x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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90-0929989
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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405 Park Ave., 14th Floor, New York, New York
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10022
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(Address of principal executive offices)
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(Zip Code)
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(212) 415-6500
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(Registrant's telephone number, including area code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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June 30,
2016 |
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December 31,
2015 |
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(Unaudited)
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ASSETS
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Real estate investments, at cost:
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Land
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$
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345,312
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$
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358,278
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Buildings, fixtures and improvements
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1,556,185
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1,540,821
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Acquired intangible lease assets
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319,380
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319,028
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Total real estate investments, at cost
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2,220,877
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2,218,127
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Less: accumulated depreciation and amortization
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(265,183
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)
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(215,427
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)
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Total real estate investments, net
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1,955,694
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2,002,700
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Cash and cash equivalents
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148,993
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130,500
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Restricted cash
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7,889
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7,887
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Commercial mortgage loan, held for investment, net
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17,150
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17,135
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Prepaid expenses and other assets
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24,980
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21,982
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Deferred costs, net
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1,283
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—
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Assets held for sale
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—
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56,884
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Total assets
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$
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2,155,989
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$
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2,237,088
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Mortgage notes payable, net of deferred financing costs
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$
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1,022,031
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$
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1,033,582
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Mortgage premiums, net
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12,651
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14,892
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Market lease liabilities, net
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16,212
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18,133
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Accounts payable and accrued expenses (including $1,279 and $541 due to related parties as of June 30, 2016 and December 31, 2015, respectively)
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11,409
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24,964
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Deferred rent and other liabilities
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9,005
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9,569
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Distributions payable
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8,860
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9,199
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Total liabilities
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1,080,168
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1,110,339
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Preferred stock, $0.01 par value per share, 50,000,000 shares authorized, none issued and outstanding
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—
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—
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Common stock, $0.01 par value per share, 300,000,000 shares authorized, 65,475,650 and 64,961,256 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
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655
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650
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Additional paid-in capital
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1,441,724
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1,429,294
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Accumulated deficit
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(366,558
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)
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(303,195
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)
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Total stockholders' equity
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1,075,821
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1,126,749
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Total liabilities and stockholders' equity
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$
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2,155,989
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$
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2,237,088
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2016
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2015
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2016
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2015
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Revenues:
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Rental income
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$
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41,176
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$
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40,216
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$
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81,676
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$
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80,431
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Operating expense reimbursements
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2,871
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3,053
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5,817
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5,704
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Interest income from debt investments
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230
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—
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570
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—
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Total revenues
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44,277
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43,269
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88,063
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86,135
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Operating expenses:
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Asset management fees to related party
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4,500
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4,096
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9,000
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4,096
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Property operating
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3,283
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3,439
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6,620
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6,526
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Acquisition and transaction related
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734
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377
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1,077
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506
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General and administrative
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2,464
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3,552
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5,842
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5,499
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Depreciation and amortization
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25,538
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25,386
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51,031
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50,773
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Total operating expenses
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36,519
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36,850
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73,570
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67,400
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Operating income
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7,758
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6,419
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14,493
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18,735
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Other (expense) income:
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Interest expense
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(12,328
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)
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(8,239
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)
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(24,959
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)
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(16,399
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)
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Distribution income from other real estate securities
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—
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169
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—
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338
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Gain on sale of other real estate securities
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—
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—
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—
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546
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Gain on sale of real estate investments
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454
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—
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454
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—
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Other income
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39
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27
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81
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57
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Total other expense, net
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(11,835
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)
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(8,043
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)
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(24,424
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)
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(15,458
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)
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Net (loss) income
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$
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(4,077
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)
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$
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(1,624
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)
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$
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(9,931
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)
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$
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3,277
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Other comprehensive (loss) income:
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Change in unrealized income on investment securities
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—
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(7
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)
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—
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(184
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)
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Comprehensive (loss) income
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$
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(4,077
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)
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$
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(1,631
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)
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$
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(9,931
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)
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$
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3,093
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Basic net (loss) income per share
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$
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(0.06
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)
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$
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(0.02
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)
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$
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(0.15
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)
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$
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0.05
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Diluted net (loss) income per share
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$
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(0.06
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)
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$
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(0.02
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)
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$
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(0.15
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)
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$
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0.05
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Common Stock
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|||||||||||
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Number of
Shares
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Par Value
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Additional Paid-in
Capital
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Accumulated Deficit
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Total Stockholders' Equity
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|||||||||
Balance, December 31, 2015
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64,961,256
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$
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650
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$
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1,429,294
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$
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(303,195
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)
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$
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1,126,749
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Common stock issued through distribution reinvestment plan
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522,248
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5
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12,600
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—
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12,605
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Common stock repurchases
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(7,854
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)
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—
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(190
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)
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—
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(190
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)
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Share-based compensation
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—
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—
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20
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—
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20
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Distributions declared
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—
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—
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|
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—
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(53,432
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)
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(53,432
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)
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Net loss
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—
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|
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—
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|
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—
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(9,931
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)
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|
(9,931
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)
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Balance, June 30, 2016
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65,475,650
|
|
|
$
|
655
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|
|
$
|
1,441,724
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|
|
$
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(366,558
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)
|
|
$
|
1,075,821
|
|
|
Six Months Ended June 30,
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||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
$
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(9,931
|
)
|
|
$
|
3,277
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
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|
|
|
||||
Depreciation
|
33,723
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|
|
33,473
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|
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Amortization of in-place lease assets
|
17,291
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|
|
17,300
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|
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Amortization (including accelerated write-off) of deferred costs
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2,267
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|
|
2,608
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|
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Amortization of mortgage premiums on borrowings
|
(2,241
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)
|
|
(3,734
|
)
|
||
Discount accretion and premium amortization on investments, net
|
(15
|
)
|
|
—
|
|
||
Amortization of market lease intangibles, net
|
534
|
|
|
833
|
|
||
Share-based compensation
|
20
|
|
|
14
|
|
||
Gain on sale of real estate investments
|
(454
|
)
|
|
—
|
|
||
Gain on sale of other real estate securities
|
—
|
|
|
(546
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Prepaid expenses and other assets
|
(4,344
|
)
|
|
(4,120
|
)
|
||
Accounts payable and accrued expenses
|
1,929
|
|
|
1,115
|
|
||
Deferred rent and other liabilities
|
(564
|
)
|
|
(178
|
)
|
||
Net cash provided by operating activities
|
38,215
|
|
|
50,042
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from sale of commercial mortgage loans
|
56,884
|
|
|
—
|
|
||
Investments in real estate and other assets
|
(34,244
|
)
|
|
—
|
|
||
Proceeds from sale of real estate investments
|
15,471
|
|
|
—
|
|
||
Proceeds from sale of other real estate securities
|
—
|
|
|
9,253
|
|
||
Net cash provided by investing activities
|
38,111
|
|
|
9,253
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|||
Payments on mortgage notes payable
|
(500
|
)
|
|
(478
|
)
|
||
Payments of deferred financing costs
|
—
|
|
|
(2,000
|
)
|
||
Refunds of deferred financing costs
|
88
|
|
|
—
|
|
||
Common stock repurchases
|
(16,253
|
)
|
|
(11,649
|
)
|
||
Distributions paid
|
(41,166
|
)
|
|
(24,195
|
)
|
||
Restricted cash
|
(2
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(57,833
|
)
|
|
(38,322
|
)
|
||
Net change in cash and cash equivalents
|
18,493
|
|
|
20,973
|
|
||
Cash and cash equivalents, beginning of period
|
130,500
|
|
|
74,760
|
|
||
Cash and cash equivalents, end of period
|
$
|
148,993
|
|
|
$
|
95,733
|
|
|
|
|
|
||||
Supplemental Disclosures:
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|
||||
Cash paid for interest
|
$
|
23,857
|
|
|
$
|
17,137
|
|
Cash paid for income taxes
|
$
|
670
|
|
|
$
|
787
|
|
|
|
|
|
||||
Non-Cash Financing Activities:
|
|
|
|
||||
Mortgage notes payable released in connection with disposition of real estate
|
$
|
13,389
|
|
|
$
|
—
|
|
Common stock issued through distribution reinvestment plan
|
$
|
12,605
|
|
|
$
|
29,902
|
|
|
|
Six Months Ended
|
||
(Dollar amounts in thousands)
|
|
June 30, 2016
|
||
Real estate investments, at cost:
|
|
|
||
Land
|
|
$
|
1,729
|
|
Buildings, fixtures and improvements
|
|
29,664
|
|
|
Total tangible assets
|
|
31,393
|
|
|
Acquired intangibles:
|
|
|
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In-place leases
(1)
|
|
3,162
|
|
|
Above-market lease assets
(1)
|
|
548
|
|
|
Above-market ground lease liability
(1)
|
|
(85
|
)
|
|
Below-market lease liabilities
(1)
|
|
(774
|
)
|
|
Total intangible assets, net
|
|
2,851
|
|
|
Cash paid for acquired real estate investments
|
|
$
|
34,244
|
|
Number of properties purchased
|
|
4
|
|
(1)
|
Weighted-average remaining amortization periods for in-place leases, above-market lease assets, above-market ground lease liability and below-market lease liabilities acquired during the
six months ended June 30, 2016
were
9.5 years
,
9.6 years
,
48.6 years
and
9.5 years
, respectively, as of each property's respective acquisition date.
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
(In thousands)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-place leases
|
|
$
|
305,651
|
|
|
$
|
84,011
|
|
|
$
|
221,640
|
|
|
$
|
305,245
|
|
|
$
|
68,278
|
|
|
$
|
236,967
|
|
Above-market lease assets
|
|
13,729
|
|
|
6,711
|
|
|
7,018
|
|
|
13,783
|
|
|
5,555
|
|
|
8,228
|
|
||||||
Total acquired intangible lease assets
|
|
$
|
319,380
|
|
|
$
|
90,722
|
|
|
$
|
228,658
|
|
|
$
|
319,028
|
|
|
$
|
73,833
|
|
|
$
|
245,195
|
|
Intangible liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Above-market ground lease liability
|
|
$
|
85
|
|
|
$
|
1
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Below-market lease liabilities
|
|
19,241
|
|
|
3,113
|
|
|
16,128
|
|
|
20,623
|
|
|
2,490
|
|
|
18,133
|
|
||||||
Total acquired intangible lease liabilities
|
|
$
|
19,326
|
|
|
$
|
3,114
|
|
|
$
|
16,212
|
|
|
$
|
20,623
|
|
|
$
|
2,490
|
|
|
$
|
18,133
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
In-place leases
|
|
$
|
8,613
|
|
|
$
|
8,650
|
|
|
$
|
17,291
|
|
|
$
|
17,300
|
|
Total added to depreciation and amortization
|
|
$
|
8,613
|
|
|
$
|
8,650
|
|
|
$
|
17,291
|
|
|
$
|
17,300
|
|
|
|
|
|
|
|
|
|
|
||||||||
Above-market leases
|
|
$
|
(740
|
)
|
|
$
|
(752
|
)
|
|
$
|
(1,496
|
)
|
|
$
|
(1,503
|
)
|
Below-market lease liabilities
|
|
620
|
|
|
335
|
|
|
961
|
|
|
670
|
|
||||
Total deducted from rental income
|
|
$
|
(120
|
)
|
|
$
|
(417
|
)
|
|
$
|
(535
|
)
|
|
$
|
(833
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Above-market ground lease liability
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Total deducted from property operating expense
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
(In thousands)
|
|
July 1, 2016 to December 31, 2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
||||||||||
In-place leases
|
|
$
|
17,106
|
|
|
$
|
34,212
|
|
|
$
|
24,207
|
|
|
$
|
24,187
|
|
|
$
|
22,569
|
|
Total to be added to depreciation and amortization
|
|
$
|
17,106
|
|
|
$
|
34,212
|
|
|
$
|
24,207
|
|
|
$
|
24,187
|
|
|
$
|
22,569
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Above-market leases
|
|
$
|
(1,453
|
)
|
|
$
|
(2,906
|
)
|
|
$
|
(526
|
)
|
|
$
|
(526
|
)
|
|
$
|
(526
|
)
|
Below-market lease liabilities
|
|
1,504
|
|
|
3,009
|
|
|
974
|
|
|
974
|
|
|
974
|
|
|||||
Total to be added to rental income
|
|
$
|
51
|
|
|
$
|
103
|
|
|
$
|
448
|
|
|
$
|
448
|
|
|
$
|
448
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Above-market ground lease liability
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Total to be deducted from property operating expense
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
|
Six Months Ended June 30,
|
||||||
(In thousands, except per share data)
|
|
2016
(1)
|
|
2015
|
||||
Pro forma revenues
|
|
$
|
88,427
|
|
|
$
|
87,465
|
|
Pro forma net (loss) income
|
|
$
|
(9,803
|
)
|
|
$
|
3,886
|
|
Basic pro forma net (loss) income per share
|
|
$
|
(0.15
|
)
|
|
$
|
0.06
|
|
Diluted pro forma net (loss) income per share
|
|
$
|
(0.15
|
)
|
|
$
|
0.06
|
|
(1)
|
For the
six months ended June 30, 2016
, aggregate revenues and net income derived from the Company's 2016 acquisitions (for the Company's period of ownership) were
$1.0 million
and
$0.5 million
, respectively.
|
(In thousands)
|
|
Future Minimum
Base Rent Payments
|
||
July 1, 2016 to December 31, 2016
|
|
$
|
79,234
|
|
2017
|
|
160,078
|
|
|
2018
|
|
153,784
|
|
|
2019
|
|
155,875
|
|
|
2020
|
|
150,703
|
|
|
Thereafter
|
|
912,235
|
|
|
|
|
$
|
1,611,909
|
|
|
|
June 30,
|
||
Tenant
|
|
2016
|
|
2015
|
SunTrust Bank
|
|
17.8%
|
|
17.9%
|
Sanofi US
|
|
11.4%
|
|
11.6%
|
C&S Wholesale Grocer
|
|
10.2%
|
|
10.4%
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
Loan Type
|
|
Property Type
|
|
Par Value
|
|
Percentage
|
|
Par Value
|
|
Percentage
|
||||||
|
|
|
|
(In thousands)
|
|
|
|
|
|
|
||||||
Senior
|
|
Student Housing — Multifamily
|
|
$
|
17,200
|
|
|
100.0
|
%
|
|
$
|
17,200
|
|
|
21.6
|
%
|
Senior
|
|
Retail
|
|
—
|
|
(1)
|
—
|
%
|
|
18,150
|
|
(1)
|
22.7
|
%
|
||
Senior
|
|
Hospitality
|
|
—
|
|
(1)
|
—
|
%
|
|
44,500
|
|
(1)
|
55.7
|
%
|
||
|
|
|
|
$
|
17,200
|
|
|
100.0
|
%
|
|
$
|
79,850
|
|
|
100.0
|
%
|
(1)
|
These loans were classified as held for sale as of December 31, 2015 and were sold during the
six months ended June 30, 2016
for
$56.9 million
.
|
Investment Rating
|
|
Summary Description
|
1
|
|
Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
|
2
|
|
Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
|
3
|
|
Performing investments requiring closer monitoring. Trends and risk factors show some deterioration.
|
4
|
|
Underperforming investment with some loss of interest expected but still expecting a positive return on investment. Trends and risk factors are negative.
|
5
|
|
Underperforming investment with expected loss of interest and some principal.
|
(In thousands)
|
|
Six Months Ended June 30, 2016
|
||
Beginning balance
|
|
$
|
17,135
|
|
Discount accretion and premium amortization
(1)
|
|
15
|
|
|
Ending balance
|
|
$
|
17,150
|
|
(1)
|
Includes amortization of capitalized origination fees and expenses.
|
(In thousands)
|
|
Aggregate Cost Basis
|
|
Sale Price
|
|
Realized Gain
|
||||||
Six Months Ended June 30, 2015
|
|
$
|
8,707
|
|
|
$
|
9,253
|
|
|
$
|
546
|
|
|
|
|
|
Outstanding Loan Amount as of
|
|
Effective Interest Rate as of
|
|
|
|
|
|
|
||||||||||
Portfolio
|
|
Encumbered Properties
|
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
|
Interest Rate
|
|
Maturity
|
|
Anticipated Repayment
|
||||||
|
|
|
|
(In thousands)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||
SAAB Sensis I
|
|
1
|
|
$
|
8,018
|
|
|
$
|
8,190
|
|
|
6.01
|
%
|
|
6.01
|
%
|
|
Fixed
|
|
Apr. 2025
|
|
Apr. 2025
|
SunTrust Bank II
|
|
30
|
|
25,000
|
|
|
25,000
|
|
|
5.50
|
%
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
C&S Wholesale Grocer I
|
|
4
|
|
82,313
|
|
|
82,313
|
|
|
5.56
|
%
|
|
5.56
|
%
|
|
Fixed
|
|
Apr. 2037
|
|
Apr. 2017
|
||
SunTrust Bank III
|
|
116
|
|
90,045
|
|
|
99,677
|
|
|
5.50
|
%
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
SunTrust Bank IV
|
|
27
|
|
21,243
|
|
|
25,000
|
|
|
5.50
|
%
|
|
5.50
|
%
|
|
Fixed
|
|
Jul. 2031
|
|
Jul. 2021
|
||
Sanofi US I
|
|
1
|
|
125,000
|
|
|
125,000
|
|
|
5.16
|
%
|
|
5.16
|
%
|
|
Fixed
|
|
Jul. 2026
|
|
Jan. 2021
|
||
Stop & Shop I
|
|
4
|
|
38,608
|
|
|
38,936
|
|
|
5.63
|
%
|
|
5.63
|
%
|
|
Fixed
|
|
Jun. 2041
|
|
Jun. 2021
|
||
Multi-Tenant Mortgage Loan
|
|
268
|
|
649,532
|
|
|
649,532
|
|
|
4.36
|
%
|
|
4.36
|
%
|
|
Fixed
|
|
Sep. 2020
|
|
Sep. 2020
|
||
Gross mortgage notes payable
|
|
451
|
|
1,039,759
|
|
|
1,053,648
|
|
|
4.76
|
%
|
(1)
|
4.77
|
%
|
(1)
|
|
|
|
|
|
||
Deferred financing costs, net of accumulated amortization
|
|
|
|
(17,728
|
)
|
|
(20,066
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage notes payable, net of deferred financing costs
|
|
|
|
$
|
1,022,031
|
|
|
$
|
1,033,582
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Calculated on a weighted-average basis for all mortgages outstanding as of the dates indicated.
|
(In thousands)
|
|
Future Principal Payments
|
||
July 1, 2016 to December 31, 2016
|
|
$
|
514
|
|
2017
|
|
1,080
|
|
|
2018
|
|
1,143
|
|
|
2019
|
|
1,211
|
|
|
2020
|
|
650,808
|
|
|
Thereafter
|
|
385,003
|
|
|
|
|
$
|
1,039,759
|
|
(In thousands)
|
|
Quoted Prices
in Active
Markets
Level 1
|
|
Significant Other
Observable
Inputs
Level 2
|
|
Significant
Unobservable
Inputs
Level 3
|
|
Total
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Commercial mortgage-backed securities
|
|
$
|
—
|
|
|
$
|
56,884
|
|
|
$
|
—
|
|
|
$
|
56,884
|
|
|
|
|
|
Carrying Amount at
|
|
Fair Value at
|
|
Carrying Amount at
|
|
Fair Value at
|
||||||||
(In thousands)
|
|
Level
|
|
June 30, 2016
|
|
June 30, 2016
|
|
December 31, 2015
|
|
December 31, 2015
|
||||||||
Commercial mortgage loan, held for investment
|
|
3
|
|
$
|
17,150
|
|
|
$
|
16,527
|
|
|
$
|
17,135
|
|
|
$
|
17,200
|
|
Gross mortgage notes payable and mortgage premiums, net
|
|
3
|
|
$
|
1,052,410
|
|
|
$
|
1,095,341
|
|
|
$
|
1,068,540
|
|
|
$
|
1,103,352
|
|
•
|
after one year from the purchase date —
92.5%
of Estimated Per-Share NAV;
|
•
|
after two years from the purchase date —
95.0%
of Estimated Per-Share NAV;
|
•
|
after three years from the purchase date —
97.5%
of Estimated Per-Share NAV; and
|
•
|
after four years from the purchase date —
100.0%
of Estimated Per-Share NAV.
|
|
|
Number of Shares
|
|
Weighted-Average Price per Share
|
|||
Cumulative repurchases as of December 31, 2015
|
|
2,073,645
|
|
|
$
|
24.12
|
|
Six months ended June 30, 2016
|
|
7,854
|
|
|
24.17
|
|
|
Cumulative repurchases as of June 30, 2016
|
|
2,081,499
|
|
|
$
|
24.12
|
|
(In thousands)
|
|
Future Minimum Base Rent Payments
|
||
July 1, 2016 to December 31, 2016
|
|
$
|
458
|
|
2017
|
|
921
|
|
|
2018
|
|
903
|
|
|
2019
|
|
902
|
|
|
2020
|
|
674
|
|
|
Thereafter
|
|
4,975
|
|
|
|
|
$
|
8,833
|
|
(In thousands)
|
|
Funding Expiration
|
||
July 1, 2016 to December 31, 2016
|
|
$
|
—
|
|
2017
|
|
2,450
|
|
|
2018
|
|
—
|
|
|
2019
|
|
—
|
|
|
2020
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
|
|
$
|
2,450
|
|
(i)
|
for any period commencing on or after April 1, 2015, the Company paid the Advisor or its assignees as compensation for services rendered in connection with the management of the Company’s assets an Asset Management Fee (as defined in the Original A&R Advisory Agreement) equal to
0.75%
per annum of the Cost of Assets (as defined in the Original A&R Advisory Agreement);
|
(ii)
|
such Asset Management Fee was payable monthly in arrears in cash, in shares of common stock, or a combination of both, the form of payment determined in the sole discretion of the Advisor; and
|
(iii)
|
the Company would not cause the OP to issue any Class B Units in respect of periods subsequent to March 31, 2015.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Payable as of
|
||||||||||||||||||
(In thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
June 30,
2016 |
|
December 31,
2015 |
||||||||||||
Ongoing fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset management fees
|
|
$
|
4,500
|
|
|
$
|
4,096
|
|
|
$
|
9,000
|
|
|
$
|
4,096
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Professional fees and other reimbursements
(1)
|
|
661
|
|
|
913
|
|
|
1,523
|
|
|
1,548
|
|
|
558
|
|
|
541
|
|
||||||
Distributions on Class B Units
(1)
|
|
432
|
|
|
411
|
|
|
864
|
|
|
697
|
|
|
142
|
|
|
—
|
|
||||||
Total related party operation fees and reimbursements
|
|
$
|
5,593
|
|
|
$
|
5,420
|
|
|
$
|
11,387
|
|
|
$
|
6,341
|
|
|
$
|
700
|
|
|
$
|
541
|
|
(1)
|
These costs are included in general and administrative expense on the consolidated statements of operations and comprehensive (loss) income.
|
•
|
the sum of (i) the "market value" (as defined in the Listing Note) of the Company's common stock plus (ii) the sum of all distributions or dividends (from any source) paid by the Company to its stockholders prior to the Listing; and
|
•
|
the sum of (i) the total raised in the Company's initial public offering ("IPO") and under the Company's distribution reinvestment plan ("DRIP") prior to the Listing ("Gross Proceeds") plus (ii) the total amount of cash that, if distributed to those stockholders who purchased shares of common stock in the IPO and under the DRIP, would have provided those stockholders a
6.0%
cumulative, non-compounded, pre-tax annual return (based on a 365-day year) on the gross proceeds.
|
•
|
it increases the number of shares of Company capital stock, par value
$0.01
per share (the "Capital Stock"), available for awards thereunder from
5.0%
of the Company's outstanding shares of Capital Stock on a fully diluted basis at any time, not exceed
3.4 million
shares of Capital Stock, to
10.0%
of the Company's outstanding shares of Capital Stock on a fully diluted basis at any time;
|
•
|
it removes the fixed amount of shares that were automatically granted to the Company's independent directors; and
|
•
|
it adds restricted stock units (including dividend equivalent rights thereon) as a permitted form of award.
|
|
Number of Shares of Common Stock
|
|
Weighted-Average Issue Price
|
|||
Unvested, December 31, 2015
|
7,455
|
|
|
$
|
23.34
|
|
Vested
|
(1,563
|
)
|
|
22.50
|
|
|
Unvested, June 30, 2016
|
5,892
|
|
|
$
|
23.56
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In thousands, except share and per share amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Computation of Basic Net (Loss) Income Per Share:
|
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) income
|
|
$
|
(4,077
|
)
|
|
$
|
(1,624
|
)
|
|
$
|
(9,931
|
)
|
|
$
|
3,277
|
|
Basic weighted-average shares outstanding
|
|
65,301,764
|
|
|
66,045,785
|
|
|
65,128,592
|
|
|
65,859,933
|
|
||||
Basic net (loss) income per share
|
|
$
|
(0.06
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
||||||||
Computation of Diluted Net (Loss) Income Per Share:
|
|
|
|
|
|
|
|
|
||||||||
Basic net (loss) income
|
|
$
|
(4,077
|
)
|
|
$
|
(1,624
|
)
|
|
$
|
(9,931
|
)
|
|
$
|
3,277
|
|
Adjustments to net (loss) income for common share equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
||||
Diluted net (loss) income
|
|
$
|
(4,077
|
)
|
|
$
|
(1,624
|
)
|
|
$
|
(9,931
|
)
|
|
$
|
3,169
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average shares outstanding
|
|
65,301,764
|
|
|
66,045,785
|
|
|
65,128,592
|
|
|
65,859,933
|
|
||||
Shares of unvested restricted stock
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,293
|
|
||||
OP Units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
||||
Diluted weighted-average shares outstanding
|
|
65,301,764
|
|
|
66,045,785
|
|
|
65,128,592
|
|
|
65,865,316
|
|
||||
Diluted net (loss) income per share
|
|
$
|
(0.06
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.05
|
|
(1)
|
Weighted-average number of shares of unvested restricted stock outstanding for the period presented. There were
5,892
and
5,008
shares of unvested restricted stock outstanding as of
June 30, 2016
and
2015
, respectively.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended
|
|||||
|
|
2016
|
|
2015
|
|
June 30, 2016
|
|||
Unvested restricted stock
|
|
6,716
|
|
|
5,485
|
|
|
7,086
|
|
OP Units
|
|
90
|
|
|
90
|
|
|
90
|
|
Class B Units
|
|
1,052,420
|
|
|
998,786
|
|
|
1,052,420
|
|
Total weighted-average antidilutive common share equivalents
|
|
1,059,226
|
|
|
1,004,361
|
|
|
1,059,596
|
|
•
|
We have announced that a special committee comprised entirely of independent directors (the "Special Committee") has initiated a strategic review process to identify, examine and consider a range of strategic alternatives available to us with the objective of maximizing shareholder value, including potential strategic transactions involving us and one or more entities sponsored by affiliates of AR Global Investments, LLC (the successor business to AR Capital, LLC, "AR Global" or our "Sponsor"). The Special Committee has not made a decision whether to recommend to our board of directors that we enter into any proposed transaction, and there can be no assurance that any of these preliminary discussions will result in a definitive agreement or that any such transactions would be approved by stockholders.
|
•
|
All of our executive officers are also officers, managers or holders of a direct or indirect controlling interest in American Finance Advisors, LLC (our "Advisor") or other entities under common control with our Sponsor. As a result, our executive officers, our Advisor and its affiliates face conflicts of interest, including significant conflicts created by our Advisor's compensation arrangements with us and other investment programs advised by affiliates of our Sponsor and conflicts in allocating time among these entities and us, which could negatively impact our operating results.
|
•
|
Although we previously announced our intention to list our shares of common stock on the New York Stock Exchange ("NYSE"), there can be no assurance that our shares of common stock will be listed. No public market currently exists, or may ever exist, for shares of our common stock and our shares are, and may continue to be, illiquid.
|
•
|
We depend on tenants for our rental revenue and, accordingly, our rental revenue is dependent upon the success and economic viability of our tenants.
|
•
|
Our tenants may not achieve our rental rate incentives and our expenses could be greater, which may impact our results of operations.
|
•
|
We have not generated, and in the future may not generate, operating cash flows sufficient to cover 100% of our distributions, and, as such, we may be forced to source distributions from borrowings, which may be at unfavorable rates, or depend on our Advisor to waive reimbursement of certain expenses or fees. There is no assurance that our Advisor will waive reimbursement of expenses or fees.
|
•
|
We may be unable to pay or maintain cash distributions at the current rate or increase distributions over time.
|
•
|
We are obligated to pay fees, which may be substantial, to our Advisor and its affiliates.
|
•
|
We are subject to risks associated with any dislocation or liquidity disruptions that may exist or occur in the credit markets of the United States of America.
|
•
|
We may fail to continue to qualify to be treated as a real estate investment trust for U.S. federal income tax purposes ("REIT"), which would result in higher taxes, may adversely affect our operations and would reduce the value of an investment in our common stock and our cash available for distributions.
|
•
|
We may be deemed by regulators to be an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and thus subject to regulation under the Investment Company Act.
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
|
|
Remaining Lease
Term
(1)
|
|
Dollar General I
|
|
Apr. & May 2013
|
|
2
|
|
18,126
|
|
|
11.8
|
Walgreens I
|
|
Jul. 2013
|
|
1
|
|
10,500
|
|
|
21.3
|
Dollar General II
|
|
Jul. 2013
|
|
2
|
|
18,052
|
|
|
11.9
|
Auto Zone I
|
|
Jul. 2013
|
|
1
|
|
7,370
|
|
|
11.1
|
Dollar General III
|
|
Jul. 2013
|
|
5
|
|
45,989
|
|
|
11.9
|
BSFS I
|
|
Jul. 2013
|
|
1
|
|
8,934
|
|
|
7.6
|
Dollar General IV
|
|
Jul. 2013
|
|
2
|
|
18,126
|
|
|
9.7
|
Tractor Supply I
|
|
Aug. 2013
|
|
1
|
|
19,097
|
|
|
11.4
|
Dollar General V
|
|
Aug. 2013
|
|
1
|
|
12,480
|
|
|
11.6
|
Mattress Firm I
|
|
Aug. & Nov. 2013; Feb., Mar. & Apr. 2014
|
|
5
|
|
23,612
|
|
|
9.2
|
Family Dollar I
|
|
Aug. 2013
|
|
1
|
|
8,050
|
|
|
5.0
|
Lowe's I
|
|
Aug. 2013
|
|
5
|
|
671,313
|
|
|
13.0
|
O'Reilly Auto Parts I
|
|
Aug. 2013
|
|
1
|
|
10,692
|
|
|
14.0
|
Food Lion I
|
|
Aug. 2013
|
|
1
|
|
44,549
|
|
|
13.3
|
Family Dollar II
|
|
Aug. 2013
|
|
1
|
|
8,028
|
|
|
7.0
|
Walgreens II
|
|
Aug. 2013
|
|
1
|
|
14,490
|
|
|
16.8
|
Dollar General VI
|
|
Aug. 2013
|
|
1
|
|
9,014
|
|
|
9.7
|
Dollar General VII
|
|
Aug. 2013
|
|
1
|
|
9,100
|
|
|
11.8
|
Family Dollar III
|
|
Aug. 2013
|
|
1
|
|
8,000
|
|
|
6.3
|
Chili's I
|
|
Aug. 2013
|
|
2
|
|
12,700
|
|
|
9.4
|
CVS I
|
|
Aug. 2013
|
|
1
|
|
10,055
|
|
|
9.6
|
Joe's Crab Shack I
|
|
Aug. 2013
|
|
2
|
|
16,012
|
|
|
10.8
|
Dollar General VIII
|
|
Sep. 2013
|
|
1
|
|
9,100
|
|
|
12.1
|
Tire Kingdom I
|
|
Sep. 2013
|
|
1
|
|
6,635
|
|
|
8.8
|
Auto Zone II
|
|
Sep. 2013
|
|
1
|
|
7,370
|
|
|
6.9
|
Family Dollar IV
|
|
Sep. 2013
|
|
1
|
|
8,320
|
|
|
7.0
|
Fresenius I
|
|
Sep. 2013
|
|
1
|
|
5,800
|
|
|
9.0
|
Dollar General IX
|
|
Sep. 2013
|
|
1
|
|
9,014
|
|
|
8.8
|
Advance Auto I
|
|
Sep. 2013
|
|
1
|
|
10,500
|
|
|
7.0
|
Walgreens III
|
|
Sep. 2013
|
|
1
|
|
15,120
|
|
|
9.8
|
Walgreens IV
|
|
Sep. 2013
|
|
1
|
|
13,500
|
|
|
8.3
|
CVS II
|
|
Sep. 2013
|
|
1
|
|
13,905
|
|
|
20.6
|
Arby's I
|
|
Sep. 2013
|
|
1
|
|
3,000
|
|
|
12.0
|
Dollar General X
|
|
Sep. 2013
|
|
1
|
|
9,100
|
|
|
11.8
|
AmeriCold I
|
|
Sep. 2013
|
|
9
|
|
1,407,166
|
|
|
11.3
|
Home Depot I
|
|
Sep. 2013
|
|
2
|
|
1,315,200
|
|
|
10.6
|
New Breed Logistics I
|
|
Sep. 2013
|
|
1
|
|
390,486
|
|
|
5.4
|
American Express Travel Related Services I
|
|
Sep. 2013
|
|
2
|
|
785,164
|
|
|
3.6
|
L.A. Fitness I
|
|
Sep. 2013
|
|
1
|
|
45,000
|
|
|
7.7
|
SunTrust Bank I
|
|
Sep. 2013
|
|
32
|
|
182,400
|
|
|
7.3
|
National Tire & Battery I
|
|
Sep. 2013
|
|
1
|
|
10,795
|
|
|
7.4
|
Circle K I
|
|
Sep. 2013
|
|
19
|
|
54,521
|
|
|
12.4
|
Walgreens V
|
|
Sep. 2013
|
|
1
|
|
14,490
|
|
|
11.2
|
Walgreens VI
|
|
Sep. 2013
|
|
1
|
|
14,560
|
|
|
12.8
|
FedEx Ground I
|
|
Sep. 2013
|
|
1
|
|
21,662
|
|
|
6.9
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
|
|
Remaining Lease
Term
(1)
|
|
Walgreens VII
|
|
Sep. 2013
|
|
10
|
|
142,140
|
|
|
13.3
|
O'Charley's I
|
|
Sep. 2013
|
|
20
|
|
135,973
|
|
|
15.4
|
Krystal Burgers Corporation I
|
|
Sep. 2013
|
|
6
|
|
12,730
|
|
|
13.2
|
Merrill Lynch, Pierce, Fenner & Smith I
|
|
Sep. 2013
|
|
3
|
|
553,841
|
|
|
8.4
|
1st Constitution Bancorp I
|
|
Sep. 2013
|
|
1
|
|
4,500
|
|
|
7.6
|
American Tire Distributors I
|
|
Sep. 2013
|
|
1
|
|
125,060
|
|
|
7.6
|
Tractor Supply II
|
|
Oct. 2013
|
|
1
|
|
23,500
|
|
|
7.3
|
United Healthcare I
|
|
Oct. 2013
|
|
1
|
|
400,000
|
|
|
5.0
|
National Tire & Battery II
|
|
Oct. 2013
|
|
1
|
|
7,368
|
|
|
15.9
|
Tractor Supply III
|
|
Oct. 2013
|
|
1
|
|
19,097
|
|
|
11.8
|
Mattress Firm II
|
|
Oct. 2013
|
|
1
|
|
4,304
|
|
|
7.2
|
Dollar General XI
|
|
Oct. 2013
|
|
1
|
|
9,026
|
|
|
10.8
|
Academy Sports I
|
|
Oct. 2013
|
|
1
|
|
71,640
|
|
|
12.0
|
Talecris Plasma Resources I
|
|
Oct. 2013
|
|
1
|
|
22,262
|
|
|
6.8
|
Amazon I
|
|
Oct. 2013
|
|
1
|
|
79,105
|
|
|
7.1
|
Fresenius II
|
|
Oct. 2013
|
|
2
|
|
16,047
|
|
|
11.1
|
Dollar General XII
|
|
Nov. 2013 & Jan. 2014
|
|
2
|
|
18,126
|
|
|
12.5
|
Dollar General XIII
|
|
Nov. 2013
|
|
1
|
|
9,169
|
|
|
9.8
|
Advance Auto II
|
|
Nov. 2013
|
|
2
|
|
13,887
|
|
|
6.9
|
FedEx Ground II
|
|
Nov. 2013
|
|
1
|
|
48,897
|
|
|
7.1
|
Burger King I
|
|
Nov. 2013
|
|
41
|
|
168,192
|
|
|
17.4
|
Dollar General XIV
|
|
Nov. 2013
|
|
3
|
|
27,078
|
|
|
11.9
|
Dollar General XV
|
|
Nov. 2013
|
|
1
|
|
9,026
|
|
|
12.4
|
FedEx Ground III
|
|
Nov. 2013
|
|
1
|
|
24,310
|
|
|
7.2
|
Dollar General XVI
|
|
Nov. 2013
|
|
1
|
|
9,014
|
|
|
9.4
|
Family Dollar V
|
|
Nov. 2013
|
|
1
|
|
8,400
|
|
|
6.8
|
Walgreens VIII
|
|
Dec. 2013
|
|
1
|
|
14,490
|
|
|
7.5
|
CVS III
|
|
Dec. 2013
|
|
1
|
|
10,880
|
|
|
7.6
|
Mattress Firm III
|
|
Dec. 2013
|
|
1
|
|
5,057
|
|
|
7.0
|
Arby's II
|
|
Dec. 2013
|
|
1
|
|
3,494
|
|
|
11.8
|
Family Dollar VI
|
|
Dec. 2013
|
|
2
|
|
17,484
|
|
|
7.6
|
SAAB Sensis I
|
|
Dec. 2013
|
|
1
|
|
90,822
|
|
|
8.8
|
Citizens Bank I
|
|
Dec. 2013
|
|
9
|
|
34,777
|
|
|
7.5
|
Walgreens IX
|
|
Jan. 2014
|
|
1
|
|
14,490
|
|
|
6.6
|
SunTrust Bank II
|
|
Jan. 2014
|
|
30
|
|
148,233
|
|
|
10.8
|
Mattress Firm IV
|
|
Jan. 2014
|
|
1
|
|
5,040
|
|
|
8.2
|
FedEx Ground IV
|
|
Jan. 2014
|
|
1
|
|
59,167
|
|
|
7.0
|
Mattress Firm V
|
|
Jan. 2014
|
|
1
|
|
5,548
|
|
|
7.3
|
Family Dollar VII
|
|
Feb. 2014
|
|
1
|
|
8,320
|
|
|
8.0
|
Aaron's I
|
|
Feb. 2014
|
|
1
|
|
7,964
|
|
|
7.2
|
Auto Zone III
|
|
Feb. 2014
|
|
1
|
|
6,786
|
|
|
6.8
|
C&S Wholesale Grocer I
|
|
Feb. 2014
|
|
5
|
|
3,044,685
|
|
|
6.3
|
Advance Auto III
|
|
Feb. 2014
|
|
1
|
|
6,124
|
|
|
8.2
|
Family Dollar VIII
|
|
Mar. 2014
|
|
3
|
|
24,960
|
|
|
7.1
|
Dollar General XVII
|
|
Mar. & May 2014
|
|
3
|
|
27,078
|
|
|
11.8
|
SunTrust Bank III
|
|
Mar. 2014
|
|
116
|
|
610,576
|
|
|
10.3
|
SunTrust Bank IV
|
|
Mar. 2014
|
|
27
|
|
142,625
|
|
|
10.8
|
Dollar General XVIII
|
|
Mar. 2014
|
|
1
|
|
9,026
|
|
|
11.8
|
Sanofi US I
|
|
Mar. 2014
|
|
1
|
|
736,572
|
|
|
10.0
|
Family Dollar IX
|
|
Apr. 2014
|
|
1
|
|
8,320
|
|
|
7.8
|
Stop & Shop I
|
|
May 2014
|
|
8
|
|
544,112
|
|
|
10.4
|
Bi-Lo I
|
|
May 2014
|
|
1
|
|
55,718
|
|
|
9.5
|
Portfolio
|
|
Acquisition Date
|
|
Number of
Properties
|
|
Rentable Square Feet
|
|
Remaining Lease
Term
(1)
|
|
Dollar General XIX
|
|
May 2014
|
|
1
|
|
12,480
|
|
|
12.2
|
Dollar General XX
|
|
May 2014
|
|
5
|
|
48,584
|
|
|
10.8
|
Dollar General XXI
|
|
May 2014
|
|
1
|
|
9,238
|
|
|
12.2
|
Dollar General XXII
|
|
May 2014
|
|
1
|
|
10,566
|
|
|
10.8
|
FedEx Ground V
|
|
Feb. 2016
|
|
1
|
|
45,755
|
|
|
9.1
|
FedEx Ground VI
|
|
Feb. 2016
|
|
1
|
|
120,731
|
|
|
9.2
|
FedEx Ground VII
|
|
Feb. 2016
|
|
1
|
|
42,299
|
|
|
9.3
|
FedEx Ground VIII
|
|
Feb. 2016
|
|
1
|
|
78,673
|
|
|
9.3
|
|
|
|
|
459
|
|
13,330,463
|
|
|
9.6
|
(1)
|
Remaining lease term in years as of
June 30, 2016
. If the portfolio has multiple properties with varying lease expirations, remaining lease term is calculated on a weighted-average basis.
|
Deal Name
|
|
Par Value
|
|
Carrying Value
|
|
Interest Rate
|
|
Effective Yield
|
|
Loan to Value
(1)
|
||||||
|
|
(In thousands)
|
|
(In thousands)
|
|
|
|
|
|
|
||||||
Senior Loan
|
|
$
|
17,200
|
|
|
$
|
17,150
|
|
|
4.50% + 1M LIBOR
|
|
5.1
|
%
|
|
66.0
|
%
|
|
|
$
|
17,200
|
|
|
$
|
17,150
|
|
|
|
|
5.1
|
%
|
|
66.0
|
%
|
(1)
|
Loan to value percentage is from metrics at origination.
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||
(Dollar amounts in thousands)
|
|
Weighted-Average Carrying Value
|
|
Interest Expense
|
|
Weighted-Average Interest Rate
|
|
Weighted-Average Carrying Value
|
|
Interest Expense
|
|
Weighted-Average Interest Rate
|
||||||||||
Mortgage Notes Payable
|
|
$
|
1,049,926
|
|
|
$
|
12,443
|
|
|
4.77
|
%
|
|
$
|
469,719
|
|
|
$
|
6,614
|
|
|
5.66
|
%
|
Credit Facility
|
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
|
$
|
423,000
|
|
|
2,194
|
|
|
1.94
|
%
|
||
Amortization of deferred financing costs
|
|
|
|
1,150
|
|
|
|
|
|
|
1,306
|
|
|
|
||||||||
Amortization of mortgage premiums
|
|
|
|
(1,265
|
)
|
|
|
|
|
|
(1,875
|
)
|
|
|
||||||||
Interest Expense
|
|
|
|
$
|
12,328
|
|
|
|
|
|
|
$
|
8,239
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||
(Dollar amounts in thousands)
|
|
Weighted-Average Carrying Value
|
|
Interest Expense
|
|
Weighted-Average Interest Rate
|
|
Weighted-Average Carrying Value
|
|
Interest Expense
|
|
Weighted-Average Interest Rate
|
||||||||||
Mortgage Notes Payable
|
|
$
|
1,051,487
|
|
|
$
|
24,950
|
|
|
4.77
|
%
|
|
$
|
469,841
|
|
|
$
|
13,172
|
|
|
5.66
|
%
|
Credit Facility
|
|
$
|
—
|
|
|
—
|
|
|
—
|
%
|
|
$
|
423,000
|
|
|
4,352
|
|
|
1.93
|
%
|
||
Amortization of deferred financing costs
|
|
|
|
2,250
|
|
|
|
|
|
|
2,608
|
|
|
|
||||||||
Amortization of mortgage premiums
|
|
|
|
(2,241
|
)
|
|
|
|
|
|
(3,733
|
)
|
|
|
||||||||
Interest Expense
|
|
|
|
$
|
24,959
|
|
|
|
|
|
|
$
|
16,399
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended June 30, 2016
|
||||||||
(In thousands)
|
|
March 31, 2016
|
|
June 30, 2016
|
|
|||||||
Net loss (in accordance with GAAP)
|
|
$
|
(5,854
|
)
|
|
$
|
(4,077
|
)
|
|
$
|
(9,931
|
)
|
Gain on sale of real estate investments
|
|
—
|
|
|
(454
|
)
|
|
(454
|
)
|
|||
Depreciation and amortization
|
|
25,493
|
|
|
25,538
|
|
|
51,031
|
|
|||
FFO
|
|
19,639
|
|
|
21,007
|
|
|
40,646
|
|
|||
Acquisition and transaction related fees and expenses
|
|
343
|
|
|
734
|
|
|
1,077
|
|
|||
Amortization of market lease and other intangibles, net
|
|
415
|
|
|
119
|
|
|
534
|
|
|||
Straight-line rent
|
|
(1,723
|
)
|
|
(1,682
|
)
|
|
(3,405
|
)
|
|||
Amortization of mortgage premiums on borrowings
|
|
(976
|
)
|
|
(1,265
|
)
|
|
(2,241
|
)
|
|||
Discount accretion on investment
|
|
(7
|
)
|
|
(8
|
)
|
|
(15
|
)
|
|||
MFFO
|
|
$
|
17,691
|
|
|
$
|
18,905
|
|
|
$
|
36,596
|
|
(1)
|
Includes $6.2 million, $9.4 million and $15.6 million of cash flows provided by operations in prior periods for the
three months ended
March 31, 2016 and June 30, 2016 and the
six months ended June 30, 2016
, respectively.
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
||||||||||||
(In thousands)
|
|
Total
|
|
July 1, 2016 to December 31, 2016
|
|
2017-2018
|
|
2019-2020
|
|
Thereafter
|
||||||||||
Principal on mortgage notes payable
|
|
$
|
1,039,759
|
|
|
$
|
514
|
|
|
$
|
84,536
|
|
|
$
|
652,019
|
|
|
$
|
302,690
|
|
Interest on mortgage notes payable
|
|
205,444
|
|
|
24,753
|
|
|
91,095
|
|
|
82,390
|
|
|
7,206
|
|
|||||
Ground lease rental payments due
|
|
8,833
|
|
|
458
|
|
|
1,824
|
|
|
1,576
|
|
|
4,975
|
|
|||||
|
|
$
|
1,254,036
|
|
|
$
|
25,725
|
|
|
$
|
177,455
|
|
|
$
|
735,985
|
|
|
$
|
314,871
|
|
Portfolio
|
|
Maturity
|
|
Anticipated Repayment
|
SAAB Sensis I
|
|
Apr. 2025
|
|
Apr. 2025
|
SunTrust Bank II
|
|
Jul. 2031
|
|
Jul. 2021
|
C&S Wholesale Grocer I
|
|
Apr. 2037
|
|
Apr. 2017
|
SunTrust Bank III
|
|
Jul. 2031
|
|
Jul. 2021
|
SunTrust Bank IV
|
|
Jul. 2031
|
|
Jul. 2021
|
Sanofi US I - New Loan
|
|
Jul. 2026
|
|
Jan. 2021
|
Stop & Shop I
|
|
Jun. 2041
|
|
Jun. 2021
|
Multi-Tenant Mortgage Loan
|
|
Sep. 2020
|
|
Sep. 2020
|
•
|
after one year from the purchase date —
92.5%
of Estimated Per-Share NAV;
|
•
|
after two years from the purchase date —
95.0%
of Estimated Per-Share NAV;
|
•
|
after three years from the purchase date —
97.5%
of Estimated Per-Share NAV; and
|
•
|
after four years from the purchase date —
100.0%
of Estimated Per-Share NAV.
|
|
|
Number of Shares
|
|
Weighted-Average Price per Share
|
|||
Cumulative repurchases as of December 31, 2015
|
|
2,073,645
|
|
|
$
|
24.12
|
|
Six months ended June 30, 2016
|
|
7,854
|
|
|
24.17
|
|
|
Cumulative repurchases as of June 30, 2016
|
|
2,081,499
|
|
|
$
|
24.12
|
|
|
AMERICAN FINANCE TRUST, INC.
|
|
|
|
|
|
By:
|
/s/ Edward M. Weil, Jr.
|
|
|
Edward M. Weil, Jr.
|
|
|
Chief Executive Officer and President
(Principal Executive Officer)
|
|
|
|
|
By:
|
/s/ Nicholas Radesca
|
|
|
Nicholas Radesca
|
|
|
Chief Financial Officer, Treasurer and Secretary
(Principal Financial Officer and Principal Accounting Officer) |
Exhibit No.
|
|
Description
|
10.29 *
|
|
Form of Restricted Stock Award Agreement
|
31.1 *
|
|
Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2 *
|
|
Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32 *
|
|
Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
99.1
(1)
|
|
Amendment to Amended and Restated Share Repurchase Program
|
99.2
(1)
|
|
Amendment to Distribution Reinvestment Plan
|
101 *
|
|
XBRL (eXtensible Business Reporting Language). The following materials from American Finance Trust, Inc.'s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2016, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive (Loss) Income, (iii) the Consolidated Statement of Changes in Stockholders' Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of
American Finance Trust, Inc.
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated this 11th day of August, 2016
|
|
/s/ Edward M. Weil, Jr.
|
|
|
Edward M. Weil, Jr.
|
|
|
Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of
American Finance Trust, Inc.
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated this 11th day of August, 2016
|
|
/s/ Nicholas Radesca
|
|
|
Nicholas Radesca
|
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
/s/ Edward M. Weil, Jr.
|
|
Edward M. Weil, Jr.
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Nicholas Radesca
|
|
Nicholas Radesca
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
(Principal Financial Officer and Principal Accounting Officer)
|