Maryland | 27-3099608 | ||
(State or other jurisdiction of | (IRS Employer Identification No.) | ||
incorporation or organization) | |||
One Federal Street | |||
23rd Floor | |||
Boston, | Massachusetts | 02110 | |
(Address of principal executive offices) | (Zip |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common stock, $0.01 par value per share | STAG | New York Stock Exchange |
6.875% Series C Cumulative Redeemable Preferred Stock ($0.01 par value) | STAG-PC | New York Stock Exchange |
September 30, 2018 | December 31, 2017 | June 30, 2019 | December 31, 2018 | |||||||||||
Assets | ||||||||||||||
Rental Property: | ||||||||||||||
Land | $ | 355,590 | $ | 321,560 | $ | 397,193 | $ | 364,023 | ||||||
Buildings and improvements, net of accumulated depreciation of $301,787 and $249,057, respectively | 2,202,755 | 1,932,764 | ||||||||||||
Deferred leasing intangibles, net of accumulated amortization of $237,892 and $280,642, respectively | 327,734 | 313,253 | ||||||||||||
Buildings and improvements, net of accumulated depreciation of $344,597 and $316,930, respectively | 2,574,746 | 2,285,663 | ||||||||||||
Deferred leasing intangibles, net of accumulated amortization of $229,864 and $246,502, respectively | 381,133 | 342,015 | ||||||||||||
Total rental property, net | 2,886,079 | 2,567,577 | 3,353,072 | 2,991,701 | ||||||||||
Cash and cash equivalents | 6,024 | 24,562 | 5,092 | 7,968 | ||||||||||
Restricted cash | 5,231 | 3,567 | 4,503 | 14,574 | ||||||||||
Tenant accounts receivable, net | 39,170 | 33,602 | ||||||||||||
Tenant accounts receivable | 45,871 | 42,236 | ||||||||||||
Prepaid expenses and other assets | 35,122 | 25,364 | 36,919 | 36,902 | ||||||||||
Interest rate swaps | 17,649 | 6,079 | 983 | 9,151 | ||||||||||
Assets held for sale, net | — | 19,916 | ||||||||||||
Operating lease right-of-use assets | 15,717 | — | ||||||||||||
Total assets | $ | 2,989,275 | $ | 2,680,667 | $ | 3,462,157 | $ | 3,102,532 | ||||||
Liabilities and Equity | ||||||||||||||
Liabilities: | ||||||||||||||
Unsecured credit facility | $ | 95,000 | $ | 271,000 | $ | 129,000 | $ | 100,500 | ||||||
Unsecured term loans, net | 596,085 | 446,265 | 596,879 | 596,360 | ||||||||||
Unsecured notes, net | 572,389 | 398,234 | 572,684 | 572,488 | ||||||||||
Mortgage notes, net | 56,993 | 58,282 | 55,659 | 56,560 | ||||||||||
Accounts payable, accrued expenses and other liabilities | 53,445 | 43,216 | 49,911 | 45,507 | ||||||||||
Interest rate swaps | — | 1,217 | 18,865 | 4,011 | ||||||||||
Tenant prepaid rent and security deposits | 19,328 | 19,045 | 21,220 | 22,153 | ||||||||||
Dividends and distributions payable | 14,530 | 11,880 | 16,822 | 13,754 | ||||||||||
Deferred leasing intangibles, net of accumulated amortization of $13,043 and $13,555, respectively | 20,708 | 21,221 | ||||||||||||
Deferred leasing intangibles, net of accumulated amortization of $10,854 and $12,764, respectively | 20,340 | 21,567 | ||||||||||||
Operating lease liabilities | 17,525 | — | ||||||||||||
Total liabilities | 1,428,478 | 1,270,360 | 1,498,905 | 1,432,900 | ||||||||||
Commitments and contingencies (Note 10) | ||||||||||||||
Commitments and contingencies (Note 11) | ||||||||||||||
Equity: | ||||||||||||||
Preferred stock, par value $0.01 per share, 15,000,000 shares authorized, | ||||||||||||||
Series B, -0- and 2,800,000 shares (liquidation preference of $25.00 per share) issued and outstanding at September 30, 2018 and December 31, 2017, respectively | — | 70,000 | ||||||||||||
Series C, 3,000,000 shares (liquidation preference of $25.00 per share) issued and outstanding at September 30, 2018 and December 31, 2017 | 75,000 | 75,000 | ||||||||||||
Common stock, par value $0.01 per share, 150,000,000 shares authorized, 107,825,791 and 97,012,543 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 1,078 | 970 | ||||||||||||
Preferred stock, par value $0.01 per share, 20,000,000 and 15,000,000 shares authorized at June 30, 2019 and December 31, 2018, respectively, | ||||||||||||||
Series C, 3,000,000 shares (liquidation preference of $25.00 per share) issued and outstanding at June 30, 2019 and December 31, 2018 | 75,000 | 75,000 | ||||||||||||
Common stock, par value $0.01 per share, 300,000,000 and 150,000,000 shares authorized at June 30, 2019 and December 31, 2018, respectively, 126,372,945 and 112,165,786 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 1,264 | 1,122 | ||||||||||||
Additional paid-in capital | 2,003,983 | 1,725,825 | 2,501,013 | 2,118,179 | ||||||||||
Cumulative dividends in excess of earnings | (589,785 | ) | (516,691 | ) | (653,759 | ) | (584,979 | ) | ||||||
Accumulated other comprehensive income | 16,485 | 3,936 | ||||||||||||
Accumulated other comprehensive income (loss) | (17,771 | ) | 4,481 | |||||||||||
Total stockholders’ equity | 1,506,761 | 1,359,040 | 1,905,747 | 1,613,803 | ||||||||||
Noncontrolling interest | 54,036 | 51,267 | 57,505 | 55,829 | ||||||||||
Total equity | 1,560,797 | 1,410,307 | 1,963,252 | 1,669,632 | ||||||||||
Total liabilities and equity | $ | 2,989,275 | $ | 2,680,667 | $ | 3,462,157 | $ | 3,102,532 |
Three months ended September 30, | Nine months ended September 30, | Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||
Rental income | $ | 75,159 | $ | 65,673 | $ | 217,227 | $ | 186,621 | $ | 96,362 | $ | 84,866 | $ | 191,977 | $ | 167,993 | ||||||||||||||
Tenant recoveries | 13,518 | 12,366 | 39,443 | 32,952 | ||||||||||||||||||||||||||
Other income | 269 | 105 | 1,033 | 244 | 284 | 608 | 371 | 764 | ||||||||||||||||||||||
Total revenue | 88,946 | 78,144 | 257,703 | 219,817 | 96,646 | 85,474 | 192,348 | 168,757 | ||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||
Property | 17,112 | 15,401 | 50,735 | 42,312 | 16,955 | 16,124 | 36,466 | 33,623 | ||||||||||||||||||||||
General and administrative | 8,911 | 8,380 | 25,637 | 25,090 | 8,587 | 7,978 | 17,799 | 16,726 | ||||||||||||||||||||||
Property acquisition costs | — | 1,386 | — | 4,684 | ||||||||||||||||||||||||||
Depreciation and amortization | 44,355 | 38,186 | 125,221 | 110,286 | 44,633 | 40,901 | 86,936 | 80,866 | ||||||||||||||||||||||
Loss on impairments | — | — | 2,934 | — | — | — | 5,344 | 2,934 | ||||||||||||||||||||||
Loss on involuntary conversion | — | — | — | 330 | ||||||||||||||||||||||||||
Other expenses | 223 | 58 | 864 | 1,502 | 427 | 350 | 826 | 641 | ||||||||||||||||||||||
Total expenses | 70,601 | 63,411 | 205,391 | 184,204 | 70,602 | 65,353 | 147,371 | 134,790 | ||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||
Interest and other income | 3 | 2 | 16 | 10 | 2 | 7 | 18 | 13 | ||||||||||||||||||||||
Interest expense | (12,698 | ) | (10,446 | ) | (35,602 | ) | (31,557 | ) | (12,193 | ) | (11,512 | ) | (25,027 | ) | (22,904 | ) | ||||||||||||||
Loss on extinguishment of debt | (13 | ) | (13 | ) | (13 | ) | (15 | ) | ||||||||||||||||||||||
Gain on the sales of rental property, net | 3,239 | 17,563 | 32,276 | 19,225 | 317 | 6,348 | 1,591 | 29,037 | ||||||||||||||||||||||
Total other income (expense) | (9,469 | ) | 7,106 | (3,323 | ) | (12,337 | ) | (11,874 | ) | (5,157 | ) | (23,418 | ) | 6,146 | ||||||||||||||||
Net income | $ | 8,876 | $ | 21,839 | $ | 48,989 | $ | 23,276 | $ | 14,170 | $ | 14,964 | $ | 21,559 | $ | 40,113 | ||||||||||||||
Less: income attributable to noncontrolling interest after preferred stock dividends | 281 | 828 | 1,589 | 673 | 408 | 392 | 622 | 1,334 | ||||||||||||||||||||||
Net income attributable to STAG Industrial, Inc. | $ | 8,595 | $ | 21,011 | $ | 47,400 | $ | 22,603 | $ | 13,762 | $ | 14,572 | $ | 20,937 | $ | 38,779 | ||||||||||||||
Less: preferred stock dividends | 1,289 | 2,449 | 6,315 | 7,345 | 1,289 | 2,578 | 2,578 | 5,026 | ||||||||||||||||||||||
Less: redemption of preferred stock | — | — | 2,661 | — | — | 2,661 | — | 2,661 | ||||||||||||||||||||||
Less: amount allocated to participating securities | 69 | 84 | 209 | 250 | 79 | 69 | 158 | 140 | ||||||||||||||||||||||
Net income attributable to common stockholders | $ | 7,237 | $ | 18,478 | $ | 38,215 | $ | 15,008 | $ | 12,394 | $ | 9,264 | $ | 18,201 | $ | 30,952 | ||||||||||||||
Weighted average common shares outstanding — basic | 105,783 | 92,787 | 101,095 | 87,632 | 125,251 | 100,386 | 120,015 | 98,713 | ||||||||||||||||||||||
Weighted average common shares outstanding — diluted | 106,333 | 93,435 | 101,495 | 88,238 | 125,560 | 100,733 | 120,306 | 99,037 | ||||||||||||||||||||||
Net income per share — basic and diluted | ||||||||||||||||||||||||||||||
Net income per share attributable to common stockholders — basic | $ | 0.07 | $ | 0.20 | $ | 0.38 | $ | 0.17 | $ | 0.10 | $ | 0.09 | $ | 0.15 | $ | 0.31 | ||||||||||||||
Net income per share attributable to common stockholders — diluted | $ | 0.07 | $ | 0.20 | $ | 0.38 | $ | 0.17 | $ | 0.10 | $ | 0.09 | $ | 0.15 | $ | 0.31 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 8,876 | $ | 21,839 | $ | 48,989 | $ | 23,276 | |||||||
Other comprehensive income: | |||||||||||||||
Income on interest rate swaps | 2,060 | 598 | 12,811 | 300 | |||||||||||
Other comprehensive income | 2,060 | 598 | 12,811 | 300 | |||||||||||
Comprehensive income | 10,936 | 22,437 | 61,800 | 23,576 | |||||||||||
Income attributable to noncontrolling interest after preferred stock dividends | (281 | ) | (828 | ) | (1,589 | ) | (673 | ) | |||||||
Other comprehensive income attributable to noncontrolling interest | (76 | ) | (26 | ) | (509 | ) | (13 | ) | |||||||
Comprehensive income attributable to STAG Industrial, Inc. | $ | 10,579 | $ | 21,583 | $ | 59,702 | $ | 22,890 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | 14,170 | $ | 14,964 | $ | 21,559 | $ | 40,113 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Income (loss) on interest rate swaps | (16,028 | ) | 3,028 | (23,006 | ) | 10,751 | |||||||||
Other comprehensive income (loss) | (16,028 | ) | 3,028 | (23,006 | ) | 10,751 | |||||||||
Comprehensive income (loss) | (1,858 | ) | 17,992 | (1,447 | ) | 50,864 | |||||||||
Income attributable to noncontrolling interest after preferred stock dividends | (408 | ) | (392 | ) | (622 | ) | (1,334 | ) | |||||||
Other comprehensive (income) loss attributable to noncontrolling interest | 510 | (122 | ) | 754 | (442 | ) | |||||||||
Comprehensive income (loss) attributable to STAG Industrial, Inc. | $ | (1,756 | ) | $ | 17,478 | $ | (1,315 | ) | $ | 49,088 |
Preferred Stock | Common Stock | Additional Paid-in Capital | Cumulative Dividends in excess of Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | Noncontrolling Interest - Unit holders in Operating Partnership | Total Equity | Preferred Stock | Common Stock | Additional Paid-in Capital | Cumulative Dividends in Excess of Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | Noncontrolling Interest - Unit Holders in Operating Partnership | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2017 | $ | 145,000 | 97,012,543 | $ | 970 | $ | 1,725,825 | $ | (516,691 | ) | $ | 3,936 | $ | 1,359,040 | $ | 51,267 | $ | 1,410,307 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedging instruments cumulative effect adjustment (Note 2) | — | — | — | — | (258 | ) | 247 | (11 | ) | 11 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from sales of common stock | — | 10,387,962 | 104 | 276,353 | — | — | 276,457 | — | 276,457 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2019 | $ | 75,000 | 118,174,102 | $ | 1,182 | $ | 2,266,695 | $ | (621,225 | ) | $ | (2,253 | ) | $ | 1,719,399 | $ | 55,442 | $ | 1,774,841 | |||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from sales of common stock, net | — | 8,180,794 | 82 | 236,254 | — | — | 236,336 | — | 236,336 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions, net | — | — | — | — | (46,296 | ) | — | (46,296 | ) | (2,326 | ) | (48,622 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash compensation activity, net | — | 3,190 | — | 1,656 | — | — | 1,656 | 899 | 2,555 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of common units to common stock | — | 14,859 | — | 207 | — | — | 207 | (207 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rebalancing of noncontrolling interest | — | — | — | (3,799 | ) | — | — | (3,799 | ) | 3,799 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (15,518 | ) | (15,518 | ) | (510 | ) | (16,028 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 13,762 | — | 13,762 | 408 | 14,170 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | 75,000 | 126,372,945 | $ | 1,264 | $ | 2,501,013 | $ | (653,759 | ) | $ | (17,771 | ) | $ | 1,905,747 | $ | 57,505 | $ | 1,963,252 | |||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2018 | $ | 145,000 | 97,229,588 | $ | 972 | $ | 1,724,627 | $ | (530,257 | ) | $ | 11,581 | $ | 1,351,923 | $ | 53,076 | $ | 1,404,999 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from sales of common stock, net | — | 6,819,580 | 68 | 174,850 | — | — | 174,918 | — | 174,918 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of preferred stock | (70,000 | ) | — | — | 5,141 | (5,158 | ) | — | (70,017 | ) | — | (70,017 | ) | (70,000 | ) | — | — | 5,141 | (5,158 | ) | — | (70,017 | ) | — | (70,017 | ) | ||||||||||||||||||||||||||||||||||||||||||
Offering costs | — | — | — | (3,129 | ) | — | — | (3,129 | ) | — | (3,129 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions, net | — | — | — | — | (114,541 | ) | — | (114,541 | ) | (5,253 | ) | (119,794 | ) | — | — | — | — | (38,481 | ) | — | (38,481 | ) | (1,997 | ) | (40,478 | ) | ||||||||||||||||||||||||||||||||||||||||||
Non-cash compensation activity, net | — | 73,231 | 1 | 1,829 | (537 | ) | — | 1,293 | 3,880 | 5,173 | — | 2,615 | — | 1,323 | — | — | 1,323 | 890 | 2,213 | |||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of common units to common stock | — | 352,055 | 3 | 4,398 | — | — | 4,401 | (4,401 | ) | — | — | 186,383 | 2 | 2,314 | — | — | 2,316 | (2,316 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Rebalancing of noncontrolling interest | — | — | — | (6,434 | ) | — | — | (6,434 | ) | 6,434 | — | — | — | — | (3,253 | ) | — | — | (3,253 | ) | 3,253 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 12,302 | 12,302 | 509 | 12,811 | — | — | — | — | — | 2,911 | 2,911 | 117 | 3,028 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 47,400 | — | 47,400 | 1,589 | 48,989 | — | — | — | — | 14,584 | — | 14,584 | 380 | 14,964 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2018 | $ | 75,000 | 107,825,791 | $ | 1,078 | $ | 2,003,983 | $ | (589,785 | ) | $ | 16,485 | $ | 1,506,761 | $ | 54,036 | $ | 1,560,797 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2016 | $ | 145,000 | 80,352,304 | $ | 804 | $ | 1,293,706 | $ | (410,978 | ) | $ | (1,496 | ) | $ | 1,027,036 | $ | 39,890 | $ | 1,066,926 | |||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from sales of common stock | — | 13,165,996 | 132 | 339,492 | — | — | 339,624 | — | 339,624 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offering costs | — | — | — | (4,746 | ) | — | — | (4,746 | ) | — | (4,746 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2018 | $ | 75,000 | 104,238,166 | $ | 1,042 | $ | 1,905,002 | $ | (559,312 | ) | $ | 14,492 | $ | 1,436,224 | $ | 53,403 | $ | 1,489,627 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2018 | $ | 75,000 | 112,165,786 | $ | 1,122 | $ | 2,118,179 | $ | (584,979 | ) | $ | 4,481 | $ | 1,613,803 | $ | 55,829 | $ | 1,669,632 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Leases cumulative effect adjustment (Note 2) | — | — | — | — | (214 | ) | — | (214 | ) | — | (214 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from sales of common stock, net | — | 13,622,203 | 137 | 384,728 | — | — | 384,865 | — | 384,865 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions, net | — | — | — | — | (100,509 | ) | — | (100,509 | ) | (4,932 | ) | (105,441 | ) | — | — | — | — | (89,130 | ) | — | (89,130 | ) | (3,872 | ) | (93,002 | ) | ||||||||||||||||||||||||||||||||||||||||||
Non-cash compensation activity, net | — | 43,492 | — | 2,911 | (194 | ) | — | 2,717 | 3,509 | 6,226 | — | 131,026 | 1 | 523 | (373 | ) | — | 151 | 3,267 | 3,418 | ||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of common units to common stock | — | 300,991 | 3 | 3,314 | — | — | 3,317 | (3,317 | ) | — | — | 453,930 | 4 | 6,231 | — | — | 6,235 | (6,235 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of units | — | — | — | — | — | — | — | 18,558 | 18,558 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rebalancing of noncontrolling interest | — | — | — | (8,648 | ) | — | — | (8,648 | ) | 8,648 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (22,252 | ) | (22,252 | ) | (754 | ) | (23,006 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 20,937 | — | 20,937 | 622 | 21,559 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | 75,000 | 126,372,945 | $ | 1,264 | $ | 2,501,013 | $ | (653,759 | ) | $ | (17,771 | ) | $ | 1,905,747 | $ | 57,505 | $ | 1,963,252 | |||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended June 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2017 | $ | 145,000 | 97,012,543 | $ | 970 | $ | 1,725,825 | $ | (516,691 | ) | $ | 3,936 | $ | 1,359,040 | $ | 51,267 | $ | 1,410,307 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedging instruments cumulative effect adjustment | — | — | — | — | (258 | ) | 247 | (11 | ) | 11 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from sales of common stock, net | — | 6,819,580 | 68 | 174,743 | — | — | 174,811 | — | 174,811 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of preferred stock | (70,000 | ) | — | — | 5,141 | (5,158 | ) | — | (70,017 | ) | — | (70,017 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions, net | — | — | — | — | (75,447 | ) | — | (75,447 | ) | (3,810 | ) | (79,257 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash compensation activity, net | — | 73,988 | 1 | 468 | (537 | ) | — | (68 | ) | 2,987 | 2,919 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of common units to common stock | — | 332,055 | 3 | 4,137 | — | — | 4,140 | (4,140 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rebalancing of noncontrolling interest | — | — | — | 3,632 | — | — | 3,632 | (3,632 | ) | — | — | — | — | (5,312 | ) | — | — | (5,312 | ) | 5,312 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 287 | 287 | 13 | 300 | — | — | — | — | — | 10,309 | 10,309 | 442 | 10,751 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 22,603 | — | 22,603 | 673 | 23,276 | — | — | — | — | 38,779 | — | 38,779 | 1,334 | 40,113 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2017 | $ | 145,000 | 93,862,783 | $ | 939 | $ | 1,638,309 | $ | (489,078 | ) | $ | (1,209 | ) | $ | 1,293,961 | $ | 50,762 | $ | 1,344,723 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2018 | $ | 75,000 | 104,238,166 | $ | 1,042 | $ | 1,905,002 | $ | (559,312 | ) | $ | 14,492 | $ | 1,436,224 | $ | 53,403 | $ | 1,489,627 |
Nine months ended September 30, | Six months ended June 30, | |||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | 48,989 | $ | 23,276 | $ | 21,559 | $ | 40,113 | ||||||
Adjustment to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 125,221 | 110,286 | 86,936 | 80,866 | ||||||||||
Loss on impairments | 2,934 | — | 5,344 | 2,934 | ||||||||||
Loss on involuntary conversion | — | 330 | ||||||||||||
Non-cash portion of interest expense | 1,698 | 1,465 | 1,236 | 1,081 | ||||||||||
Intangible amortization in rental income, net | 3,206 | 3,873 | ||||||||||||
Amortization of above and below market leases, net | 2,102 | 2,056 | ||||||||||||
Straight-line rent adjustments, net | (8,297 | ) | (4,855 | ) | (5,522 | ) | (5,449 | ) | ||||||
Dividends on forfeited equity compensation | 15 | 2 | 7 | 9 | ||||||||||
Loss on extinguishment of debt | 13 | 15 | ||||||||||||
Gain on the sales of rental property, net | (32,276 | ) | (19,225 | ) | (1,591 | ) | (29,037 | ) | ||||||
Non-cash compensation expense | 6,671 | 7,159 | 4,815 | 4,435 | ||||||||||
Change in assets and liabilities: | ||||||||||||||
Tenant accounts receivable, net | 501 | (955 | ) | |||||||||||
Tenant accounts receivable | 1,389 | 1,916 | ||||||||||||
Prepaid expenses and other assets | (9,597 | ) | (10,479 | ) | (3,338 | ) | (5,155 | ) | ||||||
Accounts payable, accrued expenses and other liabilities | 9,249 | 5,572 | (1,433 | ) | 1,161 | |||||||||
Tenant prepaid rent and security deposits | 283 | 3,570 | (933 | ) | 2,391 | |||||||||
Total adjustments | 99,621 | 96,758 | 89,012 | 57,208 | ||||||||||
Net cash provided by operating activities | 148,610 | 120,034 | 110,571 | 97,321 | ||||||||||
Cash flows from investing activities: | ||||||||||||||
Acquisitions of land and buildings and improvements | (382,981 | ) | (405,790 | ) | (368,188 | ) | (222,366 | ) | ||||||
Additions of land and building and improvements | (23,578 | ) | (27,539 | ) | (18,949 | ) | (13,610 | ) | ||||||
Acquisitions of other assets | (794 | ) | — | (1,049 | ) | — | ||||||||
Acquisitions of other liabilities | 242 | — | ||||||||||||
Proceeds from sales of rental property, net | 89,407 | 43,454 | 17,688 | 79,701 | ||||||||||
Proceeds from insurance on involuntary conversion | — | 857 | ||||||||||||
Acquisition deposits, net | (695 | ) | 685 | 2,142 | (905 | ) | ||||||||
Acquisitions of deferred leasing intangibles | (74,851 | ) | (79,961 | ) | (76,188 | ) | (41,755 | ) | ||||||
Net cash used in investing activities | (393,250 | ) | (468,294 | ) | (444,544 | ) | (198,935 | ) | ||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from unsecured credit facility | 643,000 | 538,000 | 381,000 | 249,000 | ||||||||||
Repayment of unsecured credit facility | (819,000 | ) | (321,000 | ) | (352,500 | ) | (503,000 | ) | ||||||
Proceeds from unsecured term loans | 150,000 | — | — | 75,000 | ||||||||||
Proceeds from unsecured notes | 175,000 | — | — | 175,000 | ||||||||||
Repayment of mortgage notes | (1,379 | ) | (105,027 | ) | (961 | ) | (922 | ) | ||||||
Payment of loan fees and costs | (4,451 | ) | (1,185 | ) | (48 | ) | (1,073 | ) | ||||||
Proceeds from sales of common stock | 276,457 | 339,624 | ||||||||||||
Redemption of preferred stock | (70,000 | ) | — | |||||||||||
Offering costs | (3,191 | ) | (4,746 | ) | ||||||||||
Proceeds from sales of common stock, net | 384,913 | 174,802 | ||||||||||||
Dividends and distributions | (117,146 | ) | (103,655 | ) | (89,934 | ) | (75,742 | ) | ||||||
Repurchase and retirement of share-based compensation | (1,524 | ) | (969 | ) | (1,444 | ) | (1,524 | ) | ||||||
Net cash provided by financing activities | 227,766 | 341,042 | 321,026 | 91,541 | ||||||||||
Decrease in cash and cash equivalents and restricted cash | (16,874 | ) | (7,218 | ) | (12,947 | ) | (10,073 | ) | ||||||
Cash and cash equivalents and restricted cash—beginning of period | 28,129 | 21,805 | 22,542 | 28,129 | ||||||||||
Cash and cash equivalents and restricted cash—end of period | $ | 11,255 | $ | 14,587 | $ | 9,595 | $ | 18,056 | ||||||
Supplemental disclosure: | ||||||||||||||
Cash paid for interest, net of capitalized interest | $ | 31,875 | $ | 30,476 | $ | 21,965 | $ | 19,748 | ||||||
Supplemental schedule of non-cash investing and financing activities | ||||||||||||||
Issuance of units for acquisitions of land and building and improvements and deferred leasing intangibles | $ | — | $ | 18,558 | ||||||||||
Acquisitions of land and buildings and improvements | $ | (232 | ) | $ | (17,304 | ) | $ | (72 | ) | $ | — | |||
Acquisitions of deferred leasing intangibles | $ | (48 | ) | $ | (2,064 | ) | $ | (24 | ) | $ | — | |||
Partial disposal of building due to involuntary conversion of building | $ | — | $ | 363 | ||||||||||
Investing other receivables due to involuntary conversion of building | $ | — | $ | (363 | ) | |||||||||
Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities | $ | (1,475 | ) | $ | (13,201 | ) | $ | (7,351 | ) | $ | (1,642 | ) | ||
Additions to building and other capital improvements from non-cash compensation | $ | (20 | ) | $ | (24 | ) | $ | (40 | ) | $ | (9 | ) | ||
Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities | $ | 48 | $ | 30 | $ | (62 | ) | $ | (41 | ) | ||||
Reclassification of preferred stock called for redemption to liability | $ | 70,000 | $ | — | $ | — | $ | 70,000 | ||||||
Leases cumulative effect adjustment (Note 2) | $ | (214 | ) | $ | — | |||||||||
Dividends and distributions accrued | $ | 14,530 | $ | 11,516 | $ | 16,822 | $ | 15,396 |
Reconciliation of cash and cash equivalents and restricted cash (in thousands) | June 30, 2019 | December 31, 2018 | ||||||
Cash and cash equivalents | $ | 5,092 | $ | 7,968 | ||||
Restricted cash | 4,503 | 14,574 | ||||||
Total cash and cash equivalents and restricted cash | $ | 9,595 | $ | 22,542 |
Reconciliation of cash and cash equivalents and restricted cash (in thousands) | September 30, 2018 | December 31, 2017 | ||||||
Cash and cash equivalents | $ | 6,024 | $ | 24,562 | ||||
Restricted cash | 5,231 | 3,567 | ||||||
Total cash and cash equivalents and restricted cash | $ | 11,255 | $ | 28,129 |
Rental Property (in thousands) | June 30, 2019 | December 31, 2018 | ||||||
Land | $ | 397,193 | $ | 364,023 | ||||
Buildings, net of accumulated depreciation of $227,359 and $199,497, respectively | 2,330,493 | 2,082,781 | ||||||
Tenant improvements, net of accumulated depreciation of $20,796 and $36,450, respectively | 32,127 | 30,704 | ||||||
Building and land improvements, net of accumulated depreciation of $96,442 and $80,983, respectively | 192,473 | 168,229 | ||||||
Construction in progress | 19,653 | 3,949 | ||||||
Deferred leasing intangibles, net of accumulated amortization of $229,864 and $246,502, respectively | 381,133 | 342,015 | ||||||
Total rental property, net | $ | 3,353,072 | $ | 2,991,701 |
Rental Property (in thousands) | September 30, 2018 | December 31, 2017 | ||||||
Land | $ | 355,590 | $ | 321,560 | ||||
Buildings, net of accumulated depreciation of $190,538 and $160,281, respectively | 2,006,013 | 1,756,579 | ||||||
Tenant improvements, net of accumulated depreciation of $35,495 and $32,714, respectively | 30,577 | 30,138 | ||||||
Building and land improvements, net of accumulated depreciation of $75,754 and $56,062, respectively | 160,496 | 143,170 | ||||||
Construction in progress | 5,669 | 2,877 | ||||||
Deferred leasing intangibles, net of accumulated amortization of $237,892 and $280,642, respectively | 327,734 | 313,253 | ||||||
Total rental property, net | $ | 2,886,079 | $ | 2,567,577 |
Market (1) | Date Acquired | Square Feet | Buildings | Purchase Price (in thousands) | ||||||||
Cincinnati/Dayton, OH | January 24, 2019 | 176,000 | 1 | $ | 9,965 | |||||||
Pittsburgh, PA | February 21, 2019 | 455,000 | 1 | 28,676 | ||||||||
Boston, MA | February 21, 2019 | 349,870 | 1 | 26,483 | ||||||||
Minneapolis/St Paul, MN | February 28, 2019 | 248,816 | 1 | 21,955 | ||||||||
Greenville/Spartanburg, SC | March 7, 2019 | 331,845 | 1 | 24,536 | ||||||||
Philadelphia, PA | March 7, 2019 | 148,300 | 1 | 10,546 | ||||||||
Omaha/Council Bluffs, NE-IA | March 11, 2019 | 237,632 | 1 | 20,005 | ||||||||
Houston, TX | March 28, 2019 | 132,000 | 1 | 17,307 | ||||||||
Baltimore, MD | March 28, 2019 | 167,410 | 1 | 13,648 | ||||||||
Houston, TX | March 28, 2019 | 116,750 | 1 | 12,242 | ||||||||
Three months ended March 31, 2019 | 2,363,623 | 10 | 185,363 | |||||||||
Minneapolis/St Paul, MN | April 2, 2019 | 100,600 | 1 | 9,045 | ||||||||
West Michigan, MI | April 8, 2019 | 230,200 | 1 | 15,786 | ||||||||
Greensboro/Winston-Salem, NC | April 12, 2019 | 129,600 | 1 | 7,771 | ||||||||
Greenville/Spartanburg, SC | April 25, 2019 | 319,660 | 2 | 15,432 | ||||||||
Charleston/N Charleston, SC | April 29, 2019 | 500,355 | 1 | 40,522 | ||||||||
Houston, TX | April 29, 2019 | 128,136 | 1 | 13,649 | ||||||||
Richmond, VA | May 16, 2019 | 109,520 | 1 | 9,467 | ||||||||
Laredo, TX | June 6, 2019 | 213,982 | 1 | 18,972 | ||||||||
Baton Rouge, LA | June 18, 2019 | 252,800 | 2 | 20,041 | ||||||||
Philadelphia, PA | June 19, 2019 | 187,569 | 2 | 13,645 | ||||||||
Columbus, OH | June 28, 2019 | 857,390 | 1 | 95,828 | ||||||||
Three months ended June 30, 2019 | 3,029,812 | 14 | 260,158 | |||||||||
Six months ended June 30, 2019 | 5,393,435 | 24 | $ | 445,521 |
Market (1) | Date Acquired | Square Feet | Buildings | Purchase Price (in thousands) | ||||||||
Greenville/Spartanburg, SC | January 11, 2018 | 203,000 | 1 | $ | 10,755 | |||||||
Minneapolis/St Paul, MN | January 26, 2018 | 145,351 | 1 | 13,538 | ||||||||
Philadelphia, PA | February 1, 2018 | 278,582 | 1 | 18,277 | ||||||||
Houston, TX | February 22, 2018 | 242,225 | 2 | 22,478 | ||||||||
Greenville/Spartanburg, SC | March 30, 2018 | 222,710 | 1 | 13,773 | ||||||||
Three months ended March 31, 2018 | 1,091,868 | 6 | 78,821 | |||||||||
Chicago, IL | April 23, 2018 | 169,311 | 2 | 10,975 | ||||||||
Milwaukee/Madison, WI | April 26, 2018 | 53,680 | 1 | 4,316 | ||||||||
Pittsburgh, PA | April 30, 2018 | 175,000 | 1 | 15,380 | ||||||||
Detroit, MI | May 9, 2018 | 274,500 | 1 | 19,328 | ||||||||
Minneapolis/St Paul, MN | May 15, 2018 | 509,910 | 2 | 26,983 | ||||||||
Cincinnati/Dayton, OH | May 23, 2018 | 158,500 | 1 | 7,317 | ||||||||
Baton Rouge, LA | May 31, 2018 | 279,236 | 1 | 21,379 | ||||||||
Las Vegas, NV | June 12, 2018 | 122,472 | 1 | 17,920 | ||||||||
Greenville/Spartanburg, SC | June 15, 2018 | 131,805 | 1 | 5,621 | ||||||||
Denver, CO | June 18, 2018 | 64,750 | 1 | 7,044 | ||||||||
Cincinnati/Dayton, OH | June 25, 2018 | 465,136 | 1 | 16,421 | ||||||||
Charlotte, NC | June 29, 2018 | 69,200 | 1 | 5,446 | ||||||||
Houston, TX | June 29, 2018 | 252,662 | 1 | 27,170 | ||||||||
Three months ended June 30, 2018 | 2,726,162 | 15 | 185,300 | |||||||||
Knoxville, TN | July 10, 2018 | 106,000 | 1 | 6,477 | ||||||||
Pittsburgh, PA | August 2, 2018 | 265,568 | 1 | 19,186 | ||||||||
Raleigh/Durham, NC | August 2, 2018 | 365,000 | 1 | 21,067 | ||||||||
Detroit, MI | August 6, 2018 | 439,150 | 1 | 21,077 | ||||||||
Des Moines, IA | August 8, 2018 | 121,922 | 1 | 6,053 | ||||||||
McAllen/Edinburg/Pharr, TX | August 9, 2018 | 270,084 | 1 | 18,523 | ||||||||
Pittsburgh, PA | August 15, 2018 | 200,500 | 1 | 11,327 | ||||||||
Minneapolis/St Paul, MN | August 24, 2018 | 120,606 | 1 | 8,422 | ||||||||
Milwaukee/Madison, WI | September 28, 2018 | 100,800 | 1 | 7,484 | ||||||||
Milwaukee/Madison, WI | September 28, 2018 | 174,633 | 2 | 13,288 | ||||||||
Chicago, IL | September 28, 2018 | 105,637 | 1 | 6,368 | ||||||||
Indianapolis, IN | September 28, 2018 | 478,721 | 1 | 29,085 | ||||||||
Augusta/Richmond County, GA | September 28, 2018 | 203,726 | 1 | 9,379 | ||||||||
Charlotte, NC | September 28, 2018 | 301,000 | 1 | 16,807 | ||||||||
Three months ended September 30, 2018 | 3,253,347 | 15 | 194,543 | |||||||||
Nine months ended September 30, 2018 | 7,071,377 | 36 | $ | 458,664 |
Acquired Assets and Liabilities | Purchase Price (in thousands) | Weighted Average Amortization Period (years) of Intangibles at Acquisition | ||||
Land | $ | 38,581 | N/A | |||
Buildings | 292,663 | N/A | ||||
Tenant improvements | 4,054 | N/A | ||||
Building and land improvements | 30,930 | N/A | ||||
Construction in progress | 2,032 | N/A | ||||
Other assets | 1,049 | N/A | ||||
Deferred leasing intangibles - In-place leases | 45,457 | 10.7 | ||||
Deferred leasing intangibles - Tenant relationships | 19,431 | 13.2 | ||||
Deferred leasing intangibles - Above market leases | 13,485 | 14.3 | ||||
Deferred leasing intangibles - Below market leases | (2,161 | ) | 7.3 | |||
Total purchase price | $ | 445,521 |
Acquired Assets and Liabilities | Purchase Price (in thousands) | Weighted Average Amortization Period (years) of Intangibles at Acquisition | ||||
Land | $ | 39,340 | N/A | |||
Buildings | 317,293 | N/A | ||||
Tenant improvements | 4,849 | N/A | ||||
Building and land improvements | 21,731 | N/A | ||||
Deferred leasing intangibles - In-place leases | 52,276 | 8.7 | ||||
Deferred leasing intangibles - Tenant relationships | 21,861 | 11.8 | ||||
Deferred leasing intangibles - Above market leases | 4,062 | 8.2 | ||||
Deferred leasing intangibles - Below market leases | (3,122 | ) | 6.7 | |||
Deferred leasing intangibles - Above market ground leases | (178 | ) | 48.1 | |||
Other assets | 794 | N/A | ||||
Other liabilities | (242 | ) | N/A | |||
Total purchase price | $ | 458,664 |
Results of Operations (in thousands) | Three months ended June 30, 2019 | Six months ended June 30, 2019 | ||||||
Total revenue | $ | 5,497 | $ | 6,691 | ||||
Net income | $ | 957 | $ | 812 |
Results of Operations (in thousands) | Three months ended September 30, 2018 | Nine months ended September 30, 2018 | ||||||
Total revenue | $ | 7,122 | $ | 11,156 | ||||
Net income | $ | 1,556 | $ | 1,642 |
Market (1) | Buildings | Event or Change in Circumstance Leading to Impairment Evaluation(2) | Valuation technique utilized to estimate fair value | Fair Value(3) | Loss on Impairments | |||||||||
(in thousands) | ||||||||||||||
Buena Vista, VA(4) | 1 | Change in estimated hold period | (5) | Discounted cash flows | (6) | |||||||||
Sergeant Bluff, IA(4) | 1 | Change in estimated hold period | (5) | Discounted cash flows | (6) | |||||||||
Three months ended March 31, 2018 | $ | 3,176 | $ | 2,934 | ||||||||||
Nine months ended September 30, 2018 | $ | 3,176 | $ | 2,934 |
Market(1) | Buildings | Event or Change in Circumstance Leading to Impairment Evaluation(2) | Valuation technique utilized to estimate fair value | Fair Value(3) | Loss on Impairments | |||||||||
(in thousands) | ||||||||||||||
Rapid City, SD | 1 | Change in estimated hold period | Discounted cash flows | (4) | ||||||||||
Three months ended March 31, 2019 | $ | 4,373 | $ | 5,344 | ||||||||||
Six months ended June 30, 2019 | $ | 4,373 | $ | 5,344 |
(1) | As defined by CoStar. If the building is located outside of a CoStar |
(2) | The Company tested the asset group for impairment utilizing a probability weighted recovery analysis of certain scenarios, and it was determined that the carrying value of the property and intangibles were not recoverable from the estimated future undiscounted cash flows. |
(3) | The estimated fair value of the |
(4) |
Level 3 inputs used to determine fair value for the property impaired |
September 30, 2018 | December 31, 2017 | June 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Deferred Leasing Intangibles (in thousands) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||||||||
Above market leases | $ | 70,454 | $ | (31,663 | ) | $ | 38,791 | $ | 78,558 | $ | (36,810 | ) | $ | 41,748 | $ | 83,136 | $ | (31,731 | ) | $ | 51,405 | $ | 73,122 | $ | (31,059 | ) | $ | 42,063 | ||||||||||||||||||||
Other intangible lease assets | 495,172 | (206,229 | ) | 288,943 | 515,337 | (243,832 | ) | 271,505 | 527,861 | (198,133 | ) | 329,728 | 515,395 | (215,443 | ) | 299,952 | ||||||||||||||||||||||||||||||||
Total deferred leasing intangible assets | $ | 565,626 | $ | (237,892 | ) | $ | 327,734 | $ | 593,895 | $ | (280,642 | ) | $ | 313,253 | $ | 610,997 | $ | (229,864 | ) | $ | 381,133 | $ | 588,517 | $ | (246,502 | ) | $ | 342,015 | ||||||||||||||||||||
Below market leases | $ | 33,751 | $ | (13,043 | ) | $ | 20,708 | $ | 34,776 | $ | (13,555 | ) | $ | 21,221 | $ | 31,194 | $ | (10,854 | ) | $ | 20,340 | $ | 34,331 | $ | (12,764 | ) | $ | 21,567 | ||||||||||||||||||||
Total deferred leasing intangible liabilities | $ | 33,751 | $ | (13,043 | ) | $ | 20,708 | $ | 34,776 | $ | (13,555 | ) | $ | 21,221 | $ | 31,194 | $ | (10,854 | ) | $ | 20,340 | $ | 34,331 | $ | (12,764 | ) | $ | 21,567 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
Deferred Leasing Intangibles Amortization (in thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net decrease to rental income related to above and below market lease amortization | $ | 1,146 | $ | 849 | $ | 2,113 | $ | 2,056 | ||||||||
Amortization expense related to other intangible lease assets | $ | 17,899 | $ | 18,237 | $ | 34,713 | $ | 36,337 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
Deferred Leasing Intangibles Amortization (in thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net decrease to rental income related to above and below market lease amortization | $ | 1,150 | $ | 1,318 | $ | 3,206 | $ | 3,873 | ||||||||
Amortization expense related to other intangible lease assets | $ | 20,361 | $ | 17,934 | $ | 56,698 | $ | 53,747 |
Year | Amortization Expense Related to Other Intangible Lease Assets (in thousands) | Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands) | ||||||
Remainder of 2019 | $ | 33,534 | $ | 2,305 | ||||
2020 | $ | 57,911 | $ | 4,292 | ||||
2021 | $ | 47,013 | $ | 2,986 | ||||
2022 | $ | 38,654 | $ | 2,176 | ||||
2023 | $ | 32,001 | $ | 2,171 |
Year | Amortization Expense Related to Other Intangible Lease Assets (in thousands) | Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands) | ||||||
Remainder of 2018 | $ | 17,263 | $ | 927 | ||||
2019 | $ | 57,841 | $ | 3,926 | ||||
2020 | $ | 47,750 | $ | 3,546 | ||||
2021 | $ | 37,229 | $ | 2,163 | ||||
2022 | $ | 29,690 | $ | 1,154 |
Loan | Principal Outstanding as of June 30, 2019 (in thousands) | Principal Outstanding as of December 31, 2018 (in thousands) | Interest Rate (1)(2) | Maturity Date | Prepayment Terms (3) | ||||||||||
Unsecured credit facility: | |||||||||||||||
Unsecured Credit Facility (4) | $ | 129,000 | $ | 100,500 | L + 0.90% | Jan-15-2023 | i | ||||||||
Total unsecured credit facility | 129,000 | 100,500 | |||||||||||||
Unsecured term loans: | |||||||||||||||
Unsecured Term Loan C | 150,000 | 150,000 | 2.39 | % | Sep-29-2020 | i | |||||||||
Unsecured Term Loan B | 150,000 | 150,000 | 3.05 | % | Mar-21-2021 | i | |||||||||
Unsecured Term Loan A | 150,000 | 150,000 | 2.70 | % | Mar-31-2022 | i | |||||||||
Unsecured Term Loan D | 150,000 | 150,000 | 2.85 | % | Jan-04-2023 | i | |||||||||
Unsecured Term Loan E (5) | — | — | 3.92 | % | Jan-15-2024 | i | |||||||||
Total unsecured term loans | 600,000 | 600,000 | |||||||||||||
Less: Total unamortized deferred financing fees and debt issuance costs | (3,121 | ) | (3,640 | ) | |||||||||||
Total carrying value unsecured term loans, net | 596,879 | 596,360 | |||||||||||||
Unsecured notes: | |||||||||||||||
Series F Unsecured Notes | 100,000 | 100,000 | 3.98 | % | Jan-05-2023 | ii | |||||||||
Series A Unsecured Notes | 50,000 | 50,000 | 4.98 | % | Oct-1-2024 | ii | |||||||||
Series D Unsecured Notes | 100,000 | 100,000 | 4.32 | % | Feb-20-2025 | ii | |||||||||
Series G Unsecured Notes | 75,000 | 75,000 | 4.10 | % | Jun-13-2025 | ii | |||||||||
Series B Unsecured Notes | 50,000 | 50,000 | 4.98 | % | Jul-1-2026 | ii | |||||||||
Series C Unsecured Notes | 80,000 | 80,000 | 4.42 | % | Dec-30-2026 | ii | |||||||||
Series E Unsecured Notes | 20,000 | 20,000 | 4.42 | % | Feb-20-2027 | ii | |||||||||
Series H Unsecured Notes | 100,000 | 100,000 | 4.27 | % | Jun-13-2028 | ii | |||||||||
Total unsecured notes | 575,000 | 575,000 | |||||||||||||
Less: Total unamortized deferred financing fees and debt issuance costs | (2,316 | ) | (2,512 | ) | |||||||||||
Total carrying value unsecured notes, net | 572,684 | 572,488 | |||||||||||||
Mortgage notes (secured debt): | |||||||||||||||
Wells Fargo Bank, National Association CMBS Loan | 52,312 | 53,216 | 4.31 | % | Dec-1-2022 | iii | |||||||||
Thrivent Financial for Lutherans | 3,738 | 3,795 | 4.78 | % | Dec-15-2023 | iv | |||||||||
Total mortgage notes | 56,050 | 57,011 | |||||||||||||
Add: Total unamortized fair market value premiums | 45 | 50 | |||||||||||||
Less: Total unamortized deferred financing fees and debt issuance costs | (436 | ) | (501 | ) | |||||||||||
Total carrying value mortgage notes, net | 55,659 | 56,560 | |||||||||||||
Total / weighted average interest rate (6) | $ | 1,354,222 | $ | 1,325,908 | 3.55 | % |
Loan | Principal Outstanding as of September 30, 2018 (in thousands) | Principal Outstanding as of December 31, 2017 (in thousands) | Interest Rate (1) | Maturity Date | Prepayment Terms (2) | ||||||||||
Unsecured credit facility: | |||||||||||||||
Unsecured Credit Facility (3) | $ | 95,000 | $ | 271,000 | L + 1.05% | Jan-15-2023 | i | ||||||||
Total unsecured credit facility | 95,000 | 271,000 | |||||||||||||
Unsecured term loans: | |||||||||||||||
Unsecured Term Loan C | 150,000 | 150,000 | L + 1.30% | Sep-29-2020 | i | ||||||||||
Unsecured Term Loan B | 150,000 | 150,000 | L + 1.30% | Mar-21-2021 | i | ||||||||||
Unsecured Term Loan A | 150,000 | 150,000 | L + 1.30% | Mar-31-2022 | i | ||||||||||
Unsecured Term Loan D | 150,000 | — | L + 1.30% | Jan-04-2023 | i | ||||||||||
Unsecured Term Loan E (4) | — | — | L + 1.20% | Jan-15-2024 | i | ||||||||||
Total unsecured term loans | 600,000 | 450,000 | |||||||||||||
Less: Total unamortized deferred financing fees and debt issuance costs | (3,915 | ) | (3,735 | ) | |||||||||||
Total carrying value unsecured term loans, net | 596,085 | 446,265 | |||||||||||||
Unsecured notes: | |||||||||||||||
Series F Unsecured Notes | 100,000 | 100,000 | 3.98 | % | Jan-05-2023 | ii | |||||||||
Series A Unsecured Notes | 50,000 | 50,000 | 4.98 | % | Oct-1-2024 | ii | |||||||||
Series D Unsecured Notes | 100,000 | 100,000 | �� | 4.32 | % | Feb-20-2025 | ii | ||||||||
Series G Unsecured Notes | 75,000 | — | 4.10 | % | Jun-13-2025 | ii | |||||||||
Series B Unsecured Notes | 50,000 | 50,000 | 4.98 | % | Jul-1-2026 | ii | |||||||||
Series C Unsecured Notes | 80,000 | 80,000 | 4.42 | % | Dec-30-2026 | ii | |||||||||
Series E Unsecured Notes | 20,000 | 20,000 | 4.42 | % | Feb-20-2027 | ii | |||||||||
Series H Unsecured Notes | 100,000 | — | 4.27 | % | Jun-13-2028 | ii | |||||||||
Total unsecured notes | 575,000 | 400,000 | |||||||||||||
Less: Total unamortized deferred financing fees and debt issuance costs | (2,611 | ) | (1,766 | ) | |||||||||||
Total carrying value unsecured notes, net | 572,389 | 398,234 | |||||||||||||
Mortgage notes (secured debt): | |||||||||||||||
Wells Fargo Bank, National Association CMBS Loan | 53,652 | 54,949 | 4.31 | % | Dec-1-2022 | iii | |||||||||
Thrivent Financial for Lutherans | 3,824 | 3,906 | 4.78 | % | Dec-15-2023 | iv | |||||||||
Total mortgage notes | 57,476 | 58,855 | |||||||||||||
Add: Total unamortized fair market value premiums | 52 | 61 | |||||||||||||
Less: Total unamortized deferred financing fees and debt issuance costs | (535 | ) | (634 | ) | |||||||||||
Total carrying value mortgage notes, net | 56,993 | 58,282 | |||||||||||||
Total / weighted average interest rate (5) | $ | 1,320,467 | $ | 1,173,781 | 3.69 | % |
(1) | Interest rate as of |
(2) | As of June 30, 2019, one-month LIBOR for the unsecured term loans A, B, C, D, and E was swapped to a fixed rate of 1.70%, 2.05%, 1.39%, 1.85%, and 2.92%, respectively. |
(3) | Prepayment terms consist of (i) pre-payable with no penalty; (ii) pre-payable with penalty; (iii) pre-payable without penalty three months prior to the maturity date, however can be |
The capacity of the unsecured credit facility is $500.0 million. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately |
The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $600.0 million of debt, |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
Costs Included in Interest Expense (in thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Amortization of deferred financing fees and debt issuance costs and fair market value premiums | $ | 617 | $ | 546 | $ | 1,698 | $ | 1,553 | ||||||||
Facility fees and unused fees | $ | 275 | $ | 286 | $ | 928 | $ | 839 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
Costs Included in Interest Expense (in thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Amortization of deferred financing fees and debt issuance costs and fair market value premiums | $ | 618 | $ | 547 | $ | 1,236 | $ | 1,081 | ||||||||
Facility, unused, and other fees | $ | 387 | $ | 314 | $ | 770 | $ | 653 |
June 30, 2019 | December 31, 2018 | |||||||||||||||
Principal Outstanding | Fair Value | Principal Outstanding | Fair Value | |||||||||||||
Unsecured credit facility | $ | 129,000 | $ | 129,000 | $ | 100,500 | $ | 100,500 | ||||||||
Unsecured term loans | 600,000 | 600,000 | 600,000 | 600,000 | ||||||||||||
Unsecured notes | 575,000 | 611,132 | 575,000 | 585,292 | ||||||||||||
Mortgage notes | 56,050 | 57,049 | 57,011 | 57,289 | ||||||||||||
Total principal amount | 1,360,050 | $ | 1,397,181 | 1,332,511 | $ | 1,343,081 | ||||||||||
Add: Total unamortized fair market value premiums | 45 | 50 | ||||||||||||||
Less: Total unamortized deferred financing fees and debt issuance costs | (5,873 | ) | (6,653 | ) | ||||||||||||
Total carrying value | $ | 1,354,222 | $ | 1,325,908 |
September 30, 2018 | December 31, 2017 | |||||||||||||||
Principal Outstanding | Fair Value | Principal Outstanding | Fair Value | |||||||||||||
Unsecured credit facility | $ | 95,000 | $ | 95,000 | $ | 271,000 | $ | 271,528 | ||||||||
Unsecured term loans | 600,000 | 607,663 | 450,000 | 451,463 | ||||||||||||
Unsecured notes | 575,000 | 569,493 | 400,000 | 415,599 | ||||||||||||
Mortgage notes | 57,476 | 57,608 | 58,855 | 59,769 | ||||||||||||
Total principal amount | 1,327,476 | $ | 1,329,764 | 1,179,855 | $ | 1,198,359 | ||||||||||
Add: Total unamortized fair market value premiums | 52 | 61 | ||||||||||||||
Less: Total unamortized deferred financing fees and debt issuance costs | (7,061 | ) | (6,135 | ) | ||||||||||||
Total carrying value | $ | 1,320,467 | $ | 1,173,781 |
Interest Rate Derivative Counterparty | Trade Date | Effective Date | Notional Amount (in thousands) | Fair Value (in thousands) | Pay Fixed Interest Rate | Receive Variable Interest Rate | Maturity Date | ||||||||||||
Regions Bank | Mar-01-2013 | Mar-01-2013 | $ | 25,000 | $ | 103 | 1.3300 | % | One-month L | Feb-14-2020 | |||||||||
Capital One, N.A. | Jun-13-2013 | Jul-01-2013 | $ | 50,000 | $ | 96 | 1.6810 | % | One-month L | Feb-14-2020 | |||||||||
Capital One, N.A. | Jun-13-2013 | Aug-01-2013 | $ | 25,000 | $ | 44 | 1.7030 | % | One-month L | Feb-14-2020 | |||||||||
Regions Bank | Sep-30-2013 | Feb-03-2014 | $ | 25,000 | $ | (1 | ) | 1.9925 | % | One-month L | Feb-14-2020 | ||||||||
The Toronto-Dominion Bank | Oct-14-2015 | Sep-29-2016 | $ | 25,000 | $ | 125 | 1.3830 | % | One-month L | Sep-29-2020 | |||||||||
PNC Bank, N.A. | Oct-14-2015 | Sep-29-2016 | $ | 50,000 | $ | 246 | 1.3906 | % | One-month L | Sep-29-2020 | |||||||||
Regions Bank | Oct-14-2015 | Sep-29-2016 | $ | 35,000 | $ | 174 | 1.3858 | % | One-month L | Sep-29-2020 | |||||||||
U.S. Bank, N.A. | Oct-14-2015 | Sep-29-2016 | $ | 25,000 | $ | 122 | 1.3950 | % | One-month L | Sep-29-2020 | |||||||||
Capital One, N.A. | Oct-14-2015 | Sep-29-2016 | $ | 15,000 | $ | 73 | 1.3950 | % | One-month L | Sep-29-2020 | |||||||||
Royal Bank of Canada | Jan-08-2015 | Mar-20-2015 | $ | 25,000 | $ | (6 | ) | 1.7090 | % | One-month L | Mar-21-2021 | ||||||||
The Toronto-Dominion Bank | Jan-08-2015 | Mar-20-2015 | $ | 25,000 | $ | (7 | ) | 1.7105 | % | One-month L | Mar-21-2021 | ||||||||
The Toronto-Dominion Bank | Jan-08-2015 | Sep-10-2017 | $ | 100,000 | $ | (907 | ) | 2.2255 | % | One-month L | Mar-21-2021 | ||||||||
Wells Fargo, N.A. | Jan-08-2015 | Mar-20-2015 | $ | 25,000 | $ | (145 | ) | 1.8280 | % | One-month L | Mar-31-2022 | ||||||||
The Toronto-Dominion Bank | Jan-08-2015 | Feb-14-2020 | $ | 25,000 | $ | (496 | ) | 2.4535 | % | One-month L | Mar-31-2022 | ||||||||
Regions Bank | Jan-08-2015 | Feb-14-2020 | $ | 50,000 | $ | (1,015 | ) | 2.4750 | % | One-month L | Mar-31-2022 | ||||||||
Capital One, N.A. | Jan-08-2015 | Feb-14-2020 | $ | 50,000 | $ | (1,072 | ) | 2.5300 | % | One-month L | Mar-31-2022 | ||||||||
The Toronto-Dominion Bank | Jul-20-2017 | Oct-30-2017 | $ | 25,000 | $ | (210 | ) | 1.8485 | % | One-month L | Jan-04-2023 | ||||||||
Royal Bank of Canada | Jul-20-2017 | Oct-30-2017 | $ | 25,000 | $ | (211 | ) | 1.8505 | % | One-month L | Jan-04-2023 | ||||||||
Wells Fargo, N.A. | Jul-20-2017 | Oct-30-2017 | $ | 25,000 | $ | (211 | ) | 1.8505 | % | One-month L | Jan-04-2023 | ||||||||
PNC Bank, N.A. | Jul-20-2017 | Oct-30-2017 | $ | 25,000 | $ | (209 | ) | 1.8485 | % | One-month L | Jan-04-2023 | ||||||||
PNC Bank, N.A. | Jul-20-2017 | Oct-30-2017 | $ | 50,000 | $ | (417 | ) | 1.8475 | % | One-month L | Jan-04-2023 | ||||||||
The Toronto-Dominion Bank | Jul-24-2018 | Jul-26-2019 | $ | 50,000 | $ | (2,828 | ) | 2.9180 | % | One-month L | Jan-12-2024 | ||||||||
PNC Bank, N.A. | Jul-24-2018 | Jul-26-2019 | $ | 50,000 | $ | (2,830 | ) | 2.9190 | % | One-month L | Jan-12-2024 | ||||||||
Bank of Montreal | Jul-24-2018 | Jul-26-2019 | $ | 50,000 | $ | (2,829 | ) | 2.9190 | % | One-month L | Jan-12-2024 | ||||||||
U.S. Bank, N.A. | Jul-24-2018 | Jul-26-2019 | $ | 25,000 | $ | (1,415 | ) | 2.9190 | % | One-month L | Jan-12-2024 | ||||||||
Wells Fargo, N.A. | May-02-2019 | Jul-15-2020 | $ | 50,000 | $ | (1,351 | ) | 2.2460 | % | One-month L | Jan-15-2025 | ||||||||
U.S. Bank, N.A. | May-02-2019 | Jul-15-2020 | $ | 50,000 | $ | (1,349 | ) | 2.2459 | % | One-month L | Jan-15-2025 | ||||||||
Regions Bank | May-02-2019 | Jul-15-2020 | $ | 50,000 | $ | (1,356 | ) | 2.2459 | % | One-month L | Jan-15-2025 |
Interest Rate Derivative Counterparty | Trade Date | Effective Date | Notional Amount (in thousands) | Fair Value (in thousands) | Pay Fixed Interest Rate | Receive Variable Interest Rate | Maturity Date | ||||||||||||
Regions Bank | Mar-01-2013 | Mar-01-2013 | $ | 25,000 | $ | 471 | 1.3300 | % | One-month L | Feb-14-2020 | |||||||||
Capital One, N.A. | Jun-13-2013 | Jul-01-2013 | $ | 50,000 | $ | 703 | 1.6810 | % | One-month L | Feb-14-2020 | |||||||||
Capital One, N.A. | Jun-13-2013 | Aug-01-2013 | $ | 25,000 | $ | 344 | 1.7030 | % | One-month L | Feb-14-2020 | |||||||||
Regions Bank | Sep-30-2013 | Feb-03-2014 | $ | 25,000 | $ | 245 | 1.9925 | % | One-month L | Feb-14-2020 | |||||||||
The Toronto-Dominion Bank | Oct-14-2015 | Sep-29-2016 | $ | 25,000 | $ | 700 | 1.3830 | % | One-month L | Sep-29-2020 | |||||||||
PNC Bank, N.A. | Oct-14-2015 | Sep-29-2016 | $ | 50,000 | $ | 1,391 | 1.3906 | % | One-month L | Sep-29-2020 | |||||||||
Regions Bank | Oct-14-2015 | Sep-29-2016 | $ | 35,000 | $ | 978 | 1.3858 | % | One-month L | Sep-29-2020 | |||||||||
U.S. Bank, N.A. | Oct-14-2015 | Sep-29-2016 | $ | 25,000 | $ | 695 | 1.3950 | % | One-month L | Sep-29-2020 | |||||||||
Capital One, N.A. | Oct-14-2015 | Sep-29-2016 | $ | 15,000 | $ | 417 | 1.3950 | % | One-month L | Sep-29-2020 | |||||||||
Royal Bank of Canada | Jan-08-2015 | Mar-20-2015 | $ | 25,000 | $ | 684 | 1.7090 | % | One-month L | Mar-21-2021 | |||||||||
The Toronto-Dominion Bank | Jan-08-2015 | Mar-20-2015 | $ | 25,000 | $ | 682 | 1.7105 | % | One-month L | Mar-21-2021 | |||||||||
The Toronto-Dominion Bank | Jan-08-2015 | Sep-10-2017 | $ | 100,000 | $ | 1,488 | 2.2255 | % | One-month L | Mar-21-2021 | |||||||||
Wells Fargo, N.A. | Jan-08-2015 | Mar-20-2015 | $ | 25,000 | $ | 886 | 1.8280 | % | One-month L | Mar-31-2022 | |||||||||
The Toronto-Dominion Bank | Jan-08-2015 | Feb-14-2020 | $ | 25,000 | $ | 271 | 2.4535 | % | One-month L | Mar-31-2022 | |||||||||
Regions Bank | Jan-08-2015 | Feb-14-2020 | $ | 50,000 | $ | 520 | 2.4750 | % | One-month L | Mar-31-2022 | |||||||||
Capital One, N.A. | Jan-08-2015 | Feb-14-2020 | $ | 50,000 | $ | 467 | 2.5300 | % | One-month L | Mar-31-2022 | |||||||||
The Toronto-Dominion Bank | Jul-20-2017 | Oct-30-2017 | $ | 25,000 | $ | 1,054 | 1.8485 | % | One-month L | Jan-04-2023 | |||||||||
Royal Bank of Canada | Jul-20-2017 | Oct-30-2017 | $ | 25,000 | $ | 1,054 | 1.8505 | % | One-month L | Jan-04-2023 | |||||||||
Wells Fargo, N.A. | Jul-20-2017 | Oct-30-2017 | $ | 25,000 | $ | 1,055 | 1.8505 | % | One-month L | Jan-04-2023 | |||||||||
PNC Bank, N.A. | Jul-20-2017 | Oct-30-2017 | $ | 25,000 | $ | 1,052 | 1.8485 | % | One-month L | Jan-04-2023 | |||||||||
PNC Bank, N.A. | Jul-20-2017 | Oct-30-2017 | $ | 50,000 | $ | 2,105 | 1.8475 | % | One-month L | Jan-04-2023 | |||||||||
The Toronto-Dominion Bank | Jul-24-2018 | Jul-26-2019 | $ | 50,000 | $ | 111 | 2.9180 | % | One-month L | Jan-12-2024 | |||||||||
PNC Bank, N.A. | Jul-24-2018 | Jul-26-2019 | $ | 50,000 | $ | 106 | 2.9190 | % | One-month L | Jan-12-2024 | |||||||||
Bank of Montreal | Jul-24-2018 | Jul-26-2019 | $ | 50,000 | $ | 113 | 2.9190 | % | One-month L | Jan-12-2024 | |||||||||
U.S. Bank, N.A. | Jul-24-2018 | Jul-26-2019 | $ | 25,000 | $ | 57 | 2.9190 | % | One-month L | Jan-12-2024 |
Balance Sheet Line Item (in thousands) | Notional Amount June 30, 2019 | Fair Value June 30, 2019 | Notional Amount December 31, 2018 | Fair Value December 31, 2018 | ||||||||||||
Interest rate swaps-Asset | $ | 250,000 | $ | 983 | $ | 600,000 | $ | 9,151 | ||||||||
Interest rate swaps-Liability | $ | 800,000 | $ | (18,865 | ) | $ | 300,000 | $ | (4,011 | ) |
Balance Sheet Line Item (in thousands) | Notional Amount September 30, 2018 | Fair Value September 30, 2018 | Notional Amount December 31, 2017 | Fair Value December 31, 2017 | ||||||||||||
Interest rate swaps-Asset | $ | 900,000 | $ | 17,649 | $ | 475,000 | $ | 6,079 | ||||||||
Interest rate swaps-Liability | $ | — | $ | — | $ | 250,000 | $ | (1,217 | ) |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
Effect of Cash Flow Hedge Accounting (in thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Income (loss) recognized in accumulated other comprehensive income (loss) on interest rate swaps | $ | (14,946 | ) | $ | 3,284 | $ | (20,802 | ) | $ | 10,777 | ||||||
Income reclassified from accumulated other comprehensive income (loss) into income as interest expense | $ | 1,082 | $ | 256 | $ | 2,204 | $ | 26 | ||||||||
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded | $ | 12,193 | $ | 11,512 | $ | 25,027 | $ | 22,904 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
Effect of Cash Flow Hedge Accounting (in thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Income (loss) recognized in accumulated other comprehensive income on interest rate swaps | $ | 2,572 | $ | 316 | $ | 13,349 | $ | (1,126 | ) | |||||||
Income (loss) reclassified from accumulated other comprehensive income into income (loss) as interest expense | $ | 512 | $ | (282 | ) | $ | 538 | $ | (1,426 | ) | ||||||
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded | $ | 12,698 | $ | 10,446 | $ | 35,602 | $ | 31,557 |
Fair Value Measurements as of September 30, 2018 Using | Fair Value Measurements as of June 30, 2019 Using | |||||||||||||||||||||||||||||||
Balance Sheet Line Item (in thousands) | Fair Value September 30, 2018 | Level 1 | Level 2 | Level 3 | Fair Value June 30, 2019 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Interest rate swaps-Asset | $ | 17,649 | $ | — | $ | 17,649 | $ | — | $ | 983 | $ | — | $ | 983 | $ | — | ||||||||||||||||
Interest rate swaps-Liability | $ | — | $ | — | $ | — | $ | — | $ | (18,865 | ) | $ | — | $ | (18,865 | ) | $ | — |
Fair Value Measurements as of December 31, 2018 Using | ||||||||||||||||
Balance Sheet Line Item (in thousands) | Fair Value December 31, 2018 | Level 1 | Level 2 | Level 3 | ||||||||||||
Interest rate swaps-Asset | $ | 9,151 | $ | — | $ | 9,151 | $ | — | ||||||||
Interest rate swaps-Liability | $ | (4,011 | ) | $ | — | $ | (4,011 | ) | $ | — |
Fair Value Measurements as of December 31, 2017 Using | ||||||||||||||||
Balance Sheet Line Item (in thousands) | Fair Value December 31, 2017 | Level 1 | Level 2 | Level 3 | ||||||||||||
Interest rate swaps-Asset | $ | 6,079 | $ | — | $ | 6,079 | $ | — | ||||||||
Interest rate swaps-Liability | $ | (1,217 | ) | $ | — | $ | (1,217 | ) | $ | — |
Preferred Stock Issuances | Issuance Date | Number of Shares | Liquidation Value Per Share | Interest Rate | ||||||||
6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock") | March 17, 2016 | 3,000,000 | $ | 25.00 | 6.875 | % |
Quarter Ended 2019 | Declaration Date | Series C Preferred Stock Per Share | Payment Date | |||||
June 30 | April 9, 2019 | $ | 0.4296875 | July 1, 2019 | ||||
March 31 | January 10, 2019 | 0.4296875 | April 1, 2019 | |||||
Total | $ | 0.8593750 |
Quarter Ended 2018 | Declaration Date | Series B Preferred Stock Per Share | Series C Preferred Stock Per Share | Payment Date | ||||||||
December 31 | October 10, 2018 | $ | — | $ | 0.4296875 | December 31, 2018 | ||||||
September 30 | July 11, 2018 | 0.0460069 | (1) | 0.4296875 | October 1, 2018 | |||||||
June 30 | April 10, 2018 | 0.4140625 | 0.4296875 | July 2, 2018 | ||||||||
March 31 | February 14, 2018 | 0.4140625 | 0.4296875 | April 2, 2018 | ||||||||
Total | $ | 0.8741319 | $ | 1.7187500 |
(1) | On June 11, 2018, the Company gave notice to redeem all 2,800,000 issued and outstanding shares of the 6.625% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”).
On Common Stock On April 30, 2019, the Company filed Articles of Amendment to its Articles of Amendment and Restatement to increase the number of authorized shares of the Company’s common stock from 150,000,000 to 300,000,000. The following table
17 The
On April 1, 2019, the Company completed an underwritten public offering of 7,475,000 shares of common stock (including 975,000 shares issued pursuant to the underwriters’ option to purchase additional shares) at a price to the underwriters of $28.72 per share. The offering closed on April 4, 2019 and the Company received net proceeds of approximately $214.7 million. The
On 18 Restricted Restricted shares of common stock granted on January
The unrecognized compensation expense associated with the Company’s restricted shares of common stock at The following table summarizes the fair value at vesting for the restricted shares of common stock that vested during the three and
7. Noncontrolling Interest The following table
LTIP Units LTIP units granted on January 19 The fair value of the LTIP units at the date of grant was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the LTIP units are based on Level 3 inputs and are non-recurring fair value measurements. The following table
The following table summarizes activity related to the Company’s unvested LTIP units for the
The unrecognized compensation expense associated with the Company’s LTIP units at The following table summarizes the fair value at vesting for the LTIP units that vested during the three and
8. Equity Incentive Plan On January The fair value of the performance units at the date of grant was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units are based on Level 3 inputs and are non-recurring fair value measurements. The performance unit equity compensation expense is recognized
20
On The unrecognized compensation expense associated with the Non-cash Compensation Expense The following table summarizes the amount recorded in general and administrative expenses in the accompanying Consolidated Statements of Operations for the amortization of restricted shares of common stock, LTIP units, performance units,
9. Leases Lessor Leases The Company has operating leases in which it is the lessor for its rental property. Certain leases contain variable lease payments based upon changes in the Consumer Price Index (“CPI”). Certain leases contain options to renew or terminate the lease, and options for the lessee to purchase the rental property, all of which are predominately at the sole discretion of the lessee. The following table summarizes the components of rental income recognized during the three and six months ended June 30, 2019 included in the accompanying Consolidated Statements of Operations.
As of June 30, 2019, the Company had accrued rental income of approximately $37.4 million included in tenant accounts receivable on the accompanying Consolidated Balance Sheets. As of December 31, 2018, the Company had accrued rental income of approximately $32.4 million, net of allowance for doubtful accounts of approximately $0.8 million, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets. As of June 30, 2019 and December 31, 2018, the Company had approximately $18.4 million and $18.3 million, respectively, of total lease security deposits available in the form of existing letters of credit, which are not reflected on the accompanying Consolidated Balance Sheets. As of June 30, 2019 and December 31, 2018, the Company had approximately $0.7 million and $0.7 million, respectively, of lease security deposits available in cash, which are included in restricted cash on the accompanying Consolidated Balance Sheets. The Company’s remaining lease security deposits are commingled in cash and cash equivalents. These funds may be used to settle tenant accounts receivables in the event of a default under the related lease. As of June 30, 2019 and December 31, 2018, the Company’s total liability associated with these lease security deposits was approximately $9.0 million 21 and $8.4 million, respectively, and is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets. The Company estimates that billings for real estate taxes, which are the responsibility of certain tenants under the terms of their leases and are not reflected on the Company’s consolidated financial statements, was approximately $4.1 million, $8.0 million, $4.0 million and $7.1 million for the three and six months ended June 30, 2019 and 2018, respectively. These amounts would have been the maximum real estate tax expense of the Company, excluding any penalties or interest, had the tenants not met their contractual obligations for these periods. The following table summarizes the maturity of fixed lease payments under the Company’s leases as of June 30, 2019.
The following table summarizes the minimum contractual lease payments under the superseded leases standard, Topic 840, as of December 31, 2018.
Lessee Leases The Company has operating leases in which it is the lessee for ground leases and its corporate office lease. These leases have remaining lease terms of approximately 1.8 years to 47.5 years. Certain ground leases contain options to extend the leases for ten years to 20 years, all of which are reasonably certain to be exercised, and are included in the computation of the Company’s right-of-use assets and operating lease liabilities. The following table summarizes supplemental information related to operating lease right-of-use assets and operating lease liabilities recognized in the Company’s Consolidated Balance Sheets as of June 30, 2019.
The following table summarizes the operating lease cost recognized during the three and six months ended June 30, 2019 included in the Company’s Consolidated Statements of Operations.
The following table summarizes supplemental cash flow information related to operating leases recognized during the six months ended June 30, 2019 in the Company’s Consolidated Statements of Cash Flows.
22 The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office lease as of June 30, 2019.
The following table summarizes the minimum contractual lease payments under the superseded leases standard, Topic 840, as of December 31, 2018.
10. Earnings Per Share During the three and The following table
23 11. Commitments and Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance subject to deductible requirements. Management believes that the ultimate settlement of these actions will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. The Company has letters of credit of approximately On July 12, 2019, the Company entered into a $200.0 million unsecured term loan agreement. The new unsecured term loan bears a current interest rate of LIBOR plus a spread of 1.00% based on the Company’s debt rating, as defined in the loan agreement, and matures on January 12, 2025. On July 16, 2019, the Company entered into an interest rate swap with a total notional amount of $50.0 million, which in conjunction with the interest rate swaps entered into on May 2, 2019, fix LIBOR at 2.113575% on the new unsecured term loan. The interest rate swaps will become effective on July 15, 2020 and expire on January 15, 2025. 24 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion with the financial statements and related notes included elsewhere in Item 1 of this report and the audited financial statements and related notes thereto included in our most recent Annual Report on Form 10-K. As used herein, except where the context otherwise requires, “Company,” “we,” “our” and “us,” refer to STAG Industrial, Inc. and our consolidated subsidiaries and partnerships, including our operating partnership,STAG Industrial Operating Partnership, L.P. Forward-Looking Statements This report contains “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. Forward-looking statements in this report include, among others, statements about our future financial condition, results of operations, capitalization rates on future acquisitions, our business strategy and objectives, including our acquisition strategy, occupancy and leasing rates and trends, and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). Our forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by our forward-looking statements are reasonable, we can give no assurance that our plans, intentions, expectations, strategies or prospects will be attained or achieved and you should not place undue reliance on these forward‑looking statements. Furthermore, actual results may differ materially from those described in the forward‑looking statements and may be affected by a variety of risks and factors including, without limitation: the factors included in our Annual Report on Form 10-K for the year ended December 31, our ability to raise equity capital on attractive terms; the competitive environment in which we operate; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets; decreased rental rates or increased vacancy rates; potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants; acquisition risks, including our ability to identify and complete accretive acquisitions and/or failure of such acquisitions to perform in accordance with projections; the timing of acquisitions and dispositions; technological developments, particularly those affecting supply chains and logistics; potential natural disasters and other potentially catastrophic events such as acts of war and/or terrorism; international, national, regional and local economic conditions; the general level of interest rates and currencies; potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate and zoning laws or real estate investment trust (“REIT”) or corporate income tax laws, and potential increases in real property tax rates; 25 financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all; credit risk in the event of non-performance by the counterparties to the interest rate swaps and revolving and unfunded debt; lack of or insufficient amounts of insurance; our ability to maintain our qualification as a REIT; our ability to retain key personnel; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Certain Definitions In this report: We define “GAAP” as generally accepted accounting principles in the United States. We define “total annualized base rental revenue” as the contractual monthly base rent as of June 30, 2019 (which differs from rent calculated in accordance with GAAP) multiplied by 12. If a tenant is in a free rent period as of June 30, 2019, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12. We define “occupancy rate” as the percentage of total leasable square footage for which either revenue recognition has commenced in accordance with GAAP or the lease term has commenced as of the close of the reporting period, whichever occurs earlier. We define the “Value Add Portfolio” as properties that meet any of the following criteria: (i) less than 75% occupied as of the acquisition date; (ii) will be less than 75% occupied due to known move-outs within two years of the acquisition date; (iii) out of service with significant physical renovation of the asset; or (iv) development. We define “Stabilization” for properties under development or being redeveloped as the earlier of achieving 90% occupancy or 12 months after completion. With respect to properties acquired and immediately added to the Value Add Portfolio, (i) if acquired with less than 75% occupancy as of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy or 12 months from the acquisition date; or (ii) if acquired and will be less than 75% occupied due to known move-outs within two years of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy after the known move-outs have occurred or 12 months after the known move-outs have occurred. We define the “Operating Portfolio” as all warehouse and light manufacturing assets that were acquired stabilized or have achieved Stabilization. The Operating Portfolio excludes non-core flex/office assets and assets contained in the Value Add Portfolio. We define a “Comparable Lease” as a lease in the same space with a similar lease structure as compared to the previous in-place lease, excluding new leases for space that was not occupied under our ownership. We define “SL Rent Change” as the percentage change in the average monthly base rent over the term of the lease, calculated on a straight-line basis, of the lease commenced during the period compared to the Comparable Lease for assets included in the Operating Portfolio. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses, and this calculation excludes the impact of any holdover rent. 26 We define “Cash Rent Change” as the percentage change in the base rent of the lease commenced during the period compared to the base rent of the Comparable Lease for assets included in the Operating Portfolio. The calculation compares the first base rent payment due after the lease commencement date compared to the base rent of the last monthly payment due prior to the termination of the lease, excluding holdover rent. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses. We define a “New Lease” as any lease that is signed for an initial term equal to or greater than 12 months for any vacant space, including a lease signed by a new tenant or an existing tenant that is expanding into new (additional) space. We define “Renewal” Lease as a lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the same space as the current lease at lease expiration, (ii) a renewal of only a portion of the current space at lease expiration and (iii) an early renewal or workout, which ultimately does extend the original term for 12 months or more. Overview We are a REIT focused on the acquisition, ownership, and operation of single-tenant, industrial properties throughout the United States. We are a Maryland corporation and our common stock is publicly traded on the New York Stock Exchange under the symbol “STAG.” We are organized and conduct our operations to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, and generally are not subject to federal income tax to the extent we currently distribute our income to our stockholders and maintain our qualification as a REIT. We remain subject to state and local taxes on our income and property and to U.S. federal income and excise taxes on our undistributed income. Factors That May Influence Future Results of Operations Our ability to increase revenues or cash flow will depend in part on our (i) external growth, specifically acquisition activity, and (ii) internal growth, specifically occupancy and rental rates on our portfolio. A variety of other factors, including those noted below, also affect our future results of operations. Outlook The outlook for our business remains positive, albeit on a moderated basis in light of over rates. Several industrial specific trends contribute to the expected strong demand, including: the rise of e-commerce (as compared to the traditional retail store distribution model) and the concomitant demand by e-commerce industry participants for well-located, functional distribution space; the increasing attractiveness of the U.S. as a manufacturing and distribution location because of the size of the U.S. consumer market, an increase in overseas labor costs and the overall cost of supplying and shipping goods (i.e. the shortening and fattening of the supply chain); and the overall quality of the transportation infrastructure in the U.S. Conditions in Our Markets The buildings in our portfolio are located in markets throughout the United States. Positive or negative changes in economic or other conditions, new supply, adverse weather conditions and natural disasters, and other factors in these markets may affect our overall performance. Rental Income We receive income primarily in the form of rental income from the tenants who occupy our buildings. The amount of rental income generated by the buildings in our portfolio depends principally on occupancy and rental rates. As of Future economic downturns or regional downturns affecting our submarkets that impair our ability to renew or re-lease space and the ability of our tenants to fulfill their lease commitments, as in the case of tenant bankruptcies, could adversely affect our ability to maintain or increase rental rates at our buildings. Our ability to lease our properties and the attendant rental rate is dependent upon, among other things, (i) the overall economy, (ii) the supply/demand dynamic in our markets, (iii) the quality of our properties, including age, clear height, and configuration, and (iv) our tenants’ ability to meet their contractual obligations to us. The following table
Property Operating Expenses Our property operating expenses generally consist of utilities, real estate taxes, management fees, insurance, and site repair and maintenance costs. For the majority of our tenants, our property operating expenses are controlled, in part, by the triple net provisions in tenant leases. In our triple net leases, the tenant is responsible for all aspects of and costs related to the building and its operation during the lease term, including utilities, taxes, insurance and maintenance Scheduled Lease Expirations Our ability to re-lease space subject to expiring leases will impact our results of operations and is affected by economic and competitive conditions in our markets and by the desirability of our individual buildings. Leases that comprise approximately The following table
Portfolio Summary The following table
Portfolio Acquisitions The following table summarizes our acquisitions during the
(1) As defined by CoStar Realty Information Portfolio Dispositions During the Geographic Diversification The following table
(1) As defined by Industry Diversification The following table
(1) Industry classification based on The following table
(1) Includes tenants, guarantors, and/or non-guarantor parents. Critical Accounting Policies See “Critical Accounting Policies” in On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842); see Note 2 in the accompanying Notes to Consolidated Financial Statements under “New Accounting Standards and Reclassifications.” Results of Operations The following discussion of our results of our same store (as defined below) net operating income (“NOI”) should be read in conjunction with our Consolidated Financial Statements. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below. Same store results are considered to be useful to investors in evaluating our performance because they provide information relating to changes in building-level operating performance without taking into account the effects of acquisitions or dispositions. We encourage the reader to not only look at our same store results, but also our total portfolio results, due to historic and future growth. We define same store properties as properties that were in the Operating Portfolio for the entirety of the comparative periods presented. Same store properties exclude Operating Portfolio properties with expansions placed into service after December 31, 2017. On June 30, Comparison of the three months ended June 30, 2019 to the three months ended June 30, 2018 The following table summarizes selected operating information for our same store portfolio and our total portfolio for the three months ended
Net Income Net income for our total portfolio decreased by Same Store Total Operating Revenue Same store total operating revenue consists primarily of For a detailed reconciliation of our same store total operating revenue to net income, see the table above. Same store rental income, which is comprised of lease income and other billings as discussed below, increased by Same store lease income increased by $0.5 million or 0.5% to $63.7 million for the three months ended June 30, 2019 compared to $63.2 million for the three months ended June 30, 2018. Approximately Same store Same Store Operating Expenses Same store operating expenses consist primarily of property operating expenses and real estate taxes and insurance. For a detailed reconciliation of our same store operating expenses to net income, see the table above. Total same store property operating expenses increased by Acquisitions and Dispositions Net Operating Income For a detailed reconciliation of our acquisitions and dispositions NOI to net income, see the table above. Subsequent to Other Net Operating Income Our other assets include our flex/office buildings, Value Add Portfolio, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after For a detailed reconciliation of our other NOI to net income, see the table above. At Total Other Expenses Total other expenses consist of general and administrative expenses, Total other expenses increased Total Other Income (Expense) Total other income (expense) consists of interest and other income, interest expense, Total Comparison of the The following table summarizes selected operating information for our same store portfolio and our total portfolio for the
Net Income Net income for our total portfolio Same Store Total Operating Revenue Same store total operating revenue consists primarily of For a detailed reconciliation of our same store total operating revenue to net income, see the table above. Same store rental income, which is comprised of lease income and other billings as discussed below, increased by Same store lease income increased by $1.8 million or 1.3% to $127.3 million for the six months ended June 30, 2019 compared to $125.5 million for the six months ended June 30, 2018. Approximately Same store Same Store Operating Expenses Same store operating expenses consist primarily of property operating expenses and real estate taxes and insurance. For a detailed reconciliation of our same store operating expenses to net income, see the table above. Total same store operating expenses increased by Acquisitionsand DispositionsNet Operating Income For a detailed reconciliation of our acquisitions and dispositions NOI to net income, see the table above. Subsequent to December 31, Other Net Operating Income Our other assets include our flex/office buildings, Value Add Portfolio, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, For a detailed reconciliation of our other NOI to net income, see the table above. At Total Other Expenses Total other expenses consist of general and administrative expenses, Total other expenses increased Total Other Income (Expense) Total other income (expense) consists of interest and other income, interest expense, Total other Non-GAAP Financial Measures In this report, we disclose funds from operations (“FFO”) and NOI, which meet the definition of “non-GAAP financial measures” as set forth in Item 10(e) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”). As a result, we are required to include in this report a statement of why management believes that presentation of these measures provides useful information to investors. Funds From Operations FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, FFO should be compared with our reported net income (loss) in accordance with GAAP, as presented in our consolidated financial statements included in this report. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO represents GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating buildings, land sales, impairment write-downs of depreciable real estate, real estate related depreciation and amortization (excluding amortization of deferred financing costs and fair market value of debt adjustment) and after adjustments for unconsolidated partnerships and joint ventures. Management uses FFO as a supplemental performance measure because it is a widely recognized measure of the performance of REITs. FFO may be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our buildings that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our buildings, 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. In addition, other REITs may not calculate FFO in accordance with the NAREIT definition, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity, and is not indicative of funds available for our cash needs, including our ability to pay dividends. The following table sets forth a reconciliation of our FFO attributable to common stockholders and unit holders for the periods presented to net income, the nearest GAAP equivalent.
Net Operating Income We consider NOI to be an appropriate supplemental performance measure to net income (loss) because we believe it helps investors and management understand the core operations of our buildings. NOI is defined as rental The following table sets forth a reconciliation of our NOI for the periods presented to net income, the nearest GAAP equivalent.
Cash Flows Comparison of the The following table summarizes our cash flows for the
Net cash provided by operating activities increased Net cash used in investing activities Net cash provided by financing activities Liquidity and Capital Resources We believe that our liquidity needs will be satisfied through cash flows generated by operations, disposition proceeds, and financing activities. Operating cash flow is primarily rental income, expense recoveries from tenants, and other income from operations and is our principal source of funds that we use to pay operating expenses, debt service, recurring capital expenditures and the distributions required to maintain our REIT qualification. We look to the capital markets (common equity, preferred equity, and debt) to primarily fund our acquisition activity. We seek to increase cash flows from our properties by maintaining quality standards for our buildings that promote high occupancy rates and permit increases in rental rates while reducing tenant turnover and controlling operating expenses. We believe that our revenue, together with proceeds from building sales and debt and equity financings, will continue to provide funds for our short-term and medium-term liquidity needs. Our short-term liquidity requirements consist primarily of funds to pay for operating expenses and other expenditures directly associated with our buildings, including interest expense, interest rate swap payments, scheduled principal payments on outstanding indebtedness, funding of property acquisitions under contract, general and administrative expenses, and capital expenditures for tenant improvements and leasing commissions. Our long-term liquidity needs, in addition to recurring short-term liquidity needs as discussed above, consist primarily of funds necessary to pay for acquisitions, non-recurring capital expenditures, and scheduled debt maturities. We intend to satisfy our long-term liquidity needs through cash flow from operations, the issuance of equity or debt securities, other borrowings, property dispositions, or, in connection with acquisitions of certain additional buildings, the issuance of common units in the Operating Partnership. As of In addition, we require funds for future dividends to be paid to our common and preferred stockholders and
On During the
On Indebtedness Outstanding The following table
The aggregate undrawn nominal commitments on the unsecured credit facility and unsecured term loans as of On July 12, 2019, we entered into a $200.0 million unsecured term loan agreement. The new unsecured term loan bears a current interest rate of LIBOR plus a spread of 1.00% based on the our debt rating, as defined in the loan agreement, and matures on January 12, 2025. On July 16, 2019, we entered into an interest rate swap with a total notional amount of $50.0 million, which in conjunction with the interest rate swaps entered into on May 2, 2019, fix LIBOR at 2.113575% on the new unsecured term loan. The interest rate swaps will become effective on July 15, 2020 and expire on January 15, 2025. Our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes are subject to ongoing compliance with a number of financial and other covenants. As of The
We regularly pursue new financing opportunities to ensure an appropriate balance sheet position. As a result of these dedicated efforts, we are confident in our ability to meet future debt maturities and building acquisition funding needs. We believe that our current balance sheet is in an adequate position at the date of this filing, despite possible volatility in the credit markets. Our interest rate exposure as it relates to interest expense payments on our floating rate debt is managed through our use of interest rate swaps, which fix the rate of our long term floating rate debt. For a detailed discussion on our use of interest rate swaps, see “Interest Rate Risk” below. Equity Preferred Stock The following table
Common Stock The following
On April 30, 2019, we filed Articles of Amendment to our Articles of Amendment and Restatement to increase the number of authorized shares of our common stock from 150,000,000 to 300,000,000. The following table
On April 1, 2019, we completed an underwritten public offering of 7,475,000 shares of common stock (including 975,000 shares issued pursuant to the underwriters’ option to purchase additional shares) at a price to the underwriters of $28.72 per share. The offering closed on April 4, 2019 and we received net proceeds of approximately $214.7 million. Noncontrolling Interest We own our interests in all of our properties and conduct substantially all of our business through Interest Rate Risk We use interest rate swaps to fix the rate of our variable rate debt. As of We recognize all derivatives on the balance sheet at fair value. If the derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income (loss), which is a component of equity. Derivatives that are not designated as hedges must be adjusted to fair value and the changes in fair value must be reflected as income or expense. We have established criteria for suitable counterparties in relation to various specific types of risk. We only use counterparties that have a credit rating of no lower than investment grade at swap inception from Moody’s Investor Services, Standard & Poor’s, or Fitch Ratings or other nationally recognized rating agencies. The following table details our outstanding interest rate swaps as of
The swaps outlined in the above table were all designated as cash flow hedges of interest rate risk, and all are valued as Level 2 financial instruments. Level 2 financial instruments are defined as significant other observable inputs. As of As of Off-balance Sheet Arrangements As of Item 3. Quantitativeand Qualitative Disclosures about Market Risk Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The primary market risk we are exposed to is interest rate risk. We have used derivative financial instruments to manage, or hedge, interest rate risks related to our borrowings, primarily through interest rate swaps. As of existing debt when it matures or significantly increase our future interest expense. From time to time, we enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. While these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under GAAP. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions. If interest rates increased by 100 basispoints and assuming we had an outstanding balance of Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures As required by SEC Rule 13a-15(b), we have evaluated, under the supervision of and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of Changes in Internal Controls There was no change to our internal control over financial reporting during the quarter ended PART II. Other Information Item 1. Legal Proceedings From time to time, we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings which, 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 our company. Item 1A. Risk Factors There have been no material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the quarter ended June 30, 2019, the Operating Partnership issued 14,859 common units in the Operating Partnership upon exchange of outstanding long term incentive plan units pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated. Subject to certain restrictions, common units in the Operating Partnership may be redeemed for cash in an amount equal to the value of a share of common stock or, at our election, for a share of common stock on a one-for-one basis. During the quarter ended June 30, 2019, we issued 14,859 shares of common stock upon redemption of 14,859 common units in the Operating Partnership held by various limited partners. The issuance of such shares of common stock was either registered under the Securities Act or effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act and the rules and regulations promulgated thereunder. We relied on the exemption based on representations given by the holders of the common units. All other issuances of unregistered securities during the quarter ended June 30, 2019, if any, have previously been disclosed in filings with the SEC. Item 3. Defaults Upon Senior Securities None. Item 4. Mine SafetyDisclosures Not applicable. Item 5. Other Information None. Item 6. Exhibits
(1) Incorporated by reference to STAG Industrial, Inc.’s Current Report on Form 8-K filed with the SEC on July 30, 2019. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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