|
|
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
MARYLAND
|
46-2024407
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
11620 Wilshire Boulevard, Suite 1000,
Los Angeles, California
|
90025
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
Large accelerated filer
|
þ
|
|
Accelerated filer
|
¨
|
|
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Land
|
$
|
925,360
|
|
|
$
|
683,919
|
|
Buildings and improvements
|
1,051,037
|
|
|
811,614
|
|
||
Tenant improvements
|
47,663
|
|
|
38,644
|
|
||
Furniture, fixtures and equipment
|
167
|
|
|
174
|
|
||
Construction in progress
|
33,158
|
|
|
17,778
|
|
||
Total real estate held for investment
|
2,057,385
|
|
|
1,552,129
|
|
||
Accumulated depreciation
|
(165,385
|
)
|
|
(135,140
|
)
|
||
Investments in real estate, net
|
1,892,000
|
|
|
1,416,989
|
|
||
Cash and cash equivalents
|
12,918
|
|
|
15,525
|
|
||
Note receivable, net
|
—
|
|
|
5,934
|
|
||
Rents and other receivables, net
|
3,040
|
|
|
2,749
|
|
||
Deferred rent receivable, net
|
14,929
|
|
|
11,873
|
|
||
Deferred leasing costs, net
|
10,756
|
|
|
8,672
|
|
||
Deferred loan costs, net
|
2,084
|
|
|
847
|
|
||
Acquired lease intangible assets, net
|
49,147
|
|
|
36,365
|
|
||
Acquired indefinite-lived intangible
|
5,156
|
|
|
5,170
|
|
||
Interest rate swap asset
|
4,752
|
|
|
5,594
|
|
||
Other assets
|
7,144
|
|
|
5,290
|
|
||
Acquisition related deposits
|
1,075
|
|
|
—
|
|
||
Total Assets
|
$
|
2,003,001
|
|
|
$
|
1,515,008
|
|
LIABILITIES & EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Notes payable
|
$
|
664,209
|
|
|
$
|
500,184
|
|
Interest rate swap liability
|
785
|
|
|
2,045
|
|
||
Accounts payable, accrued expenses and other liabilities
|
22,190
|
|
|
13,585
|
|
||
Dividends payable
|
11,580
|
|
|
9,282
|
|
||
Acquired lease intangible liabilities, net
|
18,147
|
|
|
9,130
|
|
||
Tenant security deposits
|
19,149
|
|
|
15,187
|
|
||
Prepaid rents
|
5,738
|
|
|
3,455
|
|
||
Total Liabilities
|
741,798
|
|
|
552,868
|
|
||
Equity
|
|
|
|
||||
Rexford Industrial Realty, Inc. stockholders’ equity
|
|
|
|
||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized; 5.875% series A cumulative redeemable preferred stock, liquidation preference $25.00 per share, 3,600,000 shares outstanding at September 30, 2017 and December 31, 2016
|
86,651
|
|
|
86,651
|
|
||
Common Stock, $0.01 par value 490,000,000 shares authorized and 77,595,240 and 66,454,375 shares outstanding at September 30, 2017 and December 31, 2016, respectively
|
773
|
|
|
662
|
|
||
Additional paid in capital
|
1,213,123
|
|
|
907,834
|
|
||
Cumulative distributions in excess of earnings
|
(67,578
|
)
|
|
(59,277
|
)
|
||
Accumulated other comprehensive income
|
3,870
|
|
|
3,445
|
|
||
Total stockholders’ equity
|
1,236,839
|
|
|
939,315
|
|
||
Noncontrolling interests
|
24,364
|
|
|
22,825
|
|
||
Total Equity
|
1,261,203
|
|
|
962,140
|
|
||
Total Liabilities and Equity
|
$
|
2,003,001
|
|
|
$
|
1,515,008
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
RENTAL REVENUES
|
|
|
|
|
|
|
|
||||||||
Rental income
|
$
|
36,748
|
|
|
$
|
28,285
|
|
|
$
|
97,494
|
|
|
$
|
77,903
|
|
Tenant reimbursements
|
6,279
|
|
|
4,467
|
|
|
16,606
|
|
|
12,144
|
|
||||
Other income
|
203
|
|
|
192
|
|
|
550
|
|
|
764
|
|
||||
TOTAL RENTAL REVENUES
|
43,230
|
|
|
32,944
|
|
|
114,650
|
|
|
90,811
|
|
||||
Management, leasing and development services
|
109
|
|
|
131
|
|
|
380
|
|
|
376
|
|
||||
Interest income
|
—
|
|
|
228
|
|
|
445
|
|
|
228
|
|
||||
TOTAL REVENUES
|
43,339
|
|
|
33,303
|
|
|
115,475
|
|
|
91,415
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Property expenses
|
11,229
|
|
|
8,978
|
|
|
29,987
|
|
|
24,480
|
|
||||
General and administrative
|
5,843
|
|
|
5,067
|
|
|
16,052
|
|
|
13,190
|
|
||||
Depreciation and amortization
|
17,971
|
|
|
13,341
|
|
|
46,085
|
|
|
37,165
|
|
||||
TOTAL OPERATING EXPENSES
|
35,043
|
|
|
27,386
|
|
|
92,124
|
|
|
74,835
|
|
||||
OTHER EXPENSES
|
|
|
|
|
|
|
|
||||||||
Acquisition expenses
|
16
|
|
|
380
|
|
|
421
|
|
|
1,490
|
|
||||
Interest expense
|
6,271
|
|
|
3,804
|
|
|
14,571
|
|
|
10,774
|
|
||||
TOTAL OTHER EXPENSES
|
6,287
|
|
|
4,184
|
|
|
14,992
|
|
|
12,264
|
|
||||
TOTAL EXPENSES
|
41,330
|
|
|
31,570
|
|
|
107,116
|
|
|
87,099
|
|
||||
Equity in income from unconsolidated real estate entities
|
—
|
|
|
1,328
|
|
|
11
|
|
|
1,451
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
||||
Gains on sale of real estate
|
—
|
|
|
—
|
|
|
19,237
|
|
|
11,563
|
|
||||
NET INCOME
|
2,009
|
|
|
3,061
|
|
|
27,585
|
|
|
17,330
|
|
||||
Less: net income attributable to noncontrolling interest
|
(21
|
)
|
|
(63
|
)
|
|
(684
|
)
|
|
(533
|
)
|
||||
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.
|
1,988
|
|
|
2,998
|
|
|
26,901
|
|
|
16,797
|
|
||||
Less: preferred stock dividends
|
(1,322
|
)
|
|
(661
|
)
|
|
(3,966
|
)
|
|
(661
|
)
|
||||
Less: earnings allocated to participating securities
|
(80
|
)
|
|
(70
|
)
|
|
(327
|
)
|
|
(223
|
)
|
||||
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
586
|
|
|
$
|
2,267
|
|
|
$
|
22,608
|
|
|
$
|
15,913
|
|
Net income attributable to common stockholders per share - basic and diluted
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.33
|
|
|
$
|
0.26
|
|
Weighted average shares of common stock outstanding - basic
|
72,621,219
|
|
|
65,707,476
|
|
|
68,984,047
|
|
|
61,694,835
|
|
||||
Weighted average shares of common stock outstanding - diluted
|
73,068,081
|
|
|
67,985,177
|
|
|
69,364,855
|
|
|
61,919,976
|
|
||||
Dividends declared per common share
|
$
|
0.145
|
|
|
$
|
0.135
|
|
|
$
|
0.435
|
|
|
$
|
0.405
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
2,009
|
|
|
$
|
3,061
|
|
|
$
|
27,585
|
|
|
$
|
17,330
|
|
Other comprehensive income (loss): cash flow hedge adjustment
|
662
|
|
|
1,613
|
|
|
418
|
|
|
(2,794
|
)
|
||||
Comprehensive income
|
2,671
|
|
|
4,674
|
|
|
28,003
|
|
|
14,536
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
(29
|
)
|
|
(112
|
)
|
|
(677
|
)
|
|
(470
|
)
|
||||
Comprehensive income attributable to Rexford Industrial Realty, Inc.
|
$
|
2,642
|
|
|
$
|
4,562
|
|
|
$
|
27,326
|
|
|
$
|
14,066
|
|
|
Preferred Stock
|
|
Number of
Shares
|
|
Common
Stock
|
|
Additional
Paid-in Capital
|
|
Cumulative Distributions in Excess of Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|||||||||||||||||
Balance at January 1, 2017
|
$
|
86,651
|
|
|
66,454,375
|
|
|
$
|
662
|
|
|
$
|
907,834
|
|
|
$
|
(59,277
|
)
|
|
$
|
3,445
|
|
|
$
|
939,315
|
|
|
$
|
22,825
|
|
|
$
|
962,140
|
|
Issuance of common stock
|
—
|
|
|
11,043,880
|
|
|
110
|
|
|
308,994
|
|
|
—
|
|
|
—
|
|
|
309,104
|
|
|
—
|
|
|
309,104
|
|
||||||||
Offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,236
|
)
|
|
—
|
|
|
—
|
|
|
(5,236
|
)
|
|
—
|
|
|
(5,236
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
67,132
|
|
|
1
|
|
|
1,711
|
|
|
—
|
|
|
—
|
|
|
1,712
|
|
|
2,478
|
|
|
4,190
|
|
||||||||
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock
|
—
|
|
|
(31,403
|
)
|
|
—
|
|
|
(798
|
)
|
|
—
|
|
|
—
|
|
|
(798
|
)
|
|
—
|
|
|
(798
|
)
|
||||||||
Conversion of units to common stock
|
—
|
|
|
61,256
|
|
|
—
|
|
|
618
|
|
|
—
|
|
|
—
|
|
|
618
|
|
|
(618
|
)
|
|
—
|
|
||||||||
Net income
|
3,966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,935
|
|
|
—
|
|
|
26,901
|
|
|
684
|
|
|
27,585
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
425
|
|
|
425
|
|
|
(7
|
)
|
|
418
|
|
||||||||
Preferred stock dividends
|
(3,966
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,966
|
)
|
|
—
|
|
|
(3,966
|
)
|
||||||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,236
|
)
|
|
—
|
|
|
(31,236
|
)
|
|
—
|
|
|
(31,236
|
)
|
||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(998
|
)
|
|
(998
|
)
|
||||||||
Balance at September 30, 2017
|
$
|
86,651
|
|
|
77,595,240
|
|
|
$
|
773
|
|
|
$
|
1,213,123
|
|
|
$
|
(67,578
|
)
|
|
$
|
3,870
|
|
|
$
|
1,236,839
|
|
|
$
|
24,364
|
|
|
$
|
1,261,203
|
|
|
Preferred Stock
|
|
Number of
Shares
|
|
Common
Stock
|
|
Additional
Paid-in Capital
|
|
Cumulative Distributions in Excess of Earnings
|
|
Accumulated
Other Comprehensive Loss |
|
Total
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|||||||||||||||||
Balance at January 1, 2016
|
$
|
—
|
|
|
55,598,684
|
|
|
$
|
553
|
|
|
$
|
722,722
|
|
|
$
|
(48,103
|
)
|
|
$
|
(3,033
|
)
|
|
$
|
672,139
|
|
|
$
|
21,605
|
|
|
$
|
693,744
|
|
Issuance of preferred stock
|
90,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90,000
|
|
|
—
|
|
|
90,000
|
|
||||||||
Issuance of common stock
|
—
|
|
|
10,350,000
|
|
|
104
|
|
|
182,574
|
|
|
—
|
|
|
—
|
|
|
182,678
|
|
|
—
|
|
|
182,678
|
|
||||||||
Offering costs
|
(3,336
|
)
|
|
—
|
|
|
—
|
|
|
(8,435
|
)
|
|
—
|
|
|
—
|
|
|
(11,771
|
)
|
|
—
|
|
|
(11,771
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
77,093
|
|
|
1
|
|
|
1,489
|
|
|
—
|
|
|
—
|
|
|
1,490
|
|
|
1,500
|
|
|
2,990
|
|
||||||||
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock
|
—
|
|
|
(25,236
|
)
|
|
—
|
|
|
(501
|
)
|
|
—
|
|
|
—
|
|
|
(501
|
)
|
|
—
|
|
|
(501
|
)
|
||||||||
Conversion of units to common stock
|
—
|
|
|
47,800
|
|
|
—
|
|
|
505
|
|
|
—
|
|
|
—
|
|
|
505
|
|
|
(505
|
)
|
|
—
|
|
||||||||
Acquisition of real estate portfolio
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
125
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,797
|
|
|
—
|
|
|
16,797
|
|
|
533
|
|
|
17,330
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,731
|
)
|
|
(2,731
|
)
|
|
(63
|
)
|
|
(2,794
|
)
|
||||||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,345
|
)
|
|
—
|
|
|
(25,345
|
)
|
|
—
|
|
|
(25,345
|
)
|
||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(898
|
)
|
|
(898
|
)
|
||||||||
Balance at September 30, 2016
|
$
|
86,664
|
|
|
66,048,341
|
|
|
$
|
658
|
|
|
$
|
898,354
|
|
|
$
|
(56,651
|
)
|
|
$
|
(5,764
|
)
|
|
$
|
923,261
|
|
|
$
|
22,297
|
|
|
$
|
945,558
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
27,585
|
|
|
$
|
17,330
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Equity in income from unconsolidated real estate entities
|
(11
|
)
|
|
(1,451
|
)
|
||
Provision for doubtful accounts
|
863
|
|
|
1,105
|
|
||
Depreciation and amortization
|
46,085
|
|
|
37,165
|
|
||
Amortization of (below) above market lease intangibles, net
|
(1,203
|
)
|
|
17
|
|
||
Accretion of loan origination fees
|
(150
|
)
|
|
(75
|
)
|
||
Deferred interest income on notes receivable
|
84
|
|
|
(42
|
)
|
||
Loss on extinguishment of debt
|
22
|
|
|
—
|
|
||
Gain on sale of real estate
|
(19,237
|
)
|
|
(11,563
|
)
|
||
Amortization of debt issuance costs
|
853
|
|
|
748
|
|
||
Accretion of premium on notes payable
|
(131
|
)
|
|
(178
|
)
|
||
Equity based compensation expense
|
4,070
|
|
|
2,879
|
|
||
Straight-line rent
|
(3,259
|
)
|
|
(3,412
|
)
|
||
Change in working capital components:
|
|
|
|
||||
Rents and other receivables
|
(1,154
|
)
|
|
(688
|
)
|
||
Deferred leasing costs
|
(3,612
|
)
|
|
(3,787
|
)
|
||
Other assets
|
(2,301
|
)
|
|
(10
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
6,227
|
|
|
3,910
|
|
||
Tenant security deposits
|
2,054
|
|
|
1,830
|
|
||
Prepaid rents
|
1,344
|
|
|
232
|
|
||
Net cash provided by operating activities
|
58,129
|
|
|
44,010
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Acquisition of investments in real estate
|
(532,108
|
)
|
|
(308,277
|
)
|
||
Capital expenditures
|
(29,182
|
)
|
|
(23,687
|
)
|
||
Acquisition related deposits
|
(1,075
|
)
|
|
(400
|
)
|
||
Distributions from unconsolidated real estate entities
|
11
|
|
|
5,530
|
|
||
Issuance of notes receivable
|
—
|
|
|
(5,700
|
)
|
||
Principal repayments of note receivable
|
6,000
|
|
|
—
|
|
||
Proceeds from sale of real estate
|
64,406
|
|
|
20,435
|
|
||
Net cash used in investing activities
|
(491,948
|
)
|
|
(312,099
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Issuance of preferred stock, net
|
—
|
|
|
87,032
|
|
||
Issuance of common stock, net
|
303,868
|
|
|
174,302
|
|
||
Proceeds from notes payable
|
552,000
|
|
|
263,000
|
|
||
Repayment of notes payable
|
(387,497
|
)
|
|
(178,923
|
)
|
||
Debt issuance costs
|
(2,266
|
)
|
|
(1,924
|
)
|
||
Debt extinguishment costs
|
(193
|
)
|
|
—
|
|
||
Dividends paid to preferred stockholders
|
(3,966
|
)
|
|
—
|
|
||
Dividends paid to common stockholders
|
(28,955
|
)
|
|
(23,935
|
)
|
||
Distributions paid to common unitholders
|
(981
|
)
|
|
(900
|
)
|
||
Repurchase of common shares to satisfy employee tax withholding requirements
|
(798
|
)
|
|
(501
|
)
|
||
Net cash provided by financing activities
|
431,212
|
|
|
318,151
|
|
||
(Decrease) increase in cash and cash equivalents
|
(2,607
|
)
|
|
50,062
|
|
||
Cash and cash equivalents, beginning of period
|
15,525
|
|
|
5,201
|
|
||
Cash and cash equivalents, end of period
|
$
|
12,918
|
|
|
$
|
55,263
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest (net of capitalized interest of $1,311 and $1,315 for the nine months ended September 30, 2017 and 2016, respectively)
|
$
|
14,105
|
|
|
$
|
11,125
|
|
Supplemental disclosure of noncash investing and financing transactions:
|
|
|
|
||||
Capital expenditure accruals
|
$
|
1,659
|
|
|
$
|
2,886
|
|
Accrual of dividends
|
$
|
11,580
|
|
|
$
|
9,214
|
|
Accrual of offering costs
|
$
|
—
|
|
|
$
|
427
|
|
1.
|
Organization
|
2.
|
Summary of Significant Accounting Policies
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Rents and other receivables
|
$
|
5,262
|
|
|
$
|
5,565
|
|
Allowance for doubtful accounts
|
(2,222
|
)
|
|
(2,816
|
)
|
||
Rents and other receivables, net
|
$
|
3,040
|
|
|
$
|
2,749
|
|
|
|
|
|
||||
Deferred rent receivable
|
$
|
14,992
|
|
|
$
|
11,903
|
|
Allowance for doubtful accounts
|
(63
|
)
|
|
(30
|
)
|
||
Deferred rent receivable, net
|
$
|
14,929
|
|
|
$
|
11,873
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Provision for doubtful accounts
|
$
|
231
|
|
|
$
|
228
|
|
|
$
|
897
|
|
|
$
|
1,061
|
|
3.
|
Investments in Real Estate
|
Property
|
|
Submarket
|
|
Date of Acquisition
|
|
Rentable Square Feet
|
|
Number of Buildings
|
|
Contractual Purchase Price
(1)
(in thousands)
|
|||
28903 Avenue Paine
(2)
|
|
Los Angeles - San Fernando Valley
|
|
2/17/2017
|
|
111,346
|
|
|
1
|
|
$
|
17,060
|
|
2390 Ward Avenue
(3)
|
|
Ventura
|
|
4/28/2017
|
|
138,700
|
|
|
1
|
|
16,499
|
|
|
Safari Business Center
(4)
|
|
Inland Empire - West
|
|
5/24/2017
|
|
1,138,090
|
|
|
16
|
|
141,200
|
|
|
4175 Conant Street
(5)
|
|
Los Angeles - South Bay
|
|
6/14/2017
|
|
142,593
|
|
|
1
|
|
30,600
|
|
|
5421 Argosy Avenue
(5)
|
|
Orange County - West
|
|
6/15/2017
|
|
35,321
|
|
|
1
|
|
5,300
|
|
|
14820-14830 Carmenita Road
(2)
|
|
Los Angeles - Mid-counties
|
|
6/30/2017
|
|
198,062
|
|
|
3
|
|
30,650
|
|
|
3002-3072 Inland Empire Blvd
(2)
|
|
Inland Empire - West
|
|
7/3/2017
|
|
218,407
|
|
|
4
|
|
26,900
|
|
|
17000 Kingsview Avenue
(2)
|
|
Los Angeles - South Bay
|
|
7/11/2017
|
|
100,121
|
|
|
1
|
|
13,986
|
|
|
Rancho Pacifica Park
(6)
|
|
Los Angeles - South Bay
|
|
7/18/2017
|
|
1,170,806
|
|
|
6
|
|
210,500
|
|
|
11190 White Birch Drive
(2)
|
|
Inland Empire - West
|
|
7/20/2017
|
|
201,035
|
|
|
1
|
|
19,810
|
|
|
4832-4850 Azusa Canyon Road
(2)
|
|
Los Angeles - San Gabriel Valley
|
|
7/28/2017
|
|
87,421
|
|
|
1
|
|
14,550
|
|
|
1825 Soto Street
(5)
|
|
Los Angeles - Central
|
|
9/8/2017
|
|
25,040
|
|
|
2
|
|
3,475
|
|
|
19402 Susana Road
(5)
|
|
Los Angeles - South Bay
|
|
9/13/2017
|
|
15,433
|
|
|
1
|
|
3,942
|
|
|
Total 2017 Wholly-Owned Property Acquisitions
|
|
|
|
3,582,375
|
|
|
39
|
|
$
|
534,472
|
|
(1)
|
Represents the gross contractual purchase price before prorations and closing costs. Does not include capitalized acquisition costs totaling
$1.4 million
.
|
(2)
|
This acquisition was funded with available cash on hand and borrowings under our unsecured revolving credit facility.
|
(3)
|
This acquisition was partially funded through a 1031 Exchange using
$6.5 million
of net cash proceeds from the sale of our property located at 9375 Archibald Avenue and borrowings under our unsecured revolving credit facility.
|
(4)
|
This acquisition was partially funded through a 1031 Exchange using
$39.7 million
of net cash proceeds from the sale of our property located at 2535 Midway Drive, borrowings under our unsecured revolving credit facility and available cash on hand.
|
(5)
|
This acquisition was funded with available cash on hand.
|
(6)
|
This acquisition was partially funded with net cash proceeds from the issuance of
$125.0 million
of senior unsecured guaranteed notes and borrowings under our unsecured revolving credit facility.
|
|
Rancho Pacifica Park
|
|
Other 2017 Acquisitions
|
|
Total 2017 Acquisitions
|
||||||
Assets:
|
|
|
|
|
|
||||||
Land
|
$
|
121,329
|
|
|
$
|
147,757
|
|
|
$
|
269,086
|
|
Buildings and improvements
|
85,336
|
|
|
159,905
|
|
|
245,241
|
|
|||
Tenant improvements
|
1,440
|
|
|
4,662
|
|
|
6,102
|
|
|||
Acquired lease intangible assets
(1)
|
8,852
|
|
|
17,144
|
|
|
25,996
|
|
|||
Other acquired assets
(2)
|
5
|
|
|
144
|
|
|
149
|
|
|||
Total assets acquired
|
216,962
|
|
|
329,612
|
|
|
546,574
|
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Acquired lease intangible liabilities
(3)
|
6,264
|
|
|
5,032
|
|
|
11,296
|
|
|||
Other assumed liabilities
(2)
|
1,126
|
|
|
2,044
|
|
|
3,170
|
|
|||
Total liabilities assumed
|
7,390
|
|
|
7,076
|
|
|
14,466
|
|
|||
Net assets acquired
|
$
|
209,572
|
|
|
$
|
322,536
|
|
|
$
|
532,108
|
|
(1)
|
For Rancho Pacifica Park, acquired lease intangible assets is comprised of in-place lease intangibles with weighted average amortization period of
3.2
years. For the other 2017 acquisitions, acquired lease intangible assets is comprised of
$15.8 million
of in-place lease intangibles with a weighted average amortization period of
4.6
years and
$1.3 million
of above-market lease intangibles with a weighted average amortization period of
11.1
years.
|
(2)
|
Includes other working capital assets acquired and liabilities assumed, at the time of acquisition.
|
(3)
|
Represents below-market lease intangibles with a weighted average amortization period of
3.5
years and
3.3
years for Rancho Pacifica Park and the other 2017 acquisitions, respectively.
|
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2017
|
||||
Total revenues
|
|
$
|
8,084
|
|
|
$
|
9,475
|
|
Net income
|
|
$
|
951
|
|
|
$
|
729
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total revenues
|
$
|
43,936
|
|
|
$
|
41,109
|
|
|
$
|
130,645
|
|
|
$
|
113,954
|
|
Net income attributable to common stockholders
|
$
|
738
|
|
|
$
|
1,173
|
|
|
$
|
22,340
|
|
|
$
|
11,082
|
|
Net income attributable to common stockholders per share - basic
|
$
|
0.01
|
|
|
$
|
0.02
|
|
|
$
|
0.32
|
|
|
$
|
0.18
|
|
Net income attributable to common stockholders per share - diluted
|
$
|
0.01
|
|
|
$
|
0.02
|
|
|
$
|
0.32
|
|
|
$
|
0.18
|
|
Property
|
|
Submarket
|
|
Date of Disposition
|
|
Rentable Square Feet
|
|
Contractual Sales Price
(1)
(in thousands)
|
|
Gain Recorded
(in thousands)
|
|||||
9375 Archibald Avenue
|
|
Inland Empire West
|
|
3/31/2017
|
|
62,677
|
|
|
$
|
6,875
|
|
|
$
|
2,668
|
|
2535 Midway Drive
|
|
San Diego - Central
|
|
5/17/2017
|
|
373,744
|
|
|
$
|
40,050
|
|
|
$
|
15,974
|
|
2811 Harbor Boulevard
|
|
Orange County - Airport
|
|
6/28/2017
|
|
126,796
|
|
|
$
|
18,700
|
|
|
$
|
595
|
|
Total
|
|
|
|
|
|
563,217
|
|
|
$
|
65,625
|
|
|
$
|
19,237
|
|
(1)
|
Represents the gross contractual sales price before commissions, prorations and other closing costs.
|
4.
|
Intangible Assets
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Acquired Lease Intangible Assets:
|
|
|
|
||||
In-place lease intangibles
|
$
|
91,760
|
|
|
$
|
68,234
|
|
Accumulated amortization
|
(48,126
|
)
|
|
(37,648
|
)
|
||
In-place lease intangibles, net
|
43,634
|
|
|
30,586
|
|
||
Above-market tenant leases
|
10,896
|
|
|
10,191
|
|
||
Accumulated amortization
|
(5,383
|
)
|
|
(4,412
|
)
|
||
Above-market tenant leases, net
|
5,513
|
|
|
5,779
|
|
||
Acquired lease intangible assets, net
|
$
|
49,147
|
|
|
$
|
36,365
|
|
Acquired Lease Intangible Liabilities:
|
|
|
|
|
|
||
Below-market tenant leases
|
$
|
(23,594
|
)
|
|
$
|
(12,426
|
)
|
Accumulated accretion
|
5,604
|
|
|
3,477
|
|
||
Below-market tenant leases, net
|
(17,990
|
)
|
|
(8,949
|
)
|
||
Above-market ground lease
|
(290
|
)
|
|
(290
|
)
|
||
Accumulated accretion
|
133
|
|
|
109
|
|
||
Above-market ground lease, net
|
(157
|
)
|
|
(181
|
)
|
||
Acquired lease intangible liabilities, net
|
$
|
(18,147
|
)
|
|
$
|
(9,130
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
In-place lease intangibles
(1)
|
$
|
4,708
|
|
|
$
|
3,561
|
|
|
$
|
10,812
|
|
|
$
|
9,849
|
|
Net above (below)-market tenant leases
(2)
|
$
|
(877
|
)
|
|
$
|
(31
|
)
|
|
$
|
(1,179
|
)
|
|
$
|
41
|
|
Above-market ground lease
(3)
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
|
$
|
(24
|
)
|
|
$
|
(24
|
)
|
(1)
|
The amortization of in-place lease intangibles is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented.
|
(2)
|
The amortization of net above (below)-market tenant leases is recorded as a decrease (increase) to rental revenues in the consolidated statements of operations for the periods presented.
|
(3)
|
The accretion of the above-market ground lease is recorded as a decrease to property expenses in the consolidated statements of operations for the periods presented.
|
5.
|
Notes Payable
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Principal amount
|
|
$
|
666,979
|
|
|
$
|
502,476
|
|
Less: unamortized discount and debt issuance costs
(1)
|
|
(2,770
|
)
|
|
(2,292
|
)
|
||
Carrying value
|
|
$
|
664,209
|
|
|
$
|
500,184
|
|
(1)
|
Excludes unamortized debt issuance costs related to our unsecured revolving credit facility, which are presented in the line item “Deferred loan costs, net” in the consolidated balance sheets.
|
|
September 30, 2017
|
|
December 31, 2016
|
|
|
|
|
|
|
|
||||||||||||||
|
Principal Amount
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Principal Amount
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Contractual
Maturity Date
|
|
Stated
Interest
Rate
(1)
|
|
Effective Interest Rate
(2)
|
|
||||||||||
Secured Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
$60M Term Loan
(3)
|
$
|
59,087
|
|
|
$
|
(145
|
)
|
|
$
|
59,674
|
|
|
$
|
(204
|
)
|
|
8/1/2019
|
(4)
|
LIBOR+1.90%
|
|
|
3.95
|
%
|
|
Gilbert/La Palma
(5)
|
2,803
|
|
|
(139
|
)
|
|
2,909
|
|
|
(145
|
)
|
|
3/1/2031
|
|
5.125
|
%
|
|
5.41
|
%
|
|
||||
12907 Imperial Highway
(6)
|
5,089
|
|
|
82
|
|
|
5,182
|
|
|
180
|
|
|
4/1/2018
|
|
5.950
|
%
|
|
3.32
|
%
|
|
||||
1065 Walnut Street
|
—
|
|
|
—
|
|
|
9,711
|
|
|
192
|
|
|
2/1/2019
|
|
N/A
|
|
|
N/A
|
|
|
||||
Unsecured Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$100M Term Loan Facility
|
100,000
|
|
|
(364
|
)
|
|
100,000
|
|
|
—
|
|
|
2/14/2022
|
|
LIBOR+1.20%
|
|
(7)
|
3.18
|
%
|
(8)
|
||||
Revolving Credit Facility
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2/12/2021
|
(9)
|
LIBOR+1.10%
|
|
(7)(10)
|
2.33
|
%
|
|
||||
$225M Term Loan Facility
|
225,000
|
|
|
(1,469
|
)
|
|
225,000
|
|
|
(1,680
|
)
|
|
1/14/2023
|
|
LIBOR+1.50%
|
|
(7)
|
2.86
|
%
|
|
||||
$100M Notes
|
100,000
|
|
|
(595
|
)
|
|
100,000
|
|
|
(635
|
)
|
|
8/6/2025
|
|
4.290
|
%
|
|
4.37
|
%
|
|
||||
$125M Notes
|
125,000
|
|
|
(140
|
)
|
|
—
|
|
|
—
|
|
|
7/13/2027
|
|
3.930
|
%
|
|
3.94
|
%
|
|
||||
Total
|
$
|
666,979
|
|
|
$
|
(2,770
|
)
|
|
$
|
502,476
|
|
|
$
|
(2,292
|
)
|
|
|
|
|
|
|
|
(1)
|
Reflects the contractual interest rate under the terms of the loan, as of
September 30, 2017
.
|
(2)
|
Reflects the effective interest rate as of
September 30, 2017
, which includes the effect of the amortization of discounts/premiums and debt issuance costs and the effect of interest rate swaps that are effective as of
September 30, 2017
.
|
(3)
|
This term loan is secured by
six
properties. Beginning August 15, 2016, monthly payments of interest and principal are based on a
30
-year amortization table. As of
September 30, 2017
, the interest rate on this variable-rate term loan has been effectively fixed through the use of
two
interest rate swaps, one of which is an amortizing swap. See Note 7 for details.
|
(4)
|
One
additional
one
-year extension available at the borrower’s option.
|
(5)
|
Monthly payments of interest and principal are based on a
20
-year amortization table.
|
(6)
|
Monthly payments of interest and principal are based on a
30
-year amortization table, with a balloon payment at maturity.
|
(7)
|
The LIBOR margin will range from
1.20%
to
1.70%
for the
$100.0 million
term loan facility,
1.10%
to
1.50%
for the revolving credit facility and
1.50%
to
2.25%
for the
$225.0 million
term loan facility depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value, or leverage ratio, which is measured on a quarterly basis.
|
(8)
|
As of
September 30, 2017
, the interest on the
$100.0 million
term loan facility has been effectively fixed through the use of two interest rate swaps. See Note 7 for details.
|
(9)
|
Two
additional
six
-month extensions available at the borrower’s option.
|
(10)
|
The unsecured revolving credit facility is subject to an applicable facility fee which is calculated as a percentage of the total lenders’ commitment amount, regardless of usage. The applicable facility fee will range from
0.15%
to
0.30%
depending upon our leverage ratio.
|
October 1, 2017 - December 31, 2017
|
$
|
263
|
|
2018
|
5,991
|
|
|
2019
|
58,266
|
|
|
2020
|
166
|
|
|
2021
|
50,175
|
|
|
Thereafter
|
552,118
|
|
|
Total
|
$
|
666,979
|
|
•
|
Maintaining a ratio of total indebtedness to total asset value of not more than
60%
;
|
•
|
For the Amended Credit Agreement and the $225 Million Term Loan Facility, maintaining a ratio of secured debt to total asset value of not more than
45%
;
|
•
|
For the $100 Million Notes and the $125 Million Notes, maintaining a ratio of secured debt to total asset value of not more than
40%
;
|
•
|
Maintaining a ratio of total secured recourse debt to total asset value of not more than
15%
;
|
•
|
Maintaining a minimum tangible net worth of at least the sum of (i)
$760,740,750
, and (ii) an amount equal to at least
75%
of the net equity proceeds received by the Company after September 30, 2016;
|
•
|
Maintaining a ratio of adjusted EBITDA (as defined in each of the loan agreements) to fixed charges of at least
1.50
to
1.0
;
|
•
|
Maintaining a ratio of total unsecured debt to total unencumbered asset value of not more than
60%
; and
|
•
|
Maintaining a ratio of unencumbered NOI (as defined in each of the loan agreements) to unsecured interest expense of at least
1.75
to
1.0
.
|
6.
|
Operating Leases
|
7.
|
Interest Rate Swaps
|
|
|
|
|
|
|
|
|
Fair Value
|
|
Current Notional Value
(1)
|
|||||||||||||
Derivative Instrument
|
|
Effective Date
|
|
Maturity Date
|
|
Interest Strike Rate
|
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||||||
Assets
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest Rate Swap
|
|
2/14/2018
|
|
1/14/2022
|
|
1.349
|
%
|
|
$
|
2,521
|
|
|
$
|
3,245
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest Rate Swap
|
|
8/14/2018
|
|
1/14/2022
|
|
1.406
|
%
|
|
$
|
1,763
|
|
|
$
|
2,349
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest Rate Swap
|
|
12/14/2018
|
|
8/14/2021
|
|
1.764
|
%
|
|
$
|
468
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
(3)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swap
|
|
1/15/2015
|
|
2/15/2019
|
|
1.826
|
%
|
|
$
|
121
|
|
|
$
|
338
|
|
|
$
|
30,000
|
|
|
$
|
30,000
|
|
Interest Rate Swap
|
|
7/15/2015
|
|
2/15/2019
|
|
2.010
|
%
|
|
$
|
187
|
|
|
$
|
440
|
|
|
$
|
29,087
|
|
|
$
|
29,674
|
|
Interest Rate Swap
|
|
8/14/2015
|
|
12/14/2018
|
|
1.790
|
%
|
|
$
|
174
|
|
|
$
|
529
|
|
|
$
|
50,000
|
|
|
$
|
50,000
|
|
Interest Rate Swap
|
|
2/16/2016
|
|
12/14/2018
|
|
2.005
|
%
|
|
$
|
303
|
|
|
$
|
738
|
|
|
$
|
50,000
|
|
|
$
|
50,000
|
|
(1)
|
Represents the notional value of swaps that are effective as of the balance sheet date presented.
|
(2)
|
The fair value of these interest rate swaps is included in the line item “Interest rate swap asset” in the accompanying consolidated balance sheets.
|
(3)
|
The fair value of these interest rate swaps is included in the line item “Interest rate swap liability” in the accompanying consolidated balance sheets.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest Rate Swaps in Cash Flow Hedging Relationships:
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) recognized in AOCI on derivatives (effective portion)
|
$
|
382
|
|
|
$
|
1,036
|
|
|
$
|
(672
|
)
|
|
$
|
(4,465
|
)
|
Amount of loss reclassified from AOCI into earnings under “Interest expense” (effective portion)
|
$
|
(280
|
)
|
|
$
|
(577
|
)
|
|
$
|
(1,090
|
)
|
|
$
|
(1,671
|
)
|
Amount of gain (loss) recognized in earnings under “Interest expense” (ineffective portion and amount excluded from effectiveness testing)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
8.
|
Fair Value Measurements
|
|
|
Fair Value Measurement Using
|
||||||||||||||
|
|
Total Fair Value
|
|
Quoted Price in Active
Markets for Identical
Assets and Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swap Asset
|
|
$
|
4,752
|
|
|
$
|
—
|
|
|
$
|
4,752
|
|
|
$
|
—
|
|
Interest Rate Swap Liability
|
|
$
|
(785
|
)
|
|
$
|
—
|
|
|
$
|
(785
|
)
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swap Asset
|
|
$
|
5,594
|
|
|
$
|
—
|
|
|
$
|
5,594
|
|
|
$
|
—
|
|
Interest Rate Swap Liability
|
|
$
|
(2,045
|
)
|
|
$
|
—
|
|
|
$
|
(2,045
|
)
|
|
$
|
—
|
|
|
|
Fair Value Measurement Using
|
|
|
||||||||||||||||
Liabilities
|
|
Total Fair Value
|
|
Quoted Price in Active
Markets for Identical
Assets and Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
|
Carrying Value
|
||||||||||
Notes Payable at:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
September 30, 2017
|
|
$
|
670,134
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
670,134
|
|
|
$
|
664,209
|
|
December 31, 2016
|
|
$
|
507,733
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
507,733
|
|
|
$
|
500,184
|
|
9.
|
Related Party Transactions
|
10.
|
Commitments and Contingencies
|
|
|
Office Leases
|
|
Ground Lease
|
||||
October 1, 2017 - December 31, 2017
|
|
$
|
185
|
|
|
$
|
36
|
|
2018
|
|
783
|
|
|
144
|
|
||
2019
|
|
569
|
|
|
144
|
|
||
2020
|
|
164
|
|
|
144
|
|
||
2021
|
|
120
|
|
|
144
|
|
||
Thereafter
|
|
—
|
|
|
5,820
|
|
||
Total
|
|
$
|
1,821
|
|
|
$
|
6,432
|
|
11.
|
Investment in Unconsolidated Real Estate Entities
|
12.
|
Equity
|
|
Unvested Awards
|
|||||||
|
Restricted
Common Stock
|
|
LTIP Units
|
|
Performance Units
|
|||
Balance at January 1, 2017
|
287,827
|
|
|
241,691
|
|
|
514,998
|
|
Granted
|
103,091
|
|
|
—
|
|
|
—
|
|
Forfeited
|
(35,959
|
)
|
|
—
|
|
|
—
|
|
Vested
(1)
|
(97,092
|
)
|
|
—
|
|
|
—
|
|
Balance at September 30, 2017
|
257,867
|
|
|
241,691
|
|
|
514,998
|
|
(1)
|
During the
nine
months ended
September 30, 2017
,
31,403
shares of the Company’s common stock were tendered in accordance with the terms of the Plan to satisfy minimum statutory tax withholding requirements associated with the vesting of restricted shares of common stock.
|
|
Unvested Awards
|
|||||||
|
Restricted
Common Stock |
|
LTIP Units
|
|
Performance Units
(1)
|
|||
October 1, 2017 - December 31, 2017
|
81,993
|
|
|
70,837
|
|
|
—
|
|
2018
|
69,720
|
|
|
70,842
|
|
|
315,998
|
|
2019
|
50,182
|
|
|
70,838
|
|
|
199,000
|
|
2020
|
36,657
|
|
|
29,174
|
|
|
—
|
|
2021
|
19,315
|
|
|
—
|
|
|
—
|
|
Total
|
257,867
|
|
|
241,691
|
|
|
514,998
|
|
(1)
|
Represents the maximum number of Performance Units that would be earned on December 14, 2018 and December 29, 2019, in the event that specified maximum total shareholder return (“TSR”) goals are achieved over the three-year performance period from December 15, 2015 through December 14, 2018 and the three-year performance period from December 29, 2016 through December 28, 2019, respectively. The number of Performance Units that ultimately vest will be based on both the Company’s absolute TSR and TSR performance relative to a peer group over each three-year performance period. The maximum number of Performance Units will be earned under the awards if the Company both (i) achieves
50%
or higher absolute TSR, inclusive of all dividends paid, over each performance period and (ii) finishes in the
75
th or greater percentile of the peer group for TSR over each three-year performance period.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Expensed share-based compensation
(1)
|
|
$
|
1,329
|
|
|
$
|
991
|
|
|
$
|
4,070
|
|
|
$
|
2,879
|
|
Capitalized share-based compensation
(2)
|
|
7
|
|
|
38
|
|
|
120
|
|
|
111
|
|
||||
Total share-based compensation
|
|
$
|
1,336
|
|
|
$
|
1,029
|
|
|
$
|
4,190
|
|
|
$
|
2,990
|
|
(1)
|
Amounts expensed are included in “General and administrative” and “Property expenses” in the accompanying consolidated statements of operations.
|
(2)
|
Amounts capitalized, which relate to employees who provide construction and leasing services, are included in “Building and improvements” and “Deferred leasing costs, net” in the consolidated balance sheets.
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Beginning Balance
|
|
$
|
3,445
|
|
|
$
|
(3,033
|
)
|
Other comprehensive loss before reclassifications
|
|
(672
|
)
|
|
(4,465
|
)
|
||
Amounts reclassified from accumulated other comprehensive loss to interest expense
|
|
1,090
|
|
|
1,671
|
|
||
Net current period other comprehensive income (loss)
|
|
418
|
|
|
(2,794
|
)
|
||
Less other comprehensive loss attributable to noncontrolling interests
|
|
7
|
|
|
63
|
|
||
Other comprehensive income (loss) attributable to common stockholders
|
|
425
|
|
|
(2,731
|
)
|
||
Ending Balance
|
|
$
|
3,870
|
|
|
$
|
(5,764
|
)
|
13.
|
Earnings Per Share
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
2,009
|
|
|
$
|
3,061
|
|
|
$
|
27,585
|
|
|
$
|
17,330
|
|
Less: Preferred stock dividends
|
(1,322
|
)
|
|
(661
|
)
|
|
(3,966
|
)
|
|
(661
|
)
|
||||
Less: Net income attributable to noncontrolling interests
|
(21
|
)
|
|
(63
|
)
|
|
(684
|
)
|
|
(533
|
)
|
||||
Less: Net income attributable to participating securities
|
(80
|
)
|
|
(70
|
)
|
|
(327
|
)
|
|
(223
|
)
|
||||
Net income attributable to common stockholders
|
$
|
586
|
|
|
$
|
2,267
|
|
|
$
|
22,608
|
|
|
$
|
15,913
|
|
Add back: Net income attributable to noncontrolling interests
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
||||
Numerator for diluted net income attributable to common stockholders
|
$
|
586
|
|
|
$
|
2,330
|
|
|
$
|
22,608
|
|
|
$
|
15,913
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock outstanding – basic
|
72,621,219
|
|
|
65,707,476
|
|
|
68,984,047
|
|
|
61,694,835
|
|
||||
Effect of dilutive securities - performance units
|
446,862
|
|
|
286,697
|
|
|
380,808
|
|
|
225,141
|
|
||||
Effect of dilutive securities - operating partnership units
|
—
|
|
|
1,991,004
|
|
|
—
|
|
|
—
|
|
||||
Weighted average shares of common stock outstanding – diluted
|
73,068,081
|
|
|
67,985,177
|
|
|
69,364,855
|
|
|
61,919,976
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share
—
Basic
|
|
|
|
|
|
|
|
|
|
||||||
Net income attributable to common stockholders
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.33
|
|
|
$
|
0.26
|
|
Earnings per share
—
Diluted
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common stockholders
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.33
|
|
|
$
|
0.26
|
|
14.
|
Subsequent Events
|
•
|
the competitive environment in which we operate;
|
•
|
real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets;
|
•
|
decreased rental rates or increasing vacancy rates;
|
•
|
potential defaults on or non-renewal of leases by tenants;
|
•
|
potential bankruptcy or insolvency of tenants;
|
•
|
acquisition risks, including failure of such acquisitions to perform in accordance with expectations;
|
•
|
the timing of acquisitions and dispositions;
|
•
|
potential natural disasters such as earthquakes, wildfires or floods;
|
•
|
the consequence of any future security alerts and/or terrorist attacks;
|
•
|
national, international, regional and local economic conditions;
|
•
|
the general level of interest rates;
|
•
|
potential changes in the law or governmental regulations that affect us and interpretations of those laws and regulations, including changes in real estate and zoning or real estate investment trust (“REIT”) tax laws, and potential increases in real property tax rates;
|
•
|
financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
|
•
|
lack of or insufficient amounts of insurance;
|
•
|
our failure to complete acquisitions;
|
•
|
our failure to successfully integrate acquired properties;
|
•
|
our ability to qualify and maintain our qualification as a REIT;
|
•
|
our ability to maintain our current investment grade rating by Fitch;
|
•
|
litigation, including costs associated with prosecuting or defending pending or threatened claims and any adverse outcomes; and
|
•
|
possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us.
|
•
|
During the first quarter of 2017, we acquired one property with
0.1 million
rentable square feet, for a gross purchase price of
$17.1 million
.
|
•
|
During the second quarter of 2017, we acquired an industrial business park consisting of 16 buildings totaling approximately
1.1 million
rentable square feet, for a gross purchase price of
$141.2 million
. We also acquired four additional properties with a combined
0.5 million
rentable square feet, for a total gross purchase price of
$83.0 million
.
|
•
|
During the third quarter of 2017, we acquired seven properties with a combined
1.8 million
rentable square feet, for a total gross purchase price of
$293.2 million
.
|
•
|
During the second quarter of 2017, we completed the lease-up of two of our value-add repositioning properties located at 679-691 Anderson Street and 18118 Broadway Street.
|
•
|
During the third quarter of 2017, we completed the repositioning and lease-up of our 108,500 square foot value-add repositioning property located at 3880 Valley Boulevard. We also pre-leased space totaling 20,198 square feet at 228th Street and 43,927 square feet at 3233 Mission Oaks Boulevard, with leases commencing in November 2017 and February 2018, respectively.
|
•
|
Subsequent to September 30, 2017, we pre-leased our 207,953 square foot value-add repositioning property located at 12131 Western Avenue. The lease has an expected commencement date of December 31, 2017.
|
•
|
During the first quarter of 2017, we sold one property with
0.1 million
rentable square feet, for a gross sales price of
$6.9 million
.
|
•
|
During the second quarter of 2017, we sold two properties with a combined
0.5 million
rentable square feet, for a total gross sales price of
$58.8 million
. Net cash proceeds of
$39.7 million
from one of the dispositions were used to partially fund the acquisition of the industrial business park noted above, as part of a 1031 Exchange transaction.
|
•
|
In February 2017, we entered into an agreement for a $450 million senior unsecured credit facility, comprised of a $350 million unsecured revolving credit facility that will mature in February 2021, with two six-month extensions available, and a $100 million unsecured term loan facility that will mature in February 2022. Borrowings under the $350 million unsecured revolving credit facility bear interest at LIBOR plus an applicable margin that will range from 1.10% to 1.50% per annum depending on our leverage ratio, and the $100 million unsecured term loan facility bears interest at LIBOR plus an applicable margin that will range from 1.20% to 1.70% per annum depending on our leverage ratio.
|
•
|
In March 2017, we repaid the
$9.7 million
outstanding balance on one of our secured mortgage loans in advance of the February 1, 2019 maturity date.
|
•
|
In July 2017, we completed a private placement of $125 million of 10-year senior notes at a fixed annual interest rate of 3.93% (the “$125 Million Notes”).
|
•
|
During the first quarter of 2017, we sold
168,685
shares of common stock under our at-the-market equity offering program for gross proceeds of
$3.9 million
, or approximately
$23.16
per share.
|
•
|
During the second quarter of 2017, we sold
4,398,476
shares of common stock under our at-the-market equity offering program for gross proceeds of
$116.6 million
, or approximately
$26.52
per share.
|
•
|
During the third quarter of 2017, we sold
6,476,719
shares of common stock under our at-the-market equity offering program for gross proceeds of
$188.6 million
, or approximately
$29.11
per share.
|
|
|
|
|
|
|
|
|
Estimated Construction Period
(1)
|
|
|
|
||
Property (Submarket)
|
|
Market
|
|
Total Property Rentable Square Feet
|
|
Vacant Rentable Square Feet Under Repositioning/Lease-up
|
|
Start
|
|
Completion
|
|
Total Property Leased % at 9/30/17
|
|
Current Repositioning:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14750 Nelson (San Gabriel Valley)
(2)
|
|
LA
|
|
147,360
|
|
147,360
|
|
3Q-2016
|
|
2Q-2018
|
|
—%
|
|
301-445 Figueroa Street (South Bay)
(3)
|
|
LA
|
|
133,625
|
|
77,975
|
|
4Q-2016
|
|
3Q-2018
|
|
42%
|
|
12131 Western Avenue (West OC)
|
|
OC
|
|
207,953
|
|
107,953
|
|
1Q-2017
|
|
4Q-2017
|
|
100%
|
(4)
|
28903 Avenue Paine (SF Valley)
(5)
|
|
LA
|
|
111,346
|
|
111,346
|
|
1Q-2017
|
|
4Q-2018
|
|
—%
|
|
228th Street (South Bay)
(6)
|
|
LA
|
|
88,971
|
|
23,453
|
|
1Q-2016
|
|
4Q-2017
|
|
96%
|
(6)
|
3233 Mission Oaks Blvd (Ventura):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unit 3233-H
|
|
VC
|
|
461,210
|
|
43,927
|
|
1Q-2017
|
|
4Q-2017
|
|
72%
|
(7)
|
Unit 3233
|
|
VC
|
|
461,210
|
|
111,419
|
|
2Q-2017
|
|
3Q-2018
|
|
72%
|
|
Total
|
|
|
|
|
|
623,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease-up Stage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1601 Alton Parkway (OC Airport)
|
|
OC
|
|
124,988
|
|
15,874
|
|
4Q-2014
|
|
4Q-2017
|
|
87%
|
|
9401 De Soto Avenue (SF Valley)
(8)
|
|
LA
|
|
150,831
|
|
150,831
|
|
2Q-2015
|
|
1Q-2016
|
|
—%
|
|
Total
|
|
|
|
|
|
166,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future Repositioning:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9615 Norwalk Boulevard (Mid-Counties)
(9)
|
|
LA
|
|
38,362
|
|
—
|
|
2Q-2018
|
|
2Q-2019
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Repositioning, Lease-up Stage and Future Repositioning
|
|
|
|
|
|
790,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Completed and Leased-up:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
679-691 S. Anderson Street (Central LA)
|
|
LA
|
|
47,490
|
|
—
|
|
N/A
|
|
N/A
|
|
100%
|
|
18118 S. Broadway Street (South Bay)
|
|
LA
|
|
78,183
|
|
—
|
|
N/A
|
|
N/A
|
|
100%
|
|
3880 Valley Boulevard (San Gabriel Valley)
|
|
LA
|
|
108,550
|
|
—
|
|
N/A
|
|
N/A
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The estimated construction period is subject to change as a result of a number of factors including but not limited to permit requirements, delays in construction, changes in scope, and other unforeseen circumstances.
|
(2)
|
The total property rentable square feet in the table above reflects the square footage of the existing building that was acquired. Upon completion of the project, the property will be approximately 200,000 square feet, which reflects an increase in square footage from the construction of two additional buildings on the excess land.
|
(3)
|
The property located at 301-445 Figueroa has 14 units, all of which will be repositioned in various phases. We expect that repositioning of the first seven units totaling 77,975 rentable square will be completed during 4Q-2017 and the remaining seven units totaling 55,650 rentable square feet will be completed between 4Q-2017 and 3Q-2018.
|
(4)
|
As of September 30, 2017, this property is 48.1% leased. The pro-forma leased percentage of 100% reflects the execution of a lease subsequent to September 30, 2017, for the entire property to a single tenant which has an expected commencement date of December 31, 2017.
|
(5)
|
The total property rentable square feet in the table above reflects the square footage of the building that was acquired. Upon completion of the project, the property will be approximately 224,000 square feet, which reflects an increase in square footage from the construction of one additional building on the excess land.
|
(6)
|
The property located at 228th Street includes eight buildings, of which three buildings aggregating
23,453
rentable square feet were under repositioning as of
September 30, 2017
. As of September 30, 2017, repositioning space aggregating 20,198 rentable square feet has been pre-leased to two tenants with a commencement date of November 1, 2017.
|
(7)
|
As of September 30, 2017, Unit H has been pre-leased to a tenant with a commencement date of February 1, 2018.
|
(8)
|
On November 2, 2017, we sold our property located at 9401 De Soto to an unaffiliated third party for a contract price of
$23.0 million
.
|
(9)
|
9615 Norwalk has 10.26 acres of partially paved storage yard/industrial land that is under a month-to-month lease as of
September 30, 2017
. We plan to construct a new building with approximately 200,000 rentable square feet after the lease is terminated.
|
|
|
New Leases
|
|||||||||||||||||
Quarter
|
|
Number
of Leases |
|
Rentable Square Feet
|
|
Weighted Average Lease Term
(in years) |
|
Effective Rent Per Square Foot
(1)
|
|
GAAP Leasing Spreads
(2)(4)
|
|
Cash Leasing Spreads
(3)(4)
|
|||||||
Q1-2017
|
|
65
|
|
|
423,766
|
|
|
4.7
|
|
|
$
|
10.44
|
|
|
32.2
|
%
|
|
20.4
|
%
|
Q2-2017
|
|
52
|
|
|
310,950
|
|
|
4.0
|
|
|
$
|
9.94
|
|
|
31.3
|
%
|
|
24.2
|
%
|
Q3-2017
|
|
61
|
|
|
678,882
|
|
|
4.4
|
|
|
$
|
10.31
|
|
|
33.6
|
%
|
|
21.4
|
%
|
Total/Weighted Average
|
|
178
|
|
|
1,413,598
|
|
|
4.4
|
|
|
$
|
10.27
|
|
|
32.6
|
%
|
|
21.7
|
%
|
|
|
Renewals
|
|
Expiring Leases
|
|
|
||||||||||||||||||||||
Quarter
|
|
Number
of Leases |
|
Rentable Square Feet
|
|
Weighted Average Lease Term
(in years) |
|
Effective Rent Per Square Foot
(1)
|
|
GAAP Leasing Spreads
(2)(5)
|
|
Cash Leasing Spreads
(3)(5)
|
|
Number
of Leases |
|
Rentable Square Feet
(6)
|
|
Retention %
(7)
|
||||||||||
Q1-2017
|
|
74
|
|
|
439,602
|
|
|
3.3
|
|
|
$
|
10.41
|
|
|
17.9
|
%
|
|
9.6
|
%
|
|
136
|
|
|
1,248,787
|
|
|
56.6
|
%
|
Q2-2017
|
|
87
|
|
|
469,766
|
|
|
3.5
|
|
|
$
|
10.57
|
|
|
16.5
|
%
|
|
5.9
|
%
|
|
127
|
|
|
771,093
|
|
|
70.8
|
%
|
Q3-2017
|
|
66
|
|
|
614,175
|
|
|
3.6
|
|
|
$
|
8.64
|
|
|
21.2
|
%
|
|
13.4
|
%
|
|
118
|
|
|
971,551
|
|
|
66.2
|
%
|
Total/Weighted Average
|
|
227
|
|
|
1,523,543
|
|
|
3.5
|
|
|
$
|
9.75
|
|
|
18.6
|
%
|
|
9.6
|
%
|
|
381
|
|
|
2,991,431
|
|
|
63.9
|
%
|
(1)
|
Effective rent per square foot is the average base rent calculated in accordance with GAAP, over the term of the lease, expressed in dollars per square foot per year. Includes all new and renewal leases that were executed during the quarter.
|
(2)
|
Calculated as the change between GAAP rents for new or renewal leases and the expiring GAAP rents on the expiring leases for the same space.
|
(3)
|
Calculated as the change between starting cash rents for new or renewal leases and the expiring cash rents on the expiring leases for the same space.
|
(4)
|
The GAAP and cash re-leasing spreads for new leases executed during the
nine
months ended
September 30, 2017
, exclude
53
leases aggregating
527,236
rentable square feet for which space was vacant when the property was acquired or there was no comparable lease data. Comparable leases generally exclude: (i) space that has never been occupied under our ownership, (ii) recently repositioned/redeveloped space, (iii) space that has been vacant for over one year, (iv) space with different lease structures (for example, a change from a gross lease to a modified gross lease or an increase or decrease in the leased square footage) or (v) space with lease terms shorter than six months.
|
(5)
|
The GAAP and cash re-leasing rent spreads for renewal leases executed during the
nine
months ended
September 30, 2017
, exclude
four
leases aggregating
38,474
rentable square feet for which space was vacant when the property was acquired or there was no comparable lease data. Comparable leases generally exclude: (i) space with different lease structures or (ii) space with lease terms shorter than six months.
|
(6)
|
Includes five leases totaling
471,484
rentable square feet that expired during the
nine
months ended
September 30, 2017
, for which the space was placed into repositioning after each tenant vacated.
|
(7)
|
Retention is calculated as renewal lease square footage plus relocation/expansion square footage, divided by the square footage of leases expiring during the period. Retention excludes leases associated with space that is placed into repositioning after the tenant vacates.
|
Year of Lease Expiration
|
|
Number of Leases Expiring
|
|
Total Rentable Square Feet
(1)
|
|
Percentage of Total Owned Square Feet
|
|
Annualized Base Rent
(2)
|
|
Percentage of Total Annualized Base Rent
(3)
|
|
Annualized Base Rent per Square Foot
(4)
|
||||||||
Available
|
|
—
|
|
|
504,853
|
|
|
2.8
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
Current Repositioning
(5)
|
|
—
|
|
|
559,308
|
|
|
3.1
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
MTM Tenants
(6)
|
|
100
|
|
|
223,304
|
|
|
1.3
|
%
|
|
$
|
2,225
|
|
|
1.5
|
%
|
|
$
|
9.96
|
|
Remainder of 2017
|
|
99
|
|
|
780,868
|
|
|
4.3
|
%
|
|
$
|
7,713
|
|
|
5.2
|
%
|
|
$
|
9.88
|
|
2018
|
|
352
|
|
|
2,519,326
|
|
|
14.0
|
%
|
|
$
|
22,522
|
|
|
15.2
|
%
|
|
$
|
8.94
|
|
2019
|
|
301
|
|
|
2,565,082
|
|
|
14.2
|
%
|
|
$
|
23,170
|
|
|
15.6
|
%
|
|
$
|
9.03
|
|
2020
|
|
252
|
|
|
3,471,261
|
|
|
19.2
|
%
|
|
$
|
28,599
|
|
|
19.2
|
%
|
|
$
|
8.24
|
|
2021
|
|
123
|
|
|
3,233,164
|
|
|
17.9
|
%
|
|
$
|
26,758
|
|
|
18.0
|
%
|
|
$
|
8.28
|
|
2022
|
|
85
|
|
|
1,626,380
|
|
|
9.0
|
%
|
|
$
|
13,286
|
|
|
8.9
|
%
|
|
$
|
8.17
|
|
2023
|
|
20
|
|
|
595,581
|
|
|
3.3
|
%
|
|
$
|
6,159
|
|
|
4.1
|
%
|
|
$
|
10.34
|
|
2024
|
|
13
|
|
|
731,124
|
|
|
4.1
|
%
|
|
$
|
6,892
|
|
|
4.6
|
%
|
|
$
|
9.43
|
|
2025
|
|
4
|
|
|
148,215
|
|
|
0.8
|
%
|
|
$
|
1,712
|
|
|
1.2
|
%
|
|
$
|
11.55
|
|
2026
|
|
6
|
|
|
273,904
|
|
|
1.5
|
%
|
|
$
|
3,150
|
|
|
2.1
|
%
|
|
$
|
11.50
|
|
Thereafter
|
|
11
|
|
|
812,242
|
|
|
4.5
|
%
|
|
$
|
6,481
|
|
|
4.4
|
%
|
|
$
|
7.98
|
|
Total Consolidated Portfolio
|
|
1,366
|
|
|
18,044,612
|
|
|
100.0
|
%
|
|
$
|
148,667
|
|
|
100.0
|
%
|
|
$
|
8.76
|
|
(1)
|
Represents the contracted square footage upon expiration.
|
(2)
|
Calculated as monthly contracted base rent (in thousands) per the terms of such lease, as of
September 30, 2017
, multiplied by 12. Excludes billboard and antenna revenue and rent abatements.
|
(3)
|
Calculated as annualized base rent set forth in this table divided by annualized base rent for the total portfolio as of
September 30, 2017
.
|
(4)
|
Calculated as annualized base rent for such leases divided by the leased square feet for such leases as of
September 30, 2017
.
|
(5)
|
Represents space at six of our properties that were classified as current repositioning as of
September 30, 2017
. Refer to the table under “
Acquisitions and Redevelopment of Properties”
for a summary of these properties. Excludes completed repositioning properties, properties in lease-up and pre-leased space at current repositioning properties.
|
(6)
|
Represents tenants under month-to-month (“MTM”) leases or having holdover tenancy. Includes
61
MTM leases aggregating
63,790
rentable square feet at our property located at 14723-14825 Oxnard Street, where due to number and the small size of spaces, we typically only enter into MTM leases.
|
|
Same Properties Portfolio
|
|
Total Portfolio
|
||||||||||||||||||||||||||
|
Three Months Ended September 30,
|
|
Increase/(Decrease)
|
|
%
|
|
Three Months Ended September 30,
|
|
Increase/(Decrease)
|
|
%
|
||||||||||||||||||
|
2017
|
|
2016
|
|
|
Change
|
|
2017
|
|
2016
|
|
|
Change
|
||||||||||||||||
RENTAL REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Rental income
|
$
|
25,155
|
|
|
$
|
23,359
|
|
|
$
|
1,796
|
|
|
7.7
|
%
|
|
$
|
36,748
|
|
|
$
|
28,285
|
|
|
$
|
8,463
|
|
|
29.9
|
%
|
Tenant reimbursements
|
3,834
|
|
|
3,508
|
|
|
326
|
|
|
9.3
|
%
|
|
6,279
|
|
|
4,467
|
|
|
1,812
|
|
|
40.6
|
%
|
||||||
Other income
|
134
|
|
|
171
|
|
|
(37
|
)
|
|
(21.6
|
)%
|
|
203
|
|
|
192
|
|
|
11
|
|
|
5.7
|
%
|
||||||
TOTAL RENTAL REVENUES
|
29,123
|
|
|
27,038
|
|
|
2,085
|
|
|
7.7
|
%
|
|
43,230
|
|
|
32,944
|
|
|
10,286
|
|
|
31.2
|
%
|
||||||
Management, leasing and development services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
109
|
|
|
131
|
|
|
(22
|
)
|
|
(16.8
|
)%
|
||||||
Interest income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
228
|
|
|
(228
|
)
|
|
(100.0
|
)%
|
||||||
TOTAL REVENUES
|
29,123
|
|
|
27,038
|
|
|
2,085
|
|
|
7.7
|
%
|
|
43,339
|
|
|
33,303
|
|
|
10,036
|
|
|
30.1
|
%
|
||||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Property expenses
|
7,655
|
|
|
7,493
|
|
|
162
|
|
|
2.2
|
%
|
|
11,229
|
|
|
8,978
|
|
|
2,251
|
|
|
25.1
|
%
|
||||||
General and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
5,843
|
|
|
5,067
|
|
|
776
|
|
|
15.3
|
%
|
||||||
Depreciation and amortization
|
9,761
|
|
|
10,150
|
|
|
(389
|
)
|
|
(3.8
|
)%
|
|
17,971
|
|
|
13,341
|
|
|
4,630
|
|
|
34.7
|
%
|
||||||
TOTAL OPERATING EXPENSES
|
17,416
|
|
|
17,643
|
|
|
(227
|
)
|
|
(1.3
|
)%
|
|
35,043
|
|
|
27,386
|
|
|
7,657
|
|
|
28.0
|
%
|
||||||
OTHER EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acquisition expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
16
|
|
|
380
|
|
|
(364
|
)
|
|
(95.8
|
)%
|
||||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
6,271
|
|
|
3,804
|
|
|
2,467
|
|
|
64.9
|
%
|
||||||
TOTAL OTHER EXPENSES
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
6,287
|
|
|
4,184
|
|
|
2,103
|
|
|
50.3
|
%
|
||||||
TOTAL EXPENSES
|
17,416
|
|
|
17,643
|
|
|
(227
|
)
|
|
(1.3
|
)%
|
|
41,330
|
|
|
31,570
|
|
|
9,760
|
|
|
30.9
|
%
|
||||||
Equity in income from unconsolidated real estate entities
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
1,328
|
|
|
(1,328
|
)
|
|
|
||||||||
NET INCOME
|
$
|
11,707
|
|
|
$
|
9,395
|
|
|
$
|
2,312
|
|
|
|
|
$
|
2,009
|
|
|
$
|
3,061
|
|
|
$
|
(1,052
|
)
|
|
|
|
Same Properties Portfolio
|
|
Total Portfolio
|
||||||||||||||||||||||||||
|
Nine Months Ended September 30,
|
|
Increase/(Decrease)
|
|
%
|
|
Nine Months Ended September 30,
|
|
Increase/(Decrease)
|
|
%
|
||||||||||||||||||
|
2017
|
|
2016
|
|
|
Change
|
|
2017
|
|
2016
|
|
|
Change
|
||||||||||||||||
RENTAL REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Rental income
|
$
|
73,682
|
|
|
$
|
68,541
|
|
|
$
|
5,141
|
|
|
7.5
|
%
|
|
$
|
97,494
|
|
|
$
|
77,903
|
|
|
$
|
19,591
|
|
|
25.1
|
%
|
Tenant reimbursements
|
11,536
|
|
|
10,394
|
|
|
1,142
|
|
|
11.0
|
%
|
|
16,606
|
|
|
12,144
|
|
|
4,462
|
|
|
36.7
|
%
|
||||||
Other income
|
436
|
|
|
592
|
|
|
(156
|
)
|
|
(26.4
|
)%
|
|
550
|
|
|
764
|
|
|
(214
|
)
|
|
(28.0
|
)%
|
||||||
TOTAL RENTAL REVENUES
|
85,654
|
|
|
79,527
|
|
|
6,127
|
|
|
7.7
|
%
|
|
114,650
|
|
|
90,811
|
|
|
23,839
|
|
|
26.3
|
%
|
||||||
Management, leasing and development services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
380
|
|
|
376
|
|
|
4
|
|
|
1.1
|
%
|
||||||
Interest income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
445
|
|
|
228
|
|
|
217
|
|
|
95.2
|
%
|
||||||
TOTAL REVENUES
|
85,654
|
|
|
79,527
|
|
|
6,127
|
|
|
7.7
|
%
|
|
115,475
|
|
|
91,415
|
|
|
24,060
|
|
|
26.3
|
%
|
||||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Property expenses
|
22,791
|
|
|
21,449
|
|
|
1,342
|
|
|
6.3
|
%
|
|
29,987
|
|
|
24,480
|
|
|
5,507
|
|
|
22.5
|
%
|
||||||
General and administrative
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
16,052
|
|
|
13,190
|
|
|
2,862
|
|
|
21.7
|
%
|
||||||
Depreciation and amortization
|
29,704
|
|
|
31,387
|
|
|
(1,683
|
)
|
|
(5.4
|
)%
|
|
46,085
|
|
|
37,165
|
|
|
8,920
|
|
|
24.0
|
%
|
||||||
TOTAL OPERATING EXPENSES
|
52,495
|
|
|
52,836
|
|
|
(341
|
)
|
|
(0.6
|
)%
|
|
92,124
|
|
|
74,835
|
|
|
17,289
|
|
|
23.1
|
%
|
||||||
OTHER EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acquisition expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
421
|
|
|
1,490
|
|
|
(1,069
|
)
|
|
(71.7
|
)%
|
||||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
14,571
|
|
|
10,774
|
|
|
3,797
|
|
|
35.2
|
%
|
||||||
TOTAL OTHER EXPENSES
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
14,992
|
|
|
12,264
|
|
|
2,728
|
|
|
22.2
|
%
|
||||||
TOTAL EXPENSES
|
52,495
|
|
|
52,836
|
|
|
(341
|
)
|
|
(0.6
|
)%
|
|
107,116
|
|
|
87,099
|
|
|
20,017
|
|
|
23.0
|
%
|
||||||
Equity in income from unconsolidated real estate entities
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
11
|
|
|
1,451
|
|
|
(1,440
|
)
|
|
|
||||||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(22
|
)
|
|
—
|
|
|
(22
|
)
|
|
|
||||||||
Gain on sale of real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
19,237
|
|
|
11,563
|
|
|
7,674
|
|
|
|
||||||||
NET INCOME
|
$
|
33,159
|
|
|
$
|
26,691
|
|
|
$
|
6,468
|
|
|
|
|
$
|
27,585
|
|
|
$
|
17,330
|
|
|
$
|
10,255
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
2,009
|
|
|
$
|
3,061
|
|
|
$
|
27,585
|
|
|
$
|
17,330
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
17,971
|
|
|
13,341
|
|
|
46,085
|
|
|
37,165
|
|
||||
Depreciation and amortization from unconsolidated joint ventures
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Deduct:
|
|
|
|
|
|
|
|
||||||||
Gains on sale of real estate
|
—
|
|
|
—
|
|
|
19,237
|
|
|
11,563
|
|
||||
Gain on acquisition of unconsolidated joint venture property
|
—
|
|
|
1,332
|
|
|
11
|
|
|
1,332
|
|
||||
Funds From Operations (FFO)
|
$
|
19,980
|
|
|
$
|
15,070
|
|
|
$
|
54,422
|
|
|
$
|
41,610
|
|
Less: preferred stock dividends
|
(1,322
|
)
|
|
(661
|
)
|
|
(3,966
|
)
|
|
(661
|
)
|
||||
Less: FFO attributable to noncontrolling interest
(2)
|
(491
|
)
|
|
(424
|
)
|
|
(1,408
|
)
|
|
(1,294
|
)
|
||||
Less: FFO attributable to participating securities
(3)
|
(133
|
)
|
|
(111
|
)
|
|
(408
|
)
|
|
(349
|
)
|
||||
FFO attributable to common stockholders
|
$
|
18,034
|
|
|
$
|
13,874
|
|
|
$
|
48,640
|
|
|
$
|
39,306
|
|
(1)
|
Amount represents our 15% ownership interest in the JV that owned the property located at 3233 Mission Oaks Boulevard for all periods, prior to our acquiring the remaining 85% ownership interest on July 6, 2016.
|
(2)
|
Noncontrolling interests represent holders of outstanding common units of the Company's operating partnership that are owned by unit holders other than the Company.
|
(3)
|
Participating securities include unvested shares of restricted stock, unvested LTIP units and unvested performance units.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Rental income
|
$
|
36,748
|
|
|
$
|
28,285
|
|
|
$
|
97,494
|
|
|
$
|
77,903
|
|
Tenant reimbursements
|
6,279
|
|
|
4,467
|
|
|
16,606
|
|
|
12,144
|
|
||||
Other income
|
203
|
|
|
192
|
|
|
550
|
|
|
764
|
|
||||
Total operating revenues
|
43,230
|
|
|
32,944
|
|
|
114,650
|
|
|
90,811
|
|
||||
Property expenses
|
11,229
|
|
|
8,978
|
|
|
29,987
|
|
|
24,480
|
|
||||
Net Operating Income
|
$
|
32,001
|
|
|
$
|
23,966
|
|
|
$
|
84,663
|
|
|
$
|
66,331
|
|
Amortization of (below) above market lease intangibles, net
|
(885
|
)
|
|
(39
|
)
|
|
(1,203
|
)
|
|
17
|
|
||||
Straight line rental revenue adjustment
|
(1,307
|
)
|
|
(1,395
|
)
|
|
(3,259
|
)
|
|
(3,412
|
)
|
||||
Cash Net Operating Income
|
$
|
29,809
|
|
|
$
|
22,532
|
|
|
$
|
80,201
|
|
|
$
|
62,936
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
2,009
|
|
|
$
|
3,061
|
|
|
$
|
27,585
|
|
|
$
|
17,330
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative
|
5,843
|
|
|
5,067
|
|
|
16,052
|
|
|
13,190
|
|
||||
Depreciation and amortization
|
17,971
|
|
|
13,341
|
|
|
46,085
|
|
|
37,165
|
|
||||
Acquisition expenses
|
16
|
|
|
380
|
|
|
421
|
|
|
1,490
|
|
||||
Interest expense
|
6,271
|
|
|
3,804
|
|
|
14,571
|
|
|
10,774
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management, leasing and development services
|
109
|
|
|
131
|
|
|
380
|
|
|
376
|
|
||||
Interest income
|
—
|
|
|
228
|
|
|
445
|
|
|
228
|
|
||||
Equity in income from unconsolidated real estate entities
|
—
|
|
|
1,328
|
|
|
11
|
|
|
1,451
|
|
||||
Gains on sale of real estate
|
—
|
|
|
—
|
|
|
19,237
|
|
|
11,563
|
|
||||
Net Operating Income
|
$
|
32,001
|
|
|
$
|
23,966
|
|
|
$
|
84,663
|
|
|
$
|
66,331
|
|
Amortization of (below) above market lease intangibles, net
|
(885
|
)
|
|
(39
|
)
|
|
(1,203
|
)
|
|
17
|
|
||||
Straight line rental revenue adjustment
|
(1,307
|
)
|
|
(1,395
|
)
|
|
(3,259
|
)
|
|
(3,412
|
)
|
||||
Cash Net Operating Income
|
$
|
29,809
|
|
|
$
|
22,532
|
|
|
$
|
80,201
|
|
|
$
|
62,936
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
2,009
|
|
|
$
|
3,061
|
|
|
$
|
27,585
|
|
|
$
|
17,330
|
|
Interest expense
|
6,271
|
|
|
3,804
|
|
|
14,571
|
|
|
10,774
|
|
||||
Depreciation and amortization
|
17,971
|
|
|
13,341
|
|
|
46,085
|
|
|
37,165
|
|
||||
Proportionate share of real estate related depreciation and amortization from unconsolidated joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
EBITDA
|
$
|
26,251
|
|
|
$
|
20,206
|
|
|
$
|
88,241
|
|
|
$
|
65,279
|
|
|
|
Nine Months Ended September 30, 2017
|
|||||||||
|
|
Total
|
|
Square
Feet
(1)
|
|
Per Square Foot
(2)
|
|||||
Non-Recurring Capital Expenditures
(3)
|
|
$
|
23,966
|
|
|
11,709,772
|
|
|
$
|
2.05
|
|
Recurring Capital Expenditures
(4)
|
|
1,699
|
|
|
16,104,713
|
|
|
$
|
0.11
|
|
|
Total Capital Expenditures
|
|
$
|
25,665
|
|
|
|
|
|
(1)
|
For non-recurring capital expenditures, reflects the aggregate square footage of the properties in which we incurred such capital expenditures. For recurring capital expenditures reflects the weighted average square footage of our consolidated portfolio during the period.
|
(2)
|
Per square foot amounts are calculated by dividing the aggregate capital expenditure costs by the square footage as defined in (1) above.
|
(3)
|
Non-recurring capital expenditures are expenditures made in respect of a property for improvement to the appearance of such property or any other major upgrade or renovation of such property, and further includes capital expenditures for seismic upgrades, or capital expenditures for deferred maintenance existing at the time such property was acquired.
|
(4)
|
Recurring capital expenditures are expenditures made in respect of a property for maintenance of such property and replacement of items due to ordinary wear and tear including, but not limited to, expenditures made for maintenance or replacement of parking lot, roofing materials, mechanical systems, HVAC systems and other structural systems.
|
|
Payments by Period
|
||||||||||||||||||||||||||
|
Total
|
|
Remainder of 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||||
Principal payments and debt maturities
|
$
|
666,979
|
|
|
$
|
263
|
|
|
$
|
5,991
|
|
|
$
|
58,266
|
|
|
$
|
166
|
|
|
$
|
50,175
|
|
|
$
|
552,118
|
|
Interest payments - fixed-rate debt
|
84,744
|
|
|
1,340
|
|
|
9,441
|
|
|
9,333
|
|
|
9,325
|
|
|
9,316
|
|
|
45,989
|
|
|||||||
Interest payments - variable-rate debt
(1)
|
50,573
|
|
|
2,953
|
|
|
11,578
|
|
|
10,803
|
|
|
9,745
|
|
|
8,718
|
|
|
6,776
|
|
|||||||
Interest rate swap payments
(2)
|
3,958
|
|
|
271
|
|
|
1,268
|
|
|
901
|
|
|
852
|
|
|
653
|
|
|
13
|
|
|||||||
Office lease payments
|
1,821
|
|
|
185
|
|
|
783
|
|
|
569
|
|
|
164
|
|
|
120
|
|
|
—
|
|
|||||||
Ground lease payments
|
6,432
|
|
|
36
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
5,820
|
|
|||||||
Contractual obligations
(3)
|
20,383
|
|
|
20,383
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
834,890
|
|
|
$
|
25,431
|
|
|
$
|
29,205
|
|
|
$
|
80,016
|
|
|
$
|
20,396
|
|
|
$
|
69,126
|
|
|
$
|
610,716
|
|
(1)
|
Based on the 1-month LIBOR rate of
1.23222%
, as of
September 30, 2017
.
|
(2)
|
Reflects the estimated payments to counterparties assuming that the 1-month LIBOR rate is equal to
1.23222%
from the effective date through the maturity date of each respective interest rate swap.
|
(3)
|
Includes total commitments for tenant improvement and construction work related to obligations under certain tenant leases and vendor contracts. We anticipate these obligations to be paid as incurred through the remainder of 2017 and 2018. As the timing of these obligations is subject to a number of factors, for purposes of this table, we have included the full amount under “Remainder of 2017”.
|
|
|
Maturity Date
|
|
Stated
Interest Rate
|
|
Effective
Interest Rate
(1)
|
|
Principal Balance
(in thousands)
(2)
|
|
Maturity Date of Effective Swaps
|
|||
Secured Debt:
|
|
|
|
|
|
|
|
|
|
|
|||
$60M Term Loan
|
|
8/1/2019
(3)
|
|
LIBOR + 1.90%
|
|
3.817
|
%
|
(4)
|
$
|
59,087
|
|
|
2/15/2019
|
Gilbert/La Palma
|
|
3/1/2031
|
|
5.125%
|
|
5.125
|
%
|
|
2,803
|
|
|
—
|
|
12907 Imperial Highway
|
|
4/1/2018
|
|
5.950%
|
|
5.950
|
%
|
|
5,089
|
|
|
—
|
|
Unsecured Debt:
|
|
|
|
|
|
|
|
|
|
|
|||
Amended $100M Term Loan Facility
|
|
2/14/2022
|
|
LIBOR +1.20%
(5)
|
|
3.098
|
%
|
(6)
|
100,000
|
|
|
12/14/2018
|
|
Amended Revolver
(7)
|
|
2/12/2021
(8)
|
|
LIBOR +1.10%
(5)
|
|
2.332
|
%
|
|
50,000
|
|
|
—
|
|
$225M Term Loan Facility
|
|
1/14/2023
|
|
LIBOR +1.50%
(5)
|
|
2.732
|
%
|
(9)
|
225,000
|
|
|
—
|
|
$100M Senior Notes
|
|
8/6/2025
|
|
4.290%
|
|
4.290
|
%
|
|
100,000
|
|
|
—
|
|
$125M Senior Notes
|
|
7/13/2027
|
|
3.930%
|
|
3.930
|
%
|
|
$
|
125,000
|
|
|
—
|
Total Consolidated
|
|
|
|
|
|
3.346
|
%
|
|
$
|
666,979
|
|
|
|
(1)
|
Includes the effect of interest rate swaps that were effective as of
September 30, 2017
. Assumes a 1-month LIBOR rate of
1.23222%
as of
September 30, 2017
, as applicable. Excludes the effect of amortization of debt issuance costs, discounts/premiums and the facility fee on the Amended Revolver.
|
(2)
|
Excludes unamortized debt issuance costs and discounts/premiums aggregating
$2.8 million
as of
September 30, 2017
.
|
(3)
|
One additional one-year extension is available, if certain conditions are satisfied.
|
(4)
|
As of
September 30, 2017
, this term loan has been effectively fixed at
3.817%
through the use of two interest rate swaps as follows: (i) $30 million at 3.726% with an effective date of January 15, 2015 and (ii)
$29.1 million
at 3.91% with an effective date of July 15, 2015.
|
(5)
|
The LIBOR margin will range from 1.20% to 1.70% for the Amended $100 Million Term Loan, 1.10% to 1.50% for the Amended Revolver and 1.50% to 2.25% for the $225 Million Term Loan Facility depending on our leverage ratio, which is the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value. This leverage ratio is measured on a quarterly basis, and as a result, the effective interest rate will fluctuate from period to period.
|
(6)
|
As of
September 30, 2017
, the Amended $100 Million Term Loan has been effectively fixed at 1.8975% plus the applicable LIBOR margin through the use of two interest rate swaps as follows: (i) $50 million with a strike rate of 1.79% with an effective date of August 14, 2015, and (ii) $50 million with a strike rate of 2.005% with an effective date of February 16, 2016.
|
(7)
|
The Amended Revolver is subject to an applicable facility fee which is calculated as a percentage of the total lenders’ commitment amount, regardless of usage. The applicable facility fee will range from
0.15%
to
0.30%
depending upon our leverage ratio.
|
(8)
|
Two additional six-month extensions available at the borrower’s option.
|
(9)
|
As of
September 30, 2017
, we have executed two interest rate swaps that will effectively fix the interest on the $225 Million Term Loan Facility as follows: (i) $125 million at 1.349% plus the applicable LIBOR margin from February 14, 2018, to January 14, 2022, and (ii) $100 million at 1.406% plus the applicable LIBOR margin from August 14, 2018, to January 14, 2022.
|
|
|
Average Term Remaining
(in years)
|
|
Stated
Interest Rate
|
|
Effective
Interest Rate
(1)
|
|
Principal Balance
(in thousands)
(2)
|
|
% of Total
|
||
Fixed vs. Variable:
|
|
|
|
|
|
|
|
|
|
|
||
Fixed
|
|
6.6
|
|
3.83%
|
|
3.83%
|
|
$
|
391,979
|
|
|
59%
|
Variable
|
|
4.9
|
|
LIBOR + 1.43%
|
|
2.66%
|
|
$
|
275,000
|
|
|
41%
|
Secured vs. Unsecured:
|
|
|
|
|
|
|
|
|
|
|
||
Secured
|
|
2.2
|
|
|
|
4.03%
|
|
$
|
66,979
|
|
|
10%
|
Unsecured
|
|
6.3
|
|
|
|
3.27%
|
|
$
|
600,000
|
|
|
90%
|
(1)
|
Includes the effect of interest rate swaps that were effective as of
September 30, 2017
. Excludes the effect of amortization of debt issuance costs, discounts/premiums and the facility fee on the Amended Revolver. Assumes a 1-month LIBOR rate of
1.23222%
as of
September 30, 2017
, as applicable.
|
(2)
|
Excludes unamortized debt issuance costs and discount/premiums aggregating
$2.8 million
as of
September 30, 2017
.
|
•
|
Maintaining a ratio of total indebtedness to total asset value of not more than 60%;
|
•
|
For the Amended Credit Agreement and the $225 Million Term Loan Facility, maintaining a ratio of secured debt to total asset value of not more than 45%;
|
•
|
For the $100 Million Notes and the $125 Million Notes, maintaining a ratio of secured debt to total asset value of not more than 40%;
|
•
|
Maintaining a ratio of total secured recourse debt to total asset value of not more than 15%;
|
•
|
Maintaining a minimum tangible net worth of at least the sum of (i) $760,740,750, and (ii) an amount equal to at least 75% of the net equity proceeds received by the Company after September 30, 2016;
|
•
|
Maintaining a ratio of adjusted EBITDA (as defined in each of the loan agreements) to fixed charges of at least 1.50 to 1.0;
|
•
|
Maintaining a ratio of total unsecured debt to total unencumbered asset value of not more than 60%;
|
•
|
Maintaining a ratio of unencumbered NOI (as defined in each of the loan agreements) to unsecured interest expense of at least 1.75 to 1.0.
|
•
|
Maintaining a Debt Service Coverage Ratio (as defined in the term loan agreement) of at least 1.10 to 1.00, to be tested quarterly;
|
•
|
Maintaining Unencumbered Liquid Assets (as defined in the term loan agreement) of not less than (i) $5 million, or (ii) $8 million if we elect to have Line of Credit Availability (as defined in the term loan agreement) included in the calculation, of which $2 million must be cash or cash equivalents, to be tested annually as of December 31 of each year;
|
•
|
Maintaining a minimum Fair Market Net Worth (as defined in the term loan agreement) of at least $75 million, to be tested annually as of December 31 of each year.
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||
|
|
2017
|
|
2016
|
|
Change
|
||||||
Cash provided by operating activities
|
|
$
|
58,129
|
|
|
$
|
44,010
|
|
|
$
|
14,119
|
|
Cash used in investing activities
|
|
$
|
(491,948
|
)
|
|
$
|
(312,099
|
)
|
|
$
|
(179,849
|
)
|
Cash provided by financing activities
|
|
$
|
431,212
|
|
|
$
|
318,151
|
|
|
$
|
113,061
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares Purchased as Part of
Publicly Announced Plans or Programs
|
|
Maximum
Number (or approximate dollar value) of Shares that May Yet Be Purchased Under the Plans
or Programs
|
|||
July 1, 2017 to July 31, 2017
(1)
|
|
13,543
|
|
|
$
|
27.85
|
|
|
N/A
|
|
N/A
|
August 1, 2017 to August 31, 2017
(1)
|
|
607
|
|
|
28.67
|
|
|
N/A
|
|
N/A
|
|
September 1, 2017 to September 30, 2017
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
|
|
14,150
|
|
|
$
|
27.88
|
|
|
N/A
|
|
N/A
|
(1)
|
In July 2017 and August 2017, these shares were tendered by certain of our employees to satisfy minimum statutory tax withholding obligations related to the vesting of restricted shares.
|
Exhibit
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
4.1
|
|
|
4.2
|
|
|
10.1*
|
|
|
10.2
|
|
|
31.1*
|
|
|
31.2*
|
|
|
31.3*
|
|
|
32.1*
|
|
|
32.2*
|
|
|
32.3*
|
|
|
101.1*
|
|
The registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) the Notes to the Consolidated Financial Statements (unaudited) that have been detail tagged.
|
*
|
Filed herein
|
|
|
Rexford Industrial Realty, Inc.
|
|
|
|
November 2, 2017
|
|
/s/ Michael S. Frankel
|
|
|
Michael S. Frankel
|
|
|
Co-Chief Executive Officer (Principal Executive Officer)
|
|
|
|
November 2, 2017
|
|
/s/ Howard Schwimmer
|
|
|
Howard Schwimmer
|
|
|
Co-Chief Executive Officer (Principal Executive Officer)
|
|
|
|
November 2, 2017
|
|
/s/ Adeel Khan
|
|
|
Adeel Khan
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
TABLE OF CONTENTS
|
|
||
|
|
|
|
|
|
|
Page
|
1.
|
Purchase and Sale of Property
|
1
|
|
2.
|
Purchase Price
|
1
|
|
3.
|
Conditions to Closing
|
2
|
|
|
(a)
|
Buyer’s Approvals
|
2
|
|
(b)
|
Notice of Disapproval
|
5
|
|
(c)
|
Additional Conditions Precedent
|
5
|
|
(d)
|
Waiver of Buyer’s Conditions to Closing
|
6
|
|
(e)
|
Return of Deposit
|
6
|
4.
|
Possession and Inspection
|
6
|
|
|
(a)
|
Possession
|
6
|
|
(b)
|
Inspection
|
6
|
|
(c)
|
Insurance
|
7
|
|
(d)
|
Reports
|
7
|
|
(e)
|
Tenants
|
8
|
|
(f)
|
Seller’s Access
|
8
|
5.
|
The Closing
|
8
|
|
|
(a)
|
The Closing Date
|
8
|
|
(b)
|
Deliveries through Escrow
|
8
|
|
(c)
|
Deliveries Outside Escrow
|
9
|
|
(d)
|
Notice to Tenants
|
9
|
|
(e)
|
Simultaneous Delivery; Conditions Concurrent
|
9
|
6.
|
Escrow
|
10
|
|
|
(a)
|
Opening of Escrow
|
10
|
|
(b)
|
Duties of Escrow Holder
|
10
|
|
(c)
|
Additional Provisions
|
10
|
|
(d)
|
No Extensions of Time
|
10
|
|
(e)
|
Reporting
|
10
|
7.
|
Costs
|
11
|
|
|
(a)
|
Seller
|
11
|
|
(b)
|
Buyer
|
11
|
|
(c)
|
Termination
|
11
|
8.
|
Prorations and Deposits
|
11
|
|
|
(a)
|
Rent
|
11
|
|
(b)
|
Leasing Costs
|
12
|
|
(c)
|
Security Deposits
|
12
|
|
(d)
|
Utility Charges
|
12
|
|
(e)
|
Real Estate Taxes and Assessments
|
12
|
|
(f)
|
Tenant Common Area Charges
|
12
|
|
(g)
|
Other Apportionments
|
13
|
|
(h)
|
Preliminary Closing Adjustment
|
13
|
|
(i)
|
Post-Closing Reconciliation
|
13
|
|
(j)
|
Collection Cooperation
|
13
|
9.
|
Representations and Warranties
|
13
|
|
|
(a)
|
Buyer’s Representations and Warranties
|
14
|
|
(b)
|
Seller’s Representations and Warranties
|
15
|
|
(c)
|
Limitations on Seller’s Liability
|
16
|
|
(d)
|
Disclaimer of Seller Representations and Warranties
|
18
|
|
(e)
|
Release
|
21
|
10.
|
Remedies
|
22
|
|
|
(a)
|
REMEDIES FOR BUYER’S BREACH
|
22
|
|
(b)
|
Remedies for Seller’s Breach
|
22
|
|
(c)
|
Survival of Indemnities
|
23
|
11.
|
Buyer’s Obligations Pending Closing
|
23
|
|
12.
|
Seller’s Obligations Pending Closing
|
23
|
|
13.
|
Damage or Destruction
|
24
|
|
14.
|
Eminent Domain
|
24
|
|
15.
|
Commissions
|
25
|
|
16.
|
Publicity and Confidentiality
|
25
|
|
17.
|
Exculpation
|
26
|
|
18.
|
Execution of Documents by Seller
|
26
|
|
19
|
Sophistication of the Parties
|
26
|
|
20.
|
Notice
|
27
|
|
21.
|
Miscellaneous
|
29
|
|
(a)
|
Successors and Assigns
|
29
|
|
(b)
|
Amendments
|
29
|
|
(c)
|
Governing Law
|
30
|
|
(d)
|
Interpretation
|
30
|
|
(e)
|
No Obligation to Third Parties
|
30
|
|
(f)
|
Further Assurances
|
30
|
|
(g)
|
Merger of Prior Agreements
|
30
|
|
(h)
|
Enforcement
|
30
|
|
(i)
|
Time
|
30
|
|
(j)
|
Severability
|
31
|
|
(k)
|
No Waiver
|
31
|
|
(l)
|
Legal Representation
|
31
|
|
(m)
|
Schedules and Exhibits
|
31
|
|
(n)
|
Intentionally Omitted
|
31
|
|
(o)
|
Indemnity
|
31
|
|
(p)
|
Signer’s Warranty
|
32
|
|
(q)
|
No Offer or Binding Contract
|
32
|
|
(r)
|
Counterparts
|
32
|
|
(s)
|
Survival
|
32
|
|
(t)
|
1031 Exchange
|
33
|
|
(u)
|
SEC Reporting Requirements
|
33
|
If to Buyer
:
|
Rexford Industrial Realty, L.P.
11620 Wilshire Boulevard, Suite 1000
Los Angeles, California 90025
Attention: Howard Schwimmer and David Lanzer
Phone: (310) 966-1680
Fax: (310) 966-1690
E-mail: HowardS@rexfordindustrial.com
DLanzer@rexfordindustrial.com
|
|
With a copy to:
Greenberg Glusker Fields Claman & Machtinger LLP
1900 Avenue of the Stars, 21st Floor
Los Angeles, California 90067
Attention: Kenneth S. Fields, Esq.
Phone: (310) 201-7462
Fax: (310) 201-2376
E-mail: KFields@greenbergglusker.com
|
If to Seller
:
|
CSHV Rancho Pacifica, LLC
c/o California State Teachers’ Retirement System
100 Waterfront Place, 15th Floor
West Sacramento, California 95605-2807
Attention: CalSTRS - Lamont T. King, Jr., Legal Office
Phone: (916) 414-1730
Fax: (916) 414-1723
E-mail: lking@calstrs.com
|
|
And
Attention: Henry J. Thomas
Phone: (916) 414-7975
Fax: (916) 414-7984
E-mail: hthomas@calstrs.com
|
|
With a copy to
:
CBRE Global Investors, LLC
515 South Flower Street, 31st Floor
Los Angeles, California 90071
Attention: Anthony Ecker
Phone: (213) 683-4345
Fax: (213) 683-43041
E-mail: tony.ecker@cbreglobalinvestors.com
|
|
And a copy to:
Cox, Castle & Nicholson LLP
2029 Century Park East, Suite 2100
Los Angeles, California 90067
Attention: Amy H. Wells, Esq.
Phone: (310) 284-2233
Fax: (310) 284-2100
E-mail: awells@coxcastle.com
And
Attention: Ryan E. Dosh, Esq.
Phone: (310) 284-2147
Fax: (310) 284-2100
E-mail: rdosh@coxcastle.com
|
If to Title Company
:
|
First American Title Insurance Company
National Commercial Services
777 South Figueroa Street, 4
th
Floor
Los Angeles, California 90017
Attention: Maurice Neri
Bobby Hatfield
Phone: (213) 271-1737
(949) 584-4542
Fax: (714) 361-3603
E-mail: mneri@firstam.com
bhatfield@firstam.com
|
If to Escrow Holder
:
|
First American Title Insurance CompanyNational Commercial Services
777 South Figueroa Street, 4
th
Floor
Los Angeles, California 90017
Attention: Maurice Neri
Phone: (213) 271-1737
Fax: (714) 361-3603
E-mail: mneri@firstam.com
|
|
“Seller”
|
|||
|
|
|
|
|
|
CSHV RANCHO PACIFICA, LLC,
|
|||
|
a Delaware limited liability company
|
|||
|
|
|
|
|
|
By:
|
California State Teachers’ Retirement System, a public entity, its sole member
|
||
|
|
|
|
|
|
|
By:
|
/s/ Michelle Cunningham
|
|
|
|
|
|
|
|
|
|
|
Michelle Cunningham, CFA
|
|
|
|
|
Deputy Chief Investment Office
|
|
|
|
|
(Print Name and Title)
|
|
|
|
|
|
|
“Buyer”
|
|||
|
|
|||
|
REXFORD INDUSTRIAL REALTY, L.P.,
|
|||
|
a Maryland limited partnership
|
|||
|
|
|
|
|
|
By:
|
Rexford Industrial Realty, Inc.,
|
||
|
|
a Maryland corporation,
|
||
|
|
its General Partner
|
||
|
|
|
|
|
|
|
By:
|
/s/ Howard Schwimmer
|
|
|
|
Name:
|
Howard Schwimmer
|
|
|
|
Its:
|
Co-CEO
|
|
First American Title Insurance Company
|
|||
|
|
|
|
|
|
By:
|
/s/ Maurice Neri
|
||
|
|
|
|
|
|
|
Maurice Neri, AVP
|
||
|
|
(Print Name and Title)
|
|
|
|
|
|
ASSIGNOR:
|
CSHV RANCHO PACIFICA, LLC,
|
|||
|
a Delaware limited liability company
|
|||
|
|
|
|
|
|
By:
|
California State Teachers’ Retirement System, a public entity, its sole member
|
||
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Print Name and Title)
|
|
|
|
|
|
|
|
|||
|
|
|||
ASSIGNEE:
|
________________, a ____________________
|
|||
|
|
|
|
|
|
By:
|
|
||
|
|
|
||
|
|
(Print Name and Title)
|
||
|
|
|
|
|
|
By:
|
|
||
|
|
|
||
|
|
(Print Name and Title)
|
||
|
|
|
|
|
|
|
|
|
|
¨
|
Computed on the consideration or value of the property conveyed; OR
|
¨
|
Computed on the consideration or value less liens or encumbrances remaining at time of sale.
|
|
CSHV RANCHO PACIFICA, LLC,
|
|||
|
a Delaware limited liability company
|
|||
|
|
|
|
|
|
By:
|
California State Teachers’ Retirement System, a public entity, its sole member
|
||
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Print Name and Title)
|
|
|
|
|
|
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
|
|
CSHV RANCHO PACIFICA, LLC,
|
|||
|
a Delaware limited liability company
|
|||
|
|
|
|
|
|
By:
|
California State Teachers’ Retirement System, a public entity, its sole member
|
||
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Print Name and Title)
|
|
|
|
|
|
|
|
|
|
|
|
TRANSFEROR:
|
|
|
|
|
|
|
|
CALIFORNIA STATE TEACHER'S RETIREMENT SYSTEM,
a public entity
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
(Print Name and Title)
|
|
|
|
|
|
|
|
|
CBRE GLOBAL INVESTORS, LLC
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
(Print Name and Title)
|
Re:
|
Lease dated _______________________, 20___ (the “Lease”) executed between _______________________ (“Landlord”), and _______________________ (“Tenant”), for those premises located at _______________________.
|
|
|
|
|
|
TENANT:
|
|
|
|
|
|
, a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
13.
|
Rent Rolls including step-ups for each month January 2016 - December 2016 (by building if available)
|
14.
|
Rent Rolls including step-ups for January 2017 through Closing Date (by building if available)
|
|
“Seller”
|
|||
|
|
|
|
|
|
CSHV RANCHO PACIFICA, LLC,
|
|||
|
a Delaware limited liability company
|
|||
|
|
|
|
|
|
By:
|
California State Teachers’ Retirement System, a public entity, its sole member
|
||
|
|
|
|
|
|
|
By:
|
CBRE Global Investors, LLC, a Delaware limited liability company, its investment advisor
|
|
|
|
|
|
|
|
|
By:
|
/s/ Anthony Ecker
|
|
|
|
|
|
Anthony Ecker, Senior Director,
|
|
|
|
|
Authorized Signatory
|
|
|
|
|
|
|
“Buyer”
|
|||
|
|
|||
|
REXFORD INDUSTRIAL REALTY, L.P.,
|
|||
|
a Maryland limited partnership
|
|||
|
|
|
|
|
|
By:
|
Rexford Industrial Realty, Inc.,
|
||
|
|
a Maryland corporation,
|
||
|
|
its General Partner
|
||
|
|
|
|
|
|
|
By:
|
/s/ Howard Schwimmer
|
|
|
|
Name:
|
Howard Schwimmer
|
|
|
|
Its:
|
Co-CEO
|
1.
|
Lamon’s Metal Gasket - $12,000
|
2.
|
Union Supply Company - $181,150
|
3.
|
Affiliated Pathologists Medical Group - $14,862
|
4.
|
eVox Productions - $2,387.77
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rexford Industrial Realty, 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 officers 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 officers 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.
|
November 2, 2017
|
|
By:
|
/s/ Michael S. Frankel
|
|
|
|
Michael S. Frankel
|
|
|
|
Co-Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rexford Industrial Realty, 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 officers 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 officers 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.
|
November 2, 2017
|
|
By:
|
/s/ Howard Schwimmer
|
|
|
|
Howard Schwimmer
|
|
|
|
Co-Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Rexford Industrial Realty, 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 officers 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 officers 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.
|
November 2, 2017
|
|
By:
|
/s/ Adeel Khan
|
|
|
|
Adeel Khan
|
|
|
|
Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Michael S. Frankel
|
|
Michael S. Frankel
|
|
Co-Chief Executive Officer
|
|
November 2, 2017
|
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Howard Schwimmer
|
|
Howard Schwimmer
|
|
Co-Chief Executive Officer
|
|
November 2, 2017
|
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Adeel Khan
|
|
Adeel Khan
|
|
Chief Financial Officer
|
|
November 2, 2017
|
|