☒
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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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☐
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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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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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June 30,
2020 |
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December 31,
2019 |
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Real estate investments, at cost:
|
|
|
|
||||
Land
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$
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705,115
|
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$
|
685,889
|
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Buildings, fixtures and improvements
|
2,739,863
|
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2,681,485
|
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||
Acquired intangible lease assets
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445,771
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|
448,175
|
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||
Total real estate investments, at cost
|
3,890,749
|
|
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3,815,549
|
|
||
Less: accumulated depreciation and amortization
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(582,668
|
)
|
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(529,052
|
)
|
||
Total real estate investments, net
|
3,308,081
|
|
|
3,286,497
|
|
||
Cash and cash equivalents
|
136,699
|
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|
81,898
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|
||
Restricted cash
|
20,132
|
|
|
17,942
|
|
||
Deposits for real estate investments
|
2,290
|
|
|
85
|
|
||
Deferred costs, net
|
16,096
|
|
|
17,467
|
|
||
Straight-line rent receivable
|
54,655
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|
|
46,976
|
|
||
Operating lease right-of-use assets
|
18,718
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|
|
18,959
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|
||
Prepaid expenses and other assets (including $457 and $503 due from related parties as of June 30, 2020 and December 31, 2019, respectively)
|
39,846
|
|
|
19,188
|
|
||
Assets held for sale
|
—
|
|
|
1,176
|
|
||
Total assets
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$
|
3,596,517
|
|
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$
|
3,490,188
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|
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|
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|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Mortgage notes payable, net
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$
|
1,305,104
|
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$
|
1,310,943
|
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Credit facility
|
503,147
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333,147
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|
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Below market lease liabilities, net
|
79,549
|
|
|
84,041
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|
||
Accounts payable and accrued expenses (including $599 and $1,153 due to related parties as of June 30, 2020 and December 31, 2019, respectively)
|
32,333
|
|
|
26,817
|
|
||
Operating lease liabilities
|
19,307
|
|
|
19,318
|
|
||
Deferred rent and other liabilities
|
9,431
|
|
|
10,392
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|
||
Dividends payable
|
3,617
|
|
|
3,300
|
|
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Total liabilities
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1,952,488
|
|
|
1,787,958
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||
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7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 8,796,000 shares authorized, 7,719,689 and 6,917,230 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
|
77
|
|
|
69
|
|
||
Common stock, $0.01 par value per share, 300,000,000 shares authorized, 108,527,734 and 108,475,266 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
|
1,085
|
|
|
1,085
|
|
||
Additional paid-in capital
|
2,635,166
|
|
|
2,615,089
|
|
||
Distributions in excess of accumulated earnings
|
(1,016,977
|
)
|
|
(932,912
|
)
|
||
Total stockholders’ equity
|
1,619,351
|
|
|
1,683,331
|
|
||
Non-controlling interests
|
24,678
|
|
|
18,899
|
|
||
Total equity
|
1,644,029
|
|
|
1,702,230
|
|
||
Total liabilities and equity
|
$
|
3,596,517
|
|
|
$
|
3,490,188
|
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Three Months Ended June 30,
|
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Six Months Ended June 30,
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||||||||||||
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2020
|
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2019
|
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2020
|
|
2019
|
||||||||
Revenue from tenants
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$
|
74,934
|
|
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$
|
79,109
|
|
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$
|
149,498
|
|
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$
|
150,650
|
|
|
|
|
|
|
|
|
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||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Asset management fees to related party
|
6,918
|
|
|
6,335
|
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13,823
|
|
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12,373
|
|
||||
Property operating expense
|
12,541
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|
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13,137
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|
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24,823
|
|
|
25,973
|
|
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Impairment of real estate investments
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11,502
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|
|
4
|
|
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11,502
|
|
|
827
|
|
||||
Acquisition, transaction and other costs
|
721
|
|
|
1,892
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|
|
1,173
|
|
|
2,746
|
|
||||
Equity-based compensation
|
3,247
|
|
|
3,268
|
|
|
6,458
|
|
|
6,289
|
|
||||
General and administrative
|
6,864
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|
6,441
|
|
|
12,192
|
|
|
12,502
|
|
||||
Depreciation and amortization
|
35,443
|
|
|
30,924
|
|
|
69,778
|
|
|
63,010
|
|
||||
Goodwill impairment
|
—
|
|
|
1,605
|
|
|
—
|
|
|
1,605
|
|
||||
Total operating expenses
|
77,236
|
|
|
63,606
|
|
|
139,749
|
|
|
125,325
|
|
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Operating income before gain on sale of real estate investments
|
(2,302
|
)
|
|
15,503
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|
9,749
|
|
|
25,325
|
|
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Gain on sale of real estate investments
|
2,838
|
|
|
14,365
|
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|
4,278
|
|
|
17,238
|
|
||||
Operating income
|
536
|
|
|
29,868
|
|
|
14,027
|
|
|
42,563
|
|
||||
Other (expense) income:
|
|
|
|
|
|
|
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||||||||
Interest expense
|
(18,801
|
)
|
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(21,995
|
)
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(37,907
|
)
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(40,435
|
)
|
||||
Other income
|
61
|
|
|
667
|
|
|
133
|
|
|
3,212
|
|
||||
Total other expense, net
|
(18,740
|
)
|
|
(21,328
|
)
|
|
(37,774
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)
|
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(37,223
|
)
|
||||
Net (loss) income
|
(18,204
|
)
|
|
8,540
|
|
|
(23,747
|
)
|
|
5,340
|
|
||||
Net loss (income) attributable to non-controlling interests
|
20
|
|
|
(14
|
)
|
|
29
|
|
|
(11
|
)
|
||||
Preferred stock dividends
|
(3,619
|
)
|
|
(642
|
)
|
|
(7,238
|
)
|
|
(672
|
)
|
||||
Net (loss) income attributable to common stockholders
|
(21,803
|
)
|
|
7,884
|
|
|
(30,956
|
)
|
|
4,657
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized loss on derivatives
|
—
|
|
|
1,004
|
|
|
—
|
|
|
531
|
|
||||
Comprehensive (loss) income attributable to common stockholders
|
$
|
(21,803
|
)
|
|
$
|
8,888
|
|
|
$
|
(30,956
|
)
|
|
$
|
5,188
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding — Basic
|
108,386,013
|
|
|
106,075,741
|
|
|
108,375,048
|
|
|
106,076,162
|
|
||||
Net (loss) income per share attributable to common stockholders — Basic
|
$
|
(0.20
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.29
|
)
|
|
$
|
0.04
|
|
Weighted-average shares outstanding — Diluted
|
108,386,013
|
|
|
106,394,277
|
|
|
108,375,048
|
|
|
106,389,912
|
|
||||
Net (loss) income per share attributable to common stockholders — Diluted
|
$
|
(0.20
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.29
|
)
|
|
$
|
0.04
|
|
|
Six Months Ended June 30, 2020
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Number of
Shares
|
|
Par Value
|
|
Number of
Shares
|
|
Par Value
|
|
Additional Paid-in
Capital
|
|
Accumulated Other Comprehensive income (loss)
|
|
Distributions in excess of accumulated earnings
|
|
Total Stockholders’ Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance, December 31, 2019
|
6,917,230
|
|
|
$
|
69
|
|
|
108,475,266
|
|
|
$
|
1,085
|
|
|
$
|
2,615,089
|
|
|
$
|
—
|
|
|
$
|
(932,912
|
)
|
|
$
|
1,683,331
|
|
|
$
|
18,899
|
|
|
$
|
1,702,230
|
|
Issuance of Common Stock, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
(90
|
)
|
||||||||
Issuance of Preferred Stock, net
|
802,459
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
19,601
|
|
|
—
|
|
|
—
|
|
|
19,609
|
|
|
—
|
|
|
19,609
|
|
||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
52,468
|
|
|
—
|
|
|
528
|
|
|
—
|
|
|
—
|
|
|
528
|
|
|
5,930
|
|
|
6,458
|
|
||||||||
Dividends declared on Common Stock, $0.25 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,889
|
)
|
|
(52,889
|
)
|
|
—
|
|
|
(52,889
|
)
|
||||||||
Dividends declared on Preferred Stock, $0.38 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,238
|
)
|
|
(7,238
|
)
|
|
—
|
|
|
(7,238
|
)
|
||||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(220
|
)
|
|
(220
|
)
|
|
(84
|
)
|
|
(304
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,718
|
)
|
|
(23,718
|
)
|
|
(29
|
)
|
|
(23,747
|
)
|
||||||||
Rebalancing of ownership percentage
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
(38
|
)
|
|
—
|
|
||||||||
Balance, June 30, 2020
|
7,719,689
|
|
|
$
|
77
|
|
|
108,527,734
|
|
|
$
|
1,085
|
|
|
$
|
2,635,166
|
|
|
$
|
—
|
|
|
$
|
(1,016,977
|
)
|
|
$
|
1,619,351
|
|
|
$
|
24,678
|
|
|
$
|
1,644,029
|
|
|
Three Months Ended June 30, 2020
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Number of
Shares
|
|
Par Value
|
|
Number of
Shares
|
|
Par Value
|
|
Additional Paid-in
Capital
|
|
Accumulated Other Comprehensive income (loss)
|
|
Distributions in excess of accumulated earnings
|
|
Total Stockholders’ Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance, March 31, 2020
|
7,719,689
|
|
|
$
|
77
|
|
|
108,475,266
|
|
|
$
|
1,085
|
|
|
$
|
2,634,953
|
|
|
$
|
—
|
|
|
$
|
(972,019
|
)
|
|
$
|
1,664,096
|
|
|
$
|
21,806
|
|
|
$
|
1,685,902
|
|
Issuance of Common Stock, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
||||||||
Issuance of Preferred Stock, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
(64
|
)
|
||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
52,468
|
|
|
—
|
|
|
281
|
|
|
—
|
|
|
—
|
|
|
281
|
|
|
2,966
|
|
|
3,247
|
|
||||||||
Dividends declared on Common Stock, $0.21 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,058
|
)
|
|
(23,058
|
)
|
|
—
|
|
|
(23,058
|
)
|
||||||||
Dividends declared on Preferred Stock, $0.38 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,619
|
)
|
|
(3,619
|
)
|
|
—
|
|
|
(3,619
|
)
|
||||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97
|
)
|
|
(97
|
)
|
|
(36
|
)
|
|
(133
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,184
|
)
|
|
(18,184
|
)
|
|
(20
|
)
|
|
(18,204
|
)
|
||||||||
Rebalancing of ownership percentage
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
(38
|
)
|
|
—
|
|
||||||||
Balance, June 30, 2020
|
7,719,689
|
|
|
$
|
77
|
|
|
108,527,734
|
|
|
$
|
1,085
|
|
|
$
|
2,635,166
|
|
|
$
|
—
|
|
|
$
|
(1,016,977
|
)
|
|
$
|
1,619,351
|
|
|
$
|
24,678
|
|
|
$
|
1,644,029
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Number of
Shares
|
|
Par Value
|
|
Number of
Shares
|
|
Par Value
|
|
Additional Paid-in
Capital
|
|
Accumulated Other Comprehensive income (loss)
|
|
Distributions in excess of accumulated earnings
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(170
|
)
|
|
(170
|
)
|
|
—
|
|
|
(170
|
)
|
|||||||||
Issuance of Preferred Stock, net
|
1,652,600
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
39,757
|
|
|
—
|
|
|
—
|
|
|
39,774
|
|
|
—
|
|
|
39,774
|
|
||||||||
Common stock repurchases
|
—
|
|
|
—
|
|
|
(19,870
|
)
|
|
(1
|
)
|
|
(273
|
)
|
|
—
|
|
|
—
|
|
|
(274
|
)
|
|
—
|
|
|
(274
|
)
|
||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
34,588
|
|
|
1
|
|
|
572
|
|
|
—
|
|
|
—
|
|
|
573
|
|
|
5,717
|
|
|
6,290
|
|
||||||||
Dividends declared on Common Stock, $0.28 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,420
|
)
|
|
(58,420
|
)
|
|
—
|
|
|
(58,420
|
)
|
||||||||
Dividends declared on Preferred Stock, $0.38 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(672
|
)
|
|
(672
|
)
|
|
—
|
|
|
(672
|
)
|
||||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(246
|
)
|
|
(246
|
)
|
|
(38
|
)
|
|
(284
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,329
|
|
|
5,329
|
|
|
11
|
|
|
5,340
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
531
|
|
|
—
|
|
|
531
|
|
|
—
|
|
|
531
|
|
||||||||
Rebalancing of ownership percentage
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
843
|
|
|
—
|
|
|
—
|
|
|
843
|
|
|
(843
|
)
|
|
—
|
|
||||||||
Balance, June 30, 2019
|
1,652,600
|
|
|
$
|
17
|
|
|
106,245,619
|
|
|
$
|
1,063
|
|
|
$
|
2,453,814
|
|
|
$
|
—
|
|
|
$
|
(866,226
|
)
|
|
$
|
1,588,668
|
|
|
$
|
13,182
|
|
|
$
|
1,601,850
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Number of
Shares
|
|
Par Value
|
|
Number of
Shares
|
|
Par Value
|
|
Additional Paid-in
Capital
|
|
Accumulated Other Comprehensive income (loss)
|
|
Distributions in excess of accumulated earnings
|
|
Total Stockholders' Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||||
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
|
|
Issuance of Preferred Stock, net
|
452,600
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
11,173
|
|
|
—
|
|
|
—
|
|
|
11,178
|
|
|
—
|
|
|
11,178
|
|
||||||||
Equity-based compensation
|
—
|
|
|
—
|
|
|
34,588
|
|
|
1
|
|
|
303
|
|
|
—
|
|
|
—
|
|
|
304
|
|
|
2,965
|
|
|
3,269
|
|
||||||||
Dividends declared on Common Stock, $0.28 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,213
|
)
|
|
(29,213
|
)
|
|
—
|
|
|
(29,213
|
)
|
||||||||
Dividends declared on Preferred Stock, $0.38 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(642
|
)
|
|
(642
|
)
|
|
—
|
|
|
(642
|
)
|
||||||||
Distributions to non-controlling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
|
(124
|
)
|
|
9
|
|
|
(115
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,526
|
|
|
8,526
|
|
|
14
|
|
|
8,540
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,004
|
|
|
—
|
|
|
1,004
|
|
|
—
|
|
|
1,004
|
|
||||||||
Rebalancing of ownership percentage
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
843
|
|
|
—
|
|
|
—
|
|
|
843
|
|
|
(843
|
)
|
|
—
|
|
||||||||
Balance, June 30, 2019
|
1,652,600
|
|
|
$
|
17
|
|
|
106,245,619
|
|
|
$
|
1,063
|
|
|
$
|
2,453,814
|
|
|
$
|
—
|
|
|
$
|
(866,226
|
)
|
|
$
|
1,588,668
|
|
|
$
|
13,182
|
|
|
$
|
1,601,850
|
|
|
Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(23,747
|
)
|
|
$
|
5,340
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
45,381
|
|
|
38,637
|
|
||
Amortization of in-place lease assets
|
23,337
|
|
|
23,660
|
|
||
Amortization of deferred leasing costs
|
1,061
|
|
|
713
|
|
||
Amortization (including accelerated write-off) of deferred financing costs
|
3,178
|
|
|
4,360
|
|
||
Amortization of mortgage discounts (premiums) on borrowings, net
|
(1,149
|
)
|
|
(1,633
|
)
|
||
Accretion of market lease and other intangibles, net
|
(3,281
|
)
|
|
(3,572
|
)
|
||
Equity-based compensation
|
6,458
|
|
|
6,289
|
|
||
Gain on sale of real estate investments
|
(4,278
|
)
|
|
(17,238
|
)
|
||
Impairment charges and goodwill impairment
|
11,502
|
|
|
2,432
|
|
||
Payments of prepayment costs on mortgages
|
271
|
|
|
1,977
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Straight-line rent receivable
|
(7,872
|
)
|
|
(3,793
|
)
|
||
Straight-line rent payable
|
165
|
|
|
1,031
|
|
||
Prepaid expenses and other assets
|
(4,085
|
)
|
|
272
|
|
||
Accounts payable and accrued expenses
|
3,264
|
|
|
(1,585
|
)
|
||
Deferred rent and other liabilities
|
(961
|
)
|
|
(5,303
|
)
|
||
Net cash provided by operating activities
|
49,244
|
|
|
51,587
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(4,047
|
)
|
|
(5,816
|
)
|
||
Investments in real estate and other assets
|
(102,222
|
)
|
|
(184,427
|
)
|
||
Proceeds from sale of real estate investments
|
6,785
|
|
|
22,572
|
|
||
Deposits
|
(2,205
|
)
|
|
2,956
|
|
||
Net cash used in investing activities
|
(101,689
|
)
|
|
(164,715
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|||
Proceeds from mortgage notes payable
|
—
|
|
|
241,930
|
|
||
Payments on mortgage notes payable
|
(1,507
|
)
|
|
(31,265
|
)
|
||
Proceeds from credit facility
|
190,000
|
|
|
108,000
|
|
||
Payments on credit facility
|
(20,000
|
)
|
|
(175,000
|
)
|
||
Payments of financing costs and deposits
|
(18,210
|
)
|
|
(9,836
|
)
|
||
Payments of prepayment costs on mortgages
|
(271
|
)
|
|
(1,977
|
)
|
||
Common stock repurchases
|
—
|
|
|
(274
|
)
|
||
Distributions on LTIP Units and Class A Units
|
(304
|
)
|
|
(340
|
)
|
||
Dividends paid on common stock
|
(52,889
|
)
|
|
(58,455
|
)
|
||
Dividends paid on preferred stock
|
(6,919
|
)
|
|
—
|
|
||
Common stock offering costs
|
(73
|
)
|
|
—
|
|
||
Proceeds from issuance of preferred stock, net
|
19,609
|
|
|
40,231
|
|
||
Net cash provided by financing activities
|
109,436
|
|
|
113,014
|
|
||
Net change in cash, cash equivalents and restricted cash
|
56,991
|
|
|
(114
|
)
|
||
Cash, cash equivalents and restricted cash beginning of period
|
99,840
|
|
|
109,631
|
|
||
Cash, cash equivalents and restricted cash end of period
|
$
|
156,831
|
|
|
$
|
109,517
|
|
|
Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash and cash equivalents, end of period
|
$
|
136,699
|
|
|
$
|
91,165
|
|
Restricted cash, end of period
|
20,132
|
|
|
18,352
|
|
||
Cash, cash equivalents and restricted cash end of period
|
$
|
156,831
|
|
|
$
|
109,517
|
|
|
|
|
|
||||
Supplemental Disclosures:
|
|
|
|
||||
Cash paid for interest, net of amounts capitalized
|
$
|
36,355
|
|
|
$
|
36,201
|
|
Cash paid for income taxes
|
660
|
|
|
146
|
|
||
|
|
|
|
||||
Non-Cash Investing and Financing Activities:
|
|
|
|
||||
Accrued Preferred Stock offering costs
|
$
|
210
|
|
|
$
|
360
|
|
Preferred dividend declared
|
$
|
3,619
|
|
|
$
|
672
|
|
Proceeds from real estate sales used to pay off related mortgage notes payable
|
$
|
5,586
|
|
|
$
|
85,488
|
|
Mortgage notes payable released in connection with disposition of real estate
|
$
|
(5,586
|
)
|
|
$
|
(85,488
|
)
|
Accrued capital expenditures
|
$
|
4,319
|
|
|
$
|
2,962
|
|
(In thousands)
|
|
Future Base Rent Payments
|
||
2020 (remainder)
|
|
$
|
129,178
|
|
2021
|
|
256,234
|
|
|
2022
|
|
244,104
|
|
|
2023
|
|
231,629
|
|
|
2024
|
|
212,196
|
|
|
2025
|
|
193,939
|
|
|
Thereafter
|
|
1,210,450
|
|
|
|
|
$
|
2,477,730
|
|
|
|
Six Months Ended June 30,
|
||||||
(Dollar amounts in thousands)
|
|
2020
|
|
2019
|
||||
Real estate investments, at cost:
|
|
|
|
|
||||
Land
|
|
$
|
23,798
|
|
|
$
|
33,747
|
|
Buildings, fixtures and improvements
|
|
67,537
|
|
|
120,143
|
|
||
Total tangible assets
|
|
91,335
|
|
|
153,890
|
|
||
Acquired intangible assets and liabilities: (1)
|
|
|
|
|
||||
In-place leases
|
|
11,287
|
|
|
30,959
|
|
||
Above-market lease assets
|
|
—
|
|
|
414
|
|
||
Below-market lease liabilities
|
|
(400
|
)
|
|
(836
|
)
|
||
Total intangible assets, net
|
|
10,887
|
|
|
30,537
|
|
||
Consideration paid for acquired real estate investments, net of liabilities assumed
|
|
$
|
102,222
|
|
|
$
|
184,427
|
|
Number of properties purchased
|
|
34
|
|
|
96
|
|
(1)
|
Weighted-average remaining amortization periods for in-place leases, above-market lease assets and below-market lease liabilities acquired during the six months ended June 30, 2020 were 17.7 years and 11.3 years, respectively, as of each property’s respective acquisition date.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
In-place leases, included in depreciation and amortization
|
|
$
|
10,341
|
|
|
$
|
11,060
|
|
|
$
|
23,337
|
|
|
$
|
23,660
|
|
|
|
|
|
|
|
|
|
|
||||||||
Above-market lease intangibles
|
|
$
|
(638
|
)
|
|
$
|
(812
|
)
|
|
$
|
(1,402
|
)
|
|
$
|
(1,680
|
)
|
Below-market lease liabilities
|
|
2,940
|
|
|
2,538
|
|
|
4,709
|
|
|
5,267
|
|
||||
Total included in revenue from tenants
|
|
$
|
2,302
|
|
|
$
|
1,726
|
|
|
$
|
3,307
|
|
|
$
|
3,587
|
|
|
|
|
|
|
|
|
|
|
||||||||
Below-market ground lease asset (1)
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
$
|
16
|
|
Above-market ground lease liability (1)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Total included in property operating expenses
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
15
|
|
|
$
|
15
|
|
(In thousands)
|
|
2020 (remainder)
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
||||||||||
In-place leases, to be included in depreciation and amortization
|
|
$
|
18,984
|
|
|
$
|
34,924
|
|
|
$
|
31,058
|
|
|
$
|
28,716
|
|
|
$
|
26,118
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Above-market lease intangibles
|
|
$
|
1,191
|
|
|
$
|
2,179
|
|
|
$
|
1,814
|
|
|
$
|
1,566
|
|
|
$
|
1,429
|
|
Below-market lease liabilities
|
|
(3,365
|
)
|
|
(6,283
|
)
|
|
(5,924
|
)
|
|
(5,762
|
)
|
|
(5,548
|
)
|
|||||
Total to be included in revenue from tenants
|
|
$
|
(2,174
|
)
|
|
$
|
(4,104
|
)
|
|
$
|
(4,110
|
)
|
|
$
|
(4,196
|
)
|
|
$
|
(4,119
|
)
|
(In thousands)
|
|
December 31, 2019
|
||
Real estate investments held for sale, at cost:
|
|
|
||
Land
|
|
$
|
563
|
|
Buildings, fixtures and improvements
|
|
750
|
|
|
Acquired lease intangible assets
|
|
—
|
|
|
Total real estate assets held for sale, at cost
|
|
1,313
|
|
|
Less accumulated depreciation and amortization
|
|
(137
|
)
|
|
Total real estate investments held for sale, net
|
|
1,176
|
|
|
Impairment charges related to properties reclassified as held for sale (1)
|
|
—
|
|
|
Assets held for sale
|
|
$
|
1,176
|
|
Number of properties
|
|
1
|
|
|
|
|
|
Outstanding Loan Amount as of
|
|
Effective Interest Rate as of
|
|
|
|
|
|
|
|||||||
Portfolio
|
|
Encumbered Properties
|
|
June 30,
2020 |
|
December 31,
2019 |
|
June 30,
2020 |
|
Interest Rate
|
|
Maturity
|
|
Anticipated Repayment
|
|||||
|
|
|
|
(In thousands)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|||||
Class A-1 Net Lease Mortgage Notes
|
|
95
|
|
$
|
119,689
|
|
|
$
|
120,294
|
|
|
3.83
|
%
|
|
Fixed
|
|
May 2049
|
|
May 2026
|
Class A-2 Net Lease Mortgage Notes
|
|
106
|
|
121,000
|
|
|
121,000
|
|
|
4.52
|
%
|
|
Fixed
|
|
May 2049
|
|
May 2029
|
||
Total Net Lease Mortgage Notes
|
|
201
|
|
240,689
|
|
|
241,294
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
SAAB Sensis I
|
|
1
|
|
6,442
|
|
|
6,660
|
|
|
5.93
|
%
|
|
Fixed
|
|
Apr. 2025
|
|
Apr. 2025
|
||
Truist Bank II
|
|
15
|
|
9,560
|
|
|
10,860
|
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
Truist Bank III
|
|
76
|
|
60,952
|
|
|
62,228
|
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
Truist Bank IV
|
|
10
|
|
3,791
|
|
|
6,626
|
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
Sanofi US I
|
|
1
|
|
125,000
|
|
|
125,000
|
|
|
5.16
|
%
|
|
Fixed
|
|
Jul. 2026
|
|
Jan. 2021
|
||
Stop & Shop
|
|
4
|
|
45,000
|
|
|
45,000
|
|
|
3.49
|
%
|
|
Fixed
|
|
Jan. 2030
|
|
Jan. 2030
|
||
Mortgage Loan I (1)
|
|
244
|
|
496,974
|
|
|
497,150
|
|
|
4.36
|
%
|
|
Fixed
|
|
Sep. 2020
|
|
Sep. 2020
|
||
Shops at Shelby Crossing
|
|
1
|
|
21,911
|
|
|
22,139
|
|
|
4.97
|
%
|
|
Fixed
|
|
Mar. 2024
|
|
Mar. 2024
|
||
Patton Creek
|
|
1
|
|
38,691
|
|
|
39,147
|
|
|
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
|
||
Gross mortgage notes payable
|
|
611
|
|
1,316,360
|
|
|
1,323,454
|
|
|
4.48
|
%
|
(2)
|
|
|
|
|
|
||
Deferred financing costs, net of accumulated amortization (3)
|
|
|
|
(13,159
|
)
|
|
(15,564
|
)
|
|
|
|
|
|
|
|
|
|||
Mortgage premiums and discounts, net (4)
|
|
|
|
1,903
|
|
|
3,053
|
|
|
|
|
|
|
|
|
|
|||
Mortgage notes payable, net
|
|
|
|
$
|
1,305,104
|
|
|
$
|
1,310,943
|
|
|
|
|
|
|
|
|
|
(1)
|
On July 24, 2020, this mortgage loan was repaid prior to its maturity with a portion of the proceeds from a $715.0 million loan secured by 368 properties (for additional information, see Note 14 — Subsequent Events).
|
(2)
|
Calculated on a weighted-average basis for all mortgages outstanding as of June 30, 2020.
|
(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
|
||
2020 (remainder)
|
|
$
|
536,728
|
|
2021
|
|
201,471
|
|
|
2022
|
|
2,311
|
|
|
2023
|
|
2,643
|
|
|
2024
|
|
22,287
|
|
|
2025
|
|
5,771
|
|
|
Thereafter
|
|
545,149
|
|
|
|
|
$
|
1,316,360
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Amount of loss recognized in AOCI on interest rate derivatives (1)
|
|
$
|
—
|
|
|
$
|
(485
|
)
|
|
$
|
—
|
|
|
$
|
(979
|
)
|
Amount of loss reclassified from AOCI into income as interest expense
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
(36
|
)
|
Total amount of interest expense presented in the consolidated income statements
|
|
$
|
18,801
|
|
|
$
|
21,995
|
|
|
$
|
37,907
|
|
|
$
|
40,435
|
|
(1)
|
Excludes a loss of $1.5 million in the Company’s consolidated statements of operations for the three and six months ended June 30, 2019 recorded upon termination of its interest rate swaps after the repayment of certain mortgages (see Note 4 — Mortgage Notes Payable, Net for additional information).
|
(In thousands)
|
|
Future Base Rent Payments
|
||
2020 (remainder)
|
|
$
|
814
|
|
2021
|
|
1,536
|
|
|
2022
|
|
1,553
|
|
|
2023
|
|
1,554
|
|
|
2024
|
|
1,565
|
|
|
Thereafter
|
|
46,007
|
|
|
Total lease payments
|
|
53,029
|
|
|
Less: Effects of discounting
|
|
(33,722
|
)
|
|
Total present value of lease payments
|
|
$
|
19,307
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Payable (Receivable) as of
|
|
||||||||||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
June 30,
2020 |
|
December 31,
2019 |
|
||||||||||||
Non-recurring fees and reimbursements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquisition cost reimbursements (1)
|
|
$
|
23
|
|
|
$
|
59
|
|
|
$
|
87
|
|
|
$
|
150
|
|
|
$
|
23
|
|
|
$
|
53
|
|
|
Ongoing fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset management fees to related party
|
|
6,918
|
|
|
6,335
|
|
|
13,823
|
|
|
12,373
|
|
|
|
|
|
9
|
|
|
||||||
Property management and leasing fees (2)
|
|
1,230
|
|
|
2,628
|
|
|
2,700
|
|
|
5,318
|
|
|
576
|
|
|
1,153
|
|
|
||||||
Professional fees and other reimbursements (3)
|
|
2,649
|
|
|
2,624
|
|
|
5,353
|
|
|
5,494
|
|
|
(108
|
)
|
|
(565
|
)
|
(4)
|
||||||
Professional fee credit due from Advisor
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(349
|
)
|
(4)
|
—
|
|
|
||||||
Total related party operating fees and reimbursements
|
|
$
|
10,820
|
|
|
$
|
11,646
|
|
|
$
|
21,963
|
|
|
$
|
23,335
|
|
|
$
|
142
|
|
|
$
|
650
|
|
|
|
Number of Shares of Common Stock
|
|
Weighted-Average Issue Price
|
|||
Unvested, December 31, 2019
|
111,421
|
|
|
$
|
14.52
|
|
Granted
|
52,468
|
|
|
6.48
|
|
|
Vested
|
(36,854
|
)
|
|
10.69
|
|
|
Unvested, June 30, 2020
|
127,035
|
|
|
12.31
|
|
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 June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In thousands, except share and per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net (loss) income attributable to common stockholders — Basic and Diluted
|
|
$
|
(21,803
|
)
|
|
$
|
7,884
|
|
|
$
|
(30,956
|
)
|
|
$
|
4,657
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding — Basic
|
|
108,386,013
|
|
|
106,075,741
|
|
|
108,375,048
|
|
|
106,076,162
|
|
||||
Unvested restricted shares
|
|
—
|
|
|
145,615
|
|
|
—
|
|
|
140,829
|
|
||||
OP Units
|
|
—
|
|
|
172,921
|
|
|
—
|
|
|
172,921
|
|
||||
Weighted-average shares outstanding — Diluted
|
|
108,386,013
|
|
|
106,394,277
|
|
|
108,375,048
|
|
|
106,389,912
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per share attributable to common stockholders — Basic
|
|
$
|
(0.20
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.29
|
)
|
|
$
|
0.04
|
|
Net (loss) income per share attributable to common stockholders - Diluted
|
|
$
|
(0.20
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.29
|
)
|
|
$
|
0.04
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Unvested restricted shares (1)
|
|
131,331
|
|
|
—
|
|
|
121,252
|
|
|
—
|
|
Class A Units (2)
|
|
172,921
|
|
|
—
|
|
|
172,921
|
|
|
—
|
|
LTIP Units (3)
|
|
4,496,796
|
|
|
4,496,796
|
|
|
4,496,796
|
|
|
4,496,796
|
|
Total
|
|
4,801,048
|
|
|
4,496,796
|
|
|
4,790,969
|
|
|
4,496,796
|
|
(1)
|
Weighted-average number of shares of unvested restricted shares outstanding for the periods presented. There were 127,032 and 169,032 unvested restricted shares outstanding as of June 30, 2020 and 2019, respectively.
|
(2)
|
Weighted-average number of OP Units outstanding for the periods presented. There were 172,921 Class A Units outstanding as of June 30, 2020 and 2019.
|
(3)
|
Weighted-average number of LTIP Units outstanding for the periods presented. There were 4,496,796 LTIP Units outstanding as of June 30, 2020 and 2019.
|
•
|
Payment of Dividends. During the Adjustment Period, (i) the Company is permitted to continue to pay dividends on the Series A Preferred Stock and Class A common stock at the current annualized per-share rates without satisfying any further tests for the fiscal quarter ended June 30, 2020 and the fiscal quarter ending September 30, 2020, and (ii) the Company will generally be permitted to pay dividends on the Series A Preferred Stock and Class A common stock and other distributions in an aggregate amount of up to 105% of annualized MFFO (as defined in the Credit Facility) for a look-back period of two consecutive fiscal quarters for the fiscal quarter ending December 31, 2020 and a look-back period of three consecutive fiscal quarters for the fiscal quarter ending March 31, 2021 if, as of the last day of the period, after giving effect to the payment of those dividends and distributions, the Company has a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $125.0 million. If this level of liquidity is not maintained, the applicable threshold percentage of MFFO will be 95% instead of 105%. If applicable, during the continuance of an event of default under the Credit Facility, the Company may not pay dividends or other distributions in excess of the amount necessary for the Company to maintain its status as a REIT.
|
•
|
Leverage. During the Adjustment Period, the calculation of Total Asset Value (as defined in the Credit Facility) - which serves as the basis for the denominator used to calculate the maximum consolidated leverage, maximum consolidated secured leverage and maximum other recourse debt to total asset value financial maintenance covenants in the Credit Facility - will be adjusted such that the value ascribed to the Company’s multi-tenant properties purchased through June 30, 2020 will generally be decreased by 10% for the duration of the Adjustment Period.
|
•
|
Borrowing Availability. The amount available for future borrowings under the Credit Facility is based on the lesser of (i) 60% of the value of the pool of eligible unencumbered real estate assets comprising the borrowing base, and (ii) a maximum amount of total unsecured indebtedness that could be incurred while maintaining a minimum unsecured interest coverage ratio with respect to the borrowing base, in each case, as of the determination date. During the Adjustment Period, (a) the value of all eligible unencumbered real estate assets comprising the borrowing base purchased through June 30, 2020 will generally be decreased by 10%, and (b) the minimum unsecured interest coverage ratio required to be maintained by the eligible unencumbered real estate assets comprising the borrowing base will be decreased during the fiscal quarter ended June 30, 2020 and increased during the other fiscal quarters of the Adjustment Period.
|
•
|
Fixed Charges Coverage. During the Adjustment Period, the minimum fixed charge coverage ratio financial maintenance covenant in the Credit Facility will be decreased.
|
•
|
Interest Rate. Borrowings under the Credit Facility bear interest at either (i) the Base Rate (as defined in the Credit Facility) plus an applicable margin ranging from 0.60% to 1.20%, depending on the Company’s consolidated leverage ratio, or (ii) LIBOR plus an applicable margin ranging from 1.60% to 2.20%, depending on the Company’s consolidated leverage ratio. From July 24, 2020 until delivery of the compliance certificate for the fiscal quarter ending June 30, 2021, the margin will be 1.50% with respect to the Base Rate and 2.50% with respect to LIBOR regardless of the Company’s consolidated leverage ratio. Pursuant to the amendment, the “floor” on LIBOR was increased from 0.00% to 0.25%.
|
•
|
Acquisitions. During the Adjustment Period, (i) all properties acquired with proceeds from the borrowings under the Credit Facility must be added to the borrowing base, and (ii) the Company is prohibited from acquiring any multi-tenant properties and from making certain other investments. Following the amendment, the Company is also restricted from using proceeds from borrowings under the Credit Facility to accumulate or maintain cash or cash equivalents in excess of amounts necessary to meet current working capital requirements, as determined in good faith by the OP.
|
•
|
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, as well as store closures and changes in consumer behavior resulting from or relating to the COVID-19 pandemic.
|
•
|
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 and currently prohibits us from repurchasing shares.
|
•
|
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 and provisions in our Credit Facility currently restrict us from increasing dividends over time.
|
•
|
We are obligated to pay fees, which may be substantial, to the Advisor and its affiliates.
|
•
|
We are subject to risks associated with a pandemic, epidemic or outbreak of a contagious disease, such as the ongoing global COVID-19 pandemic, including negative impacts on our tenants and their respective businesses.
|
•
|
We are subject to risks associated with any dislocations or liquidity disruptions that may exist or occur in credit markets of the United States of America (“U.S.”) from time to time, including disruptions and dislocations caused by the ongoing COVID-19 pandemic.
|
•
|
Our operating results are affected by economic and regulatory changes that have an adverse impact on the real estate market in general.
|
•
|
We may fail to continue to qualify to be treated as a real estate investment trust for U.S. federal income tax purposes (“REIT”), which would result in higher taxes, may adversely affect our operations and would reduce the value of an investment in our Series A Preferred Stock, Class A common stock and our cash available for dividends.
|
•
|
The negative impacts of the COVID-19 pandemic has caused and may continue to cause certain of our tenants to be unable to make rent payments to us timely, or at all. However, we have taken proactive steps with regard to rent collections to mitigate the impact on our business (see “—Management Actions” below).
|
•
|
There may be a decline in the demand for tenants to lease real estate, as well as a negative impact on rental rates. As of June 30, 2020, our portfolio had a high occupancy level of 94.3%, the weighted average remaining term of our leases was 8.9 years (based on annualized straight-line rent) and only 7% of our leases expiring were in the next two years (based on annualized straight line rent).
|
•
|
Capital market volatility and a tightening of credit standards could negatively impact our ability to obtain debt financing. However, despite capital market volatility, we closed on a $715 million loan in July 2020 secured by, among other things, a first mortgage on 368 single-tenant properties which we used to repay $497.0 million principal amount on a mortgage that was coming due in September 2020 and the remainder was used to repay outstanding amounts under our Credit Facility. We do not have any other significant debt principal repayments due in 2020.
|
•
|
The volatility in the global financial market could negatively impact our ability to raise capital through equity offerings, which as a result, could impact our decisions as to when and if we will seek additional equity funding.
|
•
|
The negative impact of the pandemic on our results of operations and cash flows could impact our ability to comply with covenants in our Credit Facility and the amount available for future borrowings thereunder.
|
•
|
The potential negative impact on the health of personnel of our Advisor, particularly if a significant number of the Advisor’s employees are impacted, could result in a deterioration in our ability to ensure business continuity.
|
Second Quarter 2020 Cash Rent Status
|
|
Single-Tenant
|
|
Multi-Tenant
|
|
Total Portfolio
|
|||
Cash rent paid (1)
|
|
94
|
%
|
|
63
|
%
|
|
84
|
%
|
Approved agreement (2)
|
|
4
|
%
|
|
24
|
%
|
|
10
|
%
|
Agreement negotiation (3)
|
|
1
|
%
|
|
13
|
%
|
|
5
|
%
|
Other (4)
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
July 2020 Cash Rent Status
|
|
Single-Tenant
|
|
Multi-Tenant
|
|
Total Portfolio
|
|||
Cash rent paid
|
|
96
|
%
|
|
72
|
%
|
|
88
|
%
|
Approved agreement (1)
|
|
2
|
%
|
|
18
|
%
|
|
7
|
%
|
Agreement negotiation
|
|
—
|
%
|
|
10
|
%
|
|
4
|
%
|
Other
|
|
2
|
%
|
|
—
|
%
|
|
1
|
%
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(In thousands)
|
|
Remaining Lease Term (1)
|
|
Percentage Leased
|
Dollar General I
|
|
Apr 2013; May 2013
|
|
2
|
|
18
|
|
7.8
|
|
100.0%
|
Walgreens I
|
|
Jul 2013
|
|
1
|
|
11
|
|
17.3
|
|
100.0%
|
Dollar General II
|
|
Jul 2013
|
|
2
|
|
18
|
|
7.9
|
|
100.0%
|
AutoZone I
|
|
Jul 2013
|
|
1
|
|
8
|
|
7.1
|
|
100.0%
|
Dollar General III
|
|
Jul 2013
|
|
5
|
|
46
|
|
7.9
|
|
100.0%
|
BSFS I
|
|
Jul 2013
|
|
1
|
|
9
|
|
3.6
|
|
100.0%
|
Dollar General IV
|
|
Jul 2013
|
|
2
|
|
18
|
|
5.7
|
|
100.0%
|
Tractor Supply I
|
|
Aug 2013
|
|
1
|
|
19
|
|
7.4
|
|
100.0%
|
Dollar General V
|
|
Aug 2013
|
|
1
|
|
12
|
|
7.6
|
|
100.0%
|
Mattress Firm I
|
|
Aug 2013; Nov 2013; Feb 2014; Mar 2014; Apr 2014
|
|
5
|
|
24
|
|
6.5
|
|
100.0%
|
Family Dollar I
|
|
Aug 2013
|
|
1
|
|
8
|
|
1.0
|
|
100.0%
|
Lowe's I
|
|
Aug 2013
|
|
5
|
|
671
|
|
8.9
|
|
100.0%
|
O'Reilly Auto Parts I
|
|
Aug 2013
|
|
1
|
|
11
|
|
10.0
|
|
100.0%
|
Food Lion I
|
|
Aug 2013
|
|
1
|
|
45
|
|
9.3
|
|
100.0%
|
Family Dollar II
|
|
Aug 2013
|
|
1
|
|
8
|
|
3.0
|
|
100.0%
|
Walgreens II
|
|
Aug 2013
|
|
1
|
|
14
|
|
12.8
|
|
100.0%
|
Dollar General VI
|
|
Aug 2013
|
|
1
|
|
9
|
|
5.7
|
|
100.0%
|
Dollar General VII
|
|
Aug 2013
|
|
1
|
|
9
|
|
7.8
|
|
100.0%
|
Family Dollar III
|
|
Aug 2013
|
|
1
|
|
8
|
|
2.3
|
|
100.0%
|
Chili's I
|
|
Aug 2013
|
|
2
|
|
13
|
|
5.4
|
|
100.0%
|
CVS I
|
|
Aug 2013
|
|
1
|
|
10
|
|
5.6
|
|
100.0%
|
Joe's Crab Shack I
|
|
Aug 2013
|
|
1
|
|
8
|
|
6.8
|
|
100.0%
|
Dollar General VIII
|
|
Sep 2013
|
|
1
|
|
9
|
|
8.1
|
|
100.0%
|
Tire Kingdom I
|
|
Sep 2013
|
|
1
|
|
7
|
|
4.8
|
|
100.0%
|
AutoZone II
|
|
Sep 2013
|
|
1
|
|
7
|
|
2.9
|
|
100.0%
|
Family Dollar IV
|
|
Sep 2013
|
|
1
|
|
8
|
|
3.0
|
|
100.0%
|
Fresenius I
|
|
Sep 2013
|
|
1
|
|
6
|
|
5.0
|
|
100.0%
|
Dollar General IX
|
|
Sep 2013
|
|
1
|
|
9
|
|
4.8
|
|
100.0%
|
Advance Auto I
|
|
Sep 2013
|
|
1
|
|
11
|
|
3.0
|
|
100.0%
|
Walgreens III
|
|
Sep 2013
|
|
1
|
|
15
|
|
5.8
|
|
100.0%
|
Walgreens IV
|
|
Sep 2013
|
|
1
|
|
14
|
|
4.3
|
|
100.0%
|
CVS II
|
|
Sep 2013
|
|
1
|
|
16
|
|
16.6
|
|
100.0%
|
Arby's I
|
|
Sep 2013
|
|
1
|
|
3
|
|
8.0
|
|
100.0%
|
Dollar General X
|
|
Sep 2013
|
|
1
|
|
9
|
|
7.8
|
|
100.0%
|
AmeriCold I
|
|
Sep 2013
|
|
9
|
|
1,407
|
|
7.2
|
|
100.0%
|
Home Depot I
|
|
Sep 2013
|
|
2
|
|
1,315
|
|
6.6
|
|
100.0%
|
New Breed Logistics I
|
|
Sep 2013
|
|
1
|
|
390
|
|
1.3
|
|
100.0%
|
Truist Bank I
|
|
Sep 2013
|
|
19
|
|
96
|
|
7.9
|
|
100.0%
|
National Tire & Battery I
|
|
Sep 2013
|
|
1
|
|
11
|
|
3.4
|
|
100.0%
|
Circle K I
|
|
Sep 2013
|
|
19
|
|
55
|
|
8.3
|
|
100.0%
|
Walgreens V
|
|
Sep 2013
|
|
1
|
|
14
|
|
7.2
|
|
100.0%
|
Walgreens VI
|
|
Sep 2013
|
|
1
|
|
15
|
|
8.8
|
|
100.0%
|
FedEx Ground I
|
|
Sep 2013
|
|
1
|
|
22
|
|
2.9
|
|
100.0%
|
Walgreens VII
|
|
Sep 2013
|
|
8
|
|
113
|
|
9.0
|
|
100.0%
|
O'Charley's I
|
|
Sep 2013
|
|
20
|
|
134
|
|
11.3
|
|
100.0%
|
Krystal I
|
|
Sep 2013
|
|
6
|
|
13
|
|
9.2
|
|
83.6%
|
1st Constitution Bancorp I
|
|
Sep 2013
|
|
1
|
|
3
|
|
3.6
|
|
100.0%
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(In thousands)
|
|
Remaining Lease Term (1)
|
|
Percentage Leased
|
American Tire Distributors I
|
|
Sep 2013
|
|
1
|
|
125
|
|
3.6
|
|
100.0%
|
Tractor Supply II
|
|
Oct 2013
|
|
1
|
|
23
|
|
3.3
|
|
100.0%
|
United Healthcare I
|
|
Oct 2013
|
|
1
|
|
400
|
|
1.0
|
|
100.0%
|
National Tire & Battery II
|
|
Oct 2013
|
|
1
|
|
7
|
|
11.9
|
|
100.0%
|
Tractor Supply III
|
|
Oct 2013
|
|
1
|
|
19
|
|
7.8
|
|
100.0%
|
Verizon Wireless
|
|
Oct 2013
|
|
1
|
|
4
|
|
9.3
|
|
100.0%
|
Dollar General XI
|
|
Oct 2013
|
|
1
|
|
9
|
|
6.8
|
|
100.0%
|
Talecris Plasma Resources I
|
|
Oct 2013
|
|
1
|
|
22
|
|
2.8
|
|
100.0%
|
Amazon I
|
|
Oct 2013
|
|
1
|
|
79
|
|
3.1
|
|
100.0%
|
Fresenius II
|
|
Oct 2013
|
|
2
|
|
16
|
|
7.1
|
|
100.0%
|
Dollar General XII
|
|
Nov 2013; Jan 2014
|
|
2
|
|
18
|
|
8.5
|
|
100.0%
|
Dollar General XIII
|
|
Nov 2013
|
|
1
|
|
9
|
|
5.8
|
|
100.0%
|
Advance Auto II
|
|
Nov 2013
|
|
2
|
|
14
|
|
2.9
|
|
100.0%
|
FedEx Ground II
|
|
Nov 2013
|
|
1
|
|
49
|
|
3.1
|
|
100.0%
|
Burger King I
|
|
Nov 2013
|
|
41
|
|
169
|
|
17.3
|
|
100.0%
|
Dollar General XIV
|
|
Nov 2013
|
|
3
|
|
27
|
|
7.9
|
|
100.0%
|
Dollar General XV
|
|
Nov 2013
|
|
1
|
|
9
|
|
8.3
|
|
100.0%
|
FedEx Ground III
|
|
Nov 2013
|
|
1
|
|
24
|
|
3.2
|
|
100.0%
|
Dollar General XVI
|
|
Nov 2013
|
|
1
|
|
9
|
|
5.4
|
|
100.0%
|
Family Dollar V
|
|
Nov 2013
|
|
1
|
|
8
|
|
2.8
|
|
100.0%
|
CVS III
|
|
Dec 2013
|
|
1
|
|
11
|
|
3.6
|
|
100.0%
|
Mattress Firm III
|
|
Dec 2013
|
|
1
|
|
5
|
|
8.0
|
|
100.0%
|
Arby's II
|
|
Dec 2013
|
|
1
|
|
4
|
|
7.8
|
|
100.0%
|
Family Dollar VI
|
|
Dec 2013
|
|
2
|
|
17
|
|
3.6
|
|
100.0%
|
SAAB Sensis I
|
|
Dec 2013
|
|
1
|
|
91
|
|
4.8
|
|
100.0%
|
Citizens Bank I
|
|
Dec 2013
|
|
9
|
|
31
|
|
3.5
|
|
100.0%
|
Truist Bank II
|
|
Jan 2014
|
|
15
|
|
79
|
|
8.6
|
|
100.0%
|
Mattress Firm IV
|
|
Jan 2014
|
|
1
|
|
5
|
|
4.2
|
|
100.0%
|
FedEx Ground IV
|
|
Jan 2014
|
|
1
|
|
59
|
|
3.0
|
|
100.0%
|
Mattress Firm V
|
|
Jan 2014
|
|
1
|
|
6
|
|
3.3
|
|
100.0%
|
Family Dollar VII
|
|
Feb 2014
|
|
1
|
|
8
|
|
4.0
|
|
100.0%
|
Aaron's I
|
|
Feb 2014
|
|
1
|
|
8
|
|
3.2
|
|
100.0%
|
AutoZone III
|
|
Feb 2014
|
|
1
|
|
7
|
|
2.8
|
|
100.0%
|
C&S Wholesale Grocer I
|
|
Feb 2014
|
|
1
|
|
360
|
|
2.0
|
|
100.0%
|
Advance Auto III
|
|
Feb 2014
|
|
1
|
|
6
|
|
4.2
|
|
100.0%
|
Family Dollar VIII
|
|
Mar 2014
|
|
3
|
|
25
|
|
3.1
|
|
100.0%
|
Dollar General XVII
|
|
Mar 2014; May 2014
|
|
3
|
|
27
|
|
7.8
|
|
100.0%
|
Truist Bank III [2]
|
|
Mar 2014
|
|
75
|
|
366
|
|
9.5
|
|
98.7%
|
Truist Bank IV
|
|
Mar 2014
|
|
9
|
|
55
|
|
9.3
|
|
100.0%
|
Draper Aden Associates
|
|
Mar 2014
|
|
1
|
|
78
|
|
10.3
|
|
56.0%
|
Church of Jesus Christ
|
|
Mar 2014
|
|
1
|
|
3
|
|
3.3
|
|
100.0%
|
Dollar General XVIII
|
|
Mar 2014
|
|
1
|
|
9
|
|
7.8
|
|
100.0%
|
Sanofi US I
|
|
Mar 2014
|
|
1
|
|
737
|
|
12.5
|
|
100.0%
|
Family Dollar IX
|
|
Apr 2014
|
|
1
|
|
8
|
|
3.8
|
|
100.0%
|
Stop & Shop I
|
|
May 2014
|
|
7
|
|
492
|
|
6.5
|
|
100.0%
|
Bi-Lo I
|
|
May 2014
|
|
1
|
|
56
|
|
5.5
|
|
100.0%
|
Dollar General XIX
|
|
May 2014
|
|
1
|
|
12
|
|
8.2
|
|
100.0%
|
Dollar General XX
|
|
May 2014
|
|
5
|
|
49
|
|
6.8
|
|
100.0%
|
Dollar General XXI
|
|
May 2014
|
|
1
|
|
9
|
|
8.2
|
|
100.0%
|
Dollar General XXII
|
|
May 2014
|
|
1
|
|
11
|
|
6.8
|
|
100.0%
|
FedEx Ground V
|
|
Feb 2016
|
|
1
|
|
46
|
|
5.1
|
|
100.0%
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(In thousands)
|
|
Remaining Lease Term (1)
|
|
Percentage Leased
|
FedEx Ground VI
|
|
Feb 2016
|
|
1
|
|
121
|
|
5.2
|
|
100.0%
|
FedEx Ground VII
|
|
Feb 2016
|
|
1
|
|
42
|
|
5.3
|
|
100.0%
|
FedEx Ground VIII
|
|
Feb 2016
|
|
1
|
|
79
|
|
5.3
|
|
100.0%
|
Liberty Crossing
|
|
Feb 2017
|
|
1
|
|
106
|
|
3.8
|
|
90.9%
|
San Pedro Crossing
|
|
Feb 2017
|
|
1
|
|
202
|
|
4.6
|
|
90.0%
|
Tiffany Springs MarketCenter
|
|
Feb 2017
|
|
1
|
|
265
|
|
5.2
|
|
86.9%
|
The Streets of West Chester
|
|
Feb 2017
|
|
1
|
|
237
|
|
9.6
|
|
93.8%
|
Prairie Towne Center
|
|
Feb 2017
|
|
1
|
|
264
|
|
5.3
|
|
80.4%
|
Southway Shopping Center
|
|
Feb 2017
|
|
1
|
|
182
|
|
3.4
|
|
87.9%
|
Stirling Slidell Centre (3)
|
|
Feb 2017
|
|
1
|
|
134
|
|
2.2
|
|
47.7%
|
Northwoods Marketplace
|
|
Feb 2017
|
|
1
|
|
236
|
|
4.3
|
|
97.7%
|
Centennial Plaza
|
|
Feb 2017
|
|
1
|
|
234
|
|
2.5
|
|
78.6%
|
Northlake Commons
|
|
Feb 2017
|
|
1
|
|
109
|
|
2.4
|
|
86.6%
|
Shops at Shelby Crossing
|
|
Feb 2017
|
|
1
|
|
236
|
|
3.5
|
|
86.9%
|
Shoppes of West Melbourne
|
|
Feb 2017
|
|
1
|
|
144
|
|
3.4
|
|
95.4%
|
The Centrum
|
|
Feb 2017
|
|
1
|
|
271
|
|
4.5
|
|
60.7%
|
Shoppes at Wyomissing
|
|
Feb 2017
|
|
1
|
|
103
|
|
3.3
|
|
78.0%
|
Southroads Shopping Center
|
|
Feb 2017
|
|
1
|
|
438
|
|
3.9
|
|
73.3%
|
Parkside Shopping Center
|
|
Feb 2017
|
|
1
|
|
183
|
|
3.6
|
|
89.8%
|
Colonial Landing
|
|
Feb 2017
|
|
1
|
|
264
|
|
5.7
|
|
93.6%
|
The Shops at West End
|
|
Feb 2017
|
|
1
|
|
382
|
|
6.9
|
|
72.3%
|
Township Marketplace
|
|
Feb 2017
|
|
1
|
|
299
|
|
3.1
|
|
82.9%
|
Cross Pointe Centre
|
|
Feb 2017
|
|
1
|
|
226
|
|
9.0
|
|
100.0%
|
Towne Centre Plaza
|
|
Feb 2017
|
|
1
|
|
94
|
|
2.8
|
|
100.0%
|
Village at Quail Springs
|
|
Feb 2017
|
|
1
|
|
100
|
|
6.9
|
|
100.0%
|
Pine Ridge Plaza
|
|
Feb 2017
|
|
1
|
|
239
|
|
3.3
|
|
97.5%
|
Bison Hollow
|
|
Feb 2017
|
|
1
|
|
135
|
|
4.4
|
|
100.0%
|
Jefferson Commons
|
|
Feb 2017
|
|
1
|
|
206
|
|
6.6
|
|
98.7%
|
Northpark Center
|
|
Feb 2017
|
|
1
|
|
318
|
|
5.6
|
|
97.2%
|
Anderson Station
|
|
Feb 2017
|
|
1
|
|
244
|
|
3.4
|
|
94.9%
|
Patton Creek
|
|
Feb 2017
|
|
1
|
|
491
|
|
3.1
|
|
85.6%
|
North Lakeland Plaza
|
|
Feb 2017
|
|
1
|
|
171
|
|
2.5
|
|
100.0%
|
Riverbend Marketplace
|
|
Feb 2017
|
|
1
|
|
143
|
|
4.1
|
|
89.4%
|
Montecito Crossing
|
|
Feb 2017
|
|
1
|
|
180
|
|
3.9
|
|
73.6%
|
Best on the Boulevard
|
|
Feb 2017
|
|
1
|
|
205
|
|
3.1
|
|
88.5%
|
Shops at RiverGate South
|
|
Feb 2017
|
|
1
|
|
141
|
|
5.3
|
|
100.0%
|
Dollar General XXIII
|
|
Mar 2017; May 2017; Jun 2017
|
|
8
|
|
71
|
|
9.1
|
|
100.0%
|
Jo-Ann Fabrics I
|
|
Apr 2017
|
|
1
|
|
18
|
|
4.6
|
|
100.0%
|
Bob Evans I
|
|
Apr 2017
|
|
23
|
|
117
|
|
16.8
|
|
100.0%
|
FedEx Ground IX
|
|
May 2017
|
|
1
|
|
54
|
|
5.9
|
|
100.0%
|
Chili's II
|
|
May 2017
|
|
1
|
|
6
|
|
7.3
|
|
100.0%
|
Sonic Drive In I
|
|
Jun 2017
|
|
2
|
|
3
|
|
12.0
|
|
100.0%
|
Bridgestone HOSEPower I
|
|
Jun 2017
|
|
2
|
|
41
|
|
9.1
|
|
100.0%
|
Bridgestone HOSEPower II
|
|
Jul 2017
|
|
1
|
|
25
|
|
9.3
|
|
100.0%
|
FedEx Ground X
|
|
Jul 2017
|
|
1
|
|
142
|
|
7.0
|
|
100.0%
|
Chili's III
|
|
Aug 2017
|
|
1
|
|
6
|
|
7.3
|
|
100.0%
|
FedEx Ground XI
|
|
Sep 2017
|
|
1
|
|
29
|
|
7.0
|
|
100.0%
|
Hardee's I
|
|
Sep 2017
|
|
4
|
|
13
|
|
17.3
|
|
45.9%
|
Tractor Supply IV
|
|
Oct 2017
|
|
2
|
|
51
|
|
6.4
|
|
100.0%
|
Circle K II
|
|
Nov 2017
|
|
6
|
|
20
|
|
17.0
|
|
100.0%
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(In thousands)
|
|
Remaining Lease Term (1)
|
|
Percentage Leased
|
Sonic Drive In II
|
|
Nov 2017
|
|
20
|
|
31
|
|
17.4
|
|
100.0%
|
Bridgestone HOSEPower III
|
|
Dec 2017
|
|
1
|
|
21
|
|
10.0
|
|
100.0%
|
Sonny's BBQ I
|
|
Jan 2018
|
|
3
|
|
19
|
|
13.6
|
|
100.0%
|
Mountain Express I
|
|
Jan 2018
|
|
9
|
|
30
|
|
17.5
|
|
100.0%
|
Kum & Go I
|
|
Feb 2018
|
|
1
|
|
5
|
|
7.9
|
|
100.0%
|
DaVita I
|
|
Feb 2018
|
|
2
|
|
13
|
|
5.7
|
|
100.0%
|
White Oak I
|
|
Mar 2018
|
|
9
|
|
22
|
|
17.8
|
|
100.0%
|
Mountain Express II
|
|
Jun 2018
|
|
15
|
|
59
|
|
17.8
|
|
100.0%
|
Dialysis I
|
|
Jul 2018
|
|
7
|
|
65
|
|
7.9
|
|
100.0%
|
Children of America I
|
|
Aug 2018
|
|
2
|
|
33
|
|
13.2
|
|
79.7%
|
Burger King II
|
|
Aug 2018
|
|
1
|
|
3
|
|
13.2
|
|
100.0%
|
White Oak II
|
|
Aug 2018
|
|
9
|
|
18
|
|
17.3
|
|
100.0%
|
Bob Evans II
|
|
Aug 2018
|
|
22
|
|
112
|
|
16.8
|
|
100.0%
|
Mountain Express III
|
|
Sep 2018
|
|
14
|
|
47
|
|
18.1
|
|
100.0%
|
Taco John's
|
|
Sep 2018
|
|
7
|
|
15
|
|
13.3
|
|
100.0%
|
White Oak III
|
|
Oct 2018
|
|
1
|
|
4
|
|
18.3
|
|
100.0%
|
DaVita II
|
|
Oct 2018
|
|
1
|
|
10
|
|
7.2
|
|
100.0%
|
Pizza Hut I
|
|
Oct 2018
|
|
9
|
|
23
|
|
13.3
|
|
100.0%
|
Little Caesars I
|
|
Dec 2018
|
|
11
|
|
19
|
|
18.5
|
|
100.0%
|
Caliber Collision I
|
|
Dec 2018
|
|
3
|
|
48
|
|
11.8
|
|
100.0%
|
Tractor Supply V
|
|
Dec 2018; Mar 2019
|
|
5
|
|
97
|
|
11.2
|
|
100.0%
|
Fresenius III
|
|
Jan 2019
|
|
6
|
|
44
|
|
6.9
|
|
100.0%
|
Pizza Hut II
|
|
Jan 2019
|
|
31
|
|
90
|
|
18.6
|
|
100.0%
|
Mountain Express IV
|
|
Feb 2019
|
|
8
|
|
28
|
|
18.6
|
|
100.0%
|
Mountain Express V
|
|
Feb 2019; Mar 2019; Apr 2019
|
|
18
|
|
96
|
|
18.7
|
|
100.0%
|
Fresenius IV
|
|
Mar 2019
|
|
1
|
|
9
|
|
11.4
|
|
100.0%
|
Mountain Express VI
|
|
Jun 2019
|
|
1
|
|
3
|
|
18.6
|
|
100.0%
|
IMTAA
|
|
May 2019; Jan 2020
|
|
12
|
|
40
|
|
19.0
|
|
100.0%
|
Pizza Hut III
|
|
May 2019; Jun 2019
|
|
13
|
|
47
|
|
18.9
|
|
100.0%
|
Fresenius V
|
|
Jun 2019
|
|
2
|
|
19
|
|
11.9
|
|
100.0%
|
Fresenius VI
|
|
Jun 2019
|
|
1
|
|
10
|
|
6.5
|
|
100.0%
|
Fresenius VII
|
|
Jun 2019
|
|
3
|
|
59
|
|
10.2
|
|
50.1%
|
Caliber Collision II
|
|
Aug 2019
|
|
1
|
|
19
|
|
8.8
|
|
100.0%
|
Dollar General XXV
|
|
Sep 2019
|
|
5
|
|
44
|
|
10.5
|
|
100.0%
|
Dollar General XXIV
|
|
Sep 2019; Oct 2019
|
|
9
|
|
83
|
|
14.1
|
|
100.0%
|
Mister Carwash I
|
|
Sep 2019
|
|
3
|
|
13
|
|
19.3
|
|
100.0%
|
Checkers I
|
|
Sep 2019
|
|
1
|
|
1
|
|
19.2
|
|
100.0%
|
DaVita III
|
|
Sep 2019; Mar 2020
|
|
2
|
|
20
|
|
9.1
|
|
100.0%
|
Dialysis II
|
|
Sep 2019
|
|
50
|
|
426
|
|
8.2
|
|
100.0%
|
Mister Carwash II
|
|
Nov 2019
|
|
2
|
|
8
|
|
19.4
|
|
100.0%
|
Advance Auto IV
|
|
Dec 2019; Jan 2020
|
|
14
|
|
96
|
|
9.0
|
|
100.0%
|
Advance Auto V
|
|
Dec 2019
|
|
11
|
|
73
|
|
8.5
|
|
100.0%
|
Dollar General XXVI
|
|
Dec 2019
|
|
12
|
|
114
|
|
11.9
|
|
100.0%
|
Pizza Hut IV
|
|
Dec 2019; Mar 2020
|
|
16
|
|
50
|
|
19.5
|
|
100.0%
|
American Car Center I
|
|
Mar 2020
|
|
16
|
|
176
|
|
19.8
|
|
100.0%
|
BJ's Wholesale Club
|
|
Mar 2020
|
|
1
|
|
110
|
|
10.3
|
|
100.0%
|
Mammoth Car Wash
|
|
Mar 2020
|
|
9
|
|
56
|
|
19.8
|
|
100.0%
|
Mammoth Car Wash
|
|
Apr 2020
|
|
1
|
|
16
|
|
19.8
|
|
100.0%
|
Mammoth Car Wash
|
|
Apr 2020
|
|
1
|
|
4
|
|
19.8
|
|
100.0%
|
DaVita IV
|
|
Apr 2020
|
|
1
|
|
10
|
|
11.0
|
|
100.0%
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
(In thousands)
|
|
Remaining Lease Term (1)
|
|
Percentage Leased
|
|
|
|
|
847
|
|
18,897
|
|
8.9
|
|
94.3%
|
(1)
|
Remaining lease term in years as of June 30, 2020. If the portfolio has multiple properties with varying lease expirations, remaining lease term is calculated on a weighted-average basis.
|
(2)
|
Includes one property leased to Truist Bank (formerly known as SunTrust Bank “Truist Bank”) which was unoccupied as of June 30, 2020 and was being marketed for sale. Please see Note 3 — Real Estate Investments to our consolidated financial statements in this Quarterly Report on Form 10-Q for further details.
|
(3)
|
Impaired during the quarter ended June 30, 2020. 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 June 30, 2020
|
||||||||||||||||||||
|
|
|
|
|
|
(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)
|
|
5
|
|
|
111,352
|
|
|
$
|
—
|
|
|
$
|
1,463
|
|
|
$
|
6
|
|
|
$
|
0.05
|
|
Lease renewals/amendments (2)
|
|
31
|
|
|
283,375
|
|
|
$
|
4,491
|
|
|
$
|
4,429
|
|
|
$
|
215
|
|
|
$
|
0.76
|
|
Lease terminations (3)
|
|
4
|
|
|
21,866
|
|
|
$
|
224
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Annualized rental income on a straight-line basis as of June 30, 2020. Represents the GAAP basis annualized straight-line rent that is recognized over the term on the respective leases, which includes free rent, periodic rent increases, and excludes recoveries.
|
(2)
|
New leases reflect leases in which a new tenant took possession of the space during the three months ended June 30, 2020, 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 June 30, 2020. This excludes leases modifications for deferrals/abatements in response to COVID-19 negotiations which qualify for FASB relief. For more information — see Management update on Impacts of the COVID-19 Pandemic - Management’s Actions.
|
(3)
|
Represents leases that were terminated prior to their contractual lease expiration dates.
|
|
Same Store
|
|
Acquisitions
|
|
Disposals
|
|
Total
|
||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Increase (Decrease)
|
|
Three Months Ended June 30,
|
|
Increase (Decrease)
|
|
Three Months Ended June 30,
|
|
Increase (Decrease)
|
|
Three Months Ended June 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||||
|
2020
|
|
2019
|
|
$
|
|
2020
|
|
2019
|
|
$
|
|
2020
|
|
2019
|
|
$
|
|
2020
|
|
2019
|
|
$
|
||||||||||||||||||||||||
Revenue from tenants
|
$
|
63,796
|
|
|
$
|
75,709
|
|
|
$
|
(11,913
|
)
|
|
$
|
11,119
|
|
|
$
|
3,001
|
|
|
$
|
8,118
|
|
|
$
|
19
|
|
|
$
|
399
|
|
|
$
|
(380
|
)
|
|
$
|
74,934
|
|
|
$
|
79,109
|
|
|
$
|
(4,175
|
)
|
Less: Property operating
|
11,627
|
|
|
13,083
|
|
|
(1,456
|
)
|
|
913
|
|
|
46
|
|
|
867
|
|
|
1
|
|
|
8
|
|
|
(7
|
)
|
|
12,541
|
|
|
13,137
|
|
|
(596
|
)
|
||||||||||||
NOI
|
$
|
52,169
|
|
|
$
|
62,626
|
|
|
$
|
(10,457
|
)
|
|
$
|
10,206
|
|
|
$
|
2,955
|
|
|
$
|
7,251
|
|
|
$
|
18
|
|
|
$
|
391
|
|
|
$
|
(373
|
)
|
|
$
|
62,393
|
|
|
$
|
65,972
|
|
|
$
|
(3,579
|
)
|
|
|
Six Months Ended June 30, 2020
|
||||||||||||||||||||
|
|
|
|
|
|
(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)
|
|
16
|
|
|
576,366
|
|
|
$
|
—
|
|
|
$
|
10,051
|
|
|
$
|
580
|
|
|
$
|
1.01
|
|
Lease renewals/amendments (2)
|
|
38
|
|
|
320,053
|
|
|
4,571
|
|
|
5,141
|
|
|
299
|
|
|
0.93
|
|
||||
Lease terminations (3)
|
|
8
|
|
|
40,063
|
|
|
456
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(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 six months ended June 30, 2020, excluding new property acquisitions. Lease renewals/amendments reflect leases in which an existing tenant executed terms to extend the life or change the rental terms of the lease during the six months ended June 30, 2020.
|
(3)
|
Represents leases that were terminated prior to their contractual lease expiration dates.
|
|
Same Store
|
|
Acquisitions
|
Disposals
|
|
Total
|
|||||||||||||||||||||||||||||||||||||||||
|
Six Months Ended June 30,
|
|
Increase (Decrease)
|
|
Six Months Ended June 30,
|
|
Increase (Decrease)
|
|
Six Months Ended June 30,
|
|
Increase (Decrease)
|
|
Six Months Ended June 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||||
|
2020
|
|
2019
|
|
$
|
|
2020
|
|
2019
|
|
$
|
|
2020
|
|
2019
|
|
$
|
|
2020
|
|
2019
|
|
$
|
||||||||||||||||||||||||
Revenue from tenants
|
$
|
128,883
|
|
|
$
|
143,435
|
|
|
$
|
(14,552
|
)
|
|
$
|
20,449
|
|
|
$
|
4,156
|
|
|
$
|
16,293
|
|
|
$
|
166
|
|
|
$
|
3,059
|
|
|
$
|
(2,893
|
)
|
|
$
|
149,498
|
|
|
$
|
150,650
|
|
|
$
|
(1,152
|
)
|
Less: Property operating
|
23,613
|
|
|
25,867
|
|
|
(2,254
|
)
|
|
1,209
|
|
|
55
|
|
|
1,154
|
|
|
1
|
|
|
51
|
|
|
(50
|
)
|
|
24,823
|
|
|
25,973
|
|
|
(1,150
|
)
|
||||||||||||
NOI
|
$
|
105,270
|
|
|
$
|
117,568
|
|
|
$
|
(12,298
|
)
|
|
$
|
19,240
|
|
|
$
|
4,101
|
|
|
$
|
15,139
|
|
|
$
|
165
|
|
|
$
|
3,008
|
|
|
$
|
(2,843
|
)
|
|
$
|
124,675
|
|
|
$
|
124,677
|
|
|
$
|
(2
|
)
|
(In thousands)
|
|
Six Months Ended June 30, 2020
|
||
Capital Expenditures
|
|
|
||
Revenue enhancing
|
|
$
|
3,100
|
|
Prairie Towne Tenant Improvements
|
|
3,111
|
|
|
Maintenance
|
|
36
|
|
|
Total Capital Expenditures
|
|
6,247
|
|
|
Leasing commissions
|
|
234
|
|
|
Total
|
|
$
|
6,481
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net (loss) income attributable to common stockholders (in accordance with GAAP)
|
|
$
|
(21,803
|
)
|
|
$
|
7,884
|
|
|
$
|
(30,956
|
)
|
|
$
|
4,657
|
|
Impairment charges
|
|
11,502
|
|
|
4
|
|
|
11,502
|
|
|
827
|
|
||||
Depreciation and amortization
|
|
35,443
|
|
|
30,924
|
|
|
69,778
|
|
|
63,010
|
|
||||
Gain on sale of real estate investments
|
|
(2,838
|
)
|
|
(14,365
|
)
|
|
(4,278
|
)
|
|
(17,238
|
)
|
||||
Proportionate share of adjustments for non-controlling interests to arrive at FFO
|
|
(71
|
)
|
|
(27
|
)
|
|
(123
|
)
|
|
(76
|
)
|
||||
FFO (as defined by NAREIT) attributable to common stockholders (1)
|
|
22,233
|
|
|
24,420
|
|
|
45,923
|
|
|
51,180
|
|
||||
Acquisition, transaction and other costs (2)
|
|
721
|
|
|
1,892
|
|
|
1,173
|
|
|
2,746
|
|
||||
Litigation cost reimbursements related to the Merger (3)
|
|
—
|
|
|
(115
|
)
|
|
(9
|
)
|
|
(1,948
|
)
|
||||
Legal fees and expenses — COVID-19 lease disputes (4)
|
|
242
|
|
|
—
|
|
|
242
|
|
|
—
|
|
||||
Amortization (accretion) of market lease and other intangibles, net
|
|
(2,289
|
)
|
|
(1,723
|
)
|
|
(3,281
|
)
|
|
(3,562
|
)
|
||||
Straight-line rent
|
|
(5,442
|
)
|
|
(1,566
|
)
|
|
(7,707
|
)
|
|
(2,762
|
)
|
||||
Straight-line rent (rent deferral agreements) (5)
|
|
2,082
|
|
|
—
|
|
|
2,082
|
|
|
—
|
|
||||
Amortization of mortgage discounts (premiums) on borrowings, net
|
|
(589
|
)
|
|
(839
|
)
|
|
(1,149
|
)
|
|
(1,633
|
)
|
||||
Equity-based compensation
|
|
3,247
|
|
|
3,268
|
|
|
6,458
|
|
|
6,289
|
|
||||
Amortization of deferred financing costs, net and change in accrued interest
|
|
990
|
|
|
3,062
|
|
|
2,702
|
|
|
4,391
|
|
||||
Goodwill impairment (6)
|
|
—
|
|
|
1,605
|
|
|
—
|
|
|
1,605
|
|
||||
Proportionate share of adjustments for non-controlling interests to arrive at AFFO
|
|
(1
|
)
|
|
(7
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
AFFO attributable to common stockholders (1)
|
|
$
|
21,194
|
|
|
$
|
29,997
|
|
|
$
|
46,431
|
|
|
$
|
56,300
|
|
(1)
|
FFO and AFFO for the three and six months ended June 30, 2019 includes income from a lease termination fee of $7.6 million, which is recorded in Revenue from tenants in the consolidated statements of operations. While such termination payments occur infrequently, they represent cash income for accounting and tax purposes and as such management believes they should be included in both FFO and AFFO, consistent with what we believe to be general industry practice.
|
(2)
|
Includes primarily prepayment costs incurred in connection with early debt extinguishment as well as litigation costs related to the Merger.
|
(3)
|
Included in “Other income” in our consolidated statement of operations and comprehensive loss.
|
(4)
|
Reflects legal costs incurred during the second quarter related to disputes with tenants due to store closures or other challenges resulting from COVID-19. The tenants involved in these disputes had not recently defaulted on their rent and, prior to the second quarter of 2020, had recently exhibited a pattern of regular payment. Based on the tenants involved in these matters, their history of rent payments, and the impact of the pandemic on current economic conditions, we view these costs as COVID-19-related and separable from the our ordinary general and administrative expenses related to tenant defaults. We engaged counsel in connection with these issues separate and distinct from counsel we typically engage for tenant defaults. The amount reflects what the we believe to be only those incremental legal costs above what we typically incur for tenant-related dispute issues. We may continue to incur these COVID-19 related legal costs in the future.
|
(5)
|
Represents the amount of deferred rent pursuant to lease negotiations which qualify for FASB relief for which rent was deferred but not reduced. These amounts are included in the straight-line rent receivable on our balance sheet but are considered to be cash, for purposes of AFFO, that is expected to be collected.
|
(6)
|
This is a non-cash item and is added back as it is not considered a part of operating performance.
|
(In thousands)
|
|
Same Store
|
|
Acquisitions
|
|
Disposals
|
|
Non-Property Specific
|
|
Total
|
||||||||||
Net income (loss) attributable to common stockholders (in accordance with GAAP)
|
|
$
|
(6,640
|
)
|
|
$
|
5,871
|
|
|
$
|
2,855
|
|
|
$
|
(23,889
|
)
|
|
$
|
(21,803
|
)
|
Asset management fees to related party
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,918
|
|
|
6,918
|
|
|||||
Impairment of real estate investments
|
|
11,502
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,502
|
|
|||||
Acquisition, transaction and other costs
|
|
259
|
|
|
—
|
|
|
—
|
|
|
462
|
|
|
721
|
|
|||||
Equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,247
|
|
|
3,247
|
|
|||||
General and administrative
|
|
516
|
|
|
42
|
|
|
1
|
|
|
6,305
|
|
|
6,864
|
|
|||||
Depreciation and amortization
|
|
31,150
|
|
|
4,293
|
|
|
—
|
|
|
—
|
|
|
35,443
|
|
|||||
Interest expense
|
|
15,390
|
|
|
—
|
|
|
—
|
|
|
3,411
|
|
|
18,801
|
|
|||||
Gain on sale of real estate investments
|
|
—
|
|
|
—
|
|
|
(2,838
|
)
|
|
—
|
|
|
(2,838
|
)
|
|||||
Other income
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
(61
|
)
|
|||||
Preferred Stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,619
|
|
|
3,619
|
|
|||||
Net loss attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|||||
NOI
|
|
$
|
52,169
|
|
|
$
|
10,206
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
62,393
|
|
(In thousands)
|
|
Same Store
|
|
Acquisitions
|
|
Disposals
|
|
Non-Property Specific
|
|
Total
|
||||||||||
Net income (loss) attributable to common stockholders (in accordance with GAAP)
|
|
$
|
16,051
|
|
|
$
|
2,017
|
|
|
$
|
14,112
|
|
|
$
|
(24,296
|
)
|
|
$
|
7,884
|
|
Asset management fees to related party
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,335
|
|
|
6,335
|
|
|||||
Impairment of real estate investments
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Acquisition, transaction and other costs
|
|
1,606
|
|
|
1
|
|
|
—
|
|
|
285
|
|
|
1,892
|
|
|||||
Equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,268
|
|
|
3,268
|
|
|||||
General and administrative
|
|
417
|
|
|
9
|
|
|
1
|
|
|
6,014
|
|
|
6,441
|
|
|||||
Depreciation and amortization
|
|
29,356
|
|
|
928
|
|
|
640
|
|
|
—
|
|
|
30,924
|
|
|||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,605
|
|
|
1,605
|
|
|||||
Interest expense
|
|
15,729
|
|
|
|
|
—
|
|
|
6,266
|
|
|
21,995
|
|
||||||
Gain on sale of real estate investments
|
|
—
|
|
|
—
|
|
|
(14,365
|
)
|
|
—
|
|
|
(14,365
|
)
|
|||||
Other income
|
|
(533
|
)
|
|
—
|
|
|
(1
|
)
|
|
(133
|
)
|
|
(667
|
)
|
|||||
Preferred Stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
642
|
|
|
642
|
|
|||||
Net loss attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|||||
NOI
|
|
$
|
62,626
|
|
|
$
|
2,955
|
|
|
$
|
391
|
|
|
$
|
—
|
|
|
$
|
65,972
|
|
(In thousands)
|
|
Same Store
|
|
Acquisitions
|
|
Disposals
|
|
Non-Property Specific
|
|
Total
|
||||||||||
Net (loss) income attributable to stockholders (in accordance with GAAP)
|
|
$
|
134
|
|
|
$
|
10,987
|
|
|
$
|
4,418
|
|
|
$
|
(46,495
|
)
|
|
$
|
(30,956
|
)
|
Asset management fees to related party
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,823
|
|
|
13,823
|
|
|||||
Impairment charges
|
|
11,502
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,502
|
|
|||||
Acquisition and transaction related
|
|
356
|
|
|
—
|
|
|
—
|
|
|
817
|
|
|
1,173
|
|
|||||
Equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,458
|
|
|
6,458
|
|
|||||
General and administrative
|
|
909
|
|
|
86
|
|
|
4
|
|
|
11,193
|
|
|
12,192
|
|
|||||
Depreciation and amortization
|
|
61,590
|
|
|
8,167
|
|
|
21
|
|
|
—
|
|
|
69,778
|
|
|||||
Interest expense
|
|
30,839
|
|
|
—
|
|
|
—
|
|
|
7,068
|
|
|
37,907
|
|
|||||
Gain on sale of real estate investments
|
|
—
|
|
|
—
|
|
|
(4,278
|
)
|
|
—
|
|
|
(4,278
|
)
|
|||||
Other income
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
(133
|
)
|
|||||
Preferred Stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,238
|
|
|
7,238
|
|
|||||
Net income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
|||||
NOI [1]
|
|
$
|
105,270
|
|
|
$
|
19,240
|
|
|
$
|
165
|
|
|
$
|
—
|
|
|
$
|
124,675
|
|
(In thousands)
|
|
Same Store
|
|
Acquisitions
|
|
Disposals
|
|
Non-Property Specific
|
|
Total
|
||||||||||
Net income (loss) attributable to stockholders (in accordance with GAAP)
|
|
$
|
25,435
|
|
|
$
|
2,766
|
|
|
$
|
18,579
|
|
|
$
|
(42,123
|
)
|
|
$
|
4,657
|
|
Asset management fees to related party
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,373
|
|
|
12,373
|
|
|||||
Impairment charges
|
|
700
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
827
|
|
|||||
Acquisition and transaction related
|
|
2,027
|
|
|
—
|
|
|
—
|
|
|
719
|
|
|
2,746
|
|
|||||
Equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,289
|
|
|
6,289
|
|
|||||
General and administrative
|
|
737
|
|
|
9
|
|
|
2
|
|
|
11,754
|
|
|
12,502
|
|
|||||
Depreciation and amortization
|
|
60,143
|
|
|
1,326
|
|
|
1,541
|
|
|
—
|
|
|
63,010
|
|
|||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,605
|
|
|
1,605
|
|
|||||
Interest expense
|
|
29,751
|
|
|
—
|
|
|
—
|
|
|
10,684
|
|
|
40,435
|
|
|||||
Gain on sale of real estate investments
|
|
—
|
|
|
—
|
|
|
(17,238
|
)
|
|
—
|
|
|
(17,238
|
)
|
|||||
Other income
|
|
(1,225
|
)
|
|
—
|
|
|
(3
|
)
|
|
(1,984
|
)
|
|
(3,212
|
)
|
|||||
Preferred stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
672
|
|
|
672
|
|
|||||
Net income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|||||
NOI
|
|
$
|
117,568
|
|
|
$
|
4,101
|
|
|
$
|
3,008
|
|
|
$
|
—
|
|
|
$
|
124,677
|
|
|
|
Three Months Ended
|
Six Months Ended June 30, 2020
|
||||||||||||||||||
|
|
March 31, 2020
|
|
June 30, 2020
|
|
||||||||||||||||
(In thousands)
|
|
Amount
|
|
Percentage of Dividends
|
|
Amount
|
|
Percentage of Dividends
|
|
Amount
|
|
Percentage of Dividends
|
|||||||||
Dividends and other cash distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash dividends paid to common stockholders
|
|
$
|
29,831
|
|
|
|
|
|
$
|
23,058
|
|
|
|
|
|
$
|
52,889
|
|
|
88.0
|
%
|
Cash dividends paid to preferred stockholders
|
|
3,300
|
|
|
|
|
|
3,619
|
|
|
|
|
|
6,919
|
|
|
11.5
|
%
|
|||
Cash distributions on LTIP Units
|
|
123
|
|
|
|
|
|
97
|
|
|
|
|
|
220
|
|
|
0.4
|
%
|
|||
Cash distributions on Class A Units
|
|
48
|
|
|
|
|
|
36
|
|
|
|
|
|
84
|
|
|
0.1
|
%
|
|||
Total dividends and other cash distributions paid
|
|
$
|
33,302
|
|
|
|
|
|
$
|
26,810
|
|
|
|
|
|
$
|
60,112
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Source of dividend and other cash distributions coverage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flows provided by operations
|
|
$
|
24,080
|
|
|
72.3
|
%
|
|
$
|
25,164
|
|
|
93.9
|
%
|
|
$
|
49,244
|
|
(1)
|
81.9
|
%
|
Available cash on hand
|
|
9,222
|
|
|
27.7
|
%
|
|
1,646
|
|
|
6.1
|
%
|
|
10,868
|
|
(1)
|
18.1
|
%
|
|||
Total source of dividend and other cash distributions coverage
|
|
$
|
33,302
|
|
|
100.0
|
%
|
|
$
|
26,810
|
|
|
100.0
|
%
|
|
$
|
60,112
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flows provided by operations (GAAP basis)
|
|
$
|
24,080
|
|
|
|
|
$
|
25,164
|
|
|
|
|
$
|
49,244
|
|
|
|
|||
Net loss attributable to common stockholders (in accordance with GAAP)
|
|
$
|
(9,153
|
)
|
|
|
|
$
|
(21,803
|
)
|
|
|
|
$
|
(30,956
|
)
|
|
|
•
|
difficulty accessing debt and equity capital on favorable terms, or at all, due to the severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital, or increase the cost of capital, necessary to fund the purchase of properties and meet other capital requirements, such as refinancing maturing liabilities on a timely basis, or at all, and paying dividends, and may have similar effects on our tenants and their ability to fund their business operations and meet their obligations to us;
|
•
|
disruption and instability in the global financial markets or deteriorations in credit and financing conditions could have an impact on the overall amount of capital being invested in real estate and could result in price or value decreases for real estate assets, which could negatively impact the value of our assets and may result in future acquisitions generating lower overall economic returns;
|
•
|
the volatility in the global stock markets caused by the COVID-19 pandemic and its effects and the recent declines in our stock price could dilute our stockholders’ interest in us if we sell additional equity securities at prices less than the prices our stockholders paid for their shares;
|
•
|
we may reduce the number of properties we seek to acquire in the future and, following the amendment to our Credit Facility in July 2020, we are not permitted to acquire multi-tenant properties during the Adjustment Period;
|
•
|
if we are not able to generate sufficient cash from operations, we may have to further reduce the amount of dividends we pay or identify other financing sources, and there can be no assurance that other sources will be available on favorable terms, or at all;
|
•
|
during the Adjustment Period, we are restricted from using proceeds from borrowings under the Credit Facility to accumulate or maintain cash or cash equivalents in excess of amounts necessary to meet current working capital requirements, and we are required to maintain a combination of cash, cash equivalents and amounts available for future borrowings under the Credit Facility of not less than $100.0 million, which could limit our ability to incur additional indebtedness and use cash that would otherwise be available to us;
|
•
|
our dependence on maintaining sufficient availability under our Credit Facility to fund the purchase of properties and meet other capital requirements and maintain compliance with restrictions on the payment of dividends in our Credit Facility;
|
•
|
decreases in cash rent collected from our tenants may decrease the availability of future borrowings under our Credit Facility;
|
•
|
if we are unable to comply with financial covenants and other obligations under of our Credit Facility and other debt agreements, including restrictions on the payment of dividends under our Credit Facility, we could default under those agreements which could potentially result in an acceleration of our indebtedness or foreclosure on our properties and could otherwise negatively impact our liquidity and there can be assurance that our lenders will consent to any amendment, such as the amendment entered into in July 2020, necessary to maintain compliance with our Credit Facility;
|
•
|
we have and may continue to recognize impairment charges on our assets;
|
•
|
one or more counterparties to our derivative financial instruments could default on their obligations to us or could fail, increasing the risk that we may not realize the benefits of utilizing these instruments;
|
•
|
with respect to our leases, we may be required to record reserves on previously accrued amounts in cases where it is subsequently concluded that collection is not probable;
|
•
|
difficulties completing capital improvements at our properties on a timely basis, on budget or at all, could affect the value of our properties;
|
•
|
our ability to ensure business continuity in the event our Advisor’s continuity of operations plan is not effective or is improperly implemented or deployed during a disruption;
|
•
|
increased operating risks resulting from changes to our Advisor’s operations and remote work arrangements, including the potential effects on our financial reporting systems and internal controls and procedures, cybersecurity risks and increased vulnerability to security breaches, information technology disruptions and other similar events;
|
•
|
increased operating risks resulting from changes to Lincoln’s operations, including its personnel, which may adversely impact real estate-related services provided by Lincoln with respect to our multi-tenant retail properties; and
|
•
|
complying with REIT requirements during a period of reduced cash flow could cause us to liquidate otherwise attractive investments or borrow funds on unfavorable conditions.
|
|
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
|
|
Articles of Amendment and Restatement
|
|
|
Fourth Amended and Restated Bylaws
|
|
|
Amendment to Fourth Amended and Restated Bylaws of American Finance Trust, Inc.
|
|
|
Articles Supplementary relating to election to be subject to Section 3-803 of MGCL
|
|
|
Articles of Amendment relating to reverse stock split, dated July 3, 2018
|
|
|
Articles of Amendment relating to par value decrease, dated July 3, 2018
|
|
|
Articles of Amendment relating to common stock name change, dated July 3, 2018
|
|
|
Articles Supplementary relating to reclassification of common stock, dated July 3, 2018
|
|
|
Certification of Notice of American Finance Trust, Inc. filed with the State Department of Assessments and Taxation of Maryland on September 18, 2018
|
|
|
Certification of Notice of American Finance Trust, Inc. filed with the State Department of Assessments and Taxation of Maryland on December 20, 2018
|
|
|
Articles Supplementary designating 7.50% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share
|
|
|
Articles Supplementary designating additional shares of 7.50% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share, dated May 8, 2019.
|
|
|
Articles Supplementary classifying additional shares of 7.50% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share, dated September 6, 2019
|
|
|
Articles Supplementary designating additional shares of 7.50% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share, dated October 4, 2019
|
|
|
Articles Supplementary for Series B Preferred Stock
|
|
|
Rights Agreement, dated April 13, 2020, between American Finance Trust, Inc. and Computershare Trust Company, N.A., as Rights Agent
|
|
|
Loan Agreement, dated as of July 24, 2020, by and among the entities listed on Schedule I thereto, as borrowers, and Column Financial, Inc., as lender
|
|
|
Limited Recourse Guaranty, dated as of July 24, 2020, by American Finance Operating Partnership, L.P. in favor of Column Financial, Inc.
|
|
|
Environmental Indemnity Agreement, dated as of July 24, 2020, by and among the entities listed on Schedule I thereto, American Finance Operating Partnership, L.P. and Column Financial, Inc.
|
|
|
Property Management and Leasing Agreement, dated as of July 24, 2020, by and among the parties identified on Exhibit A thereto and American Finance Properties, LLC
|
|
|
Third Amendment to Credit Agreement and Consent, entered into as of July 24, 2020 and effective as of April 1, 2020, among American Finance Operating Partnership, L.P., a Delaware limited partnership, Genie Acquisition, LLC, American Finance Trust, Inc., the other guarantors party thereto, the lenders party hereto, and BMO Harris Bank N.A., as administrative agent
|
|
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.INS *
|
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
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 - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
*
|
Filed herewith.
|
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 6th day of August, 2020
|
|
/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 6th day of August, 2020
|
|
/s/ Katie P. Kurtz
|
|
|
Katie P. Kurtz
|
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
|
(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)
|