UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2015
Griffin Capital Essential Asset REIT II, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 333-194280
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MD
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46-4654479
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(State or other jurisdiction of
incorporation)
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(IRS Employer
Identification No.)
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Griffin Capital Plaza, 1520 E. Grand Avenue, El Segundo, CA 90245
(Address of principal executive offices, including zip code)
(310) 469-6100
(Registrant's telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
Amendment No. 2 to Advisory Agreement
On November 2, 2015, Griffin Capital Essential Asset REIT II, Inc. (the "Registrant") entered into Amendment No. 2 (the "Amendment") to the Advisory Agreement between the Registrant and Griffin Capital Essential Asset Advisor II, LLC (the "Advisor").
Pursuant to the Amendment, the Advisor will pay all organizational and offering expenses related to the Registrant's public offering (the "Offering"), up to 1.0% of gross offering proceeds from the Offering. In addition, pursuant to the Amendment, acquisition fees payable to the Advisor were increased from 2.0% to 3.85%, which consists of the original 2.0% base acquisition fee and up to an additional 1.85% contingent acquisition fee (the "Contingent Acquisition Fee"). The amount of the Contingent Acquisition Fee paid upon the closing of an acquisition will be reviewed on an acquisition by acquisition basis and such payment shall not exceed the then outstanding amounts paid by the Advisor for dealer manager fees and organization and offering expenses at the time of such closing. The Advisor may waive or defer all or a portion of the acquisition fee at any time and from time to time, in the Advisor's sole discretion. The foregoing description of the Amendment is qualified in its entirety by reference to the terms of the Amendment, which is attached as Exhibit 10.1 hereto.
Item 8.01 Other Events
On November 4, 2015, the Registrant, through three wholly-owned subsidiaries of the Registrant's operating partnership (the "SPEs"), entered into a series of assignment and assumption agreements with the Registrant's sponsor related to the potential acquisitions of the following three properties: (1) a four-story, Class "A" office building located in Durham, North Carolina and leased in its entirety to Toshiba Tec Corporation (the "Toshiba Tec property") for a purchase price of approximately $35.9 million, plus closing costs and acquisition fees; (2) a to-be-built, single-story, Class "A" industrial facility located in North Charleston, South Carolina and leased in its entirety to WABCO North America, LLC (the "WABCO property") for a purchase price of approximately $13.8 million, plus closing costs and acquisition fees; and (3) a to-be-built, single-story, Class "A" distribution warehouse located in DeKalb, Illinois and leased in its entirety to 3M Company (the "3M property") for a purchase price of approximately $66.4 million, plus closing costs and acquisition fees. Pursuant to the assignment and assumption agreements, the Registrant, through the SPEs, has assumed all of the liabilities and obligations of the sponsor in connection with the respective purchase and sale agreements related to the foregoing properties.
Acquisition Contingencies
Pursuant to the purchase and sale agreements for the properties described above, the Registrant will be obligated to purchase each property only after satisfactory completion of agreed upon closing conditions. The Registrant will decide whether to acquire each property generally based upon:
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the Registrant's ability to raise sufficient proceeds in its public offering and to obtain sufficient amounts of debt or other equity capital on attractive terms to acquire each property;
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satisfactory completion of due diligence on each property and the tenants of each property;
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satisfaction of the conditions to the acquisitions in accordance with the respective purchase and sale agreements; and
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no material adverse change relating to each property, the sellers of each property, or certain economic conditions.
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There can be no assurance that the acquisition of each property will be completed. Other properties may be identified in the future that the Registrant may acquire prior to or instead of the properties described above. Due to the considerable conditions to the consummation of the acquisitions of the properties, the Registrant cannot make any assurances that the closing of any property is probable.
Item 9.01 Exhibits
(d) Exhibits.
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10.1
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Amendment No. 2 to Advisory Agreement
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Signature(s)
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Griffin Capital Essential Asset REIT II, Inc.
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Date: November 6, 2015
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By:
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/s/ Howard S. Hirsch
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Howard S. Hirsch
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Vice President and Secretary
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AMENDMENT NO. 2 TO ADVISORY AGREEMENT
THIS AMENDMENT NO. 2 TO ADVISORY AGREEMENT, dated as of November 2, 2015 is entered into among GRIFFIN CAPITAL ESSENTIAL ASSET REIT II, Inc., a Maryland corporation (the “Company”), GRIFFIN CAPITAL ESSENTIAL ASSET OPERATING PARTNERSHIP II, L.P., a Delaware limited partnership and GRIFFIN CAPITAL ESSENTIAL ASSET ADVISOR II, LLC, a Delaware limited liability company (the “Advisor”).
RECITALS
WHEREAS, the Company, the Operating Partnership and the Advisor are parties to an Advisory Agreement dated July 31, 2014, as amended by that certain Amendment No. 1 to Advisory Agreement dated March 18, 2015 (together, the “Advisory Agreement”), pursuant to which the Advisor agreed to provide certain services to the Company and the Operating Partnership, and the Company agreed to provide certain compensation to the Advisor in exchange for such service;
WHEREAS, on June 16, 2015, the parties hereto mutually consented to continue the Advisory Agreement in force until August 12, 2015, subject to an unlimited number of successive one (1) year renewals upon the mutual consent of the parties, as provided in Section 14.1 of the Advisory Agreement;
WHEREAS, on August 12, 2015, the Company reviewed the terms of the Advisory Agreement, determined that the terms of the Advisory Agreement are fair and reasonable to the Company and renewed the Advisory Agreement for an additional one (1) year term; and
WHEREAS, in connection with the Company’s decision to sell shares of Class T common stock and cease offering shares of Class A common stock, the Company, the Operating Partnership and the Advisor have determined that it is advisable to enter into an additional amendment to the Advisory Agreement to clarify expenses incurred by the Company and Advisor and fees paid to the Advisor.
NOW THEREFORE, the Company, the Operating Partnership and the Advisor hereby modify and amend the Advisory Agreement as follows:
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1.
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Defined Terms.
Capitalized terms used herein and not defined herein shall have the meanings set forth in the Advisory Agreement.
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2.
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Amendments to Advisory Agreement.
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The following term defined in Article I is hereby removed and replaced with the following:
“Capped O&O Expenses” means all Organizational and Offering Expenses (excluding Sales Commissions, the dealer manager fee and stockholder servicing fees) in excess of 3.5% of the Gross Proceeds raised in a completed Offering other than Gross Proceeds from Stock sold pursuant to the Distribution Reinvestment Plan.
Section 9.1 is hereby removed and replaced with the following
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9.1
Acquisition Fees
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The Company will pay the Advisor, as compensation for the services described in Section 4.2, Acquisition Fees in an amount up to 3.85% of the Contract Purchase Price of each Property at the time and in respect of funds expended for the acquisition or development of a Property. The Acquisition Fees consist of a 2.0% base acquisition fee and up to an additional 1.85% contingent acquisition fee (the “Contingent Acquisition Fee”). The amount of the Contingent Acquisition Fee paid upon the closing of an acquisition will be reviewed on an acquisition by acquisition basis and such payment shall not exceed the then outstanding amounts paid by the Advisor for dealer manager fees and Organizational and Offering Expenses at the time of such closing. The Advisor may waive or defer all or a portion of the Acquisition Fee at any time and from time to time, in the Advisor’s sole discretion. The purchase price allocable for a Property held through a Joint
Venture shall equal the product of (a) the Contract Purchase Price of the Property and (b) the direct or indirect ownership percentage in the Joint Venture held directly or indirectly by the Company or the Operating Partnership. For purposes of this Section 9.1, “ownership percentage” shall be the percentage of capital stock, membership interests, partnership interests or other equity interests held by the Company or the Operating Partnership, without regard to classification of such interests. The total of all Acquisition Fees and Acquisition Expenses shall be limited in accordance with the Charter.
Section 10.1(a) is hereby removed and replaced with the following:
(a)
reimbursements for Organizational and Offering Expenses in connection with an Offering (to the extent such expenses exceed 1.0% of Gross Proceeds from the Offering), provided, however, that within 60 days after the end of the month in which an Offering terminates, the Advisor shall reimburse the Company to the extent (i) there are Capped O&O Expenses borne by the Company or (ii) Organization and Offering Expenses borne by the Company (including Sales Commissions, dealer manager fees, stockholder servicing fees and non-accountable due diligence expense allowance but not including Acquisition Fees or Acquisition Expenses) exceed 15% of the Gross Proceeds raised in a completed Offering;
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3.
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Amendment.
This Amendment may not be amended or modified except in writing signed by all parties.
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4.
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Governing Law.
This Amendment shall be governed by and construed in accordance with the laws of the State of California.
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5.
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Counterparts.
This Amendment may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute a single instrument.
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[Signatures appear on next page]
IN WITNESS WHEREOF,
the parties have executed this Amendment No. 2 to Advisory Agreement to be effective for all purposes as of the date first above written.
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THE COMPANY:
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GRIFFIN CAPITAL ESSENTIAL ASSET REIT II, INC.
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By:
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/s/ Kevin A. Shields
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Kevin A. Shields
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Chief Executive Officer
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THE OPERATING PARTNERSHIP:
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GRIFFIN CAPITAL ESSENTIAL ASSET OPERATING PARTNERSHIP II, L.P.
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By:
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GRIFFIN CAPITAL ESSENTIAL ASSET REIT II, INC., ITS GENERAL PARTNER
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By:
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/s/ Kevin A. Shields
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Kevin A. Shields
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Chief Executive Officer
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THE ADVISOR:
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GRIFFIN CAPITAL ESSENTIAL ASSET ADVISOR II, LLC
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By:
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/s/ Kevin A. Shields
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Kevin A. Shields
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Chief Executive Officer
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