x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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90-0929989
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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405 Park Ave., 3rd Floor, New York, New York
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10022
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(Address of principal executive offices)
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(Zip Code)
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(212) 415-6500
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||||
(Registrant’s telephone number, including area code)
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||||
Securities registered pursuant to section 12(b) of the Act:
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||||
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Class A Common Stock, $0.01 par value
|
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AFIN
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The Nasdaq Global Select Market
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7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value
|
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AFINP
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The Nasdaq Global Select Market
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
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Smaller reporting company
o
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Emerging growth company
o
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Page
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March 31,
2019 |
|
December 31,
2018 |
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Real estate investments, at cost:
|
|
|
|
||||
Land
|
$
|
643,538
|
|
|
$
|
629,190
|
|
Buildings, fixtures and improvements
|
2,500,481
|
|
|
2,441,659
|
|
||
Acquired intangible lease assets
|
415,045
|
|
|
413,948
|
|
||
Total real estate investments, at cost
|
3,559,064
|
|
|
3,484,797
|
|
||
Less: accumulated depreciation and amortization
|
(467,700
|
)
|
|
(454,614
|
)
|
||
Total real estate investments, net
|
3,091,364
|
|
|
3,030,183
|
|
||
Cash and cash equivalents
|
108,042
|
|
|
91,451
|
|
||
Restricted cash
|
18,375
|
|
|
18,180
|
|
||
Deposits for real estate acquisitions
|
1,160
|
|
|
3,037
|
|
||
Goodwill
|
1,605
|
|
|
1,605
|
|
||
Deferred costs, net
|
17,050
|
|
|
16,222
|
|
||
Straight-line rent receivable
|
39,985
|
|
|
37,911
|
|
||
Operating lease right-of-use assets
|
19,166
|
|
|
—
|
|
||
Prepaid expenses and other assets
|
18,441
|
|
|
19,439
|
|
||
Assets held for sale
|
53,305
|
|
|
44,519
|
|
||
Total assets
|
$
|
3,368,493
|
|
|
$
|
3,262,547
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Mortgage notes payable, net
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$
|
1,184,203
|
|
|
$
|
1,196,113
|
|
Credit facility
|
432,700
|
|
|
324,700
|
|
||
Below market lease liabilities, net
|
87,419
|
|
|
89,938
|
|
||
Accounts payable and accrued expenses (including $1,930 and $2,634 due to related parties as of March 31, 2019 and December 31, 2018, respectively)
|
26,798
|
|
|
28,383
|
|
||
Operating lease liabilities
|
19,276
|
|
|
—
|
|
||
Derivative liabilities, at fair value
|
1,004
|
|
|
531
|
|
||
Deferred rent and other liabilities
|
9,156
|
|
|
13,067
|
|
||
Dividends payable
|
108
|
|
|
80
|
|
||
Total liabilities
|
1,760,664
|
|
|
1,652,812
|
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||
|
|
|
|
||||
7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 1,380,000 shares authorized, 1,200,000 issued and outstanding as of March 31, 2019 and no shares issued and outstanding as of December 31, 2018
|
12
|
|
|
—
|
|
||
Common stock, $0.01 par value per share, 300,000,000 shares authorized, 106,211,031 and 106,230,901 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
|
1,062
|
|
|
1,063
|
|
||
Additional paid-in capital
|
2,441,495
|
|
|
2,412,915
|
|
||
Accumulated other comprehensive loss
|
(1,004
|
)
|
|
(531
|
)
|
||
Accumulated deficit
|
(844,773
|
)
|
|
(812,047
|
)
|
||
Total stockholders’ equity
|
1,596,792
|
|
|
1,601,400
|
|
||
Non-controlling interests
|
11,037
|
|
|
8,335
|
|
||
Total equity
|
1,607,829
|
|
|
1,609,735
|
|
||
Total liabilities and equity
|
$
|
3,368,493
|
|
|
$
|
3,262,547
|
|
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Three Months Ended March 31,
|
||||||
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2019
|
|
2018
|
||||
Revenue from tenants
|
$
|
71,541
|
|
|
$
|
70,119
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Asset management fees to related party
|
6,038
|
|
|
5,609
|
|
||
Property operating
|
12,836
|
|
|
13,355
|
|
||
Impairment charges
|
823
|
|
|
322
|
|
||
Acquisition, transaction and other costs
|
854
|
|
|
2,016
|
|
||
Equity-based compensation
|
3,021
|
|
|
26
|
|
||
General and administrative
|
6,061
|
|
|
5,413
|
|
||
Depreciation and amortization
|
32,086
|
|
|
36,499
|
|
||
Total operating expenses
|
61,719
|
|
|
63,240
|
|
||
Operating income before gain on sale of real estate investments
|
9,822
|
|
|
6,879
|
|
||
Gain on sale of real estate investments
|
2,873
|
|
|
24,637
|
|
||
Operating income
|
12,695
|
|
|
31,516
|
|
||
Other (expense) income:
|
|
|
|
||||
Interest expense
|
(18,440
|
)
|
|
(16,107
|
)
|
||
Other income
|
2,545
|
|
|
22
|
|
||
Total other expense, net
|
(15,895
|
)
|
|
(16,085
|
)
|
||
Net (loss) income
|
(3,200
|
)
|
|
15,431
|
|
||
Net loss (income) attributable to non-controlling interests
|
3
|
|
|
(30
|
)
|
||
Preferred stock dividends
|
(30
|
)
|
|
—
|
|
||
Net (loss) income attributable to common stockholders
|
(3,227
|
)
|
|
15,401
|
|
||
|
|
|
|
||||
Other comprehensive loss:
|
|
|
|
||||
Change in unrealized loss on derivatives
|
(473
|
)
|
|
(360
|
)
|
||
Comprehensive (loss) income attributable to common stockholders
|
$
|
(3,700
|
)
|
|
$
|
15,041
|
|
|
|
|
|
||||
Weighted-average shares outstanding — Basic
|
106,076,588
|
|
|
105,196,387
|
|
||
Net (loss) income per share attributable to common stockholders — Basic
|
$
|
(0.03
|
)
|
|
$
|
0.15
|
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Weighted-average shares outstanding — Diluted
|
106,076,588
|
|
|
105,415,211
|
|
||
Net (loss) income per share attributable to common stockholders — Diluted
|
$
|
(0.03
|
)
|
|
$
|
0.15
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
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||||||||||||||||||||||
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Number of
Shares
|
|
Par Value
|
|
Number of
Shares
|
|
Par Value
|
|
Additional Paid-in
Capital
|
|
Accumulated Other Comprehensive income (loss)
|
|
Accumulated Deficit
|
|
Total Stockholders’ Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance, December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
106,230,901
|
|
|
$
|
1,063
|
|
|
$
|
2,412,915
|
|
|
$
|
(531
|
)
|
|
$
|
(812,047
|
)
|
|
$
|
1,601,400
|
|
|
$
|
8,335
|
|
|
$
|
1,609,735
|
|
Impact of adoption of new accounting pronouncement for leases (
Note 2
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(170
|
)
|
|
(170
|
)
|
|
—
|
|
|
(170
|
)
|
||||||||
Issuance of Preferred Stock, net
|
1,200,000
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
28,584
|
|
|
—
|
|
|
—
|
|
|
28,596
|
|
|
—
|
|
|
28,596
|
|
||||||||
Common stock repurchases
|
—
|
|
|
—
|
|
|
(19,870
|
)
|
|
(1
|
)
|
|
(273
|
)
|
|
—
|
|
|
—
|
|
|
(274
|
)
|
|
—
|
|
|
(274
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
269
|
|
|
—
|
|
|
—
|
|
|
269
|
|
|
2,752
|
|
|
3,021
|
|
||||||||
Dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common Stock, $0.28 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,207
|
)
|
|
(29,207
|
)
|
|
—
|
|
|
(29,207
|
)
|
||||||||
Preferred Stock, $0.38 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
||||||||
Dividends to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122
|
)
|
|
(122
|
)
|
|
(47
|
)
|
|
(169
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,197
|
)
|
|
(3,197
|
)
|
|
(3
|
)
|
|
(3,200
|
)
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(473
|
)
|
|
—
|
|
|
(473
|
)
|
|
—
|
|
|
(473
|
)
|
||||||||
Balance, March 31, 2019
|
1,200,000
|
|
|
$
|
12
|
|
|
106,211,031
|
|
|
$
|
1,062
|
|
|
$
|
2,441,495
|
|
|
$
|
(1,004
|
)
|
|
$
|
(844,773
|
)
|
|
$
|
1,596,792
|
|
|
$
|
11,037
|
|
|
$
|
1,607,829
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Number of
Shares
|
|
Par Value
|
|
Additional Paid-in
Capital
|
|
Accumulated Other Comprehensive income (loss)
|
|
Accumulated Deficit
|
|
Total Stockholders' Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
|||||||||||||||
Balance, December 31, 2017
|
105,172,185
|
|
|
$
|
1,052
|
|
|
$
|
2,393,237
|
|
|
$
|
95
|
|
|
$
|
(657,874
|
)
|
|
$
|
1,736,510
|
|
|
$
|
4,546
|
|
|
$
|
1,741,056
|
|
Common stock issued through distribution reinvestment plan
|
503,738
|
|
|
5
|
|
|
11,768
|
|
|
—
|
|
|
—
|
|
|
11,773
|
|
|
—
|
|
|
11,773
|
|
|||||||
Common stock repurchases
|
(896,655
|
)
|
|
(9
|
)
|
|
(16,583
|
)
|
|
—
|
|
|
—
|
|
|
(16,592
|
)
|
|
—
|
|
|
(16,592
|
)
|
|||||||
Share-based compensation, net of forfeitures
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|||||||
Distributions declared on Common Stock, $0.32 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,684
|
)
|
|
(33,684
|
)
|
|
—
|
|
|
(33,684
|
)
|
|||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
(65
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,401
|
|
|
15,401
|
|
|
30
|
|
|
15,431
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
(360
|
)
|
|
—
|
|
|
(360
|
)
|
|||||||
Balance, March 31, 2018
|
104,779,268
|
|
|
$
|
1,048
|
|
|
$
|
2,388,448
|
|
|
$
|
(265
|
)
|
|
$
|
(676,157
|
)
|
|
$
|
1,713,074
|
|
|
$
|
4,511
|
|
|
$
|
1,717,585
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(3,200
|
)
|
|
$
|
15,431
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
19,168
|
|
|
22,214
|
|
||
Amortization of in-place lease assets
|
12,600
|
|
|
14,098
|
|
||
Amortization of deferred leasing costs
|
318
|
|
|
187
|
|
||
Amortization (including accelerated write-off) of deferred financing costs
|
1,311
|
|
|
1,362
|
|
||
Accretion of mortgage premiums on borrowings
|
(794
|
)
|
|
(835
|
)
|
||
Amortization (accretion) of market lease intangibles, net
|
(1,844
|
)
|
|
(1,358
|
)
|
||
Share-based compensation
|
3,021
|
|
|
26
|
|
||
Mark-to-market adjustments
|
—
|
|
|
(24
|
)
|
||
Gain on sale of real estate investments
|
(2,873
|
)
|
|
(24,637
|
)
|
||
Impairment charges
|
823
|
|
|
322
|
|
||
Prepayment costs on mortgages
|
413
|
|
|
1,797
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Straight-line rent receivable
|
(1,196
|
)
|
|
(2,253
|
)
|
||
Prepaid expenses and other assets
|
873
|
|
|
(3,496
|
)
|
||
Accounts payable and accrued expenses
|
(4,314
|
)
|
|
471
|
|
||
Deferred rent and other liabilities
|
(3,911
|
)
|
|
840
|
|
||
Net cash, cash equivalents and restricted cash provided by operating activities
|
20,395
|
|
|
24,145
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(547
|
)
|
|
(2,141
|
)
|
||
Investments in real estate and other assets
|
(114,312
|
)
|
|
(44,165
|
)
|
||
Proceeds from sale of real estate investments
|
3,122
|
|
|
21,826
|
|
||
Deposits for real estate investments
|
1,877
|
|
|
(200
|
)
|
||
Net cash, cash equivalents and restricted cash used in investing activities
|
(109,860
|
)
|
|
(24,680
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|||
Proceeds from mortgage notes payable
|
—
|
|
|
29,887
|
|
||
Payments on mortgage notes payable
|
(639
|
)
|
|
(608
|
)
|
||
Proceeds from credit facility
|
108,000
|
|
|
—
|
|
||
Payments on credit facility
|
—
|
|
|
(25,000
|
)
|
||
Payments of financing costs
|
—
|
|
|
(1,166
|
)
|
||
Payments of prepayment costs on mortgages
|
(413
|
)
|
|
(1,797
|
)
|
||
Common stock repurchases
|
(274
|
)
|
|
(16,592
|
)
|
||
Distributions on LTIP Units and Class A Units
|
(131
|
)
|
|
—
|
|
||
Dividends paid on common stock
|
(29,248
|
)
|
|
(21,906
|
)
|
||
Proceeds from issuance of preferred stock. net
|
28,956
|
|
|
—
|
|
||
Net cash, cash equivalents and restricted cash provided by (used in) financing activities
|
106,251
|
|
|
(37,182
|
)
|
||
Net change in cash, cash equivalents and restricted cash
|
16,786
|
|
|
(37,717
|
)
|
||
Cash, cash equivalents and restricted cash beginning of period
|
109,631
|
|
|
127,254
|
|
||
Cash, cash equivalents and restricted cash end of period
|
$
|
126,417
|
|
|
$
|
89,537
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents, end of period
|
$
|
108,042
|
|
|
$
|
71,268
|
|
Restricted cash, end of period
|
18,375
|
|
|
18,269
|
|
||
Cash, cash equivalents and restricted cash end of period
|
$
|
126,417
|
|
|
$
|
89,537
|
|
|
|
|
|
||||
Supplemental Disclosures:
|
|
|
|
||||
Cash paid for interest
|
$
|
17,905
|
|
|
$
|
15,523
|
|
Cash paid for income taxes
|
200
|
|
|
214
|
|
||
|
|
|
|
||||
Non-Cash Investing and Financing Activities:
|
|
|
|
||||
Accrued Preferred Stock offering costs
|
$
|
359
|
|
|
$
|
—
|
|
Mortgage notes payable released in connection with disposition of real estate
|
$
|
(11,606
|
)
|
|
$
|
(39,444
|
)
|
Common stock issued through distribution reinvestment plan
|
$
|
—
|
|
|
$
|
11,773
|
|
Accrued capital expenditures
|
$
|
2,764
|
|
|
$
|
3,423
|
|
•
|
The Company currently presents Straight-line rent receivable on its own line item in the consolidated statement of cash flows, which was previously included within prepaid expenses and other assets.
|
•
|
The Company separated amortization of deferred leasing costs presented in the consolidated statement of cash flows onto its own line item with prior presentation of these costs included in amortization (including accelerated write-off) of deferred financing costs.
|
•
|
Gain on sale of real estate investments is now included as part of operating income.
|
•
|
The Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line (see additional information in the “
Recently Issued Accounting Pronouncements”
section below.
|
•
|
The Company currently presents equity-based compensation related to grants of restricted shares of common stock (“restricted shares”) in equity-based compensation in the consolidated statement of operations and comprehensive income (loss), which was previously classified in general and administrative. Also, the Company currently presents litigation costs related to the merger (the “Merger”) of the Company and American Realty Capital – Retail Centers of America, Inc. (“RCA”) in acquisition, transaction and other costs in the consolidated statement of operations and comprehensive income (loss), which were previously classified in general and administrative.
|
(In thousands)
|
|
Future Base Rent Payments
|
||
2019 (remainder)
|
|
$
|
187,539
|
|
2020
|
|
232,515
|
|
|
2021
|
|
221,348
|
|
|
2022
|
|
210,490
|
|
|
2023
|
|
195,218
|
|
|
Thereafter
|
|
1,217,962
|
|
|
|
|
$
|
2,265,072
|
|
•
|
Since the Company elected the practical expedient noted above to not separate non-lease component revenue from the associated lease component, the Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line. The prior period has been conformed to this new presentation.
|
•
|
Changes in the Company’s assessment of receivables that result in bad debt expense is now required to be recorded as an adjustment to revenue, rather than a charge to bad debt expense. This new classification applies for the first quarter of 2019 and reclassification of prior period amounts is not permitted. At transition on January 1, 2019, after assessing its reserve balances at December 31, 2018 under the new guidance, the Company wrote off accounts receivable of
$0.1 million
and straight-line rents receivable of
$0.1 million
as an adjustment to the opening balance of accumulated deficit, and accordingly rent for these tenants is currently recorded on a cash basis.
|
•
|
Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Under prior accounting guidance, the recognition would have been deferred.
|
•
|
Upon adoption of the new standard, the Company recorded ROU assets and lease liabilities equal to
$19.3 million
for the present value of the lease payments related to its ground leases. These amounts are included in operating lease right-of-use assets and operating lease liabilities on the consolidated balance sheet.
|
•
|
The Company also reclassified
$0.3 million
related to amounts previously reported as a straight-line rent liability,
$1.1 million
, net related to amounts previously reported as above and below market ground lease intangibles and
$0.1 million
of prepaid rent to the ROU assets. For additional information and disclosures related to these operating leases, see
Note 9
— Commitments and Contingencies.
|
|
|
Three Months Ended March 31,
|
||||||
(Dollar amounts in thousands)
|
|
2019
|
|
2018
|
||||
Real estate investments, at cost:
|
|
|
|
|
||||
Land
|
|
$
|
21,257
|
|
|
$
|
16,122
|
|
Buildings, fixtures and improvements
|
|
74,788
|
|
|
21,093
|
|
||
Total tangible assets
|
|
96,045
|
|
|
37,215
|
|
||
Acquired intangible assets and liabilities:
(1)
|
|
|
|
|
||||
In-place leases
|
|
18,182
|
|
|
7,171
|
|
||
Above-market lease assets
|
|
374
|
|
|
94
|
|
||
Below-market lease liabilities
|
|
(289
|
)
|
|
(315
|
)
|
||
Total intangible assets, net
|
|
18,267
|
|
|
6,950
|
|
||
Consideration paid for acquired real estate investments, net of liabilities assumed
|
|
$
|
114,312
|
|
|
$
|
44,165
|
|
Number of properties purchased
|
|
64
|
|
|
24
|
|
(1)
|
Weighted-average remaining amortization periods for in-place leases, above-market lease assets and below-market lease liabilities acquired during the
three
months ended
March 31, 2019
were
19.0 years
,
17.5 years
and
13.8 years
, respectively, as of each property’s respective acquisition date.
|
|
|
Three Months Ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
In-place leases
|
|
$
|
12,600
|
|
|
$
|
14,098
|
|
Total added to depreciation and amortization
|
|
$
|
12,600
|
|
|
$
|
14,098
|
|
|
|
|
|
|
||||
Above-market leases
|
|
$
|
(868
|
)
|
|
$
|
(1,049
|
)
|
Below-market lease liabilities
|
|
2,729
|
|
|
2,420
|
|
||
Total added to rental income
|
|
$
|
1,861
|
|
|
$
|
1,371
|
|
|
|
|
|
|
||||
Below-market ground lease asset
(1)
|
|
$
|
18
|
|
|
$
|
8
|
|
Above-market ground lease liability
(1)
|
|
(1
|
)
|
|
—
|
|
||
Total added to property operating expenses
|
|
$
|
17
|
|
|
$
|
8
|
|
(In thousands)
|
|
2019 (remainder)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
In-place leases
|
|
$
|
30,662
|
|
|
$
|
35,076
|
|
|
$
|
30,691
|
|
|
$
|
26,668
|
|
|
$
|
24,258
|
|
Total to be added to depreciation and amortization
|
|
$
|
30,662
|
|
|
$
|
35,076
|
|
|
$
|
30,691
|
|
|
$
|
26,668
|
|
|
$
|
24,258
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Above-market leases
|
|
$
|
2,379
|
|
|
$
|
2,450
|
|
|
$
|
2,135
|
|
|
$
|
1,760
|
|
|
$
|
1,512
|
|
Below-market lease liabilities
|
|
(5,690
|
)
|
|
(6,952
|
)
|
|
(6,296
|
)
|
|
(5,891
|
)
|
|
(5,721
|
)
|
|||||
Total to be added to rental income
|
|
$
|
(3,311
|
)
|
|
$
|
(4,502
|
)
|
|
$
|
(4,161
|
)
|
|
$
|
(4,131
|
)
|
|
$
|
(4,209
|
)
|
(In thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Real estate investments held for sale, at cost:
|
|
|
|
|
||||
Land
|
|
$
|
10,213
|
|
|
$
|
6,113
|
|
Buildings, fixtures and improvements
|
|
44,101
|
|
|
39,343
|
|
||
Acquired intangible lease assets
|
|
12,517
|
|
|
12,517
|
|
||
Total real estate assets held for sale, at cost
|
|
66,831
|
|
|
57,973
|
|
||
Less accumulated depreciation and amortization
|
|
(12,235
|
)
|
|
(11,278
|
)
|
||
Total real estate investments held for sale, net
|
|
54,596
|
|
|
46,695
|
|
||
|
|
|
|
|
||||
Impairment charges related to properties reclassified as held for sale
(1)
|
|
(1,291
|
)
|
|
(2,176
|
)
|
||
Assets held for sale
|
|
$
|
53,305
|
|
|
$
|
44,519
|
|
|
|
|
|
Outstanding Loan Amount as of
|
|
Effective Interest Rate as of
|
|
|
|
|
|
|
|||||||
Portfolio
|
|
Encumbered Properties
|
|
March 31,
2019 |
|
December 31,
2018 |
|
March 31,
2019 |
|
Interest Rate
|
|
Maturity
|
|
Anticipated Repayment
|
|||||
|
|
|
|
(In thousands)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|||||
SAAB Sensis I
|
|
1
|
|
$
|
6,975
|
|
|
$
|
7,077
|
|
|
5.93
|
%
|
|
Fixed
|
|
Apr. 2025
|
|
Apr. 2025
|
SunTrust Bank II
|
|
23
|
|
11,381
|
|
|
13,412
|
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
SunTrust Bank III
|
|
82
|
|
66,929
|
|
|
68,080
|
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
SunTrust Bank IV
|
|
15
|
|
18,113
|
|
|
18,113
|
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
Sanofi US I
|
|
1
|
|
125,000
|
|
|
125,000
|
|
|
5.16
|
%
|
|
Fixed
|
|
Jul. 2026
|
|
Jan. 2021
|
||
Stop & Shop I
|
|
4
|
|
36,610
|
|
|
36,812
|
|
|
5.63
|
%
|
|
Fixed
|
|
Jun. 2041
|
|
Jun. 2021
|
||
Mortgage Loan I
|
|
248
|
|
563,775
|
|
|
572,199
|
|
|
4.36
|
%
|
|
Fixed
|
|
Sep. 2020
|
|
Sep. 2020
|
||
Shops at Shelby Crossing
|
|
1
|
|
22,469
|
|
|
22,581
|
|
|
4.97
|
%
|
|
Fixed
|
|
Mar. 2024
|
|
Mar. 2024
|
||
Patton Creek
|
|
1
|
|
39,804
|
|
|
40,027
|
|
|
5.76
|
%
|
|
Fixed
|
|
Dec. 2020
|
|
Dec. 2020
|
||
Bob Evans I
|
|
23
|
|
23,950
|
|
|
23,950
|
|
|
4.71
|
%
|
|
Fixed
|
|
Sep. 2037
|
|
Sep. 2027
|
||
Mortgage Loan II
|
|
12
|
|
210,000
|
|
|
210,000
|
|
|
4.25
|
%
|
|
Fixed
|
|
Jan. 2028
|
|
Jan. 2028
|
||
Mortgage Loan III
|
|
22
|
|
33,400
|
|
|
33,400
|
|
|
4.12
|
%
|
|
Fixed
|
|
Jan. 2028
|
|
Jan. 2028
|
||
Mortgage Loan IV
|
|
39
|
|
29,887
|
|
|
29,887
|
|
|
5.16
|
%
|
|
Fixed
|
(2)
|
Mar. 2025
|
|
Mar. 2025
|
||
Gross mortgage notes payable
|
|
472
|
|
1,188,293
|
|
|
1,200,538
|
|
|
4.64
|
%
|
(1)
|
|
|
|
|
|
||
Deferred financing costs, net of accumulated amortization
(3)
|
|
|
|
(10,234
|
)
|
|
(11,363
|
)
|
|
|
|
|
|
|
|
|
|||
Mortgage premiums, net
(4)
|
|
|
|
6,144
|
|
|
6,938
|
|
|
|
|
|
|
|
|
|
|||
Mortgage notes payable, net
|
|
|
|
$
|
1,184,203
|
|
|
$
|
1,196,113
|
|
|
|
|
|
|
|
|
|
(1)
|
Calculated on a weighted-average basis for all mortgages outstanding as of the dates indicated.
|
(2)
|
Fixed as a result of the Company having entered into “pay-fixed” interest rate swap agreements, which are included in derivatives, at fair value on the consolidated balance sheets as of
March 31, 2019
and
December 31, 2018
.
|
(3)
|
Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that it is probable the financing will not close.
|
(4)
|
Mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective
mortgages.
|
(In thousands)
|
|
Future Principal Payments
|
||
2019 (remainder)
|
|
$
|
1,895
|
|
2020
|
|
604,660
|
|
|
2021
|
|
257,565
|
|
|
2022
|
|
1,070
|
|
|
2023
|
|
1,431
|
|
|
Thereafter
|
|
321,672
|
|
|
|
|
$
|
1,188,293
|
|
(In thousands)
|
|
Quoted Prices
in Active
Markets
Level 1
|
|
Significant Other
Observable
Inputs
Level 2
|
|
Significant
Unobservable
Inputs
Level 3
|
|
Total
|
||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate “Pay - Fixed” swaps - assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate “Pay - Fixed” swaps - liabilities
|
|
—
|
|
|
(1,004
|
)
|
|
—
|
|
|
(1,004
|
)
|
||||
Total
|
|
$
|
—
|
|
|
$
|
(1,004
|
)
|
|
$
|
—
|
|
|
$
|
(1,004
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Interest rate “Pay - Fixed” swaps - assets
|
|
—
|
|
|
(531
|
)
|
|
—
|
|
|
(531
|
)
|
||||
Total
|
|
$
|
—
|
|
|
$
|
(531
|
)
|
|
$
|
—
|
|
|
$
|
(531
|
)
|
(In thousands)
|
|
Quoted Prices
in Active
Markets
Level 1
|
|
Significant Other
Observable
Inputs
Level 2
|
|
Significant
Unobservable
Inputs
Level 3
|
|
Total
|
||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impaired real estate investments held for sale
|
|
$
|
—
|
|
|
$
|
43,595
|
|
|
$
|
—
|
|
|
$
|
43,595
|
|
Impaired real estate investments held for use
|
|
—
|
|
|
—
|
|
|
75
|
|
|
75
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
43,595
|
|
|
$
|
75
|
|
|
$
|
43,670
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Impaired real estate investments held for sale
|
|
$
|
—
|
|
|
$
|
42,848
|
|
|
$
|
—
|
|
|
$
|
42,848
|
|
Impaired real estate investments held for use
|
|
—
|
|
|
7,765
|
|
|
886
|
|
|
8,651
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
50,613
|
|
|
$
|
886
|
|
|
$
|
51,499
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
(In thousands)
|
|
Level
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Gross mortgage notes payable
|
|
3
|
|
$
|
1,188,293
|
|
|
$
|
1,205,830
|
|
|
$
|
1,200,538
|
|
|
$
|
1,209,364
|
|
Credit facilities
|
|
3
|
|
$
|
432,700
|
|
|
$
|
432,700
|
|
|
$
|
324,700
|
|
|
$
|
324,700
|
|
(In thousands)
|
|
Balance Sheet Location
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Interest Rate “Pay-fixed” Swaps
|
|
Derivative liabilities, at fair value
|
|
$
|
1,004
|
|
|
$
|
531
|
|
Total
|
|
|
|
$
|
1,004
|
|
|
$
|
531
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||
Interest Rate Derivative
|
|
Number of
Instruments
|
|
Notional Amount
|
|
Number of
Instruments
|
|
Notional Amount
|
||||
|
|
|
|
(In thousands)
|
|
|
|
(In thousands)
|
||||
Interest Rate “Pay Fixed” Swaps
|
|
4
|
|
$
|
29,887
|
|
|
4
|
|
$
|
29,887
|
|
|
|
Three Months Ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Amount of loss recognized in accumulated other comprehensive loss on interest rate derivatives
|
|
$
|
(493
|
)
|
|
$
|
(365
|
)
|
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense
|
|
$
|
(20
|
)
|
|
$
|
(5
|
)
|
Total amount of interest expense presented in the consolidated income statements
|
|
$
|
(18,440
|
)
|
|
$
|
(16,107
|
)
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset on the Balance Sheet
|
|
|
|||||||||||||||
(In thousands)
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts of Recognized (Liabilities)
|
|
Gross Amounts Offset on the Balance Sheet
|
|
Net Amounts of Assets (Liabilities) Presented on the Balance Sheet
|
|
Financial Instruments
|
|
Cash Collateral Received (Posted)
|
|
Net Amount
|
|||||||||||||
March 31, 2019
|
|
$
|
—
|
|
|
$
|
(1,004
|
)
|
|
$
|
—
|
|
|
$
|
(1,004
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(1,004
|
)
|
December 31, 2018
|
|
$
|
—
|
|
|
$
|
(531
|
)
|
|
$
|
—
|
|
|
$
|
(531
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(531
|
)
|
•
|
after one year from the purchase date —
92.5%
of the then-current
Estimated Per-Share NAV
;
|
•
|
after two years from the purchase date —
95.0%
of the then-current
Estimated Per-Share NAV
;
|
•
|
after three years from the purchase date —
97.5%
of the then-current
Estimated Per-Share NAV
; and
|
•
|
after four years from the purchase date —
100.0%
of the then-current
Estimated Per-Share NAV
.
|
(In thousands)
|
|
Future Base Rent Payments
|
||
2019 (remainder)
|
|
$
|
1,111
|
|
2020
|
|
1,499
|
|
|
2021
|
|
1,538
|
|
|
2022
|
|
1,554
|
|
|
2023
|
|
1,555
|
|
|
Thereafter
|
|
47,427
|
|
|
Total lease payments
|
|
54,684
|
|
|
Less: Effects of discounting
|
|
(35,408
|
)
|
|
Total present value of lease payments
|
|
$
|
19,276
|
|
|
|
Three Months Ended March 31,
|
|
Payable as of
|
|
||||||||||||
(In thousands)
|
|
2019
|
|
2018
|
|
March 31,
2019 |
|
December 31,
2018 |
|
||||||||
Non-recurring fees and reimbursements:
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition cost reimbursements
(1)
|
|
$
|
91
|
|
|
$
|
118
|
|
|
$
|
49
|
|
|
$
|
70
|
|
|
Vesting and conversion of Class B Units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Ongoing fees:
|
|
|
|
|
|
|
|
|
|
||||||||
Asset management fees to related party
|
|
6,038
|
|
|
5,609
|
|
|
80
|
|
|
95
|
|
|
||||
Property management and leasing fees
(2)
|
|
2,690
|
|
|
2,073
|
|
|
1,288
|
|
|
1,272
|
|
|
||||
Professional fees and other reimbursements
(3)
|
|
2,870
|
|
|
2,103
|
|
|
808
|
|
(4)
|
1,197
|
|
(4)
|
||||
Distributions on Class B Units
(3) (5)
|
|
—
|
|
|
338
|
|
|
—
|
|
|
—
|
|
|
||||
Total related party operating fees and reimbursements
|
|
$
|
11,689
|
|
|
$
|
10,241
|
|
|
$
|
2,225
|
|
|
$
|
2,634
|
|
|
•
|
the sum of (i) the market value (as defined in the A&R OP Agreement) of the Company’s common stock plus (ii) the sum of all distributions or dividends (from any source) paid by the Company to its stockholders prior to the Listing; and
|
•
|
the sum of (i) the gross proceeds (“Gross Proceeds”) of all public and private offerings, including issuance of the Company’s common stock pursuant to a merger (including the Merger)or business combination (an “Offering”) as of the Listing Date plus (ii) the total amount of cash that, if distributed to those stockholders who purchased shares of the Company’s common stock in an Offering prior to the Listing, would have provided those stockholders a
6.0%
cumulative, non-compounded, pre-tax annual return (based on a 365-day year) on the Gross Proceeds.
|
|
Number of Shares of Common Stock
|
|
Weighted-Average Issue Price
|
|||
Unvested, December 31, 2018
|
136,234
|
|
|
$
|
16.51
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
(496
|
)
|
|
24.19
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Unvested, March 31, 2019
|
135,738
|
|
|
16.49
|
|
Performance Level
|
|
Absolute TSR
|
|
Percentage of Award LTIPs Earned
|
||||
Below Threshold
|
|
Less than
|
24
|
%
|
|
|
—
|
%
|
Threshold
|
|
|
24
|
%
|
|
|
25
|
%
|
Target
|
|
|
30
|
%
|
|
|
50
|
%
|
Maximum
|
|
|
36
|
%
|
or higher
|
|
100
|
%
|
Performance Level
|
|
Relative TSR Excess
|
|
Percentage of Relative TSR Award LTIPs Earned
|
||||
Below Threshold
|
|
Less than
|
-600
|
|
basis points
|
|
—
|
%
|
Threshold
|
|
|
-600
|
|
basis points
|
|
25
|
%
|
Target
|
|
|
—
|
|
basis points
|
|
50
|
%
|
Maximum
|
|
|
+600
|
|
basis points
|
|
100
|
%
|
|
|
Three Months Ended March 31,
|
||||||
(In thousands, except share and per share amounts)
|
|
2019
|
|
2018
|
||||
Net (loss) income attributable to common stockholders — Basic and Diluted
|
|
$
|
(3,227
|
)
|
|
$
|
15,401
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding — Basic
|
|
106,076,588
|
|
|
105,196,387
|
|
||
Unvested restricted shares
|
|
—
|
|
|
15,212
|
|
||
OP Units
|
|
—
|
|
|
203,612
|
|
||
Weighted-average shares outstanding — Diluted
|
|
106,076,588
|
|
|
105,415,211
|
|
||
|
|
|
|
|
||||
Net (loss) income per share attributable to common stockholders — Basic
|
|
$
|
(0.03
|
)
|
|
$
|
0.15
|
|
Net (loss) income per share attributable to common stockholders — Diluted
|
|
$
|
(0.03
|
)
|
|
$
|
0.15
|
|
|
|
Three Months Ended March 31,
|
||||
|
|
2019
|
|
2018
|
||
Unvested restricted shares
(1)
|
|
135,990
|
|
|
—
|
|
OP Units
(2)
|
|
172,671
|
|
|
—
|
|
Class B Units
(3)
|
|
—
|
|
|
1,052,420
|
|
LTIP Units
(4)
|
|
4,496,796
|
|
|
—
|
|
Total
|
|
4,805,457
|
|
|
1,052,420
|
|
(1)
|
Weighted-average number of shares of unvested restricted shares outstanding for the periods presented. There were
135,735
unvested restricted shares outstanding as of
March 31, 2019
.
|
(2)
|
Weighted-average number of OP Units outstanding for the periods presented. There were
172,921
OP Units outstanding as of
March 31, 2019
.
|
(3)
|
Weighted-average number of Class B Units outstanding for the periods presented. There were
no
Class B Units outstanding as of
March 31, 2019
and
1,052,420
Class B Units outstanding as of
March 31, 2018
.
|
(4)
|
Weighted-average number of LTIP Units outstanding for the periods presented. There were
4,496,796
LTIP Units outstanding as of
March 31, 2019
and
none
outstanding as of
March 31, 2018
.
|
•
|
All of our executive officers are also officers, managers, employees or holders of a direct or indirect controlling interest in the Advisor or other entities under common control with AR Global Investments, LLC (the successor business to AR Capital, LLC, “AR Global”). As a result, our executive officers, the Advisor and its affiliates face conflicts of interest, including significant conflicts created by the Advisor’s compensation arrangements with us and other investment programs advised by affiliates of AR Global and conflicts in allocating time among these entities and us, which could negatively impact our operating results.
|
•
|
The trading price of our Class A common stock and 7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (the “Series A Preferred Stock”), may fluctuate significantly.
|
•
|
Lincoln Retail REIT Services, LLC (“Lincoln”) and its affiliates, which provide services to the Advisor in connection with our retail portfolio, faces conflicts of interest in allocating its employees’ time between providing real estate-related services to the Advisor and other programs and activities in which they are presently involved or may be involved in the future.
|
•
|
The performance of our retail portfolio is linked to the market for retail space generally and factors that may impact our retail tenants, such as the increasing use of the Internet by retailers and consumers.
|
•
|
Our rental revenue is dependent upon the success and economic viability of our tenants.
|
•
|
We may be unable to enter into and consummate property acquisitions on advantageous terms or our property acquisitions may not perform as we expect.
|
•
|
Provisions in our revolving unsecured corporate credit facility (our “Credit Facility”) may limit our ability to pay dividends on our Class A common stock, our Series A Preferred Stock or any other stock we may issue.
|
•
|
We have not generated, and in the future may not generate, operating cash flows sufficient to fund all of the dividends we pay our stockholders, and, as such, we may be forced to fund dividends from other sources, including borrowings, which may not be available on favorable terms, or at all.
|
•
|
We may be unable to pay or maintain cash dividends at the current rate or increase dividends over time.
|
•
|
We are obligated to pay fees, which may be substantial, to the Advisor and its affiliates.
|
•
|
Our operating results are affected by economic and regulatory changes that have an adverse impact on the real estate market in general, and we are subject to risks associated with any dislocation or liquidity disruptions that may exist or occur in global financial markets, including the credit markets of the United States of America.
|
•
|
We may fail to continue to qualify to be treated as a real estate investment trust (“REIT”) for U.S. federal income tax purposes, which would result in higher taxes, may adversely affect our operations and would reduce the value of an investment in our common stock and our cash available for dividends.
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(
thousands
)
|
|
Remaining Lease Term
(1)
|
|
Percentage Leased
|
Dollar General I
|
|
Apr. & May 2013
|
|
2
|
|
18
|
|
9.1
|
|
100.0%
|
Walgreens I
|
|
Jul. 2013
|
|
1
|
|
11
|
|
18.5
|
|
100.0%
|
Dollar General II
|
|
Jul. 2013
|
|
2
|
|
18
|
|
9.2
|
|
100.0%
|
AutoZone I
|
|
Jul. 2013
|
|
1
|
|
7
|
|
8.3
|
|
100.0%
|
Dollar General III
|
|
Jul. 2013
|
|
5
|
|
46
|
|
9.1
|
|
100.0%
|
BSFS I
|
|
Jul. 2013
|
|
1
|
|
9
|
|
4.8
|
|
100.0%
|
Dollar General IV
|
|
Jul. 2013
|
|
2
|
|
18
|
|
6.9
|
|
100.0%
|
Tractor Supply I
|
|
Aug. 2013
|
|
1
|
|
19
|
|
8.7
|
|
100.0%
|
Dollar General V
|
|
Aug. 2013
|
|
1
|
|
12
|
|
8.8
|
|
100.0%
|
Mattress Firm I
|
|
Aug. & Nov. 2013; Feb, Mar. 2014 & Apr. 2014
|
|
5
|
|
24
|
|
7.7
|
|
100.0%
|
Family Dollar I
|
|
Aug. 2013
|
|
1
|
|
8
|
|
2.3
|
|
100.0%
|
Lowe's I
|
|
Aug. 2013
|
|
5
|
|
671
|
|
10.3
|
|
100.0%
|
O'Reilly Auto Parts I
|
|
Aug. 2013
|
|
1
|
|
11
|
|
11.3
|
|
100.0%
|
Food Lion I
|
|
Aug. 2013
|
|
1
|
|
45
|
|
10.6
|
|
100.0%
|
Family Dollar II
|
|
Aug. 2013
|
|
1
|
|
8
|
|
4.3
|
|
100.0%
|
Walgreens II
|
|
Aug. 2013
|
|
1
|
|
14
|
|
14.0
|
|
100.0%
|
Dollar General VI
|
|
Aug. 2013
|
|
1
|
|
9
|
|
6.9
|
|
100.0%
|
Dollar General VII
|
|
Aug. 2013
|
|
1
|
|
9
|
|
9.0
|
|
100.0%
|
Family Dollar III
|
|
Aug. 2013
|
|
1
|
|
8
|
|
3.5
|
|
100.0%
|
Chili's I
|
|
Aug. 2013
|
|
2
|
|
13
|
|
6.7
|
|
100.0%
|
CVS I
|
|
Aug. 2013
|
|
1
|
|
10
|
|
6.8
|
|
100.0%
|
Joe's Crab Shack I
|
|
Aug. 2013
|
|
1
|
|
8
|
|
8.0
|
|
100.0%
|
Dollar General VIII
|
|
Sep. 2013
|
|
1
|
|
9
|
|
9.3
|
|
100.0%
|
Tire Kingdom I
|
|
Sep. 2013
|
|
1
|
|
7
|
|
6.0
|
|
100.0%
|
AutoZone II
|
|
Sep. 2013
|
|
1
|
|
7
|
|
4.2
|
|
100.0%
|
Family Dollar IV
|
|
Sep. 2013
|
|
1
|
|
8
|
|
4.3
|
|
100.0%
|
Fresenius I
|
|
Sep. 2013
|
|
1
|
|
6
|
|
6.3
|
|
100.0%
|
Dollar General IX
|
|
Sep. 2013
|
|
1
|
|
9
|
|
6.1
|
|
100.0%
|
Advance Auto I
|
|
Sep. 2013
|
|
1
|
|
11
|
|
4.3
|
|
100.0%
|
Walgreens III
|
|
Sep. 2013
|
|
1
|
|
15
|
|
7.0
|
|
100.0%
|
Walgreens IV
|
|
Sep. 2013
|
|
1
|
|
14
|
|
5.5
|
|
100.0%
|
CVS II
|
|
Sep. 2013
|
|
1
|
|
14
|
|
17.9
|
|
100.0%
|
Arby's I
|
|
Sep. 2013
|
|
1
|
|
3
|
|
9.3
|
|
100.0%
|
Dollar General X
|
|
Sep. 2013
|
|
1
|
|
9
|
|
9.0
|
|
100.0%
|
AmeriCold I
|
|
Sep. 2013
|
|
9
|
|
1,407
|
|
8.5
|
|
100.0%
|
Home Depot I
|
|
Sep. 2013
|
|
2
|
|
1,315
|
|
7.8
|
|
100.0%
|
New Breed Logistics I
|
|
Sep. 2013
|
|
1
|
|
390
|
|
2.6
|
|
100.0%
|
American Express Travel Related Services I
|
|
Sep. 2013
|
|
1
|
|
396
|
|
1.0
|
|
100.0%
|
SunTrust Bank I
(2)
|
|
Sep. 2013
|
|
21
|
|
108
|
|
9.1
|
|
94.4%
|
National Tire & Battery I
|
|
Sep. 2013
|
|
1
|
|
11
|
|
4.7
|
|
100.0%
|
Circle K I
|
|
Sep. 2013
|
|
19
|
|
55
|
|
9.6
|
|
100.0%
|
Walgreens V
|
|
Sep. 2013
|
|
1
|
|
14
|
|
8.4
|
|
100.0%
|
Walgreens VI
|
|
Sep. 2013
|
|
1
|
|
15
|
|
10.1
|
|
100.0%
|
FedEx Ground I
|
|
Sep. 2013
|
|
1
|
|
22
|
|
4.2
|
|
100.0%
|
Walgreens VII
|
|
Sep. 2013
|
|
8
|
|
113
|
|
10.4
|
|
100.0%
|
O'Charley's I
|
|
Sep. 2013
|
|
20
|
|
136
|
|
12.6
|
|
100.0%
|
Krystal I
|
|
Sep. 2013
|
|
6
|
|
13
|
|
10.5
|
|
100.0%
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(
thousands
)
|
|
Remaining Lease Term
(1)
|
|
Percentage Leased
|
1st Constitution Bancorp I
|
|
Sep. 2013
|
|
1
|
|
5
|
|
4.8
|
|
100.0%
|
American Tire Distributors I
|
|
Sep. 2013
|
|
1
|
|
125
|
|
4.8
|
|
100.0%
|
Tractor Supply II
|
|
Oct. 2013
|
|
1
|
|
24
|
|
4.5
|
|
100.0%
|
United Healthcare I
|
|
Oct. 2013
|
|
1
|
|
400
|
|
2.3
|
|
100.0%
|
National Tire & Battery II
|
|
Oct. 2013
|
|
1
|
|
7
|
|
13.2
|
|
100.0%
|
Tractor Supply III
|
|
Oct. 2013
|
|
1
|
|
19
|
|
9.1
|
|
100.0%
|
Mattress Firm II
|
|
Oct. 2013
|
|
1
|
|
4
|
|
4.4
|
|
100.0%
|
Dollar General XI
|
|
Oct. 2013
|
|
1
|
|
9
|
|
8.1
|
|
100.0%
|
Talecris Plasma Resources I
|
|
Oct. 2013
|
|
1
|
|
22
|
|
4.0
|
|
100.0%
|
Amazon I
|
|
Oct. 2013
|
|
1
|
|
79
|
|
4.3
|
|
100.0%
|
Fresenius II
|
|
Oct. 2013
|
|
2
|
|
16
|
|
8.4
|
|
100.0%
|
Dollar General XII
|
|
Nov. 2013 & Jan. 2014
|
|
2
|
|
18
|
|
9.7
|
|
100.0%
|
Dollar General XIII
|
|
Nov. 2013
|
|
1
|
|
9
|
|
7.0
|
|
100.0%
|
Advance Auto II
|
|
Nov. 2013
|
|
2
|
|
14
|
|
4.1
|
|
100.0%
|
FedEx Ground II
|
|
Nov. 2013
|
|
1
|
|
49
|
|
4.3
|
|
100.0%
|
Burger King I
|
|
Nov. 2013
|
|
41
|
|
168
|
|
14.7
|
|
100.0%
|
Dollar General XIV
|
|
Nov. 2013
|
|
3
|
|
27
|
|
9.2
|
|
100.0%
|
Dollar General XV
|
|
Nov. 2013
|
|
1
|
|
9
|
|
9.6
|
|
100.0%
|
FedEx Ground III
|
|
Nov. 2013
|
|
1
|
|
24
|
|
4.4
|
|
100.0%
|
Dollar General XVI
|
|
Nov. 2013
|
|
1
|
|
9
|
|
6.7
|
|
100.0%
|
Family Dollar V
|
|
Nov. 2013
|
|
1
|
|
8
|
|
4.0
|
|
100.0%
|
CVS III
|
|
Dec. 2013
|
|
1
|
|
11
|
|
4.8
|
|
100.0%
|
Mattress Firm III
|
|
Dec. 2013
|
|
1
|
|
5
|
|
9.3
|
|
100.0%
|
Arby's II
|
|
Dec. 2013
|
|
1
|
|
3
|
|
9.1
|
|
100.0%
|
Family Dollar VI
|
|
Dec. 2013
|
|
2
|
|
17
|
|
4.8
|
|
100.0%
|
SAAB Sensis I
|
|
Dec. 2013
|
|
1
|
|
91
|
|
6.0
|
|
100.0%
|
Citizens Bank I
|
|
Dec. 2013
|
|
9
|
|
35
|
|
5.0
|
|
100.0%
|
SunTrust Bank II
(2)
|
|
Jan. 2014
|
|
23
|
|
115
|
|
9.8
|
|
100.0%
|
Mattress Firm IV
|
|
Jan. 2014
|
|
1
|
|
5
|
|
5.4
|
|
100.0%
|
FedEx Ground IV
|
|
Jan. 2014
|
|
1
|
|
59
|
|
4.3
|
|
100.0%
|
Mattress Firm V
|
|
Jan. 2014
|
|
1
|
|
6
|
|
4.6
|
|
100.0%
|
Family Dollar VII
|
|
Feb. 2014
|
|
1
|
|
8
|
|
5.3
|
|
100.0%
|
Aaron's I
|
|
Feb. 2014
|
|
1
|
|
8
|
|
4.4
|
|
100.0%
|
AutoZone III
|
|
Feb. 2014
|
|
1
|
|
7
|
|
4.0
|
|
100.0%
|
C&S Wholesale Grocer I
|
|
Feb. 2014
|
|
2
|
|
1,671
|
|
4.0
|
|
100.0%
|
Advance Auto III
|
|
Feb. 2014
|
|
1
|
|
6
|
|
5.4
|
|
100.0%
|
Family Dollar VIII
|
|
Mar. 2014
|
|
3
|
|
25
|
|
4.3
|
|
100.0%
|
Dollar General XVII
|
|
Mar. & May 2014
|
|
3
|
|
27
|
|
9.0
|
|
100.0%
|
SunTrust Bank III
(2)
|
|
Mar. 2014
|
|
82
|
|
478
|
|
10.6
|
|
96.3%
|
SunTrust Bank IV
(2)
|
|
Mar. 2014
|
|
15
|
|
84
|
|
10.8
|
|
100.0%
|
Dollar General XVIII
|
|
Mar. 2014
|
|
1
|
|
9
|
|
9.0
|
|
100.0%
|
Sanofi US I
|
|
Mar. 2014
|
|
1
|
|
737
|
|
13.8
|
|
100.0%
|
Family Dollar IX
|
|
Apr. 2014
|
|
1
|
|
8
|
|
5.0
|
|
100.0%
|
Stop & Shop I
|
|
May 2014
|
|
7
|
|
492
|
|
7.8
|
|
100.0%
|
Bi-Lo I
|
|
May 2014
|
|
1
|
|
56
|
|
6.8
|
|
100.0%
|
Dollar General XIX
|
|
May 2014
|
|
1
|
|
12
|
|
9.4
|
|
100.0%
|
Dollar General XX
|
|
May 2014
|
|
5
|
|
49
|
|
8.1
|
|
100.0%
|
Dollar General XXI
|
|
May 2014
|
|
1
|
|
9
|
|
9.4
|
|
100.0%
|
Dollar General XXII
|
|
May 2014
|
|
1
|
|
11
|
|
8.1
|
|
100.0%
|
FedEx Ground V
|
|
Feb. 2016
|
|
1
|
|
46
|
|
6.3
|
|
100.0%
|
FedEx Ground VI
|
|
Feb. 2016
|
|
1
|
|
121
|
|
6.4
|
|
100.0%
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(
thousands
)
|
|
Remaining Lease Term
(1)
|
|
Percentage Leased
|
FedEx Ground VII
|
|
Feb. 2016
|
|
1
|
|
42
|
|
6.5
|
|
100.0%
|
FedEx Ground VIII
|
|
Feb. 2016
|
|
1
|
|
79
|
|
6.6
|
|
100.0%
|
Liberty Crossing
|
|
Feb. 2017
|
|
1
|
|
106
|
|
4.5
|
|
90.9%
|
San Pedro Crossing
|
|
Feb. 2017
|
|
1
|
|
202
|
|
3.4
|
|
59.9%
|
Tiffany Springs MarketCenter
|
|
Feb. 2017
|
|
1
|
|
265
|
|
6.1
|
|
89.6%
|
The Streets of West Chester
|
|
Feb. 2017
|
|
1
|
|
237
|
|
9.9
|
|
95.1%
|
Prairie Towne Center
|
|
Feb. 2017
|
|
1
|
|
289
|
|
4.0
|
|
40.8%
|
Southway Shopping Center
|
|
Feb. 2017
|
|
1
|
|
182
|
|
4.1
|
|
87.9%
|
Stirling Slidell Centre
|
|
Feb. 2017
|
|
1
|
|
134
|
|
2.9
|
|
48.5%
|
Northwoods Marketplace
|
|
Feb. 2017
|
|
1
|
|
236
|
|
2.9
|
|
96.5%
|
Centennial Plaza
|
|
Feb. 2017
|
|
1
|
|
234
|
|
4.4
|
|
77.8%
|
Northlake Commons
|
|
Feb. 2017
|
|
1
|
|
109
|
|
2.8
|
|
86.6%
|
Shops at Shelby Crossing
|
|
Feb. 2017
|
|
1
|
|
236
|
|
3.7
|
|
98.5%
|
Shoppes of West Melbourne
|
|
Feb. 2017
|
|
1
|
|
144
|
|
3.1
|
|
97.3%
|
The Centrum
|
|
Feb. 2017
|
|
1
|
|
271
|
|
4.1
|
|
52.5%
|
Shoppes at Wyomissing
|
|
Feb. 2017
|
|
1
|
|
103
|
|
3.1
|
|
90.0%
|
Southroads Shopping Center
|
|
Feb. 2017
|
|
1
|
|
438
|
|
4.5
|
|
71.2%
|
Parkside Shopping Center
|
|
Feb. 2017
|
|
1
|
|
182
|
|
4.0
|
|
92.0%
|
Colonial Landing
|
|
Feb. 2017
|
|
1
|
|
264
|
|
3.9
|
|
70.0%
|
The Shops at West End
|
|
Feb. 2017
|
|
1
|
|
382
|
|
7.6
|
|
73.7%
|
Township Marketplace
|
|
Feb. 2017
|
|
1
|
|
299
|
|
3.9
|
|
93.9%
|
Cross Pointe Centre
|
|
Feb. 2017
|
|
1
|
|
226
|
|
9.8
|
|
100.0%
|
Towne Centre Plaza
|
|
Feb. 2017
|
|
1
|
|
94
|
|
3.8
|
|
100.0%
|
Village at Quail Springs
|
|
Feb. 2017
|
|
1
|
|
100
|
|
6.5
|
|
100.0%
|
Pine Ridge Plaza
|
|
Feb. 2017
|
|
1
|
|
239
|
|
3.7
|
|
97.4%
|
Bison Hollow
|
|
Feb. 2017
|
|
1
|
|
135
|
|
4.7
|
|
100.0%
|
Jefferson Commons
|
|
Feb. 2017
|
|
1
|
|
206
|
|
7.3
|
|
93.7%
|
Northpark Center
|
|
Feb. 2017
|
|
1
|
|
318
|
|
5.4
|
|
99.2%
|
Anderson Station
|
|
Feb. 2017
|
|
1
|
|
244
|
|
4.2
|
|
99.0%
|
Patton Creek
|
|
Feb. 2017
|
|
1
|
|
491
|
|
3.8
|
|
85.9%
|
North Lakeland Plaza
|
|
Feb. 2017
|
|
1
|
|
171
|
|
1.5
|
|
94.9%
|
Riverbend Marketplace
|
|
Feb. 2017
|
|
1
|
|
143
|
|
4.9
|
|
91.6%
|
Montecito Crossing
|
|
Feb. 2017
|
|
1
|
|
180
|
|
3.4
|
|
93.7%
|
Best on the Boulevard
|
|
Feb. 2017
|
|
1
|
|
205
|
|
4.1
|
|
91.0%
|
Shops at RiverGate South
|
|
Feb. 2017
|
|
1
|
|
141
|
|
6.4
|
|
100.0%
|
Dollar General XXIII
|
|
Mar. & May 2017
|
|
8
|
|
72
|
|
10.4
|
|
100.0%
|
Jo-Ann Fabrics I
|
|
Apr. 2017
|
|
1
|
|
18
|
|
5.8
|
|
100.0%
|
Bob Evans I
|
|
Apr. 2017
|
|
23
|
|
117
|
|
18.1
|
|
100.0%
|
FedEx Ground IX
|
|
May 2017
|
|
1
|
|
54
|
|
7.2
|
|
100.0%
|
Chili's II
|
|
May 2017
|
|
1
|
|
6
|
|
8.6
|
|
100.0%
|
Sonic Drive In I
|
|
June 2017
|
|
2
|
|
3
|
|
13.3
|
|
100.0%
|
Bridgestone HOSEPower I
|
|
June 2017
|
|
2
|
|
41
|
|
10.4
|
|
100.0%
|
Bridgestone HOSEPower II
|
|
July 2017
|
|
1
|
|
25
|
|
10.6
|
|
100.0%
|
FedEx Ground X
|
|
July 2017
|
|
1
|
|
142
|
|
8.3
|
|
100.0%
|
Chili's III
|
|
Aug. 2017
|
|
1
|
|
6
|
|
8.6
|
|
100.0%
|
FedEx Ground XI
|
|
Sep. 2017
|
|
1
|
|
29
|
|
8.3
|
|
100.0%
|
Hardee's I
|
|
Sep. 2017
|
|
4
|
|
13
|
|
18.5
|
|
100.0%
|
Tractor Supply IV
|
|
Oct. 2017
|
|
2
|
|
51
|
|
7.6
|
|
100.0%
|
Circle K II
|
|
Nov. 2017
|
|
6
|
|
20
|
|
18.3
|
|
100.0%
|
Sonic Drive In II
|
|
Nov. 2017
|
|
20
|
|
30
|
|
18.7
|
|
100.0%
|
Bridgestone HOSEPower III
|
|
Dec. 2017
|
|
1
|
|
21
|
|
11.3
|
|
100.0%
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(
thousands
)
|
|
Remaining Lease Term
(1)
|
|
Percentage Leased
|
Sonny's BBQ I
|
|
Jan. 2018
|
|
3
|
|
19
|
|
14.9
|
|
100.0%
|
Mountain Express I
|
|
Jan. 2018
|
|
9
|
|
30
|
|
18.8
|
|
100.0%
|
Kum & Go I
|
|
Feb. 2018
|
|
1
|
|
5
|
|
9.2
|
|
100.0%
|
DaVita I
|
|
Feb. 2018
|
|
2
|
|
13
|
|
6.9
|
|
100.0%
|
White Oak I
|
|
Mar. 2018
|
|
9
|
|
22
|
|
19.6
|
|
100.0%
|
Mountain Express II
|
|
June 2018
|
|
15
|
|
59
|
|
19.1
|
|
100.0%
|
Dialysis I
|
|
July 2018
|
|
7
|
|
65
|
|
9.2
|
|
100.0%
|
Children of America I
|
|
Aug. 2018
|
|
2
|
|
32
|
|
14.4
|
|
100.0%
|
Burger King II
|
|
Aug. 2018
|
|
1
|
|
3
|
|
14.4
|
|
100.0%
|
White Oak II
|
|
Aug. 2018
|
|
9
|
|
18
|
|
18.6
|
|
100.0%
|
Bob Evans II
|
|
Aug. 2018
|
|
22
|
|
112
|
|
18.1
|
|
100.0%
|
Mountain Express III
|
|
Sep. 2018
|
|
14
|
|
47
|
|
19.4
|
|
100.0%
|
Taco John's
|
|
Sep. 2018
|
|
7
|
|
15
|
|
14.6
|
|
100.0%
|
White Oak III
|
|
Oct. 2018
|
|
1
|
|
4
|
|
19.6
|
|
100.0%
|
DaVita II
|
|
Oct. 2018
|
|
1
|
|
10
|
|
8.5
|
|
100.0%
|
Pizza Hut I
|
|
Oct. 2018
|
|
9
|
|
23
|
|
14.6
|
|
100.0%
|
Little Caesars I
|
|
Dec. 2018
|
|
11
|
|
19
|
|
19.8
|
|
100.0%
|
Caliber Collision I
|
|
Dec. 2018
|
|
3
|
|
48
|
|
13.0
|
|
100.0%
|
Tractor Supply V
|
|
Dec. 2018
|
|
4
|
|
79
|
|
12.5
|
|
100.0%
|
Fresenius III
|
|
Jan. 2019
|
|
6
|
|
44
|
|
7.2
|
|
100.0%
|
Pizza Hut II
|
|
Jan. 2019
|
|
31
|
|
90
|
|
19.9
|
|
100.0%
|
Mountain Express IV
|
|
Feb. 2019
|
|
8
|
|
28
|
|
19.9
|
|
100.0%
|
Mountain Express V
|
|
Feb. 2019
|
|
17
|
|
90
|
|
19.9
|
|
100.0%
|
Fresenius IV
|
|
Mar. 2019
|
|
1
|
|
9
|
|
12.7
|
|
100.0%
|
Tractor Supply V
|
|
Mar. 2019
|
|
1
|
|
19
|
|
12.5
|
|
100.0%
|
|
|
|
|
682
|
|
19,237
|
|
8.8
|
|
94.0%
|
(1)
|
Remaining lease term in years as of
March 31, 2019
. If the portfolio has multiple properties with varying lease expirations, remaining lease term is calculated on a weighted-average basis.
|
(2)
|
Includes certain of the
four
properties leased to SunTrust Banks, Inc. (“SunTrust”) which were unoccupied as of
March 31, 2019
. As of
March 31, 2019
, these properties were either being marketed for sale, subject to a non-binding letter of intent (“LOI”) or subject to a definitive purchase and sale agreement (“PSA”). There can be no guarantee that these properties will be sold on the terms contemplated by any applicable LOI or PSA, or at all. Please see
Note 3
— Real Estate Investments
to our consolidated financial statements in this Quarterly Report on Form 10-Q for further details.
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||
|
|
|
|
|
|
(In thousands)
|
|
|
||||||||||||||
|
|
Number of Leases
|
|
Rentable Square Feet
|
|
Annualized SLR
(1)
prior to Lease Execution/Renewal/Termination
|
|
Annualized SLR
(1)
after Lease Execution/Renewal
|
|
Costs to execute lease
|
|
Costs to execute lease per square foot
|
||||||||||
New leases
(2)
|
|
4
|
|
|
9,044
|
|
|
$
|
—
|
|
|
$
|
164
|
|
|
$
|
29
|
|
|
$
|
3.21
|
|
Lease renewals/amendments
(2)
|
|
30
|
|
|
221,874
|
|
|
3,393
|
|
|
3,247
|
|
|
166
|
|
|
$
|
0.75
|
|
|||
Lease terminations
(3)
|
|
(4
|
)
|
|
(174,940
|
)
|
|
1,350
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
Rental income on a straight-line basis.
|
(2)
|
New leases reflect leases in which a new tenant took possession of the space during the three months ended
March 31, 2019
, excluding new property acquisitions. Lease renewals/amendments reflect leases in which an existing tenant executed terms to extend the term or change the rental terms of the lease during the three months ended
March 31, 2019
.
|
(3)
|
Represents leases that were terminated prior to their contractual lease expiration dates.
|
|
Same Store
|
|
Acquisitions
|
|
Disposals
|
|
Total
|
||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended March 31,
|
|
Increase (Decrease)
|
|
Three Months Ended March 31,
|
|
Increase (Decrease)
|
|
Three Months Ended March 31,
|
|
Increase (Decrease)
|
|
Total
|
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
$
|
|
2019
|
|
2018
|
|
$
|
|
2019
|
|
2018
|
|
$
|
|
2019
|
|
2018
|
|
$
|
||||||||||||||||||||||||
Revenue from tenants
|
$
|
65,386
|
|
|
$
|
66,285
|
|
|
$
|
(899
|
)
|
|
$
|
6,224
|
|
|
$
|
548
|
|
|
$
|
5,676
|
|
|
$
|
(69
|
)
|
|
$
|
3,286
|
|
|
$
|
(3,355
|
)
|
|
$
|
71,541
|
|
|
$
|
70,119
|
|
|
$
|
1,422
|
|
Less: Property operating
|
12,743
|
|
|
12,620
|
|
|
123
|
|
|
98
|
|
|
1
|
|
|
97
|
|
|
(5
|
)
|
|
734
|
|
|
(739
|
)
|
|
12,836
|
|
|
13,355
|
|
|
(519
|
)
|
||||||||||||
NOI
|
$
|
52,643
|
|
|
$
|
53,665
|
|
|
$
|
(1,022
|
)
|
|
$
|
6,126
|
|
|
$
|
547
|
|
|
$
|
5,579
|
|
|
$
|
(64
|
)
|
|
$
|
2,552
|
|
|
$
|
(2,616
|
)
|
|
$
|
58,705
|
|
|
$
|
56,764
|
|
|
$
|
1,941
|
|
|
|
Three Months Ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Net (loss) income attributable to common stockholders (in accordance with GAAP)
|
|
$
|
(3,227
|
)
|
|
$
|
15,401
|
|
Impairment charges
|
|
823
|
|
|
322
|
|
||
Depreciation and amortization
|
|
32,086
|
|
|
36,499
|
|
||
Gain on sale of real estate investments
|
|
(2,873
|
)
|
|
(24,637
|
)
|
||
Proportionate share of adjustments for non-controlling interests to arrive at FFO
|
|
(49
|
)
|
|
(24
|
)
|
||
FFO (as defined by NAREIT) attributable to common stockholders
|
|
26,760
|
|
|
27,561
|
|
||
Acquisition, transaction and other costs
[1]
|
|
854
|
|
|
2,016
|
|
||
Litigation cost reimbursements related to the Merger
[2]
|
|
(1,833
|
)
|
|
—
|
|
||
Amortization of market lease and other intangibles, net
|
|
(1,839
|
)
|
|
(1,358
|
)
|
||
Straight-line rent
|
|
(1,196
|
)
|
|
(2,253
|
)
|
||
Amortization of mortgage premiums on borrowings
|
|
(794
|
)
|
|
(835
|
)
|
||
Mark-to-market adjustments
|
|
—
|
|
|
(24
|
)
|
||
Equity-based compensation
[3]
|
|
3,021
|
|
|
26
|
|
||
Amortization of deferred financing costs, net and change in accrued interest
|
|
1,329
|
|
|
1,419
|
|
||
Proportionate share of adjustments for non-controlling interests to arrive at AFFO
|
|
1
|
|
|
1
|
|
||
AFFO attributable to common stockholders
|
|
$
|
26,303
|
|
|
$
|
26,553
|
|
(In thousands)
|
|
Same Store
|
|
Acquisitions
|
|
Disposals
|
|
Non-Property Specific
|
|
Total
|
||||||||||
Net income (loss) attributable to common stockholders (in accordance with GAAP)
|
|
$
|
7,846
|
|
|
$
|
3,989
|
|
|
$
|
2,763
|
|
|
$
|
(17,825
|
)
|
|
$
|
(3,227
|
)
|
Asset management fees to related party
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,038
|
|
|
6,038
|
|
|||||
Impairment charges
|
|
799
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
823
|
|
|||||
Acquisition, transaction and other costs
|
|
419
|
|
|
2
|
|
|
—
|
|
|
433
|
|
|
854
|
|
|||||
Equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,021
|
|
|
3,021
|
|
|||||
General and administrative
|
|
314
|
|
|
7
|
|
|
1
|
|
|
5,739
|
|
|
6,061
|
|
|||||
Depreciation and amortization
|
|
29,937
|
|
|
2,128
|
|
|
21
|
|
|
—
|
|
|
32,086
|
|
|||||
Interest expense
|
|
14,022
|
|
|
—
|
|
|
—
|
|
|
4,418
|
|
|
18,440
|
|
|||||
Gain on sale of real estate investments
|
|
—
|
|
|
—
|
|
|
(2,873
|
)
|
|
—
|
|
|
(2,873
|
)
|
|||||
Other income
|
|
(694
|
)
|
|
—
|
|
|
—
|
|
|
(1,851
|
)
|
|
(2,545
|
)
|
|||||
Preferred Stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
30
|
|
|||||
Net loss attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||
NOI
|
|
$
|
52,643
|
|
|
$
|
6,126
|
|
|
$
|
(64
|
)
|
|
$
|
—
|
|
|
$
|
58,705
|
|
(In thousands)
|
|
Same Store
|
|
Acquisitions
|
|
Disposals
|
|
Non-Property Specific
|
|
Total
|
||||||||||
Net income (loss) attributable to common stockholders (in accordance with GAAP)
|
|
$
|
1,829
|
|
|
$
|
249
|
|
|
$
|
24,846
|
|
|
$
|
(11,523
|
)
|
|
$
|
15,401
|
|
Asset management fees to related party
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,609
|
|
|
5,609
|
|
|||||
Impairment charges
|
|
23
|
|
|
—
|
|
|
299
|
|
|
—
|
|
|
322
|
|
|||||
Acquisition, transaction and other costs
|
|
1,833
|
|
|
118
|
|
|
—
|
|
|
65
|
|
|
2,016
|
|
|||||
Equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
26
|
|
|||||
General and administrative
|
|
328
|
|
|
23
|
|
|
15
|
|
|
5,047
|
|
|
5,413
|
|
|||||
Depreciation and amortization
|
|
34,313
|
|
|
157
|
|
|
2,029
|
|
|
—
|
|
|
36,499
|
|
|||||
Interest expense
|
|
15,348
|
|
|
|
|
—
|
|
|
759
|
|
|
16,107
|
|
||||||
Gain on sale of real estate investments
|
|
—
|
|
|
—
|
|
|
(24,637
|
)
|
|
—
|
|
|
(24,637
|
)
|
|||||
Other income
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(22
|
)
|
|||||
Net loss attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
30
|
|
|||||
NOI
|
|
$
|
53,665
|
|
|
$
|
547
|
|
|
$
|
2,552
|
|
|
$
|
—
|
|
|
$
|
56,764
|
|
|
|
Three Months Ended March 31, 2019
|
|||||
|
|
||||||
(In thousands)
|
|
$
|
|
Percentage of Dividends
|
|||
Cash dividends paid to stockholders
|
|
$
|
29,248
|
|
|
99.6
|
%
|
Cash distributions on LTIP Units
|
|
84
|
|
|
0.3
|
%
|
|
Cash distributions on Class A Units
|
|
47
|
|
|
0.2
|
%
|
|
Total dividends and distributions paid
|
|
$
|
29,379
|
|
|
100.0
|
%
|
|
|
|
|
|
|||
Source of dividend coverage:
|
|
|
|
|
|||
Cash flows provided by operations
|
|
$
|
20,395
|
|
|
69.4
|
%
|
Available cash on hand
[1]
|
|
8,984
|
|
|
30.6
|
%
|
|
Total source of dividend coverage
|
|
$
|
29,379
|
|
|
100.0
|
%
|
|
|
|
|
|
|||
Cash flows provided by operations (GAAP basis)
|
|
$
|
20,395
|
|
|
|
|
Net loss (in accordance with GAAP)
|
|
$
|
(3,227
|
)
|
|
|
|
American Finance Trust, Inc.
|
|
|
|
|
|
By:
|
/s/ Edward M. Weil, Jr.
|
|
|
Edward M. Weil, Jr.
|
|
|
Chief Executive Officer and President
(Principal Executive Officer)
|
|
|
|
|
By:
|
/s/ Katie P. Kurtz
|
|
|
Katie P. Kurtz
|
|
|
Chief Financial Officer, Treasurer and Secretary
(Principal Financial Officer and Principal Accounting Officer) |
Exhibit No.
|
|
Description
|
1.1
(1)
|
|
Underwriting Agreement, dated March 22, 2019, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and the underwriters listed on Schedule I attached thereto, for whom BMO Capital Markets Corp. and Stifel, Nicolaus & Company, Incorporated acted as representatives
|
1.2
*
|
|
Equity Distribution Agreement, May 8, 2019, among the American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., Capital One Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC and SunTrust Robinson Humphrey, Inc. (Class A common stock)
|
1.3
*
|
|
Equity Distribution Agreement, May 8, 2019, among the American Finance Trust, Inc., American Finance Operating Partnership, L.P., BMO Capital Markets Corp., BBVA Securities Inc., Capital One Securities, Inc., Citizens Capital Markets, Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC and SunTrust Robinson Humphrey, Inc. (Series A Preferred Stock)
|
3.1
(2)
|
|
Articles of Amendment and Restatement
|
3.2
(3)
|
|
Fourth Amended and Restated Bylaws
|
3.3
(4)
|
|
Articles Supplementary relating to election to be subject to Section 3-803 of MGCL
|
3.4
(5)
|
|
Articles of Amendment relating to reverse stock split, dated July 3, 2018
|
3.5
(5)
|
|
Articles of Amendment relating to par value decrease, dated July 3, 2018
|
3.6
(5)
|
|
Articles of Amendment relating to common stock name change, dated July 3, 2018
|
3.7
(5)
|
|
Articles Supplementary relating to reclassification of common stock, dated July 3, 2018
|
3.8
(6)
|
|
Certification of Notice of American Finance Trust, Inc. filed with the State Department of Assessments and Taxation of Maryland on September 18, 2018
|
3.9
(7)
|
|
Certification of Notice of American Finance Trust, Inc. filed with the State Department of Assessments and Taxation of Maryland on December 20, 2018
|
3.10
(8)
|
|
Articles Supplementary designating 7.50% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share
|
3.11
*
|
|
Articles Supplementary designating additional shares of 7.50% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share
|
4.1
(9)
|
|
Second Amendment, dated March 22, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P, dated as of July 19, 2018
|
4.2
*
|
|
Third Amendment, dated May 8, 2019, to the Second Amended and Restated Agreement of Limited Partnership of American Finance Operating Partnership, L.P, dated as of July 19, 2018
|
5.1
*
|
|
Opinion of Venable LLP - Class A common stock
|
5.2
*
|
|
Opinion of Venable LLP - Series A Preferred Stock
|
10.1
(10)
|
|
Amendment No. 2, dated as of March 18, 2019, to the Third Amended and Restated Advisory Agreement, by and among American Finance Trust, Inc., American Finance Operating Partnership, L.P. and American Finance Advisors, LLC
|
23.1
|
|
Consent of Venable LLP - Class A common stock (included in Exhibit 5.1 hereto)
|
23.2
|
|
Consent of Venable LLP - Series A Preferred Stock (included in Exhibit 5.2 hereto)
|
31.1
*
|
|
Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
*
|
|
Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32
*
|
|
Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101 *
|
|
XBRL (eXtensible Business Reporting Language). The following materials from American Finance Trust, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.
|
*
|
Filed herewith.
|
(1)
|
Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 25, 2019.
|
(2)
|
Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 11, 2015.
|
(3)
|
Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 19, 2018.
|
(4)
|
Filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 filed with the SEC on November 13, 2017.
|
(5)
|
Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 9, 2018.
|
(6)
|
Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 20, 2018.
|
(7)
|
Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 20, 2018.
|
(9)
|
Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 25, 2019.
|
(10)
|
Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 18, 2019.
|
|
Very truly yours,
|
|
|
|
|
|
AMERICAN FINANCE TRUST, INC.
|
|
|
|
|
|
By:
|
/s/ Edward M. Weil, Jr.
|
|
|
Name: Edward M. Weil, Jr.
|
|
|
Title: Chief Executive Officer and President
|
|
AMERICAN FINANCE OPERATING PARTNERSHIP, L.P.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Edward M. Weil, Jr.
|
|
|
Name: Edward M. Weil, Jr.
|
|
|
Title: Chief Executive Officer and President
|
BMO CAPITAL MARKETS CORP.
By: /s/ Stephan Richford Name: Stephan Richford Title: Managing Director
BBVA SECURITIES INC.
By: /s/ James A. Brodt Name: James A. Brodt Title: Executive Director
B. RILEY FBR, INC.
By: /s/ Patrice McNicoll Name: Patrice McNicoll Title: Co-Head of Investment Banking
CITIZENS CAPITAL MARKETS, INC.
By: /s/ Mark Sanko Name: Mark Sanko Title: Managing Director
KEYBANC CAPITAL MARKETS INC.
By: /s/ John Harrison Name: John Harrison Title: Managing Director
LADENBURG THALMANN & CO., INC.
By: /s/ Steve Kaplan Name: Steve Kaplan Title: Head of Capital Markets
SUNTRUST ROBINSON HUMPHREY, INC.
By: /s/ Keith Carpenter Name: Keith Carpenter Title: Director |
|
|
Trading Day(s) on which Shares may be Sold:
|
[_______], 20[__], [_______], 20[__] . . . [_______], 20[__]
|
to be Sold in the Aggregate:
|
[_______]
|
to be Sold on each Trading Day:
|
[_______]
|
Floor Price:
|
USD[__.__]
|
Compensation:
|
[_______]% of the gross proceeds from the sale of Shares
|
|
AMERICAN FINANCE TRUST, INC.
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
AMERICAN FINANCE OPERATING PARTNERSHIP, L.P.
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
AMERICAN FINANCE TRUST, INC.
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
AMERICAN FINANCE OPERATING PARTNERSHIP, L.P.
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
•
|
the officer’s certificate referred to in Section 4(c);
|
•
|
the legal opinions referred to in Section 4(d) and (e);
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•
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the “comfort letter” referred to in Section 4(f); and
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•
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such other documents as [•] shall reasonably request.
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Very truly yours,
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AMERICAN FINANCE TRUST, INC.
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By:
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/s/ Edward M. Weil, Jr.
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Name: Edward M. Weil, Jr.
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Title: Chief Executive Officer and President
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AMERICAN FINANCE OPERATING PARTNERSHIP, L.P.
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By:
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/s/ Edward M. Weil, Jr.
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Name: Edward M. Weil, Jr.
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Title: Chief Executive Officer and President
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BMO CAPITAL MARKETS CORP.
By: /s/ Stephan Richford Name: Stephan Richford Title: Managing Director
BBVA SECURITIES INC.
By: /s/ James A. Brodt Name: James A. Brodt Title: Executive Director
B. RILEY FBR, INC.
By: /s/ Patrice McNicoll Name: Patrice McNicoll Title: Co-Head of Investment Banking
CITIZENS CAPITAL MARKETS, INC.
By: /s/ Mark Sanko Name: Mark Sanko Title: Managing Director
KEYBANC CAPITAL MARKETS INC.
By: /s/ John Harrison Name: John Harrison Title: Managing Director
LADENBURG THALMANN & CO., INC.
By: /s/ Steve Kaplan Name: Steve Kaplan Title: Head of Capital Markets
SUNTRUST ROBINSON HUMPHREY, INC.
By: /s/ Keith Carpenter Name: Keith Carpenter Title: Director |
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Trading Day(s) on which Shares may be Sold:
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[_______], 20[__], [_______], 20[__] . . . [_______], 20[__]
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to be Sold in the Aggregate:
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[_______]
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to be Sold on each Trading Day:
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[_______]
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Floor Price:
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USD[__.__]
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Compensation:
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[_______]% of the gross proceeds from the sale of Shares
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AMERICAN FINANCE TRUST, INC.
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By:
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Name:
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Title:
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AMERICAN FINANCE OPERATING PARTNERSHIP, L.P.
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By:
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Name:
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Title:
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AMERICAN FINANCE TRUST, INC.
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By:
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Name:
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Title:
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AMERICAN FINANCE OPERATING PARTNERSHIP, L.P.
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By:
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Name:
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Title:
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•
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the officer’s certificate referred to in Section 4(c);
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•
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the legal opinions referred to in Section 4(d) and (e);
|
•
|
the “comfort letter” referred to in Section 4(f); and
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•
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such other documents as [•] shall reasonably request.
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1.
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I have reviewed this
Quarterly
Report on Form
10-Q
of
American Finance Trust, Inc.
;
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2.
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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;
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3.
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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;
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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)
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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;
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(b)
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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;
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(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
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(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
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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.
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Dated this 8th day of May, 2019
|
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/s/ Edward M. Weil, Jr.
|
|
|
Edward M. Weil, Jr.
|
|
|
Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of
American Finance Trust, 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.
|
Dated this 8th day of May, 2019
|
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/s/ Katie P. Kurtz
|
|
|
Katie P. Kurtz
|
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
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(Principal Financial Officer and Principal Accounting Officer)
|
|
/s/ Edward M. Weil, Jr.
|
|
Edward M. Weil, Jr.
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Katie P. Kurtz
|
|
Katie P. Kurtz
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
(Principal Financial Officer and Principal Accounting Officer)
|