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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/02/23 Spirit Realty Capital, Inc. 10-Q 9/30/23 81:14M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 4.25M
2: EX-22.1 Published Report re: Matters Submitted to a Vote HTML 23K
of Security Holders
3: EX-31.1 Certification -- §302 - SOA'02 HTML 29K
4: EX-31.2 Certification -- §302 - SOA'02 HTML 29K
5: EX-32.1 Certification -- §906 - SOA'02 HTML 27K
11: R1 Document and Entity Information HTML 82K
12: R2 Consolidated Balance Sheets HTML 120K
13: R3 Consolidated Balance Sheets (Parenthetical) HTML 44K
14: R4 Consolidated Statements of Operations HTML 125K
15: R5 Consolidated Statements of Comprehensive Income HTML 39K
16: R6 Consolidated Statements of Stockholders' Equity HTML 135K
17: R7 Consolidated Statements of Cash Flows HTML 137K
18: R8 Pay vs Performance Disclosure HTML 36K
19: R9 Insider Trading Arrangements HTML 29K
20: R10 Organization HTML 31K
21: R11 Summary of Significant Accounting Policies HTML 81K
22: R12 Investments HTML 300K
23: R13 Debt HTML 269K
24: R14 Stockholders' Equity HTML 158K
25: R15 Commitments and Contingencies HTML 32K
26: R16 Derivative and Hedging Activities HTML 106K
27: R17 Fair Value Measurements HTML 207K
28: R18 Incentive Award Plan HTML 53K
29: R19 Income Per Share HTML 130K
30: R20 Subsequent Events HTML 31K
31: R21 Summary of Significant Accounting Policies HTML 111K
(Policies)
32: R22 Summary of Significant Accounting Policies HTML 51K
(Tables)
33: R23 Investments (Tables) HTML 295K
34: R24 Debt (Tables) HTML 244K
35: R25 Stockholders' Equity (Tables) HTML 151K
36: R26 Derivative and Hedging Activities (Tables) HTML 104K
37: R27 Fair Value Measurements (Tables) HTML 207K
38: R28 Incentive Award Plan (Tables) HTML 38K
39: R29 Income Per Share (Tables) HTML 129K
40: R30 Organization - Narrative (Details) HTML 29K
41: R31 Summary of Significant Accounting Policies - HTML 64K
Narrative (Details)
42: R32 Summary of Significant Accounting Policies - HTML 37K
Schedule of Cash, Cash Equivalents and Restricted
Cash (Details)
43: R33 Investments - Narrative (Details) HTML 73K
44: R34 Investments - Summary of Owned Real Estate HTML 80K
Activity (Details)
45: R35 Investments - Summary of Owned Real Estate HTML 48K
Activity (Footnote) (Details)
46: R36 Investments - Operating Lease Income (Details) HTML 43K
47: R37 Investments - Investments - Scheduled Minimum HTML 38K
Future Rent from Operating Lease (Details)
48: R38 Investments - Schedule of Lease Intangible Assets HTML 40K
and Liabilities, Net of Accumulated Amortization
(Details)
49: R39 Investments - Schedule of Loan Receivable Activity HTML 40K
(Details)
50: R40 Investments - Summary of Impairment and Credit HTML 33K
Losses Recognized (Details)
51: R41 Debt - Summary of Debt (Details) HTML 62K
52: R42 Debt - Summary of Debt (Footnote) (Details) HTML 33K
53: R43 Debt - Revolving Credit Facilities - Narrative HTML 61K
(Details)
54: R44 Debt - Term Loans - Narrative (Details) HTML 67K
55: R45 Debt - Summary of Senior Unsecured Notes (Details) HTML 65K
56: R46 Debt - Senior Unsecured Notes - Narrative HTML 39K
(Details)
57: R47 Debt - Mortgages Payable - Narrative (Details) HTML 45K
58: R48 Debt - Debt Extinguishment - Narrative (Details) HTML 37K
59: R49 Debt - Schedule of Debt Maturities (Details) HTML 49K
60: R50 Debt - Summary of Components of Interest Expense HTML 52K
Related to Borrowings (Details)
61: R51 Stockholders' Equity - Narrative (Details) HTML 57K
62: R52 Stockholders' Equity - Summary of Activities Under HTML 45K
2021 ATM Program (Details)
63: R53 Stockholders' Equity - Summary of Dividends HTML 34K
Declared (Details)
64: R54 Commitments and Contingencies - Narrative HTML 39K
(Details)
65: R55 Derivative and Hedging Activities - Narrative HTML 40K
(Details)
66: R56 Derivative and Hedging Activities - Summary of HTML 53K
Notional Amount and Fair Value of Instruments
(Details)
67: R57 Derivative and Hedging Activities - Summary of HTML 34K
Amounts Recorded in AOCIL and Loss Recorded in
Operations when Reclassified out of AOCIL
(Details)
68: R58 Fair Value Measurements - Schedule of Assets at HTML 31K
Fair Value on Recurring Basis (Details)
69: R59 Fair Value Measurements - Narrative (Details) HTML 29K
70: R60 Fair Value Measurements - Schedule of Assets at HTML 48K
Fair Value on Nonrecurring Basis (Details)
71: R61 Fair Value Measurements - Fair Value Inputs of HTML 67K
Long-Lived Assets Held and Used (Details)
72: R62 Fair Value Measurements - Schedule of Carrying HTML 49K
Amount and Estimated Fair Value Of Financial
Instruments (Details)
73: R63 Incentive Award Plan - Narrative (Details) HTML 90K
74: R64 Incentive Award Plan - Summary of Remaining HTML 38K
Unamortized Stock-based Compensation Expense
(Details)
75: R65 Income Per Share - Schedule of Reconciliation of HTML 74K
the Numerator and Denominator Used in the
Computation of Basic and Diluted Income (Loss) Per
Share (Details)
76: R66 Subsequent Events - Narrative (Details) HTML 39K
79: XML IDEA XML File -- Filing Summary XML 148K
77: XML XBRL Instance -- src-20230930_htm XML 3.42M
78: EXCEL IDEA Workbook of Financial Report Info XLSX 156K
8: EX-101.CAL XBRL Calculations -- src-20230930_cal XML 200K
7: EX-101.DEF XBRL Definitions -- src-20230930_def XML 765K
10: EX-101.LAB XBRL Labels -- src-20230930_lab XML 1.43M
9: EX-101.PRE XBRL Presentations -- src-20230930_pre XML 1.09M
6: EX-101.SCH XBRL Schema -- src-20230930 XSD 201K
80: JSON XBRL Instance as JSON Data -- MetaLinks 528± 819K
81: ZIP XBRL Zipped Folder -- 0000950170-23-057717-xbrl Zip 808K
| 10-Q |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form i 10-Q
i ☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended i September 30, i 2023 /
OR
i ☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number |
||
|
|
|
i SPIRIT REALTY CAPITAL, INC.
(Exact name of registrant as specified in its charter)
i Maryland |
|
i 20-1676382 |
|
|
|
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification Number) |
|
|
|
i 2727 North Harwood Street, i Suite 300, i Dallas, i Texas i 75201 |
|
( i 972) i 476-1900 |
(Address of principal executive offices; zip code) |
|
(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
i Common stock, par value $0.05 per share |
i SRC |
i New York Stock Exchange |
i 6.000% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share |
i SRC-A |
i New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐
|
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). i Yes ☒ No ☐
|
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
i Large accelerated filer ☒ |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company i ☐ |
Emerging growth company i ☐ |
||
|
|
|
|
|
|
||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes i ☐ No ☒
|
|
As of October 30, 2023, there were i 141,331,218 shares of common stock, par value $0.05, of Spirit Realty Capital, Inc. outstanding.
INDEX
|
3 |
||||
|
5 |
||||
|
Item 1. |
|
|
5 |
|
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
28 |
|
Item 3. |
|
|
44 |
|
|
Item 4. |
|
|
45 |
|
|
46 |
||||
|
Item 1. |
|
|
46 |
|
|
Item 1A. |
|
|
46 |
|
|
Item 2. |
|
Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities |
|
46 |
|
Item 3. |
|
|
46 |
|
|
Item 4. |
|
|
46 |
|
|
Item 5. |
|
|
46 |
|
|
Item 6. |
|
|
47 |
|
|
|
|
|
48 |
|
GLOSSARY
2019 Credit Facility |
$800 million unsecured revolving credit facility, expanded to $1.2 billion in March 2022, pursuant to the 2019 Revolving Credit and Term Loan Agreement |
2019 Revolving Credit and Term Loan Agreement |
Revolving credit and term loan agreement between the Operating Partnership and certain lenders dated January 14, 2019, as amended or otherwise modified from time to time |
2020 ATM Program |
At-the-market equity distribution program established in November 2020, which was terminated upon entry into the 2021 ATM Program |
2021 ATM Program |
At-the-market equity distribution program established in November 2021, pursuant to which the Corporation may offer and sell registered shares of common stock from time to time |
2022 Term Loans |
$800.0 million senior unsecured term facility pursuant to the 2022 Term Loan Agreement |
2022 Term Loan Agreement |
Term loan agreement between the Operating Partnership and certain lenders dated August 22, 2022, as amended or otherwise modified from time to time |
2023 Term Loans |
$500.0 million senior unsecured term facility pursuant to the 2023 Term Loan Agreement |
2023 Term Loan Agreement |
Term loan agreement between the Operating Partnership and certain lenders dated November 17, 2022, as amended or otherwise modified from time to time |
2026 Senior Notes |
$300.0 million principal amount senior notes issued in August 2016 |
2027 Senior Notes |
$300.0 million principal amount senior notes issued in September 2019 |
2028 Senior Notes |
$450.0 million principal amount senior notes issued in March 2021 |
2029 Senior Notes |
$400.0 million principal amount senior notes issued in June 2019 |
2030 Senior Notes |
$500.0 million principal amount senior notes issued in September 2019 |
2031 Senior Notes |
$450.0 million principal amount senior notes issued in August 2020 |
2032 Senior Notes |
$350.0 million principal amount senior notes issued in March 2021 |
Adjusted Debt |
Adjusted Debt is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
Adjusted EBITDAre |
Adjusted EBITDAre is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
AFFO |
Adjusted Funds From Operations is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
Amended Incentive Award Plan |
Second Amended and Restated Spirit Realty Capital, Inc. and Spirit Realty, L.P. 2012 Incentive Award Plan, as amended |
Annualized Base Rent (ABR) |
Represents Base Rent plus earned income from direct financing leases and deferred revenue from development deals for the final month of the reporting period. It is adjusted to reflect acquisitions and dispositions for that month as if such acquisitions and dispositions had occurred as of the beginning of the month. The total is then multiplied by 12. ABR is used when calculating certain metrics to evaluate portfolio credit and diversification and to manage risk. |
AOCIL |
Accumulated Other Comprehensive Income / (Loss) |
ASU |
Accounting Standards Update |
Base Cash Rent |
Represents Base Rent adjusted for contractual rental income abated, deemed not probable of collection, or recovered from prior period reserves |
Base Rent |
Represents contractual rental income for the period, prior to deferral or abatement agreements, and excluding contingent rents. |
CMBS |
Commercial Mortgage-Backed Securities |
Code |
Internal Revenue Code of 1986, as amended |
Company |
The Corporation and its consolidated subsidiaries |
Corporation |
Spirit Realty Capital, Inc., a Maryland corporation |
CPI |
Consumer Price Index |
EBITDAre |
EBITDAre is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
3
Exchange Act |
Securities Exchange Act of 1934, as amended |
FFO |
Funds From Operations is a non-GAAP financial measure. See definition in Management's Discussion and Analysis of Financial Condition and Results of Operations |
GAAP |
Generally Accepted Accounting Principles in the United States |
LIBOR |
London Interbank Offered Rate |
NAREIT |
National Association of Real Estate Investment Trusts |
NYSE |
New York Stock Exchange |
OP Holdings |
Spirit General OP Holdings, LLC |
Operating Partnership |
Spirit Realty, L.P., a Delaware limited partnership |
REIT |
Real estate investment trust |
SEC |
Securities and Exchange Commission |
Securities Act |
Securities Act of 1933, as amended |
Senior Unsecured Notes |
2026 Senior Notes, 2027 Senior Notes, 2028 Senior Notes, 2029 Senior Notes, 2030 Senior Notes, 2031 Senior Notes, and 2032 Senior Notes, collectively |
Series A Preferred Stock |
6,900,000 shares of 6.000% Cumulative Redeemable Preferred Stock issued October 3, 2017, with a liquidation preference of $25.00 per share |
SOFR |
Secured Overnight Financing Rate |
TSR |
Total Shareholder Return |
Unless otherwise indicated or unless the context requires otherwise, all references to the “registrant, the "Company," "Spirit Realty Capital," "we," "us" or "our" refer to the Corporation and its consolidated subsidiaries, including the Operating Partnership. Unless otherwise indicated or unless the context requires otherwise, all references to the "Operating Partnership" refer to Spirit Realty, L.P. and its consolidated subsidiaries.
4
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
SPIRIT REALTY CAPITAL, INC.
Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Data)
(Unaudited)
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
||
Investments: |
|
|
|
|
|
|
||
Real estate assets held for investment: |
|
|
|
|
|
|
||
Land and improvements |
|
$ |
i 2,742,072 |
|
|
$ |
i 2,740,250 |
|
Buildings and improvements |
|
|
i 6,081,378 |
|
|
|
i 5,892,117 |
|
Less: accumulated depreciation |
|
|
( i 1,354,807 |
) |
|
|
( i 1,211,061 |
) |
Total real estate assets held for investment, net |
|
|
i 7,468,643 |
|
|
|
i 7,421,306 |
|
Intangible lease assets, net |
|
|
i 389,100 |
|
|
|
i 423,870 |
|
Real estate assets under direct financing leases, net |
|
|
i 7,404 |
|
|
|
i 7,427 |
|
Real estate assets held for sale, net |
|
|
i 61,545 |
|
|
|
i 49,148 |
|
Loans receivable, net |
|
|
i 52,949 |
|
|
|
i 23,023 |
|
Total investments, net |
|
|
i 7,979,641 |
|
|
|
i 7,924,774 |
|
Cash and cash equivalents |
|
|
i 134,166 |
|
|
|
i 8,770 |
|
Deferred costs and other assets, net |
|
|
i 310,801 |
|
|
|
i 313,722 |
|
Goodwill |
|
|
i 225,600 |
|
|
|
i 225,600 |
|
Total assets |
|
$ |
i 8,650,208 |
|
|
$ |
i 8,472,866 |
|
|
|
|
|
|
|
|
||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
||
Revolving credit facilities |
|
$ |
— |
|
|
$ |
i 55,500 |
|
Term loans, net |
|
|
i 1,090,198 |
|
|
|
i 792,309 |
|
Senior Unsecured Notes, net |
|
|
i 2,725,505 |
|
|
|
i 2,722,514 |
|
Mortgages payable, net |
|
|
i 4,545 |
|
|
|
i 4,986 |
|
Total debt, net |
|
|
i 3,820,248 |
|
|
|
i 3,575,309 |
|
Intangible lease liabilities, net |
|
|
i 106,814 |
|
|
|
i 118,077 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
i 230,353 |
|
|
|
i 218,164 |
|
Total liabilities |
|
|
i 4,157,415 |
|
|
|
i 3,911,550 |
|
Commitments and contingencies (see Note 6) |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock and paid in capital, $ i i 0.01 / par value, i i 20,000,000 / shares authorized: i i i i 6,900,000 / / / shares issued and outstanding at both September 30, 2023 and December 31, 2022 |
|
|
i 166,177 |
|
|
|
i 166,177 |
|
Common stock, $ i i 0.05 / par value, i i 350,000,000 / shares authorized: i i 141,331,218 / and i i 141,231,219 / shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively |
|
|
i 7,067 |
|
|
|
i 7,062 |
|
Capital in excess of common stock par value |
|
|
i 7,300,728 |
|
|
|
i 7,285,629 |
|
Accumulated deficit |
|
|
( i 3,036,475 |
) |
|
|
( i 2,931,640 |
) |
Accumulated other comprehensive income |
|
|
i 55,296 |
|
|
|
i 34,088 |
|
Total stockholders’ equity |
|
|
i 4,492,793 |
|
|
|
i 4,561,316 |
|
Total liabilities and stockholders’ equity |
|
$ |
i 8,650,208 |
|
|
$ |
i 8,472,866 |
|
See accompanying notes.
5
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Data)
(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental income |
|
$ |
i 188,205 |
|
|
$ |
i 180,296 |
|
|
$ |
i 561,765 |
|
|
$ |
i 520,930 |
|
Interest income on loans receivable |
|
|
i 1,506 |
|
|
|
i 521 |
|
|
|
i 3,919 |
|
|
|
i 1,362 |
|
Earned income from direct financing leases |
|
|
i 131 |
|
|
|
i 131 |
|
|
|
i 393 |
|
|
|
i 393 |
|
Other operating income |
|
|
i 3,533 |
|
|
|
i 1,956 |
|
|
|
i 4,888 |
|
|
|
i 3,550 |
|
Total revenues |
|
|
i 193,375 |
|
|
|
i 182,904 |
|
|
|
i 570,965 |
|
|
|
i 526,235 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
i 14,062 |
|
|
|
i 14,313 |
|
|
|
i 45,016 |
|
|
|
i 42,408 |
|
Property costs (including reimbursable) |
|
|
i 8,382 |
|
|
|
i 7,395 |
|
|
|
i 24,077 |
|
|
|
i 22,600 |
|
Deal pursuit costs |
|
|
i 342 |
|
|
|
i 470 |
|
|
|
i 1,174 |
|
|
|
i 1,490 |
|
Interest |
|
|
i 36,919 |
|
|
|
i 30,956 |
|
|
|
i 104,993 |
|
|
|
i 84,573 |
|
Depreciation and amortization |
|
|
i 79,370 |
|
|
|
i 74,600 |
|
|
|
i 236,527 |
|
|
|
i 216,606 |
|
Impairments |
|
|
i 19,258 |
|
|
|
i 1,571 |
|
|
|
i 36,052 |
|
|
|
i 11,096 |
|
Total expenses |
|
|
i 158,333 |
|
|
|
i 129,305 |
|
|
|
i 447,839 |
|
|
|
i 378,773 |
|
Other income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 172 |
) |
Gain on disposition of assets |
|
|
i 3,661 |
|
|
|
i 23,302 |
|
|
|
i 66,450 |
|
|
|
i 63,107 |
|
Other income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 5,679 |
|
Total other income |
|
|
i 3,661 |
|
|
|
i 23,302 |
|
|
|
i 66,450 |
|
|
|
i 68,614 |
|
Income before income tax expense |
|
|
i 38,703 |
|
|
|
i 76,901 |
|
|
|
i 189,576 |
|
|
|
i 216,076 |
|
Income tax expense |
|
|
( i 235 |
) |
|
|
( i 261 |
) |
|
|
( i 754 |
) |
|
|
( i 640 |
) |
Net income |
|
|
i 38,468 |
|
|
|
i 76,640 |
|
|
|
i 188,822 |
|
|
|
i 215,436 |
|
Dividends paid to preferred shareholders |
|
|
( i 2,587 |
) |
|
|
( i 2,587 |
) |
|
|
( i 7,763 |
) |
|
|
( i 7,763 |
) |
Net income attributable to common stockholders |
|
$ |
i 35,881 |
|
|
$ |
i 74,053 |
|
|
$ |
i 181,059 |
|
|
$ |
i 207,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
i 0.25 |
|
|
$ |
i 0.54 |
|
|
$ |
i 1.28 |
|
|
$ |
i 1.56 |
|
Diluted |
|
$ |
i 0.25 |
|
|
$ |
i 0.54 |
|
|
$ |
i 1.28 |
|
|
$ |
i 1.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares of common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
i 141,124,401 |
|
|
|
i 136,314,369 |
|
|
|
i 141,094,907 |
|
|
|
i 132,835,210 |
|
Diluted |
|
|
i 141,149,865 |
|
|
|
i 136,314,369 |
|
|
|
i 141,103,395 |
|
|
|
i 132,965,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared per common share issued |
|
$ |
i 0.6696 |
|
|
$ |
i 0.6630 |
|
|
$ |
i 1.9956 |
|
|
$ |
i 1.9390 |
|
See accompanying notes.
6
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Comprehensive Income
(In Thousands)
(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Net income attributable to common stockholders |
|
$ |
i 35,881 |
|
|
$ |
i 74,053 |
|
|
$ |
i 181,059 |
|
|
$ |
i 207,673 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net reclassification of amounts from AOCIL |
|
|
i 8,260 |
|
|
|
i 40,204 |
|
|
|
i 21,208 |
|
|
|
i 41,608 |
|
Total comprehensive income |
|
$ |
i 44,141 |
|
|
$ |
i 114,257 |
|
|
$ |
i 202,267 |
|
|
$ |
i 249,281 |
|
See accompanying notes.
7
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Stockholders' Equity
(In Thousands, Except Share Data)
(Unaudited)
Nine Months Ended September 30, 2023 |
|
Preferred Stock |
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
Shares |
|
|
Par Value and |
|
|
Shares |
|
|
Par |
|
|
Capital in |
|
|
Accumulated |
|
|
AOCIL |
|
|
Total |
|
||||||||
Balances, December 31, 2022 |
|
|
i 6,900,000 |
|
|
$ |
i 166,177 |
|
|
|
i 141,231,219 |
|
|
$ |
i 7,062 |
|
|
$ |
i 7,285,629 |
|
|
$ |
( i 2,931,640 |
) |
|
$ |
i 34,088 |
|
|
$ |
i 4,561,316 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 96,173 |
|
|
|
— |
|
|
|
i 96,173 |
|
Dividends declared on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 2,588 |
) |
|
|
— |
|
|
|
( i 2,588 |
) |
Net income attributable to common stockholders |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
i 93,585 |
|
|
|
— |
|
|
|
i 93,585 |
|
||
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 10,586 |
) |
|
|
( i 10,586 |
) |
Dividends declared on common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 93,675 |
) |
|
|
— |
|
|
|
( i 93,675 |
) |
Tax withholdings related to net stock settlements |
|
|
— |
|
|
|
— |
|
|
|
( i 30,279 |
) |
|
|
( i 2 |
) |
|
|
— |
|
|
|
( i 1,310 |
) |
|
|
— |
|
|
|
( i 1,312 |
) |
Stock-based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
i 98,982 |
|
|
|
i 5 |
|
|
|
i 5,225 |
|
|
|
( i 659 |
) |
|
|
— |
|
|
|
i 4,571 |
|
Balances, March 31, 2023 |
|
|
i 6,900,000 |
|
|
$ |
i 166,177 |
|
|
|
i 141,299,922 |
|
|
$ |
i 7,065 |
|
|
$ |
i 7,290,854 |
|
|
$ |
( i 2,933,699 |
) |
|
$ |
i 23,502 |
|
|
$ |
i 4,553,899 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 54,181 |
|
|
|
— |
|
|
|
i 54,181 |
|
Dividends declared on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 2,588 |
) |
|
|
— |
|
|
|
( i 2,588 |
) |
Net income attributable to common stockholders |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
i 51,593 |
|
|
|
— |
|
|
|
i 51,593 |
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 23,534 |
|
|
|
i 23,534 |
|
Dividends declared on common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 93,700 |
) |
|
|
— |
|
|
|
( i 93,700 |
) |
Tax withholdings related to net stock settlements |
|
|
— |
|
|
|
— |
|
|
|
( i 3,825 |
) |
|
|
— |
|
|
|
— |
|
|
|
( i 145 |
) |
|
|
— |
|
|
|
( i 145 |
) |
Stock-based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
i 35,261 |
|
|
|
i 2 |
|
|
|
i 4,968 |
|
|
|
i 311 |
|
|
|
— |
|
|
|
i 5,281 |
|
Balances, June 30, 2023 |
|
|
i 6,900,000 |
|
|
$ |
i 166,177 |
|
|
|
i 141,331,358 |
|
|
$ |
i 7,067 |
|
|
$ |
i 7,295,822 |
|
|
$ |
( i 2,975,640 |
) |
|
$ |
i 47,036 |
|
|
$ |
i 4,540,462 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 38,468 |
|
|
|
— |
|
|
|
i 38,468 |
|
Dividends declared on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 2,587 |
) |
|
|
— |
|
|
|
( i 2,587 |
) |
Net income available to common stockholders |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
i 35,881 |
|
|
|
— |
|
|
|
i 35,881 |
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 8,260 |
|
|
|
i 8,260 |
|
Dividends declared on common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 94,635 |
) |
|
|
— |
|
|
|
( i 94,635 |
) |
Stock-based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
( i 140 |
) |
|
|
— |
|
|
|
i 4,906 |
|
|
|
( i 2,081 |
) |
|
|
— |
|
|
|
i 2,825 |
|
Balances, September 30, 2023 |
|
|
i 6,900,000 |
|
|
$ |
i 166,177 |
|
|
|
i 141,331,218 |
|
|
$ |
i 7,067 |
|
|
$ |
i 7,300,728 |
|
|
$ |
( i 3,036,475 |
) |
|
$ |
i 55,296 |
|
|
$ |
i 4,492,793 |
|
8
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Stockholders' Equity
(In Thousands, Except Share Data)
(Unaudited)
Nine Months Ended September 30, 2022 |
|
Preferred Stock |
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
Shares |
|
|
Par Value and |
|
|
Shares |
|
|
Par |
|
|
Capital in |
|
|
Accumulated |
|
|
AOCIL |
|
|
Total |
|
||||||||
Balances, December 31, 2021 |
|
|
i 6,900,000 |
|
|
$ |
i 166,177 |
|
|
|
i 127,699,235 |
|
|
$ |
i 6,385 |
|
|
$ |
i 6,673,440 |
|
|
$ |
( i 2,840,356 |
) |
|
$ |
( i 5,847 |
) |
|
$ |
i 3,999,799 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 56,056 |
|
|
|
— |
|
|
|
i 56,056 |
|
Dividends declared on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 2,588 |
) |
|
|
— |
|
|
|
( i 2,588 |
) |
Net income attributable to common stockholders |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
i 53,468 |
|
|
|
— |
|
|
|
i 53,468 |
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 702 |
|
|
|
i 702 |
|
Dividends declared on common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 85,688 |
) |
|
|
— |
|
|
|
( i 85,688 |
) |
Tax withholdings related to net stock settlements |
|
|
— |
|
|
|
— |
|
|
|
( i 39,028 |
) |
|
|
( i 2 |
) |
|
|
— |
|
|
|
( i 6,408 |
) |
|
|
— |
|
|
|
( i 6,410 |
) |
Issuance of shares of common stock, net |
|
|
— |
|
|
|
— |
|
|
|
i 6,559,406 |
|
|
|
i 328 |
|
|
|
i 299,440 |
|
|
|
— |
|
|
|
— |
|
|
|
i 299,768 |
|
Stock-based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
i 86,888 |
|
|
|
i 4 |
|
|
|
i 4,021 |
|
|
|
( i 496 |
) |
|
|
— |
|
|
|
i 3,529 |
|
Balances, March 31, 2022 |
|
|
i 6,900,000 |
|
|
$ |
i 166,177 |
|
|
|
i 134,306,501 |
|
|
$ |
i 6,715 |
|
|
$ |
i 6,976,901 |
|
|
$ |
( i 2,879,480 |
) |
|
$ |
( i 5,145 |
) |
|
$ |
i 4,265,168 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 82,740 |
|
|
|
— |
|
|
|
i 82,740 |
|
Dividends declared on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 2,588 |
) |
|
|
— |
|
|
|
( i 2,588 |
) |
Net income attributable to common stockholders |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
i 80,152 |
|
|
|
— |
|
|
|
i 80,152 |
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 702 |
|
|
|
i 702 |
|
Dividends declared on common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 86,987 |
) |
|
|
— |
|
|
|
( i 86,987 |
) |
Tax withholdings related to net stock settlements |
|
|
— |
|
|
|
— |
|
|
|
( i 403 |
) |
|
|
— |
|
|
|
— |
|
|
|
( i 17 |
) |
|
|
— |
|
|
|
( i 17 |
) |
Issuance of shares of common stock, net |
|
|
— |
|
|
|
— |
|
|
|
i 1,999,996 |
|
|
|
i 100 |
|
|
|
i 89,864 |
|
|
|
— |
|
|
|
— |
|
|
|
i 89,964 |
|
Stock-based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
i 35,591 |
|
|
|
i 2 |
|
|
|
i 4,385 |
|
|
|
( i 498 |
) |
|
|
— |
|
|
|
i 3,889 |
|
Balances, June 30, 2022 |
|
|
i 6,900,000 |
|
|
$ |
i 166,177 |
|
|
|
i 136,341,685 |
|
|
$ |
i 6,817 |
|
|
$ |
i 7,071,150 |
|
|
$ |
( i 2,886,830 |
) |
|
$ |
( i 4,443 |
) |
|
$ |
i 4,352,871 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 76,640 |
|
|
|
— |
|
|
|
i 76,640 |
|
Dividends declared on preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 2,587 |
) |
|
|
— |
|
|
|
( i 2,587 |
) |
Net income available to common stockholders |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
i 74,053 |
|
|
|
— |
|
|
|
i 74,053 |
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
i 40,204 |
|
|
|
i 40,204 |
|
Dividends declared on common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( i 92,595 |
) |
|
|
— |
|
|
|
( i 92,595 |
) |
Issuance of shares of common stock, net |
|
|
— |
|
|
|
— |
|
|
|
i 3,320,559 |
|
|
|
i 166 |
|
|
|
i 141,702 |
|
|
|
— |
|
|
|
— |
|
|
|
i 141,868 |
|
Stock-based compensation, net |
|
|
— |
|
|
|
— |
|
|
|
( i 418 |
) |
|
|
— |
|
|
|
i 4,393 |
|
|
|
( i 4 |
) |
|
|
— |
|
|
|
i 4,389 |
|
Balances, September 30, 2022 |
|
|
i 6,900,000 |
|
|
$ |
i 166,177 |
|
|
|
i 139,661,826 |
|
|
$ |
i 6,983 |
|
|
$ |
i 7,217,245 |
|
|
$ |
( i 2,905,376 |
) |
|
$ |
i 35,761 |
|
|
$ |
i 4,520,790 |
|
See accompanying notes.
9
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
|
|
Nine Months Ended |
|
|||||
|
|
|
|
2022 |
|
|||
Operating activities |
|
|
|
|
|
|
||
Net income |
|
$ |
i 188,822 |
|
|
$ |
i 215,436 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
i 236,527 |
|
|
|
i 216,606 |
|
Impairments |
|
|
i 36,052 |
|
|
|
i 11,096 |
|
Amortization of deferred financing costs |
|
|
i 5,944 |
|
|
|
i 3,637 |
|
Amortization of debt discounts, net |
|
|
i 982 |
|
|
|
i 947 |
|
Amortization of deferred losses on interest rate swaps |
|
|
i 2,106 |
|
|
|
i 2,106 |
|
Stock-based compensation expense |
|
|
i 15,106 |
|
|
|
i 12,805 |
|
Loss on debt extinguishment |
|
|
— |
|
|
|
i 172 |
|
Gain on dispositions of real estate and other assets |
|
|
( i 66,450 |
) |
|
|
( i 63,107 |
) |
Non-cash revenue |
|
|
( i 26,894 |
) |
|
|
( i 30,165 |
) |
Other |
|
|
i 32 |
|
|
|
i 10 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Deferred costs and other assets, net |
|
|
i 3,798 |
|
|
|
( i 1,683 |
) |
Accounts payable, accrued expenses and other liabilities |
|
|
( i 22,477 |
) |
|
|
( i 28,975 |
) |
Net cash provided by operating activities |
|
|
i 373,548 |
|
|
|
i 338,885 |
|
Investing activities |
|
|
|
|
|
|
||
Acquisitions of real estate |
|
|
( i 419,765 |
) |
|
|
( i 1,118,290 |
) |
Capitalized real estate expenditures |
|
|
( i 65,649 |
) |
|
|
( i 55,318 |
) |
Investments in loans receivable |
|
|
( i 13,672 |
) |
|
|
( i 12,700 |
) |
Proceeds from dispositions of real estate and other assets |
|
|
i 249,028 |
|
|
|
i 183,767 |
|
Net cash used in investing activities |
|
|
( i 250,058 |
) |
|
|
( i 1,002,541 |
) |
Financing activities |
|
|
|
|
|
|
||
Borrowings under revolving credit facilities |
|
|
i 424,000 |
|
|
|
i 1,267,800 |
|
Repayments under revolving credit facilities |
|
|
( i 479,500 |
) |
|
|
( i 1,556,200 |
) |
Repayments under mortgages payable |
|
|
( i 413 |
) |
|
|
( i 391 |
) |
Borrowings under term loans |
|
|
i 300,000 |
|
|
|
i 800,000 |
|
Deferred financing costs |
|
|
( i 269 |
) |
|
|
( i 17,028 |
) |
Proceeds from issuance of common stock, net of offering costs |
|
|
— |
|
|
|
i 531,565 |
|
Repurchase of shares of common stock, including tax withholdings related to net stock settlements |
|
|
( i 1,457 |
) |
|
|
( i 6,427 |
) |
Common stock dividends paid |
|
|
( i 281,020 |
) |
|
|
( i 255,870 |
) |
Preferred stock dividends paid |
|
|
( i 7,763 |
) |
|
|
( i 7,763 |
) |
Net cash (used in) provided by financing activities |
|
|
( i 46,422 |
) |
|
|
i 755,686 |
|
Net increase in cash, cash equivalents and restricted cash |
|
|
i 77,068 |
|
|
|
i 92,030 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
i 61,953 |
|
|
|
i 17,799 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
i 139,021 |
|
|
$ |
i 109,829 |
|
|
|
|
|
|
|
|
||
Cash paid for interest, net of interest capitalized |
|
$ |
i 133,071 |
|
|
$ |
i 99,575 |
|
Interest capitalized |
|
|
i 1,005 |
|
|
|
i 741 |
|
Cash paid for income taxes |
|
|
i 919 |
|
|
|
i 676 |
|
10
SPIRIT REALTY CAPITAL, INC.
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
Supplemental Disclosures of Non-Cash Activities: |
|
Nine Months Ended |
|
|||||
|
|
|
|
2022 |
|
|||
Dividends declared and unpaid |
|
$ |
i 94,635 |
|
|
$ |
i 92,595 |
|
Accrued capitalized costs |
|
|
i 39,552 |
|
|
|
i 18,103 |
|
Accrued market-based award dividend rights |
|
|
i 2,429 |
|
|
|
i 998 |
|
Derivative changes in fair value |
|
|
i 19,104 |
|
|
|
i 39,502 |
|
Financing provided in connection with disposition of assets |
|
|
i 33,000 |
|
|
|
— |
|
Right-of-use assets |
|
|
i 22,635 |
|
|
|
— |
|
Right-of-use liabilities |
|
|
i 22,635 |
|
|
|
— |
|
See accompanying notes.
11
SPIRIT REALTY CAPITAL, INC.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1. ORGANIZATION
Organization and Operations
Spirit Realty Capital, Inc. (the "Corporation" or "Spirit" or, with its consolidated subsidiaries, the "Company") operates as a self-administered and self-managed REIT that seeks to generate sustainable and attractive returns for stockholders by primarily investing in and managing a portfolio of single-tenant, operationally essential real estate throughout the United States that is generally leased on a long-term, triple-net basis to tenants operating retail, industrial and other property types. Single-tenant, operationally essential real estate refers to free-standing, commercial real estate facilities where tenants conduct activities that are essential to the generation of their sales and profits.
The Company’s operations are generally carried out through Spirit Realty, L.P. (the "Operating Partnership") and its subsidiaries. Spirit General OP Holdings, LLC, one of the Corporation’s wholly-owned subsidiaries, is the sole general partner and owns approximately i 1% of the Operating Partnership. The Corporation and a wholly-owned subsidiary (Spirit Notes Partner, LLC) are the only limited partners and, together, own the remaining i 99% of the Operating Partnership.
/NOTE 2. SUMMARY OF SIGNIFICANT ACOUNTING POLICIES
Basis of Accounting
The consolidated financial statements of the Company have been prepared on the accrual basis of accounting, in accordance with GAAP. In the opinion of management, the consolidated financial statements include the normal, recurring adjustments necessary for fair statement of the information required to be set forth therein. The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the year ended December 31, 2022.
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of the Corporation and its wholly-owned subsidiaries, including the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation.
The consolidated financial statements include certain special purpose entities that were formed to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted to do so under their governing documents. As of September 30, 2023 and December 31, 2022, net assets totaling $ i 11.1 million and $ i 11.7 million, respectively, were held, and net liabilities totaling $ i 4.5 million and $ i 4.9 million, respectively, were owed by these encumbered special purpose entities and are included in the consolidated balance sheets.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.
Segment Reporting
The Company views its operations as i one reportable segment, which consists of net leasing operations.
/12
Revenue Recognition
Rental Income: Cash and Straight-line Rent
The Company primarily leases real estate to its tenants under long-term, triple-net leases that are classified as operating leases. To evaluate lease classification, the Company assesses the terms and conditions of the lease to determine the appropriate lease term. Options to extend, terminate or purchase are not included in the evaluation for lease classification or for recognition of rental income unless the Company is reasonably certain the tenant will exercise the option. Evaluation of lease classification also requires an estimate of the real estate's residual value at the end of the lease term. For acquisitions, the Company uses the tangible value of the property at the date of acquisition. For lease modifications, the Company generally uses sales comparables or a direct capitalization approach to estimate residual value.
The Company’s leases generally provide for rent escalations throughout the term of the lease. For leases with fixed escalators, rental income is recognized on a straight-line basis to produce a constant periodic rent over the term of the lease. Accordingly, the difference between rental income recognized on a straight-line basis and billed rents is recorded as rent receivables, which the Company will receive only if the tenant makes all rent payments required through the initial term of their lease. For leases with variable rent escalators, rental income typically increases at a multiple of any increase in the CPI over a specified period. Because of the volatility and uncertainty regarding future changes in the CPI and the Company’s inability to determine the extent to which any specific future change in the CPI is probable, increases from variable rent escalators are recognized when the changes in the rental rates have occurred.
Some of the Company’s leases also provide for contingent rent based on a percentage of the tenant’s gross sales, which is recognized as rental income when the factor on which the contingent lease payment is based has occurred.
Rental income is subject to an evaluation for collectability, which includes management’s estimates of amounts that will not be realized based on an assessment of the risks inherent in the portfolio, considering historical experience, as well as the tenant's payment history and financial condition. The Company does not recognize rental income for amounts that are not probable of collection.
Rental Income: Tenant Reimbursement Revenue
Under a triple-net lease, the tenant is typically responsible for all improvements and is contractually obligated to pay all property operating expenses, such as real estate taxes, insurance premiums and repair and maintenance costs. Certain leases contain additional amounts recoverable from tenants for common area maintenance and certain other expenses, which are non-lease components. The Company elected to combine all its non-lease components, which were determined to have the same pattern of transfer as the related operating lease component, into a single combined lease component. Tenant reimbursement revenue is variable and is recognized in the period in which the related expenses are incurred, with the related expenses included in property costs (including reimbursable) on the consolidated statements of operations. Tenant reimbursements are recorded on a gross basis in instances when our tenants reimburse us for property costs which we incur. Tenant receivables are reduced for amounts that are not probable of collection.
Rental Income: Intangible Amortization
Amortization of above- and below-market lease intangibles are included as a decrease and increase, respectively, to rental revenue and amortization of in-place lease intangibles is included in depreciation and amortization expense in the consolidated statements of operations. All lease intangibles are amortized on a straight-line basis over the term of the lease, which includes any renewal options the Company is reasonably certain the tenant will exercise. If the Company subsequently determines it is reasonably certain that the tenant will not exercise the renewal options, the unamortized portion of any related lease intangible is accelerated over the remaining initial term of the lease. If the Company believes a lease intangible balance is no longer recoverable, the unamortized portion is immediately recognized in impairments in the consolidated statements of operations.
Loans Receivable
Interest on loans receivable is recognized using the effective interest rate method. A loan is placed on non-accrual status when the loan has become i 60 days past due, or earlier if management determines that full recovery of the contractually specified payments of principal and interest is doubtful. While on non-accrual status, interest income is recognized only when received. Delinquent loans receivable are written off against the allowance when all possible means of collection have been exhausted.
13
The Company evaluates its loans receivable balance, including accrued interest, for potential credit losses by analyzing the credit of the borrower, the remaining time to maturity of the loan, collateral value and quality (if any), and other relevant factors. Allowance for credit losses are recorded in impairments on the consolidated statement of operations.
/Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money market funds of major financial institutions with fund investments consisting of highly-rated money market instruments and other short-term instruments. Restricted cash is classified within deferred costs and other assets, net in the consolidated balance sheets. i Cash, cash equivalents and restricted cash consisted of the following (in thousands):
|
|
|
|
|
|
|
||||||
Cash and cash equivalents |
|
$ |
i 134,166 |
|
|
$ |
i 8,770 |
|
|
$ |
i 109,829 |
|
Restricted cash: |
|
|
|
|
|
|
|
|
|
|||
1031 Exchange proceeds |
|
|
i 4,210 |
|
|
|
i 53,183 |
|
|
|
— |
|
Tenant security deposits |
|
|
i 645 |
|
|
|
— |
|
|
|
— |
|
Total cash, cash equivalents and restricted cash |
|
$ |
i 139,021 |
|
|
$ |
i 61,953 |
|
|
$ |
i 109,829 |
|
Tenant Receivables
The Company reviews its rent and other tenant receivables for collectability on a regular basis, considering changes in factors such as the tenant’s payment history, the tenant’s financial condition, industry conditions in which the tenant operates and economic conditions in the geographic area in which the tenant operates. If a receivable is not probable of collection, a direct write-off of the receivable will be made. The Company had accounts receivable balances of $ i 13.1 million and $ i 18.2 million at September 30, 2023 and December 31, 2022, respectively, after the impact of $ i 2.3 million and $ i 3.2 million of receivables, respectively, that were deemed not probable of collection. These receivables are recorded within deferred cost and other assets, net in the consolidated balance sheets.
For receivable balances related to the straight-line method of recognizing rental income, the collectability is generally assessed in conjunction with the evaluation of rental income as described above. The Company had straight-line rent receivables of $ i 185.2 million and $ i 167.1 million at September 30, 2023 and December 31, 2022, respectively, after the impact of $ i 1.0 million and $ i 1.3 million of receivables, respectively, that were deemed not probable of collection. These receivables are recorded within deferred costs and other assets, net in the consolidated balance sheets.
/Goodwill
Goodwill arises from business combinations as the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Goodwill is tested for impairment at the reporting unit level annually or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. The Company performs a qualitative assessment to determine if the quantitative impairment test is necessary. The quantitative impairment test, if deemed necessary, compares the fair value of each reporting unit with its carrying amount and impairment is recognized as the amount by which the carrying amount exceeds the reporting unit’s fair value. i No impairment was recorded for the periods presented.
/Income Taxes
The Corporation has elected to be taxed as a REIT under the Code. As a REIT, the Corporation generally will not be subject to federal income tax provided it continues to satisfy certain tests concerning the Company’s sources of income, the nature of the Company’s assets, the amounts distributed to the Corporation’s stockholders and the ownership of Corporation stock. Management believes the Corporation has qualified and will continue to qualify as a REIT and, therefore, i no provision has been made for federal income taxes in the consolidated financial statements. Even if the Corporation qualifies for taxation as a REIT, it may be subject to state and local income and franchise taxes, and to federal income tax and excise tax on its undistributed income.
Taxable income earned by any of the Company's taxable REIT subsidiaries, including from non-REIT activities, is subject to federal, state and local taxes. Taxable income from non-REIT activities managed through any of the Company's taxable REIT subsidiaries is subject to federal, state and local taxes, which are not material.
/14
Earnings Per Share
The Company’s unvested restricted common stock, which contains non-forfeitable rights to receive dividends, are considered participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on their respective weighted average shares outstanding during the period.
Under the terms of the Amended Incentive Award Plan, restricted stock awards are not allocated losses, including undistributed losses as a result of dividends declared exceeding net income. The Company uses net income attributable to common shareholders to determine whether potential common shares are dilutive or anti-dilutive and undistributed net income (loss) to determine whether undistributed earnings are allocable to participating securities.
Forward Equity Sale Agreements
The Corporation may enter into forward sale agreements for the sale and issuance of shares of our common stock, either through an underwritten public offering or through the 2021 ATM Program. These agreements may be physically settled in stock, settled in cash, or net share settled at the Company’s election. The Company evaluated the forward sale agreements and concluded they meet the conditions to be classified within stockholders’ equity. Prior to settlement, a forward sale agreement will be reflected in the diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of the Corporation’s common stock used in diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares of the Corporation’s common stock that would be issued upon full physical settlement of such forward sale agreement over the number of shares of the Corporation’s common stock that could be purchased by the Company in the market (based on the average market price during the period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). Consequently, prior to settlement of a forward sale agreement, there will be no dilutive effect on the Company’s earnings per share except during periods when the average market price of the Corporation’s common stock is above the adjusted forward sale price. However, upon settlement of a forward sales agreement, if the Corporation elects to physically settle or net share settle such forward sale agreement, delivery of the Corporation’s shares will result in dilution to the Company’s earnings per share. We had i no outstanding forward sales agreements as of September 30, 2023.
/NOTE 3. INVESTMENTS
Owned Properties
As of September 30, 2023, the Company's gross investment in owned real estate properties totaled $ i 9.4 billion. The gross investment, as adjusted for any impairment, is comprised of land, buildings, lease intangible assets, lease intangible liabilities, real estate assets held under direct financing leases and real estate assets held for sale. The portfolio is geographically dispersed throughout i 49 states with Texas, at i 15.7%, as the only state with a gross investment greater than i 10.0% of the total gross investment of the Company's entire portfolio.
15
During the nine months ended September 30, 2023, the Company had the following real estate activity (dollars in thousands):
|
|
Number of Properties |
|
|
Dollar Amount of Investments |
|
||||||||||||||||||
|
|
Held in Use |
|
|
Held for Sale |
|
|
Total |
|
|
Held in Use |
|
|
Held for Sale |
|
|
Total |
|
||||||
Gross balance, December 31, 2022 |
|
|
i 2,098 |
|
|
|
i 17 |
|
|
|
i 2,115 |
|
|
$ |
i 9,122,163 |
|
|
$ |
i 61,581 |
|
|
$ |
i 9,183,744 |
|
Acquisitions/improvements (1) |
|
|
i 30 |
|
|
|
i — |
|
|
|
i 30 |
|
|
|
i 497,876 |
|
|
|
i — |
|
|
|
i 497,876 |
|
Dispositions of real estate (2) |
|
|
( i 63 |
) |
|
|
( i 45 |
) |
|
|
( i 108 |
) |
|
|
( i 138,326 |
) |
|
|
( i 112,526 |
) |
|
|
( i 250,852 |
) |
Transfers to Held for Sale |
|
|
( i 69 |
) |
|
|
i 69 |
|
|
|
i — |
|
|
|
( i 146,491 |
) |
|
|
i 146,491 |
|
|
|
i — |
|
Transfers from Held for Sale |
|
|
i 2 |
|
|
|
( i 2 |
) |
|
|
i — |
|
|
|
i 3,675 |
|
|
|
( i 3,675 |
) |
|
|
i — |
|
Impairments (3) |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 10,738 |
) |
|
|
( i 8,593 |
) |
|
|
( i 19,331 |
) |
Reset of gross balances (4) |
|
|
i — |
|
|
|
i — |
|
|
|
i — |
|
|
|
( i 21,595 |
) |
|
|
( i 4,748 |
) |
|
|
( i 26,343 |
) |
Gross balance, September 30, 2023 |
|
|
i 1,998 |
|
|
|
i 39 |
|
|
|
i 2,037 |
|
|
|
i 9,306,564 |
|
|
|
i 78,530 |
|
|
|
i 9,385,094 |
|
Accumulated depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
( i 1,548,231 |
) |
|
|
( i 16,985 |
) |
|
|
( i 1,565,216 |
) |
|||
Net balance, September 30, 2023 (5) |
|
|
|
|
|
|
|
|
|
|
$ |
i 7,758,333 |
|
|
$ |
i 61,545 |
|
|
$ |
i 7,819,878 |
|
|||
(1) Includes investments of $ i 66.2 million in revenue producing capitalized expenditures and $ i 4.0 million of non-revenue producing capitalized expenditures during the nine months ended September 30, 2023.
(2) For the nine months ended September 30, 2023, the net gains on disposal of properties held in use and held for sale were $ i 39.4 million and $ i 27.1 million, respectively.
(3) Impairments on owned real estate is comprised of real estate and intangible asset/liability impairment.
(4) Represents write-off of gross investment balances against the related accumulated depreciation and amortization balances as a result of basis reset due to impairment or intangibles and tenant improvements which have been fully amortized.
(5) Reconciliation of total owned investments to the accompanying consolidated balance sheet at September 30, 2023 is as follows:
Real estate assets held for investment, net |
|
$ |
i 7,468,643 |
|
||
Intangible lease assets, net |
|
|
|
|
i 389,100 |
|
Real estate assets under direct financing leases, net |
|
|
|
|
i 7,404 |
|
Real estate assets held for sale, net |
|
|
|
|
i 61,545 |
|
Intangible lease liabilities, net |
|
|
|
|
( i 106,814 |
) |
Net balance |
|
|
|
$ |
i 7,819,878 |
|
Operating Leases
As of September 30, 2023 and 2022, the Company held i 2,028 and i 2,113 properties under operating leases, respectively. i The following table summarizes the components of rental income recognized on these operating leases in the consolidated statements of operations (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Base Cash Rent (1) |
|
$ |
i 173,569 |
|
|
$ |
i 162,467 |
|
|
$ |
i 516,486 |
|
|
$ |
i 471,052 |
|
Variable cash rent (including reimbursables) |
|
|
i 6,331 |
|
|
|
i 6,479 |
|
|
|
i 18,385 |
|
|
|
i 19,713 |
|
Straight-line rent, net of uncollectible reserve (2) |
|
|
i 8,227 |
|
|
|
i 10,875 |
|
|
|
i 26,127 |
|
|
|
i 28,465 |
|
Amortization of above- and below- market lease intangibles, net (3) |
|
|
i 78 |
|
|
|
i 475 |
|
|
|
i 767 |
|
|
|
i 1,700 |
|
Total rental income |
|
$ |
i 188,205 |
|
|
$ |
i 180,296 |
|
|
$ |
i 561,765 |
|
|
$ |
i 520,930 |
|
(1) Includes net impact of amounts (reserved) of $( i 0.3) million and $( i 0.4) million for the three and nine months ended September 30, 2023, and $( i 0.6) million and $( i 0.5) million for the three and nine months ended September 30, 2022, respectively.
(2) Includes net impact of amounts (reserved)/recovered of $( i 2.1) million and $( i 4.1) million for the three and nine months ended September 30, 2023, respectively, and $ i 1.2 million and $ i 1.1 million for the three and nine months ended September 30, 2022, respectively.
(3) Excludes amortization of in-place leases of $ i 10.7 million and $ i 32.7 million for the three and nine months ended September 30, 2023, respectively, and $ i 11.3 million and $ i 32.6 million for the three and nine months ended September 30, 2022, respectively, which is included in depreciation and amortization expense in the consolidated statements of operations.
Lease renewal periods are exercisable at the lessees’ option and, as such, minimum future rent only includes the remaining initial non-cancellable term of our operating leases. In addition, minimum future rent includes fixed rent escalations occurring on or after October 1, 2023, but does not include variable rent escalations, such as those based on CPI, or contingent rents.
16
Minimum future rent at September 30, 2023 is as follows (in thousands):
|
|
|
||
Remainder of 2023 |
|
$ |
i 171,402 |
|
2024 |
|
|
i 686,874 |
|
2025 |
|
|
i 677,829 |
|
2026 |
|
|
i 653,584 |
|
2027 |
|
|
i 615,008 |
|
Thereafter |
|
|
i 5,110,923 |
|
Total future minimum rentals |
|
$ |
i 7,915,620 |
|
The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):
|
|
|
|
|
||||
In-place leases |
|
$ |
i 536,730 |
|
|
$ |
i 559,962 |
|
Above-market leases |
|
|
i 104,204 |
|
|
|
i 101,594 |
|
Less: accumulated amortization |
|
|
( i 251,834 |
) |
|
|
( i 237,686 |
) |
Intangible lease assets, net |
|
$ |
i 389,100 |
|
|
$ |
i 423,870 |
|
|
|
|
|
|
|
|
||
Below-market leases |
|
$ |
i 165,224 |
|
|
$ |
i 179,187 |
|
Less: accumulated amortization |
|
|
( i 58,410 |
) |
|
|
( i 61,110 |
) |
Intangible lease liabilities, net |
|
$ |
i 106,814 |
|
|
$ |
i 118,077 |
|
Direct Financing Leases
As of September 30, 2023, the Company held i one property under a direct financing lease, which was held in use. As of September 30, 2023, this property had $ i 2.1 million in scheduled minimum future payments to be received under its remaining non-cancellable lease term. As of September 30, 2023, the Company had a reserve of $ i 0.1 million against the investment balance of $ i 7.5 million, which was initially recorded in 2020 as a result of the initial term of the direct financing lease extending until 2027.
Loans Receivable
During the first quarter of 2023, the Company provided fixed-rate seller financing in conjunction with the sale of i four single-tenant properties for $ i 33.0 million, for which the properties serve as collateral. The Company also provided additional funding for an existing construction loan, for which we issued $ i 12.7 million during 2022 and increased the principal amount of the loan by $ i 0.8 million during the three months ended March 31, 2023. The Company evaluated the collectability of these amounts receivable and recorded an allowance for loan losses of $ i 0.5 million during the three months ended March 31, 2023 due to the borrowers' financials and performance metrics.
During the second quarter of 2023, the Company issued a fixed-rate, uncollateralized loan for $ i 5.0 million. Additionally, the Company purchased $ i 10.0 million of term loans for $ i 7.9 million, with $ i 2.1 million being recorded to allowance for loan losses at time of purchase. The Company evaluated the collectability of these amounts receivable and recorded an additional allowance for loan losses of $ i 0.8 million for the three months ended June 30, 2023. The Company also recorded an additional allowance for loan losses of $ i 0.1 million during the three months ended June 30, 2023 on an existing loan due to changes in the borrower's macroeconomic environment.
During the third quarter of 2023, the Company recorded an additional allowance for loan losses of $ i 15.3 million on existing loans due to changes in the borrower's financial position.
The following table details our loans receivable activity (in thousands):
|
|
Principal Balance |
|
|
Allowance for Credit Loss |
|
|
Total |
|
|||
|
$ |
i 23,700 |
|
|
$ |
( i 677 |
) |
|
$ |
i 23,023 |
|
|
Loans issued |
|
|
i 48,750 |
|
|
|
( i 18,799 |
) |
|
|
i 29,951 |
|
Loan payments received |
|
|
( i 25 |
) |
|
|
— |
|
|
|
( i 25 |
) |
|
$ |
i 72,425 |
|
|
$ |
( i 19,476 |
) |
|
$ |
i 52,949 |
|
|
17
/
Impairments and Allowance for Credit Losses
The following table summarizes impairments and allowance for credit losses recognized in the consolidated statements of operations (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Real estate asset impairment |
|
$ |
i 3,951 |
|
|
$ |
i 1,632 |
|
|
$ |
i 18,754 |
|
|
$ |
i 10,535 |
|
Intangible net (liability)/asset impairment |
|
|
( i 27 |
) |
|
|
( i 61 |
) |
|
|
i 577 |
|
|
|
i 434 |
|
Allowance for credit losses on loans receivable |
|
|
i 15,334 |
|
|
|
i — |
|
|
|
i 16,721 |
|
|
|
i 127 |
|
Total impairment loss |
|
$ |
i 19,258 |
|
|
$ |
i 1,571 |
|
|
$ |
i 36,052 |
|
|
$ |
i 11,096 |
|
NOTE 4. DEBT
The Company's debt is summarized below (dollars in thousands):
|
|
Weighted Average Effective Interest Rates (1) |
|
Weighted Average Stated Interest Rates (2) |
|
Weighted Average Remaining Years to Maturity (3) |
|
|
|
|
||||
Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Revolving credit facilities |
|
i 12.18% |
|
— |
|
i 2.5 |
|
$ |
— |
|
|
$ |
i 55,500 |
|
Term loans |
|
i 4.01% |
|
i 3.86% |
|
i 2.8 |
|
|
i 1,100,000 |
|
|
|
i 800,000 |
|
Senior Unsecured Notes |
|
i 3.42% |
|
i 3.25% |
|
i 5.7 |
|
|
i 2,750,000 |
|
|
|
i 2,750,000 |
|
Mortgages payable |
|
i 4.89% |
|
i 5.82% |
|
i 7.3 |
|
|
i 4,410 |
|
|
|
i 4,825 |
|
Total debt |
|
i 3.68% |
|
i 3.42% |
|
i 4.8 |
|
|
i 3,854,410 |
|
|
|
i 3,610,325 |
|
Debt discount, net |
|
|
|
|
|
|
|
|
( i 8,573 |
) |
|
|
( i 9,556 |
) |
Deferred financing costs, net (4) |
|
|
|
|
|
|
|
|
( i 25,589 |
) |
|
|
( i 25,460 |
) |
Total debt, net |
|
|
|
|
|
|
|
$ |
i 3,820,248 |
|
|
$ |
i 3,575,309 |
|
(1) Includes amortization of debt discount/premium, amortization of deferred financing costs, facility fees, non-utilization fees and impact of cash flow hedges, where applicable, calculated for the nine months ended September 30, 2023 based on the average principal balance outstanding during the period.
(2) Based on the outstanding principal balance as of September 30, 2023. Term loans include the impact of cash flow hedges. Excluding the impact of cash flow hedges, the stated interest rate for the term loans was i 6.31% as of September 30, 2023.
(3) Based on the outstanding principal balance as of September 30, 2023.
(4) Excludes deferred financing costs for the revolving credit facilities.
/Deferred financing costs and offering discount/premium incurred in connection with entering into debt agreements are amortized to interest expense over the initial term of the respective agreement. Both deferred financing costs and offering discount/premium are recorded net against the principal debt balance on the consolidated balance sheets, except for deferred costs related to revolving credit facilities, which are recorded in deferred costs and other assets, net.
Revolving Credit Facilities
On January 14, 2019, the Operating Partnership entered into the 2019 Revolving Credit and Term Loan Agreement, which included the 2019 Credit Facility with a borrowing capacity of $ i 800.0 million. On March 30, 2022, the Operating Partnership amended and restated the 2019 Revolving Credit and Term Loan Agreement, increasing the borrowing capacity of the 2019 Credit Facility to $ i 1.2 billion. The borrowing capacity can be further increased to $ i 1.7 billion through exercise of an accordion feature, subject to satisfying certain requirements. The 2019 Credit Facility has a maturity date of i March 31, 2026 and includes i two i six-month extensions that can be exercised at the Company’s option. Borrowings may be repaid, in whole or in part, at any time, without premium or penalty, but subject to applicable breakage fees, if any.
As of September 30, 2023, outstanding loans under the 2019 Credit Facility bore interest at a i 1-month adjusted SOFR rate plus an applicable margin of i 0.775% per annum and the aggregate revolving commitments incurred a facility fee of i 0.150% per annum, in each case, based on the Operating Partnership’s credit rating and leverage ratio (as defined in the agreement). Prior to March 30, 2022, outstanding loans under the 2019 Credit Facility bore interest at i 1-month LIBOR plus an applicable margin of i 0.90% per annum and the aggregate revolving commitments incurred a facility fee of i 0.20% per annum.
18
In connection with the amendment and restatement of the 2019 Credit Facility, the Company wrote off $ i 0.2 million in deferred financing costs and incurred deferred financing costs of $ i 8.6 million. The unamortized deferred financing costs were $ i 6.0 million as of September 30, 2023, compared to $ i 7.8 million as of December 31, 2022.
As of September 30, 2023, $ i 1.2 billion of borrowing capacity was available under the 2019 Credit Facility and there were i no outstanding letters of credit. The Operating Partnership's ability to borrow under the 2019 Credit Facility is subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2023.
Term Loans
On August 22, 2022, the Operating Partnership entered into the 2022 Term Loan Agreement, which provides for borrowings in an aggregate amount of $ i 800.0 million, comprised of a $ i 300.0 million tranche which matures i August 22, 2025 and a $ i 500.0 million tranche which matures i August 20, 2027. The 2022 Term Loan Agreement also includes an accordion feature to increase the available term loans by $ i 200.0 million, subject to satisfying certain requirements. The Company incurred $ i 8.4 million in deferred financing costs in connection with entering into the 2022 Term Loan Agreement, and the unamortized deferred financing costs were $ i 6.2 million as of September 30, 2023, compared to $ i 7.7 million as of December 31, 2022.
On November 17, 2022, the Operating Partnership entered into the 2023 Term Loan Agreement, which provides for $ i 500.0 million of unsecured term loans with a maturity date of i June 16, 2025. The 2023 Term Loan Agreement also includes an accordion feature to increase the available term loans by $ i 100.0 million, subject to satisfying certain requirements. The Company incurred $ i 4.3 million in deferred financing costs in connection with the $ i 300.0 million drawn of the 2023 Term Loans, and the unamortized deferred financing costs were $ i 3.6 million as of September 30, 2023. Borrowing capacity of $ i 200.0 million was available under the 2023 Term Loan Agreements as of September 30, 2023, which may be drawn by December 29, 2023.
As of September 30, 2023, the 2022 Term Loans and 2023 Term Loans bore interest at a i i 1-month adjusted SOFR / rate plus an applicable margin of i 0.850% and i 0.950% per annum, respectively, based on the Operating Partnership's credit rating. In conjunction with the Company's term loans, the Company entered into interest rate swaps as cash flow hedges (see Note 7).
In connection with the 2022 Term Loan Agreement and the 2023 Term Loan Agreement, the Company and Operating Partnership are subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2023.
Senior Unsecured Notes
The Senior Unsecured Notes were issued by the Operating Partnership and are guaranteed by the Company. The following is a summary of the Senior Unsecured Notes outstanding (dollars in thousands):
|
|
Maturity Date |
|
Interest Payment Dates |
|
Stated Interest Rate |
|
|
|
|
||||
2026 Senior Notes |
|
|
i March 15 and September 15 |
|
i 4.45% |
|
$ |
i 300,000 |
|
|
$ |
i 300,000 |
|
|
2027 Senior Notes |
|
|
i January 15 and July 15 |
|
i 3.20% |
|
|
i 300,000 |
|
|
|
i 300,000 |
|
|
2028 Senior Notes |
|
|
i March 15 and September 15 |
|
i 2.10% |
|
|
i 450,000 |
|
|
|
i 450,000 |
|
|
2029 Senior Notes |
|
|
i January 15 and July 15 |
|
i 4.00% |
|
|
i 400,000 |
|
|
|
i 400,000 |
|
|
2030 Senior Notes |
|
|
i January 15 and July 15 |
|
i 3.40% |
|
|
i 500,000 |
|
|
|
i 500,000 |
|
|
2031 Senior Notes |
|
|
i February 15 and August 15 |
|
i 3.20% |
|
|
i 450,000 |
|
|
|
i 450,000 |
|
|
2032 Senior Notes |
|
|
i February 15 and August 15 |
|
i 2.70% |
|
|
i 350,000 |
|
|
|
i 350,000 |
|
|
Total Senior Unsecured Notes |
|
|
|
i 3.25% |
|
$ |
i 2,750,000 |
|
|
$ |
i 2,750,000 |
|
||
The Senior Unsecured Notes are redeemable in whole at any time or in part from time to time, at the Operating Partnership’s option, at a redemption price equal to the sum of i 100% of the principal amount of the respective Senior Unsecured Notes to be redeemed plus accrued and unpaid interest and liquidated damages, if any, up to, but not including, the redemption date; and a make-whole premium. If any of the Senior Unsecured Notes are redeemed three months or less (or two months or less in the case of the 2027 Senior Notes and 2028 Senior Notes) prior to their respective maturity dates, the redemption price will not include a make-whole premium.
19
As of September 30, 2023 and December 31, 2022, the unamortized deferred financing costs were $ i 15.8 million and $ i 17.8 million, respectively, and the unamortized discount was $ i 8.7 million and $ i 9.7 million, respectively. In connection with the issuance of the Senior Unsecured Notes, the Company and Operating Partnership are subject to ongoing compliance with a number of customary financial and other affirmative and negative covenants, all of which the Company and the Operating Partnership were in compliance with as of September 30, 2023.
Mortgages Payable
Indirect wholly-owned special purpose entity subsidiaries of the Company are borrowers under two fixed-rate non-recourse loans, which have been securitized into CMBS and are secured by the borrowers’ respective leased properties and related assets. The stated interest rates as of September 30, 2023 for the loans were i 5.80% and i 6.00%, respectively. Each loan was secured by i one property. There were i i no / unamortized deferred financing costs as of either September 30, 2023 and December 31, 2022, and the unamortized net premium as of September 30, 2023 and December 31, 2022 was $ i 0.1 million and $ i 0.2 million, respectively.
Debt Extinguishment
The Company did i not extinguish any debt during the nine months ended September 30, 2023. During the nine months ended September 30, 2022, the Company recognized a loss on debt extinguishment of $ i 0.2 million as a result of the amendment and restatement of the 2019 Revolving Credit and Term Loan Agreement.
Debt Maturities
As of September 30, 2023, scheduled debt maturities, including balloon payments, were as follows (in thousands):
|
|
Scheduled |
|
|
Balloon |
|
|
Total |
|
|||
Remainder of 2023 |
|
$ |
i 141 |
|
|
$ |
— |
|
|
$ |
i 141 |
|
2024 |
|
|
i 590 |
|
|
|
— |
|
|
|
i 590 |
|
2025 |
|
|
i 610 |
|
|
|
i 600,016 |
|
|
|
i 600,626 |
|
2026 |
|
|
i 469 |
|
|
|
i 300,000 |
|
|
|
i 300,469 |
|
2027 |
|
|
i 497 |
|
|
|
i 800,000 |
|
|
|
i 800,497 |
|
Thereafter |
|
|
i 2,034 |
|
|
|
i 2,150,053 |
|
|
|
i 2,152,087 |
|
Total |
|
$ |
i 4,341 |
|
|
$ |
i 3,850,069 |
|
|
$ |
i 3,854,410 |
|
Interest Expense
The components of interest expense related to the Company's borrowings were as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Revolving credit facilities (1) |
|
$ |
i 612 |
|
|
$ |
i 3,550 |
|
|
$ |
i 4,237 |
|
|
$ |
i 8,520 |
|
Term loans (2) |
|
|
i 10,857 |
|
|
|
i 2,940 |
|
|
|
i 25,589 |
|
|
|
i 2,940 |
|
Senior Unsecured Notes |
|
|
i 22,313 |
|
|
|
i 22,313 |
|
|
|
i 66,939 |
|
|
|
i 66,939 |
|
Mortgages payable |
|
|
i 65 |
|
|
|
i 73 |
|
|
|
i 201 |
|
|
|
i 225 |
|
Non-cash: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of deferred financing costs |
|
|
i 2,325 |
|
|
|
i 1,475 |
|
|
|
i 5,944 |
|
|
|
i 3,637 |
|
Amortization of debt discount, net |
|
|
i 330 |
|
|
|
i 318 |
|
|
|
i 982 |
|
|
|
i 947 |
|
Amortization of net losses related to interest rate swaps |
|
|
i 702 |
|
|
|
i 702 |
|
|
|
i 2,106 |
|
|
|
i 2,106 |
|
Capitalized interest |
|
|
( i 285 |
) |
|
|
( i 415 |
) |
|
|
( i 1,005 |
) |
|
|
( i 741 |
) |
Total interest expense |
|
$ |
i 36,919 |
|
|
$ |
i 30,956 |
|
|
$ |
i 104,993 |
|
|
$ |
i 84,573 |
|
(1) Includes facility fees of approximately $ i 0.6 million and $ i 2.0 million for the three and nine months ended September 30, 2023, respectively, and $ i 0.5 million and $ i 1.4 million for the three and nine months ended September 30, 2022, respectively.
(2) Includes impact of cash flow hedge.
/20
NOTE 5. STOCKHOLDERS’ EQUITY
Common Stock
In January 2022, the Company entered into forward sale agreements in connection with an offering of i 9.4 million shares of common stock at an initial public offering price of $ i 47.60 per share, before underwriting discounts and offering expenses. All of these shares were settled during 2022, generating net proceeds of $ i 427.7 million.
In November 2021, the Board of Directors approved a new $ i 500.0 million ATM Program, and the Company terminated its 2020 ATM Program. i The following details the activity under the 2021 ATM Program since its inception (in thousands):
2021 ATM |
|
Forward Shares |
|
|
Regular Shares |
|
|
Total Shares |
|
|
Net Proceeds on Issuances |
|
|||||
Month ended 12/31/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares sold |
|
|
i 2,268 |
|
|
|
i 438 |
|
|
|
i 2,706 |
|
|
|
|
|
|
Shares issued |
|
|
( i 2,212 |
) |
|
|
( i 438 |
) |
|
|
( i 2,650 |
) |
|
|
$ |
i 120,286 |
|
Unsettled shares sold as of 12/31/2021 |
|
|
i 56 |
|
|
|
— |
|
|
|
i 56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year ended 12/31/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares sold |
|
|
i 2,434 |
|
|
|
i 1,525 |
|
|
|
i 3,959 |
|
|
|
|
|
|
Shares issued |
|
|
( i 2,490 |
) |
|
|
( i 1,525 |
) |
|
|
( i 4,015 |
) |
|
|
$ |
i 167,850 |
|
Unsettled shares sold as of 12/31/2022 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nine months ended 9/30/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares sold |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
Shares issued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
$ |
— |
|
Unsettled shares sold as of 9/30/2023 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
As of September 30, 2023, approximately $ i 208.7 million of capacity remained available under the 2021 ATM Program.
Preferred Stock
As of September 30, 2023, the Company had i 6.9 million shares of Series A Preferred Stock outstanding, which pays cumulative cash dividends of i 6.00% per annum on the liquidation preference of $ i 25.00 per share (equivalent to $ i 1.50 per share on an annual basis).
Dividends Declared
For the nine months ended September 30, 2023, the Company's Board of Directors declared the following dividends:
Declaration Date |
|
Dividend Per Share |
|
|
Record Date |
|
Total Amount |
|
|
Payment Date |
||
Common Stock |
|
|
|
|
|
|
|
|
|
|
||
|
$ |
i 0.6630 |
|
|
|
$ |
i 93,675 |
|
|
|||
|
$ |
i 0.6630 |
|
|
|
$ |
i 93,700 |
|
|
|||
|
$ |
i 0.6696 |
|
|
|
$ |
i 94,635 |
|
|
|||
Preferred Stock |
|
|
|
|
|
|
|
|
|
|
||
|
$ |
i 0.3750 |
|
|
|
$ |
i 2,588 |
|
|
|||
|
$ |
i 0.3750 |
|
|
|
$ |
i 2,588 |
|
|
|||
|
$ |
i 0.3750 |
|
|
|
$ |
i 2,587 |
|
|
|||
The common stock dividend declared on August 9, 2023 is included in accounts payable, accrued expenses and other liabilities in the consolidated balance sheet as of September 30, 2023.
/NOTE 6. COMMITMENTS AND CONTINGENCIES
The Company is periodically subject to claims or litigation in the ordinary course of business, including claims generated from business conducted by tenants on real estate owned by the Company. In these instances, the Company is typically indemnified by the tenant against any losses that might be suffered, and the Company and/or the tenant are typically insured against such claims. The Company had fully accrued a $ i 5.7 million contingent liability related to debt owed by a tenant in 2018, however no payments were made by the Company. Therefore, upon the debt's maturity on March 15, 2022, the Company reversed the $ i 5.7 million accrual, which is reflected as other income in the consolidated statement of operations.
21
As of September 30, 2023, there were i no outstanding claims or litigation against the Company that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.
The Company estimates future costs for known environmental remediation requirements when it is probable that the Company has incurred a liability and the related costs can be reasonably estimated. The Company considers various factors when estimating its environmental liabilities, and adjustments are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues. When only a wide range of estimated amounts can be reasonably established and no other amount within the range is better than another, the low end of the range is recorded in the consolidated financial statements. As of September 30, 2023, i no accruals have been made.
Purchase and Capital Improvement Commitments
As of September 30, 2023, the Company had commitments totaling $ i 138.1 million, of which $ i 12.2 million relates to future acquisitions and the remainder relates to improvements on properties the Company already owns. Acquisition commitments contain standard cancellation clauses contingent on the results of due diligence. $ i 20.6 million of the Company’s commitments are expected to be funded by the end of 2023, with the remainder to be funded by the end of 2025.
/NOTE 7. DERIVATIVE AND HEDGING ACTIVITIES
The Company may use interest rate derivative contracts to manage its exposure to changes in interest rates on its variable rate debt. These derivatives are considered cash flow hedges and are recorded on a gross basis at fair value. Assessments of hedge effectiveness are performed quarterly using either a qualitative or quantitative approach. The Company recognizes the entire change in the fair value in AOCIL and the change is reflected as cash flow hedge changes in fair value in the supplemental disclosures of non-cash activities in the consolidated statements of cash flows. Amounts will subsequently be reclassified to earnings when the hedged item affects earnings. The Company does not enter into derivative contracts for speculative or trading purposes and does not have derivative netting arrangements.
The Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company evaluates this risk through monitoring the creditworthiness of counterparties, which includes review of their debt ratings and financial performance. To mitigate credit risk, the Company enters into agreements with counterparties it considers credit-worthy, such as large financial institutions with favorable credit ratings.
In the third quarter of 2019, the Company terminated interest rate swaps which had been entered into in December 2018 and accelerated the reclassification of a loss of $ i 12.5 million from AOCIL to termination of interest rate swaps as a result of a portion of the hedged forecasted transactions becoming probable not to occur. There were no events of default related to the interest rate swaps prior to their termination. Given that a portion of the hedged transactions remained probable to occur, $ i 12.3 million of the loss was deferred in other comprehensive loss and is being amortized over the remaining initial term of the interest rate swaps, which ends January 31, 2024. As of September 30, 2023, the unamortized portion of loss in AOCIL related to terminated interest rate swaps was $ i 0.9 million.
During the third quarter of 2022 and the first quarter of 2023, the Company entered into new interest rate swaps, which were designated as cash flow hedge instruments. Interest rate swaps that are in an asset position are recorded in deferred costs and other assets, net on the consolidated balance sheet, while interest rate swaps that are in a liability position are recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. These instruments swap 1-month SOFR for a fixed payment. i The following table summarizes the key terms and fair value of these instruments (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Fair Value of Asset |
|
||
Interest Rate Swap Notional Amount |
|
Fixed Interest Rate |
|
Effective Date |
|
Maturity Date |
|
|
||||||
|
$ |
i 300,000 |
|
|
|
i 2.501% |
|
|
|
$ |
i 20,340 |
|
||
|
$ |
i 200,000 |
|
|
|
i 2.507% |
|
|
|
|
i 13,478 |
|
||
|
$ |
i 300,000 |
|
|
|
i 2.636% |
|
|
|
|
i 12,403 |
|
||
|
$ |
i 300,000 |
|
|
|
i 3.769% |
|
|
|
|
i 6,090 |
|
||
|
$ |
i 200,000 |
|
|
|
i 3.590% |
|
|
|
|
i 3,921 |
|
||
|
|
|
|
|
|
|
|
|
|
|
$ |
i 56,232 |
|
|
22
The following table provides information about the amounts recorded in AOCIL, as well as any amounts reclassified to operations (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Cash flow hedge derivatives |
|
$ |
i 14,229 |
|
|
$ |
i 39,606 |
|
|
$ |
i 34,852 |
|
|
$ |
i 39,606 |
|
Amount of gain reclassified from AOCIL to interest |
|
|
( i 6,671 |
) |
|
|
( i 104 |
) |
|
|
( i 15,750 |
) |
|
|
( i 104 |
) |
Amount of loss reclassified from AOCIL to interest |
|
|
i 702 |
|
|
|
i 702 |
|
|
|
i 2,106 |
|
|
|
i 2,106 |
|
Total |
|
$ |
i 8,260 |
|
|
$ |
i 40,204 |
|
|
$ |
i 21,208 |
|
|
$ |
i 41,608 |
|
During the next 12 months, we estimate that approximately $ i 0.9 million will be reclassified as an increase to interest expense related to terminated hedges of existing floating-rate debt and $ i 28.8 million will be reclassified as a decrease to interest expense related to cash flow hedge derivatives.
/NOTE 8. FAIR VALUE MEASUREMENTS
Recurring Fair Value Measurements
The Company’s interest rate swaps are measured using a market approach, using prices obtained from a nationally recognized pricing service and pricing models with market observable inputs such as interest rates and volatilities. i The Company’s financial assets that were accounted for at fair value on a recurring basis were as follows (in thousands):
|
|
|
|
|
Fair Value Hierarchy Level |
|
||||||||||
Description |
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Derivatives held at September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap assets |
|
$ |
i 56,232 |
|
|
$ |
— |
|
|
$ |
i 56,232 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives held at December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap assets |
|
$ |
i 37,128 |
|
|
$ |
— |
|
|
$ |
i 37,128 |
|
|
$ |
— |
|
Nonrecurring Fair Value Measurements
Fair value measurement of an asset on a nonrecurring basis occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset is no longer recoverable. Real estate assets and their related intangible assets are evaluated for impairment based on certain indicators including, but not limited to: the asset being held for sale, vacant, tenant bankruptcy or delinquency, and leases expiring in i 60 days or less. The fair values of real estate and intangible assets were estimated using the following information, depending on availability, in order of preference: signed purchase and sale agreements (“PSA”) or letters of intent (“LOI”); broker opinions of value (“BOV”); recently quoted bid or ask prices, or market prices for comparable properties; estimates of discounted cash flows, which consider, among other things, contractual and forecasted rental revenues, leasing assumptions, expenses based upon market conditions and capitalization rates; and expectations for the use of the real estate. i The Company’s assets that were accounted for at fair value on a nonrecurring basis as of their respective measurement dates were as follows (in thousands):
|
|
|
|
|
Fair Value Hierarchy Level |
|
||||||||||
Description |
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets held at September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impaired at March 31, 2023 |
|
$ |
i 2,526 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
i 2,526 |
|
Impaired at June 30, 2023 |
|
$ |
i 5,826 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
i 5,826 |
|
Impaired at September 30, 2023 |
|
$ |
i 29,932 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
i 29,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets held at December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impaired at June 30, 2022 |
|
$ |
i 4,700 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
i 4,700 |
|
Impaired at September 30, 2022 |
|
$ |
i 4,094 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
i 4,094 |
|
Impaired at December 31, 2022 |
|
$ |
i 29,636 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
i 29,636 |
|
23
As of September 30, 2023, the Company held i 15 properties that were impaired during 2023. As of December 31, 2022, the Company held i 18 properties that were impaired during 2022. i The Company estimated property fair value using price per square foot from unobservable inputs. The unobservable inputs for these properties are as follows:
Unobservable Input |
|
Asset Type |
|
Property Count |
|
Price Per Square Foot Range |
|
Weighted Average Price Per Square Foot |
|
Square Footage |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
PSA, LOI or BOV |
|
Retail |
|
i 14 |
|
$ i 37.74 - $ i 782.66 |
|
$ i 208.91 |
|
|
i 175,779 |
|
Comparable Properties |
|
Medical |
|
i 1 |
|
$ i 91.23 - $ i 107.52 |
|
$ i 100.33 |
|
|
i 15,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
PSA, LOI or BOV |
|
Retail |
|
i 12 |
|
$ i 30.00 - $ i 384.88 |
|
$ i 93.60 |
|
|
i 223,225 |
|
PSA, LOI or BOV |
|
Data Center |
|
i 1 |
|
$ i 24.94 |
|
$ i 24.94 |
|
|
i 188,475 |
|
Comparable Properties |
|
Retail |
|
i 3 |
|
$ i 26.05 - $ i 197.15 |
|
$ i 56.36 |
|
|
i 100,195 |
|
Comparable Properties |
|
Office |
|
i 2 |
|
$ i 71.69 - $ i 135.00 |
|
$ i 98.97 |
|
|
i 73,000 |
|
Estimated Fair Value of Financial Instruments
Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash and escrow deposits, and accounts receivable and payable. Generally, these assets and liabilities are short-term in duration and are recorded at cost, which approximates fair value, on the consolidated balance sheets. In addition, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair values. The fair values of financial instruments are estimates based upon market conditions and perceived risks at measurement date. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. The estimated fair values of these financial instruments have been derived either based on (i) market quotes for identical or similar instruments in markets or (ii) discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. The estimated fair values of the Senior Unsecured Notes are classified as Level 1 of the fair value of the hierarchy, and the remaining estimates are classified as Level 2. i The following table discloses fair value information for these financial instruments (in thousands):
|
|
|
|
|
||||||||||||
|
|
Carrying |
|
|
Estimated |
|
|
Carrying |
|
|
Estimated |
|
||||
Loans receivable, net(1) |
|
$ |
i 52,949 |
|
|
$ |
i 51,747 |
|
|
$ |
i 23,023 |
|
|
$ |
i 23,462 |
|
2019 Credit Facility |
|
|
— |
|
|
|
— |
|
|
|
i 55,500 |
|
|
|
i 55,502 |
|
Term loans, net (2) |
|
|
i 1,090,198 |
|
|
|
i 1,100,705 |
|
|
|
i 792,309 |
|
|
|
i 802,363 |
|
Senior Unsecured Notes, net (2) |
|
|
i 2,725,505 |
|
|
|
i 2,339,854 |
|
|
|
i 2,722,514 |
|
|
|
i 2,310,547 |
|
Mortgages payable, net (2) |
|
|
i 4,545 |
|
|
|
i 4,229 |
|
|
|
i 4,986 |
|
|
|
i 4,685 |
|
(1) The carrying value of the loans receivable are net of an allowance for credit losses.
(2) The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.
NOTE 9. INCENTIVE AWARD PLAN
Amended Incentive Award Plan
Pursuant to the Amended Incentive Award Plan, restricted share awards and market-based awards are granted to certain of the Company’s officers, directors and other employees. The vesting of these awards results in federal and state income tax liabilities for the recipients. As permitted by the terms of the Amended Incentive Award Plan and the award grants, certain executive officers and employees elected to surrender shares of common stock valued at $ i 1.5 million during the nine months ended September 30, 2023 solely to pay the associated statutory tax withholdings.
Restricted Share Awards
During the nine months ended September 30, 2023, the Company granted i 139 thousand restricted shares under the Amended Incentive Award Plan to certain directors and employees and recorded $ i 5.7 million in deferred compensation associated with these grants. Deferred compensation for restricted shares will be recognized in expense over the requisite service period, which is generally one to i three years. As of September 30, 2023, there were approximately i 207 thousand unvested restricted shares outstanding.
24
Market-Based Awards
During the nine months ended September 30, 2023, the Board of Directors, or committee thereof, approved target grants of i 189 thousand market-based awards to executive officers of the Company. The performance period of these grants is generally i three years. Potential shares of the Corporation’s common stock that each participant is eligible to receive is based on the initial target number of shares granted, multiplied by a percentage range between i 0% and i 375%. Grant date fair value of the market-based awards was calculated using the Monte Carlo simulation model, which incorporated stock price volatility of the Company and each of the Company’s peers and other variables over the time horizons matching the performance periods. Significant inputs for the calculation for the grants approved in the nine months ended September 30, 2023 were expected volatility of the Company of i 36.3% and expected volatility of the Company's peers, ranging from i 26.0% to i 52.7%, with an average volatility of i 34.0% and a risk-free interest rate of i 3.72%. Expected volatility was determined using an equal weighting of implied volatility and historical volatility. The fair value of the market-based award per share of these grants was $ i 74.30 as of the grant date.
Approximately $ i 4.9 million and $ i 2.5 million in dividend rights have been accrued as of September 30, 2023 and December 31, 2022, respectively. For outstanding non-vested awards at September 30, 2023, i 0.8 million shares would have been released based on the Corporation’s TSR relative to the specified peer groups through that date.
Stock-based Compensation Expense
Stock-based compensation is recognized on a straight-line basis over the minimum required service period of each award described above. The Company recorded stock-based compensation expense of $ i 4.9 million and $ i 15.1 million for the three and nine months ended September 30, 2023, respectively, and $ i 4.4 million and $ i 12.8 million for the three and nine months ended September 30, 2022, respectively. These amounts are included in general and administrative expenses in the consolidated statements of operations.
The following is a summary of remaining unamortized stock-based compensation expense (in thousands):
|
|
|
|
|
||||
Restricted share awards |
|
$ |
i 5,700 |
|
|
$ |
i 4,727 |
|
Market-based awards |
|
|
i 18,625 |
|
|
|
i 15,165 |
|
Total unamortized stock-based compensation expense |
|
$ |
i 24,325 |
|
|
$ |
i 19,892 |
|
25
NOTE 10. INCOME PER SHARE
The table below is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per share computed using the two-class method (dollars in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Net income |
|
$ |
i 38,468 |
|
|
$ |
i 76,640 |
|
|
$ |
i 188,822 |
|
|
$ |
i 215,436 |
|
Less: dividends paid to preferred |
|
|
( i 2,587 |
) |
|
|
( i 2,587 |
) |
|
|
( i 7,763 |
) |
|
|
( i 7,763 |
) |
Less: dividends and income attributable to unvested restricted stock |
|
|
( i 138 |
) |
|
|
( i 142 |
) |
|
|
( i 412 |
) |
|
|
( i 412 |
) |
Net income attributable to common stockholders used in basic and diluted income per share |
|
$ |
i 35,743 |
|
|
$ |
i 73,911 |
|
|
$ |
i 180,647 |
|
|
$ |
i 207,261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares of common stock outstanding |
|
|
i 141,331,332 |
|
|
|
i 136,530,530 |
|
|
|
i 141,317,480 |
|
|
|
i 133,058,487 |
|
Less: unvested weighted average shares of restricted stock |
|
|
( i 206,931 |
) |
|
|
( i 216,161 |
) |
|
|
( i 222,573 |
) |
|
|
( i 223,277 |
) |
Basic weighted average shares of common stock outstanding |
|
|
i 141,124,401 |
|
|
|
i 136,314,369 |
|
|
|
i 141,094,907 |
|
|
|
i 132,835,210 |
|
Plus: unvested market-based |
|
|
i 25,464 |
|
|
|
— |
|
|
|
i 8,488 |
|
|
|
i 130,087 |
|
Diluted weighted average shares of common stock outstanding (1) |
|
|
i 141,149,865 |
|
|
|
i 136,314,369 |
|
|
|
i 141,103,395 |
|
|
|
i 132,965,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share attributable to common stockholders - basic |
|
$ |
i 0.25 |
|
|
$ |
i 0.54 |
|
|
$ |
i 1.28 |
|
|
$ |
i 1.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share attributable to common stockholders - diluted |
|
$ |
i 0.25 |
|
|
$ |
i 0.54 |
|
|
$ |
i 1.28 |
|
|
$ |
i 1.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Potentially dilutive shares of common stock related to: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unvested restricted share awards |
|
|
i 42,806 |
|
|
|
i 51,338 |
|
|
|
i 61,354 |
|
|
|
i 65,060 |
|
(1) Assumes the most dilutive issuance of potentially issuable shares between the two-class and treasury stock method unless the result would be anti-dilutive.
/
26
NOTE 11. SUBSEQUENT EVENTS
On October 29, 2023, Spirit entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Realty Income Corporation, a Maryland corporation (“Realty Income”), and Saints MD Subsidiary, Inc., a Maryland corporation and wholly owned subsidiary of Realty Income (“Merger Sub”). Pursuant to the terms and conditions of the Merger Agreement, upon the closing, Spirit will be merged with and into Merger Sub, with Merger Sub continuing as the surviving corporation (the “Merger”).
Pursuant to the terms and subject to the conditions of the Merger Agreement, at the date and time the Merger becomes effective, (i) each share of Spirit common stock, par value of $ i 0.05 per share (the “Spirit Common Stock”) will automatically be converted into i 0.762 of a newly issued share of common stock (the “Exchange Ratio”), par value of $ i 0.01 per share, of Realty Income (the “Realty Income Common Stock”), and cash in lieu of fractional shares, and (ii) each outstanding share of Spirit’s i 6.000% Series A Cumulative Redeemable Preferred Stock, par value of $ i 0.01 per share (the “Spirit Series A Preferred Stock”), will be converted into the right to receive one share of newly issued Realty Income i 6.000% Series A Cumulative Redeemable Preferred Stock, having substantially the same terms as the Spirit Series A Preferred Stock.
During the period between the signing of the Merger Agreement and the consummation of the Merger, Spirit is permitted to declare and pay regular quarterly cash dividends with respect to shares of Spirit Common Stock and Spirit Series A Preferred Stock.
The Merger Agreement contains customary representations, warranties and covenants by each party. The Merger is subject to certain conditions which are set forth in the Merger Agreement, including the approval of Spirit’s shareholders. The boards of directors of the Company and Realty Income have approved the Merger Agreement. The Merger is expected to close during the first quarter of 2024.
/27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Special Note Regarding Forward-looking Statements
This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act, the Private Securities Litigation Reform Act of 1995 and other federal securities laws. When used in this quarterly report, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximately” or “plan,” or the negative of these words or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management.
Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).
The following risks and uncertainties, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:
The factors included in this quarterly report, including the documents incorporated by reference, and documents we subsequently file with the SEC and incorporate by reference, are not exhaustive and additional factors could adversely affect our business and financial performance. Additional factors that may cause risks and uncertainties include those discussed in the sections entitled "Business", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022 and this report and subsequent filings with the SEC. All forward-looking statements are based on information that was available, and speak only, to the date on which they were made. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by law.
28
Overview
Spirit Realty Capital, Inc. is an internally-managed net-lease REIT with in-house functions including acquisitions, credit research, asset management, portfolio management, real estate research, legal, finance and accounting. We invest primarily in single-tenant, operationally essential real estate assets throughout the United States, which are subsequently leased on a long-term, triple-net basis to high quality tenants with operations in retail, industrial and certain other industries. As a REIT, we are required to, among other things, annually distribute at least 90% of our taxable income (excluding net capital gains) to our stockholders. We aim to achieve this objective through consistent quarterly dividends supported by the cash flows generated by our leasing operations, which we look to continue to grow over time.
As of September 30, 2023, we owned a highly diversified portfolio of 2,037 properties operated by 338 tenants and with in-place Annualized Base Rent of $690.1 million. See "Property Portfolio Information" for further information on our portfolio diversification.
Our operations are carried out through the Operating Partnership. OP Holdings, one of our wholly-owned subsidiaries, is the sole general partner and owns approximately 1% of the Operating Partnership. We and one of our wholly-owned subsidiaries are the only limited partners, and together own the remaining 99% of the Operating Partnership. As of September 30, 2023, our assets, liabilities, and results of operations are materially the same as those of the Operating Partnership.
We have elected to be taxed as a REIT for federal income tax purposes and believe we have been organized and have operated in a manner that allows us to qualify as a REIT for federal income tax purposes.
Shares of our common stock are traded on the NYSE under the symbol “SRC.”
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our experience and various other assumptions deemed reasonable under the circumstances. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022. We have not made any material changes to these policies during the periods covered by this quarterly report.
Supplemental Guarantor Disclosures
Subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the parent guarantee is “full and unconditional,” the subsidiary obligor is consolidated into the parent company’s consolidated financial statements and, subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information.
The Company and the Operating Partnership have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which will be fully and unconditionally guaranteed by the Company. As of September 30, 2023, the Senior Unsecured Notes were outstanding. The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the Senior Unsecured Notes are guaranteed on a senior, full and unconditional basis by the Company. The Operating Partnership is consolidated into the Company’s financial statements. Accordingly, separate consolidated financial statements of the Operating Partnership are not presented.
In accordance with SEC rules, the Company has excluded summarized financial information for the Company and the Operating Partnership because the assets, liabilities and results of operations of the Company and the Operating Partnership (other than unencumbered assets held in subsidiaries of the Operating Partnership and the related results of operations thereof) are not materially different than the corresponding amounts in the Company’s consolidated financial statements, and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.
29
Liquidity and Capital Resources
ATM PROGRAM
In November 2021, the Board of Directors approved a $500.0 million 2021 ATM Program, and we terminated the 2020 ATM Program. Sales of shares of our common stock under the 2021 ATM Program may be made in sales deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act. The 2021 ATM Program contemplates that, in addition to the issuance and sale by us of shares of our common stock to or through agents, we may enter into separate forward sale agreements with an agent or one of their respective affiliates (in such capacity, each, a “forward purchaser”). When we enter into a forward sale agreement, we expect that the forward purchaser will attempt to borrow from third parties and sell, through a forward seller, shares of our common stock to hedge the forward purchaser's exposure under the forward sale agreement. We will not initially receive any proceeds from any sale of shares of our common stock borrowed by a forward purchaser and sold through a forward seller.
We generally expect to fully physically settle any forward sale agreement with the respective forward purchaser on one or more dates specified by us on or prior to the maturity date of such forward sale agreement, in which case we expect to receive aggregate net cash proceeds at settlement equal to the number of shares specified in such forward sale agreement multiplied by the relevant forward price per share. The forward sale price that we receive upon physical settlement of the agreements is subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchasers’ stock borrowing costs and (iii) scheduled dividends during the term of the forward sale agreements. However, subject to certain exceptions, we may also elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which case we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser.
As of September 30, 2023, 6.7 million shares of our common stock have been sold under the 2021 ATM Program, of which 4.7 million of these shares were sold through forward sale agreements. None of these shares were sold during the nine months ended September 30, 2023. There were no open forward contracts and approximately $208.7 million of capacity remained available under the 2021 ATM Program as of September 30, 2023.
SHORT-TERM LIQUIDITY AND CAPITAL RESOURCES
On a short-term basis, our principal demands for funds will be for operating expenses, acquisitions, distributions to stockholders and payment of interest and principal on current and any future debt financings. We expect to fund these demands primarily through cash provided by operating activities, borrowings under the 2019 Credit Facility and 2023 Term Loans and, if market conditions warrant, issuances of equity securities, including shares of our common stock under our 2021 ATM program. As of September 30, 2023, available liquidity was comprised of $134.2 million in cash and cash equivalents, $4.2 million in 1031 Exchange proceeds, $1.2 billion of borrowing capacity under the 2019 Credit Facility and $200.0 million of availability under the delayed-draw 2023 Term Loans.
LONG-TERM LIQUIDITY AND CAPITAL RESOURCES
We plan to meet our long-term capital needs, including long-term financing of property acquisitions, by issuing registered debt or equity securities, by obtaining asset level financing and by issuing fixed-rate secured or unsecured notes and bonds. In the future, some of our property acquisitions could be made by issuing partnership interests of our Operating Partnership in exchange for property owned by third parties. These partnership interests would be exchangeable for cash or, at our election, shares of our common stock. We continually evaluate financing alternatives and believe that we can obtain financing on reasonable terms. However, we cannot be sure that we will have access to the capital markets at times and on terms that are acceptable to us, particularly as uncertainty related to rising interest rates, rising inflation rates, economic outlook, geopolitical events (including the military conflict between Russia and Ukraine and in the Gaza Strip) and other factors have contributed and may continue to contribute to significant volatility and negative pressure in financial markets. We expect that our primary uses of capital will be for property and other asset acquisitions, the payment of tenant improvements, operating expenses, debt service payments and distributions to our stockholders.
30
DESCRIPTION OF CERTAIN DEBT
The following descriptions of debt should be read in conjunction with Note 4 to the consolidated financial statements herein.
2019 Credit Facility
On March 30, 2022, we amended and restated the 2019 Revolving Credit and Term Loan Agreement. As of September 30, 2023, the aggregate gross commitment under the 2019 Credit Facility was $1.2 billion, which may be increased up to $1.7 billion by exercising an accordion feature, subject to satisfying certain requirements. The 2019 Credit Facility has a maturity of March 31, 2026 and includes two six-month extensions that can be exercised at our option.
We may voluntarily prepay the 2019 Credit Facility, in whole or in part, at any time without premium or penalty. Payment of the 2019 Credit Facility is unconditionally guaranteed by the Company and material subsidiaries that meet certain conditions. As of September 30, 2023, there were no subsidiaries that met this requirement.
As of September 30, 2023, the 2019 Credit Facility bore interest at a 1-month adjusted SOFR rate plus 0.775% and incurred a facility fee of 0.150% per annum, in each case, based on the Operating Partnership’s credit rating and leverage ratio (as defined in the agreement). As of September 30, 2023, there were no borrowings or letters of credit outstanding.
Term Loans
On August 22, 2022, we entered into the 2022 Term Loan Agreement which provides for borrowings in an aggregate amount of $800.0 million comprised of a $300.0 million tranche with a maturity date of August 22, 2025 and a $500.0 million tranche with a maturity date of August 20, 2027. Borrowings may be increased up to $1.0 billion by exercising an accordion feature, subject to satisfying certain requirements. The full borrowing capacity of $800.0 million was drawn as of September 30, 2023.
On November 17, 2022, we entered into the 2023 Term Loan Agreement, which provides for $500.0 million of unsecured term loans with a maturity date of June 16, 2025. Borrowings may be increased up to $600.0 million by exercising an accordion feature, subject to satisfying certain requirements. As of September 30, 2023, $300.0 million was drawn and capacity of $200.0 million was available, which may be drawn by December 29, 2023.
Term loan borrowings may be repaid without premium or penalty. As of September 30, 2023, the 2022 Term Loans and 2023 Term Loans bore interest at a 1-month adjusted SOFR rate plus a margin of 0.850% and 0.950% per annum, respectively, based on the Operating Partnership’s credit rating. In conjunction with entering into the 2022 Term Loans, we entered into interest rate swaps to swap 1-month SOFR for a weighted average fixed rate of 2.55%. In conjunction with entering into the 2023 Term Loans, we entered into interest rate swaps to swap 1-month SOFR for a weighted average fixed rate of 3.70%.
Senior Unsecured Notes
As of September 30, 2023, we had the following Senior Unsecured Notes outstanding (dollars in thousands):
|
|
Maturity Date |
|
Interest Payment Dates |
|
Stated Interest Rate |
|
|
||
2026 Senior Notes |
|
|
March 15 and September 15 |
|
4.45% |
|
$ |
300,000 |
|
|
2027 Senior Notes |
|
|
January 15 and July 15 |
|
3.20% |
|
|
300,000 |
|
|
2028 Senior Notes |
|
|
March 15 and September 15 |
|
2.10% |
|
|
450,000 |
|
|
2029 Senior Notes |
|
|
January 15 and July 15 |
|
4.00% |
|
|
400,000 |
|
|
2030 Senior Notes |
|
|
January 15 and July 15 |
|
3.40% |
|
|
500,000 |
|
|
2031 Senior Notes |
|
|
February 15 and August 15 |
|
3.20% |
|
|
450,000 |
|
|
2032 Senior Notes |
|
|
February 15 and August 15 |
|
2.70% |
|
|
350,000 |
|
|
Total Senior Unsecured Notes |
|
|
|
3.25% |
|
$ |
2,750,000 |
|
||
The Senior Unsecured Notes are redeemable in whole at any time or in part from time to time, at the Operating Partnership’s option, at a redemption price equal to the sum of: an amount equal to 100% of the principal amount of the respective Senior Unsecured Notes to be redeemed plus accrued and unpaid interest and liquidated damages, if any, up to, but not including, the redemption date; and a make-whole premium calculated in accordance with the respective indenture. Notwithstanding the foregoing, if any of the Senior Unsecured Notes are redeemed three months or less (or two months or less in the case of the 2027 Senior Notes and 2028 Senior Notes) prior to their respective maturity dates, the redemption price will not include a make-whole premium.
31
Mortgages payable
The obligors of our property level debt are special purpose entities that hold the real estate and other collateral securing the indebtedness. Each special purpose entity is a bankruptcy remote separate legal entity and is the sole owner of its assets and solely responsible for its liabilities other than typical non-recurring covenants. As of September 30, 2023, we had two fixed-rate CMBS loans, each secured by a single property. One loan, with principal outstanding of $4.0 million, matures in August 2031 and incurs interest at 5.80%. The other loan, with principal outstanding of $0.4 million, matures in December 2025 and incurs interest at 6.00%. Both loans are partially amortizing and require a balloon payment at maturity.
DEBT MATURITIES
Future principal payments due on our various types of debt outstanding as of September 30, 2023 are as follows (in thousands):
|
|
Total |
|
|
Remainder of 2023 |
|
|
2024 |
|
|
2025 |
|
|
2026 |
|
|
2027 |
|
|
Thereafter |
|
|||||||
2019 Credit Facility |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Term loans |
|
|
1,100,000 |
|
|
|
— |
|
|
|
— |
|
|
|
600,000 |
|
|
|
— |
|
|
|
500,000 |
|
|
|
— |
|
Senior Unsecured Notes |
|
|
2,750,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
300,000 |
|
|
|
300,000 |
|
|
|
2,150,000 |
|
Mortgages payable |
|
|
4,410 |
|
|
|
141 |
|
|
|
590 |
|
|
|
626 |
|
|
|
469 |
|
|
|
497 |
|
|
|
2,087 |
|
|
|
$ |
3,854,410 |
|
|
$ |
141 |
|
|
$ |
590 |
|
|
$ |
600,626 |
|
|
$ |
300,469 |
|
|
$ |
800,497 |
|
|
$ |
2,152,087 |
|
CONTRACTUAL OBLIGATIONS
There were no material changes during the nine months ended September 30, 2023 outside the ordinary course of business to the information regarding specified contractual obligations contained in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC.
We may enter into commitments to purchase goods and services in connection with the operations of our properties. Those commitments generally have terms of one-year or less and reflect expenditure levels comparable to our historical expenditures.
CASH FLOWS
The following table presents a summary of our cash flows for the nine months ended September 30, 2023 and 2022 (in thousands):
|
|
Nine Months Ended September 30, |
|
|
|
|
||||||
|
|
|
|
2022 |
|
|
Change |
|
||||
Net cash provided by operating activities |
|
$ |
373,548 |
|
|
$ |
338,885 |
|
|
$ |
34,663 |
|
Net cash used in investing activities |
|
|
(250,058 |
) |
|
|
(1,002,541 |
) |
|
|
752,483 |
|
Net cash (used in) provided by financing activities |
|
|
(46,422 |
) |
|
|
755,686 |
|
|
|
(802,108 |
) |
Net increase in cash, cash equivalents and restricted cash |
|
$ |
77,068 |
|
|
$ |
92,030 |
|
|
$ |
(14,962 |
) |
Substantially all of our operating cash flows are generated by our investment portfolio and are primarily dependent upon the rental rates specified in our leases, the collectability of rent and the level of our property and general and administrative costs. The increase in net cash provided by operating activities was driven by a $45.6 million net increase in cash rental revenue, largely as a result of the net acquisition of higher priced assets over the trailing twelve month period. Additionally, there was an increase in cash interest received of $19.8 million, driven by interest rate swaps entered into in conjunction with entering into the 2022 Term Loans and 2023 Term Loans. The primary offset to this increase was an increase in cash interest paid of $33.5 million driven by increased interest rates and changes within our debt structure. See Management’s Discussion and Analysis of Financial Condition: Results of Operations for further discussion on our rental income and interest expenses.
32
Cash used in investing activities is generally used to fund property acquisitions, for investments in loans receivable and for capital expenditures. Cash provided by investing activities generally relates to the disposition of real estate and other assets. Changes related to our investing activity were as follows:
Our investment activity is generally funded through cash provided by operations, proceeds from dispositions, proceeds from stock issuances, and proceeds from long-term debt issuances. Changes related to our sources of funding were as follows:
DISTRIBUTION POLICY
Distributions from our current or accumulated earnings are generally classified as ordinary income, whereas distributions in excess of our current and accumulated earnings, to the extent of a stockholder’s federal income tax basis in our common stock, are generally characterized as a return of capital. U.S. stockholders that are individuals, trusts and estates generally may deduct up to 20% of the ordinary dividends (e.g., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning after December 31, 2017 and before January 1, 2026. Distributions in excess of a stockholder’s federal income tax basis in our common stock are generally characterized as capital gain.
We are required to distribute 90% of our taxable income (subject to certain adjustments and excluding net capital gains) on an annual basis to maintain qualification as a REIT for federal income tax purposes and are required to pay federal income tax at regular corporate rates to the extent we distribute less than 100% of our taxable income (including capital gains).
We intend to make distributions that will enable us to meet the distribution requirements applicable to REITs and to eliminate or minimize our obligation to pay corporate-level federal income and excise taxes.
Any distributions will be at the sole discretion of our Board of Directors, and their form, timing and amount, if any, will depend upon a number of factors, including our actual and projected results of operations, FFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable laws and such other factors as our Board of Directors deems relevant.
33
Results of Operations
Comparison of the three and nine months ended September 30, 2023 to the three and nine months ended September 30, 2022
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Increase / (Decrease) |
|
|||||||||||||||
(In Thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Three Months |
|
|
Nine Months |
|
||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rental income |
|
$ |
188,205 |
|
|
$ |
180,296 |
|
|
$ |
561,765 |
|
|
$ |
520,930 |
|
|
$ |
7,909 |
|
|
$ |
40,835 |
|
Interest income on loans receivable |
|
|
1,506 |
|
|
|
521 |
|
|
|
3,919 |
|
|
|
1,362 |
|
|
|
985 |
|
|
|
2,557 |
|
Earned income from direct financing leases |
|
|
131 |
|
|
|
131 |
|
|
|
393 |
|
|
|
393 |
|
|
|
— |
|
|
|
— |
|
Other operating income |
|
|
3,533 |
|
|
|
1,956 |
|
|
|
4,888 |
|
|
|
3,550 |
|
|
|
1,577 |
|
|
|
1,338 |
|
Total revenues |
|
|
193,375 |
|
|
|
182,904 |
|
|
|
570,965 |
|
|
|
526,235 |
|
|
|
10,471 |
|
|
|
44,730 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
General and administrative |
|
|
14,062 |
|
|
|
14,313 |
|
|
|
45,016 |
|
|
|
42,408 |
|
|
|
(251 |
) |
|
|
2,608 |
|
Property costs (including reimbursable) |
|
|
8,382 |
|
|
|
7,395 |
|
|
|
24,077 |
|
|
|
22,600 |
|
|
|
987 |
|
|
|
1,477 |
|
Deal pursuit costs |
|
|
342 |
|
|
|
470 |
|
|
|
1,174 |
|
|
|
1,490 |
|
|
|
(128 |
) |
|
|
(316 |
) |
Interest |
|
|
36,919 |
|
|
|
30,956 |
|
|
|
104,993 |
|
|
|
84,573 |
|
|
|
5,963 |
|
|
|
20,420 |
|
Depreciation and amortization |
|
|
79,370 |
|
|
|
74,600 |
|
|
|
236,527 |
|
|
|
216,606 |
|
|
|
4,770 |
|
|
|
19,921 |
|
Impairments |
|
|
19,258 |
|
|
|
1,571 |
|
|
|
36,052 |
|
|
|
11,096 |
|
|
|
17,687 |
|
|
|
24,956 |
|
Total expenses |
|
|
158,333 |
|
|
|
129,305 |
|
|
|
447,839 |
|
|
|
378,773 |
|
|
|
29,028 |
|
|
|
69,066 |
|
Other income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(172 |
) |
|
|
— |
|
|
|
172 |
|
Gain on disposition of assets |
|
|
3,661 |
|
|
|
23,302 |
|
|
|
66,450 |
|
|
|
63,107 |
|
|
|
(19,641 |
) |
|
|
3,343 |
|
Other income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,679 |
|
|
|
— |
|
|
|
(5,679 |
) |
Total other income |
|
|
3,661 |
|
|
|
23,302 |
|
|
|
66,450 |
|
|
|
68,614 |
|
|
|
(19,641 |
) |
|
|
(2,164 |
) |
Income before income tax expense |
|
|
38,703 |
|
|
|
76,901 |
|
|
|
189,576 |
|
|
|
216,076 |
|
|
|
(38,198 |
) |
|
|
(26,500 |
) |
Income tax expense |
|
|
(235 |
) |
|
|
(261 |
) |
|
|
(754 |
) |
|
|
(640 |
) |
|
|
26 |
|
|
|
(114 |
) |
Net income |
|
$ |
38,468 |
|
|
$ |
76,640 |
|
|
$ |
188,822 |
|
|
$ |
215,436 |
|
|
$ |
(38,172 |
) |
|
$ |
(26,614 |
) |
Changes related to operating properties
The components of rental income are summarized below (in thousands):
34
Base Cash Rent; Depreciation and amortization
The increase in Base Cash Rent, the largest component of rental income, was driven by the net acquisition of higher priced assets, which also was the driver for the increase in depreciation and amortization. We acquired 54 properties during the trailing twelve months ended September 30, 2023, with a total of $54.1 million of annual in-place rent. During the same period, we disposed of 135 properties, of which 37 were vacant and the remaining 98 had annual in-place rents of $23.4 million. Our acquisitions and dispositions for the trailing twelve months ended September 30, 2023 is summarized below (in thousands):
We have had minimal tenant credit issues during the comparative periods. We recognized net reserves of $0.3 million and $0.4 million during the three and nine months ended September 30, 2023. During the three and nine months ended September 30, 2022, we recognized net reserves of $0.6 million and $0.5 million, respectively.
Variable cash rent; Property costs (including reimbursable)
Variable cash rent is primarily comprised of tenant reimbursements, where our tenants are obligated under the lease agreement to reimburse us for certain property costs we incur, less reimbursements we deem not probable of collection.
For the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, total variable cash rent (including reimbursable) decreased primarily due to fewer reimbursable property taxes from acquisitions over the comparative period. Although there was a decrease in reimbursable property costs, total property costs (including reimbursable) increased, driven by an increase in non-reimbursable legal fees and property taxes recorded over the comparative period due to an increase in tenant credit issues.
For the three months ended September 30, 2023 compared to the three months ended September 30, 2022, total variable cash rent (including reimbursable) remained relatively flat, while total property costs (including reimbursable) increased. Reimbursable property costs remained relatively flat, while non-reimbursable property costs increased primarily due to an increase in non-reimbursable legal fees and property taxes recorded over the comparative period due to an increase in tenant credit issues.
The components of variable cash rent and property costs are as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Increase / (Decrease) |
|
|||||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Three Months |
|
|
Nine Months |
|
||||||
Tenant reimbursable income, net of uncollectable reserve |
|
$ |
5,072 |
|
|
$ |
5,159 |
|
|
$ |
15,202 |
|
|
$ |
16,242 |
|
|
$ |
(87 |
) |
|
$ |
(1,040 |
) |
Other variable cash rent |
|
|
1,259 |
|
|
|
1,320 |
|
|
|
3,183 |
|
|
|
3,471 |
|
|
|
(61 |
) |
|
|
(288 |
) |
Total variable cash rent (including reimbursable) |
|
$ |
6,331 |
|
|
$ |
6,479 |
|
|
$ |
18,385 |
|
|
$ |
19,713 |
|
|
$ |
(148 |
) |
|
$ |
(1,328 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reimbursable property costs |
|
$ |
5,070 |
|
|
$ |
5,166 |
|
|
$ |
15,204 |
|
|
$ |
17,132 |
|
|
$ |
(96 |
) |
|
$ |
(1,928 |
) |
Non-reimbursable property costs |
|
|
3,312 |
|
|
|
2,229 |
|
|
|
8,873 |
|
|
|
5,468 |
|
|
|
1,083 |
|
|
|
3,405 |
|
Total property costs (including reimbursable) |
|
$ |
8,382 |
|
|
$ |
7,395 |
|
|
$ |
24,077 |
|
|
$ |
22,600 |
|
|
$ |
987 |
|
|
$ |
1,477 |
|
35
Straight-line rent, net of uncollectible reserve; Amortization of above- and below- market lease intangibles, net
Non-cash rental income consists of straight-line rental revenue and amortization of above- and below-market lease intangibles, less amounts we deem not probable of collection. Straight-line rental revenue decreased for both comparative periods, driven by $2.1 million and $4.1 million of reserves for straight-line rental revenue recognized during the three and nine months ended September 30, 2023, respectively, primarily driven by tenant bankruptcies. Additionally, we recognized net recoveries of $1.2 million and $1.1 million for the three and nine months ended September 30, 2022, further driving the decrease in straight-line rental revenue over the comparative periods.
Impairments
The increase in impairments for both comparative periods was driven by an increase in held for sale properties, which is a result of an increased focus on accretive capital recycling. We recorded impairment as follows (dollars in thousands):
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||||||
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||||||||||||||||||
|
Count: |
|
|
Impairment: |
|
|
Count: |
|
|
Impairment: |
|
|
Count: |
|
|
Impairment: |
|
|
Count: |
|
|
Impairment: |
|
||||||||
Underperforming properties |
|
13 |
|
|
$ |
3,840 |
|
|
|
6 |
|
|
$ |
1,571 |
|
|
|
26 |
|
|
$ |
16,059 |
|
|
|
8 |
|
|
$ |
10,155 |
|
Vacant properties |
|
2 |
|
|
|
84 |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
3,272 |
|
|
|
1 |
|
|
|
814 |
|
Total |
|
|
|
$ |
3,924 |
|
|
|
|
|
$ |
1,571 |
|
|
|
|
|
$ |
19,331 |
|
|
|
|
|
$ |
10,969 |
|
||||
Additionally, in accordance with ASU 2016-13, we recognize an allowance for credit loss when we issue a loan. We recorded a $0.1 million allowance upon issuing a loan receivable in the first quarter of 2022. During the first quarter of 2023, we issued a loan receivable and funded an add-on to an existing loan, for which we recorded a total allowance of $0.5 million. In the second quarter of 2023, we recorded a total allowance of $0.8 million upon the issuance of a loan receivable and the purchase of term loans. In the third quarter of 2023, we recorded an additional allowance for loan losses of $15.3 million on existing loans due to changes in the borrower's financial position.
Gain on disposition of assets
For the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, net gains on disposition of assets increased due to an increase in disposition volume, specifically of occupied properties as a result of an increased focus on accretive capital recycling. This increase was partially offset by an increase in losses on disposition of assets during the three months ended September 30, 2023, primarily due to vacant assets sold. We recognized net gains on disposition of assets as follows (dollars in thousands):
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||
|
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||||||||||||||
|
Count: |
|
|
Net Gain / (Loss): |
|
|
Count: |
|
Net Gain / (Loss): |
|
|
Count: |
|
|
Net Gain / (Loss): |
|
|
Count: |
|
Net Gain / (Loss): |
|
||||||
Occupied properties sold |
|
20 |
|
|
$ |
8,622 |
|
|
10 |
|
|
23,027 |
|
|
|
77 |
|
|
$ |
71,812 |
|
|
21 |
|
$ |
60,394 |
|
Vacant properties sold |
|
19 |
|
|
|
(6,418 |
) |
|
1 |
|
|
372 |
|
|
|
31 |
|
|
|
(7,201 |
) |
|
12 |
|
|
2,359 |
|
Other |
|
|
|
|
1,457 |
|
|
|
|
|
(97 |
) |
|
|
|
|
|
1,839 |
|
|
|
|
|
354 |
|
||
Total |
|
|
|
$ |
3,661 |
|
|
|
|
$ |
23,302 |
|
|
|
|
|
$ |
66,450 |
|
|
|
|
$ |
63,107 |
|
||
36
Changes related to debt
Interest expense; Loss on debt extinguishment
Our debt outstanding is summarized below (in thousands):
In March 2022, we amended and restated the 2019 Revolving Credit and Term Loan Agreement, resulting in a loss of $0.2 million on the partial debt extinguishment. In August 2022, we entered into the 2022 Term Loans, comprised of a $300.0 million tranche which matures in 2025 and a $500.0 million tranche which matures in 2027. In November 2022, we entered into the 2023 Term Loan Agreement for $500.0 million of 2.5-year delayed-draw term loans, of which $300.0 million was drawn in June 2023 and the remainder is available to draw until December 29, 2023. In conjunction with entering into the 2022 Term Loans and the 2023 Term Loans, we entered into interest rate swaps to swap the variable rate for a fixed rate.
Our weighted average stated interest rate increased from 3.36% at September 30, 2022 to 3.42% at September 30, 2023 primarily as a result of entering into the 2023 Term Loans. The components of interest expense are summarized below (in thousands):
Changes related to general and administrative expenses
For the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, there was an increase in general and administrative expenses primarily driven by an increase of $3.1 million in compensation expenses. Compensation expenses increased due to increases in non-cash compensation, primarily due to a higher grant date fair value for the 2023 market-based awards granted in the first quarter of 2023 compared to the fair value of the 2020 market-based awards which expired unvested, as well as internal promotions.
Changes related to other income
We were contingently liable for $5.7 million of debt owed by one of our former tenants, which we fully reserved in 2018 due to the tenant filing for bankruptcy. No payments were made in relation to this contingent liability and, as the underlying debt had a maturity of March 15, 2022, we reversed our reserve in the first quarter of 2022.
37
Property Portfolio Information
2,037 |
99.6% |
49 |
338 |
37 |
Properties |
Occupancy |
States |
Tenants |
Tenant Industries |
Diversification By Tenant
The following is a summary of tenant concentration for our owned real estate properties as of September 30, 2023:
Tenant Concept (1) |
|
Number of |
|
|
Total Square Feet |
|
|
Percent of |
|
|||
Life Time Fitness |
|
|
13 |
|
|
|
1,474 |
|
|
|
4.3 |
% |
Invited Clubs |
|
|
21 |
|
|
|
1,005 |
|
|
|
3.1 |
% |
BJ's Wholesale Club |
|
|
11 |
|
|
|
1,233 |
|
|
|
2.3 |
% |
At Home |
|
|
16 |
|
|
|
1,861 |
|
|
|
2.1 |
% |
Dave & Buster's / Main Event |
|
|
15 |
|
|
|
807 |
|
|
|
1.9 |
% |
Church's Chicken |
|
|
160 |
|
|
|
231 |
|
|
|
1.9 |
% |
Dollar Tree / Family Dollar |
|
|
133 |
|
|
|
1,230 |
|
|
|
1.9 |
% |
Circle K / Clean Freak |
|
|
75 |
|
|
|
240 |
|
|
|
1.8 |
% |
Home Depot |
|
|
8 |
|
|
|
946 |
|
|
|
1.7 |
% |
GPM |
|
|
105 |
|
|
|
296 |
|
|
|
1.5 |
% |
Other(2) |
|
|
1,472 |
|
|
|
51,896 |
|
|
|
77.5 |
% |
Vacant |
|
|
8 |
|
|
|
355 |
|
|
|
— |
|
Total |
|
|
2,037 |
|
|
|
61,574 |
|
|
|
100.0 |
% |
(1) Tenant concentration represents concentration by the legal entities ultimately responsible for obligations under the lease agreements or affiliated entities. Concentration is shown by tenant concept, which represents the brand or trade name under which the tenant operates. Other tenants may operate under the same or similar brand or trade name.
(2) No tenants within other individually account for greater than 1.5% of ABR.
Lease Expirations
As of September 30, 2023, the weighted average remaining non-cancellable initial term of our leases (based on ABR) was 10.2 years. The following is a summary of lease expirations for our owned real estate as of September 30, 2023, assuming that tenants do not exercise any renewal options or early termination rights:
Leases Expiring In: |
|
Number of |
|
|
Total Square Feet |
|
|
ABR |
|
|
Percent of |
|
||||
Remainder of 2023 |
|
|
4 |
|
|
|
123 |
|
|
$ |
1,473 |
|
|
|
0.2 |
% |
2024 |
|
|
32 |
|
|
|
1,012 |
|
|
|
11,516 |
|
|
|
1.7 |
% |
2025 |
|
|
51 |
|
|
|
2,388 |
|
|
|
21,315 |
|
|
|
3.1 |
% |
2026 |
|
|
111 |
|
|
|
4,756 |
|
|
|
42,564 |
|
|
|
6.2 |
% |
2027 |
|
|
146 |
|
|
|
4,146 |
|
|
|
55,712 |
|
|
|
8.1 |
% |
2028 |
|
|
182 |
|
|
|
4,115 |
|
|
|
54,052 |
|
|
|
7.8 |
% |
2029 |
|
|
323 |
|
|
|
3,283 |
|
|
|
47,436 |
|
|
|
6.9 |
% |
2030 |
|
|
64 |
|
|
|
2,490 |
|
|
|
23,734 |
|
|
|
3.4 |
% |
2031 |
|
|
76 |
|
|
|
3,670 |
|
|
|
36,066 |
|
|
|
5.2 |
% |
2032 |
|
|
157 |
|
|
|
3,809 |
|
|
|
37,134 |
|
|
|
5.4 |
% |
Thereafter |
|
|
883 |
|
|
|
31,427 |
|
|
|
359,075 |
|
|
|
52.0 |
% |
Vacant |
|
|
8 |
|
|
|
355 |
|
|
|
— |
|
|
|
— |
|
Total owned properties |
|
|
2,037 |
|
|
|
61,574 |
|
|
$ |
690,077 |
|
|
|
100.0 |
% |
38
Diversification By Geography
The following is a summary of geographic concentration for our owned real estate properties as of September 30, 2023:
Location |
|
Number of |
|
|
Total Square Feet |
|
|
Percent of |
|
|
Location |
|
Number of |
|
|
Total Square Feet |
|
|
Percent of |
|
||||||
Texas |
|
|
299 |
|
|
|
7,961 |
|
|
|
15.3 |
% |
|
Kentucky |
|
|
47 |
|
|
|
623 |
|
|
|
1.6 |
% |
Florida |
|
|
151 |
|
|
|
2,792 |
|
|
|
6.6 |
% |
|
Massachusetts |
|
|
9 |
|
|
|
900 |
|
|
|
1.5 |
% |
Ohio |
|
|
100 |
|
|
|
5,620 |
|
|
|
6.5 |
% |
|
Louisiana |
|
|
26 |
|
|
|
653 |
|
|
|
1.2 |
% |
Georgia |
|
|
143 |
|
|
|
2,825 |
|
|
|
5.9 |
% |
|
Arkansas |
|
|
47 |
|
|
|
690 |
|
|
|
1.1 |
% |
Michigan |
|
|
97 |
|
|
|
2,854 |
|
|
|
4.3 |
% |
|
Kansas |
|
|
20 |
|
|
|
959 |
|
|
|
0.9 |
% |
Tennessee |
|
|
115 |
|
|
|
2,509 |
|
|
|
3.8 |
% |
|
Alaska |
|
|
9 |
|
|
|
319 |
|
|
|
0.8 |
% |
California |
|
|
30 |
|
|
|
1,634 |
|
|
|
3.7 |
% |
|
New Hampshire |
|
|
17 |
|
|
|
654 |
|
|
|
0.8 |
% |
Indiana |
|
|
43 |
|
|
|
4,134 |
|
|
|
3.3 |
% |
|
New Jersey |
|
|
13 |
|
|
|
466 |
|
|
|
0.7 |
% |
Illinois |
|
|
53 |
|
|
|
1,313 |
|
|
|
2.9 |
% |
|
Connecticut |
|
|
7 |
|
|
|
910 |
|
|
|
0.7 |
% |
North Carolina |
|
|
77 |
|
|
|
1,816 |
|
|
|
2.7 |
% |
|
Idaho |
|
|
13 |
|
|
|
219 |
|
|
|
0.6 |
% |
Arizona |
|
|
44 |
|
|
|
946 |
|
|
|
2.5 |
% |
|
Iowa |
|
|
11 |
|
|
|
1,300 |
|
|
|
0.6 |
% |
Colorado |
|
|
32 |
|
|
|
1,256 |
|
|
|
2.5 |
% |
|
Washington |
|
|
8 |
|
|
|
151 |
|
|
|
0.5 |
% |
South Carolina |
|
|
69 |
|
|
|
1,168 |
|
|
|
2.4 |
% |
|
Maine |
|
|
28 |
|
|
|
103 |
|
|
|
0.4 |
% |
Missouri |
|
|
66 |
|
|
|
1,437 |
|
|
|
2.4 |
% |
|
West Virginia |
|
|
12 |
|
|
|
198 |
|
|
|
0.4 |
% |
Alabama |
|
|
94 |
|
|
|
1,446 |
|
|
|
2.4 |
% |
|
Nebraska |
|
|
8 |
|
|
|
207 |
|
|
|
0.3 |
% |
New York |
|
|
33 |
|
|
|
1,694 |
|
|
|
2.3 |
% |
|
Rhode Island |
|
|
4 |
|
|
|
152 |
|
|
|
0.3 |
% |
Maryland |
|
|
11 |
|
|
|
1,358 |
|
|
|
2.3 |
% |
|
North Dakota |
|
|
4 |
|
|
|
110 |
|
|
|
0.3 |
% |
Minnesota |
|
|
30 |
|
|
|
1,241 |
|
|
|
2.2 |
% |
|
Montana |
|
|
3 |
|
|
|
152 |
|
|
|
0.3 |
% |
Virginia |
|
|
44 |
|
|
|
1,519 |
|
|
|
2.2 |
% |
|
Delaware |
|
|
1 |
|
|
|
123 |
|
|
|
0.3 |
% |
Wisconsin |
|
|
21 |
|
|
|
1,805 |
|
|
|
1.8 |
% |
|
Oregon |
|
|
3 |
|
|
|
104 |
|
|
|
0.2 |
% |
Pennsylvania |
|
|
32 |
|
|
|
1,199 |
|
|
|
1.7 |
% |
|
South Dakota |
|
|
2 |
|
|
|
30 |
|
|
|
0.2 |
% |
Oklahoma |
|
|
55 |
|
|
|
1,116 |
|
|
|
1.6 |
% |
|
Wyoming |
|
|
1 |
|
|
|
35 |
|
|
|
0.1 |
% |
New Mexico |
|
|
33 |
|
|
|
795 |
|
|
|
1.6 |
% |
|
U.S. Virgin Islands |
|
|
1 |
|
|
|
38 |
|
|
|
0.1 |
% |
Mississippi |
|
|
51 |
|
|
|
993 |
|
|
|
1.6 |
% |
|
Nevada |
|
|
1 |
|
|
|
12 |
|
|
* |
|
|
Utah |
|
|
18 |
|
|
|
1,033 |
|
|
|
1.6 |
% |
|
Vermont |
|
|
1 |
|
|
|
2 |
|
|
* |
|
|
* Less than 0.1%
39
Diversification By Asset Type and Tenant Industry
The following is a summary of asset type concentration, the industry of the underlying tenant operations for our retail properties and the underlying property use for our non-retail properties as of September 30, 2023:
Asset Type |
Tenant Industry / Underlying Use |
Number of |
|
|
Total Square Feet |
|
|
Percent of |
|
|||
Retail |
|
|
1,710 |
|
|
|
29,002 |
|
|
|
64.5 |
% |
|
Health & Fitness |
|
51 |
|
|
|
3,118 |
|
|
|
7.6 |
% |
|
Convenience Stores |
|
284 |
|
|
|
918 |
|
|
|
5.0 |
% |
|
Car Washes |
|
110 |
|
|
|
525 |
|
|
|
4.6 |
% |
|
Quick Service Restaurants |
|
317 |
|
|
|
691 |
|
|
|
4.3 |
% |
|
Casual Dining |
|
115 |
|
|
|
833 |
|
|
|
4.2 |
% |
|
Entertainment |
|
31 |
|
|
|
1,402 |
|
|
|
3.4 |
% |
|
Movie Theaters |
|
31 |
|
|
|
1,601 |
|
|
|
3.4 |
% |
|
Dollar Stores |
|
217 |
|
|
|
2,058 |
|
|
|
3.0 |
% |
|
Home Improvement |
|
35 |
|
|
|
2,114 |
|
|
|
3.0 |
% |
|
Drug Stores |
|
70 |
|
|
|
898 |
|
|
|
2.9 |
% |
|
Supercenters & Clubs |
|
17 |
|
|
|
1,864 |
|
|
|
2.7 |
% |
|
Automotive Services |
|
120 |
|
|
|
917 |
|
|
|
2.7 |
% |
|
Home Décor |
|
21 |
|
|
|
2,436 |
|
|
|
2.5 |
% |
|
Dealerships |
|
30 |
|
|
|
938 |
|
|
|
2.3 |
% |
|
Home Furnishings |
|
27 |
|
|
|
1,245 |
|
|
|
2.0 |
% |
|
Sporting Goods |
|
20 |
|
|
|
1,154 |
|
|
|
1.9 |
% |
|
Department Stores |
|
18 |
|
|
|
1,619 |
|
|
|
1.8 |
% |
|
Grocery |
|
30 |
|
|
|
1,424 |
|
|
|
1.7 |
% |
|
Other |
|
26 |
|
|
|
875 |
|
|
|
1.5 |
% |
|
Early Education |
|
41 |
|
|
|
450 |
|
|
|
1.4 |
% |
|
Specialty Retail |
|
31 |
|
|
|
669 |
|
|
|
1.1 |
% |
|
Automotive Parts |
|
53 |
|
|
|
373 |
|
|
|
0.8 |
% |
|
Discount Retail |
|
4 |
|
|
|
341 |
|
|
|
0.4 |
% |
|
Pet Supplies & Service |
|
4 |
|
|
|
201 |
|
|
|
0.3 |
% |
|
Vacant |
|
7 |
|
|
|
338 |
|
|
|
— |
|
Non-Retail |
|
|
327 |
|
|
|
32,572 |
|
|
|
35.5 |
% |
|
Distribution |
|
140 |
|
|
|
14,270 |
|
|
|
11.6 |
% |
|
Manufacturing |
|
80 |
|
|
|
12,762 |
|
|
|
11.3 |
% |
|
Industrial Outdoor Storage |
|
31 |
|
|
|
2,058 |
|
|
|
3.1 |
% |
|
Country Club |
|
21 |
|
|
|
1,005 |
|
|
|
3.1 |
% |
|
Office |
|
8 |
|
|
|
1,136 |
|
|
|
2.9 |
% |
|
Medical |
|
29 |
|
|
|
416 |
|
|
|
1.6 |
% |
|
Flex |
|
14 |
|
|
|
511 |
|
|
|
0.8 |
% |
|
Data Center |
|
2 |
|
|
|
275 |
|
|
|
0.6 |
% |
|
Hotel |
|
1 |
|
|
|
122 |
|
|
|
0.5 |
% |
|
Vacant |
|
1 |
|
|
|
17 |
|
|
|
— |
|
Total |
|
|
2,037 |
|
|
|
61,574 |
|
|
|
100.0 |
% |
Off-Balance Sheet Arrangements
As of September 30, 2023, we did not have any material off-balance sheet arrangements.
New Accounting Pronouncements
None.
40
Non-GAAP Financial Measures
FFO: FFO is calculated in accordance with the standards established by NAREIT as net income (loss) attributable to common stockholders (computed in accordance with GAAP), excluding real estate-related depreciation and amortization, impairment charges and net (gains) losses from property dispositions. By excluding amounts which do not relate to or are not indicative of operating performance, we believe FFO provides a performance measure that captures trends in occupancy rates, rental rates and operating costs when compared year-over-year. We also believe that, as a widely recognized measure of the performance of equity REITs, FFO will be used by investors as a basis to compare our performance with that of other equity REITs. However, because FFO excludes depreciation and amortization and does not capture the changes in the value of our properties that result from use or market conditions, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited.
AFFO: AFFO is an operating performance measure used by many companies in the REIT industry. We adjust FFO to eliminate the impact of certain items that we believe are not indicative of our core operating performance, such as net gains (losses) on debt extinguishment, deal pursuit costs, costs related to the COVID-19 pandemic, income associated with expiration of a contingent liability related to a guarantee of a former tenant's debt and certain non-cash items. These certain non-cash items include certain non-cash interest expenses (comprised of amortization of deferred financing costs, amortization of net debt discount/premium, and amortization of interest rate swap losses), non-cash revenues (comprised of straight-line rents net of bad debt expense, amortization of lease intangibles, and amortization of net premium/discount on loans receivable), and non-cash compensation expense.
Other equity REITs may not calculate FFO and AFFO as we do, and, accordingly, our FFO and AFFO may not be comparable to such other equity REITs’ FFO and AFFO. FFO and AFFO do not represent cash generated from operating activities determined in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should only be considered a supplement, and not an alternative, to net income (loss) attributable to common stockholders (computed in accordance with GAAP) as a performance measure.
Adjusted Debt: Adjusted Debt represents interest bearing debt (reported in accordance with GAAP) adjusted to exclude unamortized debt discount/premium and deferred financing costs and reduced by cash and cash equivalents and 1031 Exchange proceeds. By excluding these amounts, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. We believe this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding our financial condition.
EBITDAre: EBITDAre is computed in accordance with the standards established by NAREIT as net income (loss) (computed in accordance with GAAP), excluding interest expense, income tax expense, depreciation and amortization, net (gains) losses from property dispositions, and impairment charges.
Adjusted EBITDAre: Adjusted EBITDAre represents EBITDAre as adjusted for revenue producing acquisitions, capital expenditures and dispositions for the quarter (as if such acquisitions and dispositions had occurred as of the beginning of the quarter), construction rent collected, not yet recognized in earnings, and for other certain items that we believe are not indicative of our core operating performance. These other certain items include deal pursuit costs, net (gains) losses on debt extinguishment, costs related to the COVID-19 pandemic, and non-cash compensation. We believe that excluding these items, which are not key drivers of our investment decisions and may cause short-term fluctuations in net income (loss), provides a useful supplemental measure to investors in assessing the net earnings contribution of our real estate portfolio. Because these measures do not represent net income (loss) that is computed in accordance with GAAP, they should only be considered a supplement, and not an alternative, to net income (loss) (computed in accordance with GAAP) as a performance measure.
Annualized Adjusted EBITDAre: Annualized Adjusted EBITDAre is calculated as Adjusted EBITDAre, adjusted for straight-line rent related to prior periods, including amounts deemed not probable of collection (recoveries), and items where annualization would not be appropriate, multiplied by four. Our computation of Adjusted EBITDAre and Annualized Adjusted EBITDAre may differ from the methodology used by other equity REITs to calculate these measures and, therefore, may not be comparable to such other REITs.
Adjusted Debt to Annualized Adjusted EBITDAre: Adjusted Debt to Annualized Adjusted EBITDAre is used to evaluate the level of borrowed capital being used to increase the potential return of our real estate investments, and a proxy for a measure we believe is used by many lenders and ratings agencies to evaluate our ability to repay and service our debt obligations. We believe the ratio is a beneficial disclosure to investors as a supplemental means of evaluating our ability to meet obligations senior to those of our equity holders. Our computation of this ratio may differ from the methodology used by other equity REITs, and, therefore, may not be comparable to such other REITs.
41
FFO and AFFO
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(In thousands, except per share data) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net income attributable to common stockholders |
|
$ |
35,881 |
|
|
$ |
74,053 |
|
|
$ |
181,059 |
|
|
$ |
207,673 |
|
Portfolio depreciation and amortization |
|
|
79,223 |
|
|
|
74,455 |
|
|
|
236,091 |
|
|
|
216,175 |
|
Portfolio impairments |
|
|
19,258 |
|
|
|
1,571 |
|
|
|
36,052 |
|
|
|
11,096 |
|
Gain on disposition of assets |
|
|
(3,661 |
) |
|
|
(23,302 |
) |
|
|
(66,450 |
) |
|
|
(63,107 |
) |
FFO attributable to common stockholders |
|
$ |
130,701 |
|
|
$ |
126,777 |
|
|
$ |
386,752 |
|
|
$ |
371,837 |
|
Loss on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
172 |
|
Deal pursuit costs |
|
|
342 |
|
|
|
470 |
|
|
|
1,174 |
|
|
|
1,490 |
|
Non-cash interest expense, excluding capitalized interest |
|
|
3,357 |
|
|
|
2,495 |
|
|
|
9,032 |
|
|
|
6,690 |
|
Straight-line rent, net of uncollectible reserve |
|
|
(8,227 |
) |
|
|
(10,875 |
) |
|
|
(26,127 |
) |
|
|
(28,465 |
) |
Other amortization and non-cash charges |
|
|
(78 |
) |
|
|
(475 |
) |
|
|
(767 |
) |
|
|
(1,700 |
) |
Non-cash compensation expense |
|
|
4,906 |
|
|
|
4,393 |
|
|
|
15,106 |
|
|
|
12,805 |
|
Costs related to COVID-19 (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6 |
|
Other income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,679 |
) |
AFFO attributable to common stockholders |
|
$ |
131,001 |
|
|
$ |
122,785 |
|
|
$ |
385,170 |
|
|
$ |
357,156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share of common stock - Diluted |
|
$ |
0.25 |
|
|
$ |
0.54 |
|
|
$ |
1.28 |
|
|
$ |
1.56 |
|
FFO per share of common stock - Diluted (2) |
|
$ |
0.92 |
|
|
$ |
0.93 |
|
|
$ |
2.74 |
|
|
$ |
2.79 |
|
AFFO per share of common stock - Diluted (2) |
|
$ |
0.93 |
|
|
$ |
0.90 |
|
|
$ |
2.73 |
|
|
$ |
2.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares of common stock outstanding - Diluted |
|
|
141,149,865 |
|
|
|
136,314,369 |
|
|
|
141,103,395 |
|
|
|
132,965,297 |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
|
2022 |
|
2023 |
|
2022 |
|
FFO |
|
$0.2 million |
|
$0.2 million |
|
$0.6 million |
|
$0.6 million |
AFFO |
|
$0.2 million |
|
$0.2 million |
|
$0.6 million |
|
$0.6 million |
42
Adjusted Debt, Adjusted EBITDAre and Annualized Adjusted EBITDAre
|
|
September 30, |
|
|||||
(In thousands) |
|
2023 |
|
|
2022 |
|
||
2019 Credit Facility |
|
$ |
— |
|
|
$ |
— |
|
Term loans, net |
|
|
1,090,198 |
|
|
|
791,791 |
|
Senior Unsecured Notes, net |
|
|
2,725,505 |
|
|
|
2,721,534 |
|
Mortgages payable, net |
|
|
4,545 |
|
|
|
5,130 |
|
Total debt, net |
|
|
3,820,248 |
|
|
|
3,518,455 |
|
Unamortized debt discount, net |
|
|
8,573 |
|
|
|
9,877 |
|
Unamortized deferred financing costs |
|
|
25,589 |
|
|
|
26,627 |
|
Cash and cash equivalents |
|
|
(134,166 |
) |
|
|
(109,829 |
) |
1031 Exchange proceeds |
|
|
(4,210 |
) |
|
|
— |
|
Adjusted Debt |
|
$ |
3,716,034 |
|
|
$ |
3,445,130 |
|
|
|
Three Months Ended September 30, |
|
|||||
(In thousands) |
|
2023 |
|
|
2022 |
|
||
Net income |
|
$ |
38,468 |
|
|
$ |
76,640 |
|
Interest |
|
|
36,919 |
|
|
|
30,956 |
|
Depreciation and amortization |
|
|
79,370 |
|
|
|
74,600 |
|
Income tax expense |
|
|
235 |
|
|
|
261 |
|
Gain on disposition of assets |
|
|
(3,661 |
) |
|
|
(23,302 |
) |
Portfolio impairments |
|
|
19,258 |
|
|
|
1,571 |
|
EBITDAre |
|
$ |
170,589 |
|
|
$ |
160,726 |
|
Adjustments to revenue producing acquisitions and dispositions |
|
|
777 |
|
|
|
2,657 |
|
Construction rent collected, not yet recognized in earnings |
|
|
— |
|
|
|
193 |
|
Deal pursuit costs |
|
|
342 |
|
|
|
470 |
|
Non-cash compensation expense |
|
|
4,906 |
|
|
|
4,393 |
|
Adjusted EBITDAre |
|
$ |
176,614 |
|
|
$ |
168,439 |
|
Adjustments related to straight-line rent (1) |
|
|
1,356 |
|
|
|
(1,058 |
) |
Other adjustments for Annualized EBITDAre (2) |
|
|
(915 |
) |
|
|
(1,120 |
) |
Annualized Adjusted EBITDAre |
|
$ |
708,220 |
|
|
$ |
665,044 |
|
|
|
|
|
|
|
|
||
Total Debt, Net / Annualized Net Income (3) |
|
|
24.8 |
x |
|
|
11.5 |
x |
Adjusted Debt / Annualized Adjusted EBITDAre |
|
|
5.2 |
x |
|
|
5.2 |
x |
43
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to financial market risks, including interest rate risk. Interest rates and other factors, such as occupancy, rental rates and our tenants’ financial condition, influence our performance more than inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. As described above, we generally enter into leases that provide for payments of rent with scheduled increases and, to a lesser extent, contingent rent based on a percentage of the tenant’s gross sales, to help mitigate the effect of inflation. Because our properties are generally leased to tenants under triple-net leases, our exposure to rising property operating costs due to inflation is mitigated.
Interest rates are highly sensitive to many factors, including governmental monetary policies and domestic and global economic and political conditions, which are beyond our control. Our operating results depend heavily on the difference between the revenue from our assets and the interest expense incurred on our borrowings. We may incur additional variable-rate debt in the future, including amounts that we may borrow under our 2019 Credit Facility. In addition, decreases in interest rates may lead to additional competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments, which may lead to a decrease in the yields on real estate we have targeted for acquisition. In such circumstances, if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings, our results of operations will be adversely affected. Significant increases in interest rates may also have an adverse impact on our earnings if we are unable to acquire real estate with rental rates high enough to offset the increase in interest rates on our borrowings. In the event interest rates rise significantly or there is an economic downturn, defaults may increase and result in credit losses, which may adversely affect our liquidity and operating results.
As of September 30, 2023, our assets were primarily leased on a long-term, triple-net basis with contractual rent increases during the term of the lease. As of September 30, 2023, $2.8 billion of our indebtedness outstanding was fixed-rate, consisting of our Senior Unsecured Notes and mortgages payable, with a weighted average stated interest rate of 3.25%, excluding amortization of deferred financing costs and debt discounts/premiums. $1.1 billion of our indebtedness as of September 30, 2023 was variable-rate borrowings outstanding under our 2022 Term Loans and 2023 Term Loans, which bear interest at 1-month adjusted SOFR plus an applicable margin of 0.850% and 0.950% per annum, respectively. However, in conjunction with the term loans, we entered into interest rate swaps to swap 1-month SOFR, resulting in an effective weighted average fixed rate of 3.86%.
The were no outstanding borrowings under our variable-rate 2019 Credit Facility as of September 30, 2023. However, there continues to be uncertainty in market and economic conditions, including the possibility of additional measures that could be taken by the Federal Reserve and other government agencies related to concerns over inflation risk, which could result in continued increases in market interest rates and, thus, increased interest expenses on any future borrowings under our 2019 Credit Facility.
The estimated fair values of our Senior Unsecured Notes have been derived based on quoted prices in active markets, while the estimated fair values of the remaining debt instruments have been derived based on discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates and credit spreads. The debt instrument balances as of September 30, 2023 are as follows (in thousands):
|
|
Carrying |
|
|
Estimated |
|
||
2019 Credit Facility |
|
$ |
— |
|
|
$ |
— |
|
Term loans, net (1) |
|
|
1,090,198 |
|
|
|
1,100,705 |
|
Senior Unsecured Notes, net (1) |
|
|
2,725,505 |
|
|
|
2,339,854 |
|
Mortgages payable, net (1) |
|
|
4,545 |
|
|
|
4,229 |
|
(1) The carrying value of the debt instruments are net of unamortized deferred financing costs and debt discounts/premiums.
44
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness as of September 30, 2023 of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that occurred during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
45
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
From time-to-time, we may be subject to certain claims and lawsuits in the ordinary course of business, the outcome of which cannot be determined at this time. We are not currently a party as plaintiff or defendant to any legal proceedings that we believe to be material or that individually or in the aggregate would be expected to have a material effect on our business, financial condition or results of operations if determined adversely to us.
Item 1A. Risk Factors.
There have been no material changes to the risk factors as disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
During the three months ended September 30, 2023, no director or officer of the Company i i adopted / , modified or i i terminated / a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. As of September 30, 2023, there were no “Rule 10b5-1 trading arrangements” or “non-Rule 10b5-1 trading arrangements” in place.
46
Item 6. Exhibits.
Exhibit No. |
Description |
|
|
2.1 |
|
|
|
3.1 |
|
|
|
3.2 |
|
|
|
3.3 |
|
|
|
3.4 |
|
|
|
3.5 |
|
|
|
3.6 |
|
|
|
3.7 |
|
|
|
3.8 |
|
|
|
22.1* |
List of Issuers of Guaranteed Securities as of September 30, 2023. |
|
|
31.1* |
|
|
|
31.2* |
|
|
|
32.1* |
|
|
|
101.INS* |
Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. |
|
|
101.SCH* |
Inline XBRL Taxonomy Extension Schema |
|
|
101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase |
|
|
101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase |
|
|
101.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase |
|
|
101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase |
|
|
104.1* |
Cover Page Interactive Data File - The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. |
|
|
* |
47
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.
|
SPIRIT REALTY CAPITAL, INC. |
||
|
(Registrant) |
||
|
|
|
|
|
By: |
|
/s/ Prakash J. Parag |
|
Name: |
|
|
|
Title: |
|
Senior Vice President and Chief Accounting Officer |
|
|
|
(Principal Accounting Officer) |
Date: November 2, 2023
48
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 2/15/32 | ||||
| 2/15/31 | ||||
| 1/15/30 | ||||
| 7/15/29 | ||||
| 3/15/28 | ||||
| 8/22/27 | ||||
| 8/20/27 | ||||
| 1/15/27 | ||||
| 9/15/26 | ||||
| 3/31/26 | ||||
| 1/1/26 | ||||
| 8/22/25 | ||||
| 6/16/25 | ||||
| 6/15/25 | ||||
| 1/31/24 | ||||
| 12/29/23 | ||||
| 12/15/23 | ||||
| Filed on: | 11/2/23 | 8-K | ||
| 10/30/23 | 425, 8-K | |||
| 10/29/23 | 8-K | |||
| 10/13/23 | ||||
| 10/1/23 | ||||
| For Period end: | 9/30/23 | |||
| 9/29/23 | ||||
| 9/15/23 | ||||
| 8/9/23 | ||||
| 7/14/23 | ||||
| 6/30/23 | 10-Q | |||
| 6/15/23 | ||||
| 5/3/23 | 10-Q, 4, 8-K | |||
| 4/14/23 | ||||
| 3/31/23 | 10-Q | |||
| 3/15/23 | 8-K | |||
| 2/22/23 | ||||
| 12/31/22 | 10-K, ARS | |||
| 11/17/22 | 8-K | |||
| 9/30/22 | 10-Q | |||
| 9/15/22 | ||||
| 8/22/22 | 8-K | |||
| 6/30/22 | 10-Q | |||
| 3/31/22 | 10-Q | |||
| 3/30/22 | 8-K | |||
| 3/15/22 | ||||
| 12/31/21 | 10-K | |||
| 1/14/19 | 8-K | |||
| 12/31/17 | 10-K, DEF 14A | |||
| 10/3/17 | 4, 8-K | |||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 1/03/24 Realty Income Corp. 424B3 1:1.5M Toppan Merrill/FA 1/02/24 Realty Income Corp. S-4/A 3:1.6M Toppan Merrill/FA 12/19/23 Realty Income Corp. S-4 16:2.2M Toppan Merrill/FA 12/19/23 Realty Income Corp. 424B3 1:3.3M Toppan Merrill/FA 12/19/23 Spirit Realty Capital, Inc. DEFM14A 1:3.9M Toppan Merrill/FA 12/15/23 Realty Income Corp. S-4/A 6:3.8M Toppan Merrill/FA 12/01/23 Realty Income Corp. S-4 8:3.8M Toppan Merrill/FA |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 10/30/23 Spirit Realty Capital, Inc. 8-K:1,7,9 10/29/23 14:9.8M Donnelley … Solutions/FA 11/18/21 Spirit Realty Capital, Inc. 8-K:5,9 11/18/21 12:216K ActiveDisclosure/FA 4/29/19 Spirit Realty Capital, Inc. 8-K:5 4/29/19 2:546K 12/12/18 Spirit Realty Capital, Inc. 8-K:3,5,8,912/12/18 3:850K 10/02/17 Spirit Realty Capital, Inc. 8-A12B 3:184K Donnelley … Solutions/FA 8/15/17 Spirit Realty Capital, Inc. 8-K:5,7,9 8/10/17 3:164K Donnelley … Solutions/FA 3/03/17 Spirit Realty Capital, Inc. 8-K:5,9 3/02/17 3:61K 5/13/14 Spirit Realty Capital, Inc. 8-K:5,9 5/13/14 2:23K Donnelley … Solutions/FA 11/08/13 Spirit Realty Capital, Inc. S-3ASR 11/08/13 9:649K Donnelley … Solutions/FA |