
By:
|
/s/ Michael J. Bartolotta
|
|
Michael J. Bartolotta
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
VEREIT OPERATING PARTNERSHIP, L.P.
|
|
|
By: VEREIT, Inc., its sole general partner
|
|
|
By:
|
/s/ Michael J. Bartolotta
|
|
Michael J. Bartolotta
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of VEREIT, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 19, 2020
|
/s/ Glenn J. Rufrano
|
|
|
Glenn J. Rufrano
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of VEREIT, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 19, 2020
|
/s/ Michael J. Bartolotta
|
|
|
Michael J. Bartolotta
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of VEREIT Operating Partnership, L.P.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 19, 2020
|
/s/ Glenn J. Rufrano
|
|
|
Glenn J. Rufrano
|
|
|
Chief Executive Officer of VEREIT, Inc., the sole general partner
|
|
|
of VEREIT Operating Partnership, L.P.
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of VEREIT Operating Partnership, L.P.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 19, 2020
|
/s/ Michael J. Bartolotta
|
|
|
Michael J. Bartolotta
Executive Vice President and Chief Financial Officer of
|
|
|
VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P.
|
|
|
(Principal Financial Officer)
|
Date:
|
May 19, 2020
|
/s/ Glenn J. Rufrano
|
|
|
Glenn J. Rufrano
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date:
|
May 19, 2020
|
/s/ Michael J. Bartolotta
|
|
|
Michael J. Bartolotta
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date:
|
May 19, 2020
|
/s/ Glenn J. Rufrano
|
|
|
Glenn J. Rufrano
|
|
|
Chief Executive Officer of VEREIT, Inc., the sole general partner
|
|
|
of VEREIT Operating Partnership, L.P.
|
|
|
(Principal Executive Officer)
|
Date:
|
May 19, 2020
|
/s/ Michael J. Bartolotta
|
|
|
Michael J. Bartolotta
Executive Vice President and Chief Financial Officer of
|
|
|
VEREIT Inc., the sole general partner of VEREIT Operating Partnership, L.P.
|
|
|
(Principal Financial Officer)
|