Item 2.
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Managements Discussion and Analysis of Financial Condition and Results of Operations
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All
statements contained herein, other than historical facts, may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, or the Exchange Act. These statements may relate to, among other things, future events or our future performance or financial condition. In some cases, you can identify forward-looking statements by terminology such as
may, might, believe, will, provided, anticipate, future, could, growth, plan, intend, expect,
should, would, if, seek, possible, potential, likely or the negative of such terms or comparable terminology. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our business, financial condition, liquidity, results of operations, funds from operations or prospects to be materially different from any future business, financial condition,
liquidity, results of operations, funds from operations or prospects expressed or implied by such forward-looking statements. For further information about these and other factors that could affect our future results, please see the captions titled
Forward-Looking Statements and Risk Factors in this report and in our Annual Report on Form 10-K for the year ended December 31, 2015. We caution readers not to place undue reliance on any such forward-looking
statements, which are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, after the date of this Quarterly Report on Form 10-Q.
All references to we,
our, us and the Company in this Report mean Gladstone Commercial Corporation and its consolidated subsidiaries, except where the context indicates that the term means only Gladstone Commercial Corporation.
General
We are an externally-advised real
estate investment trust, or REIT, that was incorporated under the General Corporation Law of the State of Maryland on February 14, 2003. We focus on acquiring, owning, and managing primarily office and industrial properties. On a selective
basis, we may make long term industrial and commercial mortgage loans. Our properties are geographically diversified and our tenants cover a broad cross section of business sectors and range in size from small to very large private and public
companies. We actively communicate with buyout funds, real estate brokers and other third parties to locate properties for potential acquisition or to provide mortgage financing in an effort to build our portfolio. We target secondary growth markets
that possess favorable economic growth trends, diversified industries, and growing population and employment.
We have historically entered into, and
intend in the future to enter into, purchase agreements for real estate having net leases with terms of approximately 7 to 15 years and built in rental rate increases. Under a net lease, the tenant is required to pay all operating, maintenance,
repair and insurance costs and real estate taxes with respect to the leased property.
As of April 27, 2016:
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we owned 99 properties totaling 11.0 million square feet in 24 states;
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our occupancy rate was 97.5%;
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the weighted average remaining term of our mortgage debt was 6.3 years and the weighted average interest rate was 4.89%; and
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the average remaining lease term of the portfolio was 8.3 years.
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22
Business Environment
In the United States, vacancy rates have decreased for both office and industrial properties in most markets, as increased user demand has led to improved
conditions. In fact, vacancy rates in many markets have been reduced to levels seen at the peak before the most recent recession and rental rates have increased in many primary and secondary markets. This condition has led to a rise in construction
activity for both office and industrial properties in many markets; however, vacancy rates in certain secondary and tertiary markets are still higher than pre-recession levels as job growth has yet to return to all areas of the country even though
the published unemployment rate has dropped over the past 12 months. Interest rates have been volatile since the beginning of the year and although interest rates are still relatively low, lenders have increased their required spreads and overall
financing costs for fixed rate mortgages appear to be on the rise. The combined characteristics of lower vacancy rates, increased supply of capital from private and foreign buyers, and a potential rise in financing costs has led to increased
competition for new acquisitions.
From a more macro-economic perspective, the strength of the global economy and U.S. economy in particular continue to
be uncertain with increased volatility due to the recently disclosed oversupply of energy worldwide and an apparent global economic slowdown. In addition, the uncertainty surrounding the ability of the federal government to address its fiscal
condition in both the near and long term as well as other geo-political issues has increased domestic and global instability. These developments could cause interest rates and borrowing costs to rise, which may adversely affect our ability to access
both the equity and debt markets and could have an adverse effect on our tenants as well.
We continue to focus on re-leasing vacant space, renewing
upcoming lease maturities and acquiring additional properties. Currently, we have two fully vacant buildings, one located in Newburyport, Massachusetts and one located in Dayton, Ohio, and a total of five partially vacant buildings. Our Newburyport,
Massachusetts tenant vacated upon its lease termination in April 2015 and our Dayton, Ohio tenant vacated upon its lease termination in June 2015. Our Dayton, Ohio property has been classified as held for sale on our condensed consolidated balance
sheet as of March 31, 2016 and we anticipate selling this property during the second quarter of 2016.
We have one expiring lease in 2016, which is
0.1% of rental income recognized during the three months ended March 31, 2016, seven expiring leases in 2017, which is 2.3% of rental income recognized during the three months ended March 31, 2016 and three expiring leases in 2018, which
is 1.7% of rental income recognized during the three months ended March 31, 2016.
Our available vacant space at March 31, 2016 is 2.5% of our
total square footage and the annual carrying costs on the vacant space, including real estate taxes and property operating expenses, are approximately $1.3 million. We continue to actively seek new tenants for these properties.
Our ability to make new investments is highly dependent upon our ability to procure external financing. Our principal sources of external financing generally
include the issuance of equity securities, long-term mortgage loans secured by properties and borrowings under our line of credit, or the Line of Credit. While lenders credit standards have recently tightened, long-term mortgages are
readily obtainable. We continue to look to regional banks and insurance companies, in addition to the collateralized mortgage backed securities, CMBS market to issue mortgages to finance our real estate activities.
In addition to obtaining funds through borrowing, we have been active in the equity markets during the three months ended March 31, 2016. We have issued
shares of both common and preferred stock through our at-the-market programs, or ATM Programs, pursuant to our open market sale agreements with Cantor Fitzgerald & Co., or Cantor Fitzgerald, discussed in more detail below.
23
Recent Developments
2016 Financing Activity
We issued two mortgages, which
are summarized below (dollars in thousands):
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Date of Issuance
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Issuing Bank
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Debt Issued
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Interest Rate
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Maturity Date
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Principal Balance Repaid
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Previous Weighted Average Interest Rate
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3/1/2016
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First Niagara Bank
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$
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18,475
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LIBOR + 2.35%
(1)
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3/1/2023
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$
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21,197
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6.14%
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4/22/2016
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Great Southern Bank
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9,530
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LIBOR + 2.75%
(2)
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4/22/2019
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3,667
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6.25%
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(1)
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We refinanced maturing debt on our Chalfont, Pennsylvania, Corning, New York and Franklin and Eatontown, New Jersey properties, which was originally set to mature
during second quarter 2016. We entered into an interest rate cap agreement with First Niagara Bank, which caps LIBOR at 3% through March 1, 2019.
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(2)
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We refinanced maturing debt on our Coppell, Texas property, which was originally set to mature during second quarter 2016. We pooled the new mortgage debt with
unencumbered properties located in Allen and Colleyville, Texas. We entered into an interest rate cap agreement with Great Southern Bank, which caps LIBOR at 3% through April 22, 2019.
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2016 Leasing Activities
We have executed a lease on one
property, which is summarized below (dollars in thousands):
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Location
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Lease
Commencement
Date
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Square Footage
(unaudited)
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Lease Term
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Renewal
Options
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Annualized
GAAP Rent
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Tenant
Improvement
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Leasing
Commissions
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Bolingbrook, IL
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7/1/2016
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13,816
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(1)
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7.2 Years
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1 (5 year)
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$
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70
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$
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69
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$
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28
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(1)
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Tenants lease is for 24.9% of the building. The building is now 62.7% leased.
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2016 Equity Activities
Common Equity
:
We sold 65,000 shares of
common stock, raising an aggregate of $0.9 million in net proceeds under our previous ATM Program with Cantor Fitzgerald & Co., or Cantor Fitzgerald. In February 2016, we amended our common ATM program, or the Amended Common ATM, with
Cantor Fitzgerald. The amendment increased the amount of shares of common stock that we may offer and sell through Cantor Fitzgerald, to $160.0 million. All other terms of the agreement remained unchanged. As of March 31, 2016, we had a
remaining capacity to sell up to $160.0 million of common stock under the Amended Common ATM.
Preferred Equity
: Additionally, in February 2016 we
entered into an open market sales agreement, or the Preferred Stock ATM, with Cantor Fitzgerald, pursuant to which we may, from time to time, offer to sell (i) shares of our 7.75% Series A Cumulative Redeemable Preferred Stock, and
(ii) shares of our 7.50% Series B Cumulative Redeemable Preferred Stock, having an aggregate offering price of up to $40.0 million, through Cantor Fitzgerald, acting as sales agent and/or principal. During the three months ended March 31,
2016, we sold 74,000 shares of our 7.50% Series B Cumulative Redeemable Preferred Stock for net proceeds of $1.8 million. As of March 31, 2016, we had a remaining capacity to sell up to $38.2 million of preferred stock under the Preferred Stock
ATM.
24
Diversity of Our Portfolio
Our Adviser seeks to diversify our portfolio to avoid dependence on any one particular tenant, industry or geographic market. By diversifying our portfolio,
our Adviser intends to reduce the adverse effect on our portfolio of a single under-performing investment or a downturn in any particular industry or geographic market. For the three months ended March 31, 2016, our largest tenant comprised
only 5.8% of total rental income. The table below reflects the breakdown of our total rental income by tenant industry classification for the three months ended March 31, 2016 and 2015, respectively (dollars in thousands):
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For the three months ended March 31,
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2016
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2015
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Industry Classification
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Rental Income
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Percentage of
Rental Income
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Rental Income
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Percentage of
Rental Income
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Healthcare
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$
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3,347
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16.2
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%
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$
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2,644
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13.7
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%
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Telecommunications
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3,280
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15.9
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3,128
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16.1
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Automobile
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2,639
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12.8
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2,635
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13.7
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Diversified/Conglomerate Services
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1,970
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9.5
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1,167
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6.1
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Diversified/Conglomerate Manufacturing
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1,149
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5.6
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1,042
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5.4
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Electronics
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1,082
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5.2
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1,202
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6.2
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Personal, Food & Miscellaneous Services
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892
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4.3
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1,576
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8.2
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Chemicals, Plastics & Rubber
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779
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3.8
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789
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4.1
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Machinery
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682
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3.3
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772
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4.0
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Containers, Packaging & Glass
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666
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3.2
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521
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2.7
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Personal & Non-Durable Consumer Products
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656
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3.2
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657
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3.4
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Banking
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612
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3.0
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289
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1.5
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Information Technology
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588
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2.8
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0.0
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Childcare
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556
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2.7
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556
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2.9
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Buildings and Real Estate
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548
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2.7
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548
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2.8
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Beverage, Food & Tobacco
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525
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2.5
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748
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3.9
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Printing & Publishing
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390
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1.9
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391
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2.0
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Education
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164
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0.8
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164
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0.9
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Home & Office Furnishings
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132
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0.6
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132
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0.7
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Oil & Gas
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0.0
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327
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1.7
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$
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20,657
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100.0
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%
|
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$
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19,288
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100.0
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%
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The table below reflects the breakdown of total rental income by state for the three months ended March 31, 2016 and
2015, respectively (dollars in thousands):
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State
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Rental Revenue for
the three months
ended March 31, 2016
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% of Base Rent
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Number of Leases for
the three months
ended March 31, 2016
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Rental Revenue for
the three months
ended March 31, 2015
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% of Base Rent
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Number of Leases for
the three months
ended March 31, 2015
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Texas
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$
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3,722
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18.0
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%
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12
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$
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3,211
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16.6
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%
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11
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Ohio
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2,337
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11.3
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16
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2,493
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12.9
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17
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Pennsylvania
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1,678
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8.1
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6
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1,655
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8.6
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6
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North Carolina
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1,441
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7.0
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8
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1,340
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7.0
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7
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Georgia
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1,192
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5.8
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6
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718
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3.7
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3
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South Carolina
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1,153
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5.6
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2
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1,115
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5.8
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2
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Michigan
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1,074
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5.2
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4
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1,074
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5.6
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4
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Minnesota
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845
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4.1
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4
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819
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4.3
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3
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Colorado
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813
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3.9
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3
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813
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4.2
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3
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New Jersey
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798
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3.9
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|
4
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798
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4.1
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4
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All Other States
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5,604
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27.1
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|
|
33
|
|
|
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5,252
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|
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27.2
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|
|
|
33
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
20,657
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|
|
|
100.0
|
%
|
|
|
98
|
|
|
$
|
19,288
|
|
|
|
100.0
|
%
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Our Adviser and Administrator
Our Adviser is led by a management team with extensive experience purchasing real estate and originating mortgage loans. Our Adviser and Administrator are
controlled by Mr. David Gladstone, who is also our chairman and chief executive officer. Mr. Gladstone also serves as the chairman and chief executive officer of both our Adviser and Administrator. Mr. Terry Lee Brubaker, our vice
chairman and chief operating officer, is also the vice chairman and chief operating officer of our Adviser and Administrator. Mr. Robert Cutlip, our president, is also an executive managing director of our Adviser. Gladstone Administration,
LLC, or our Administrator, employs our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrators president) and their respective staffs.
25
Our Adviser and Administrator also provide investment advisory and administrative services, respectively, to
certain of our affiliates, including, but not limited to, Gladstone Capital Corporation and Gladstone Investment Corporation, both publicly-traded business development companies, as well as Gladstone Land Corporation, a publicly-traded REIT that
primarily invests in farmland. With the exception of Ms. Danielle Jones, our chief financial officer, Mr. Jay Beckhorn, our treasurer, and Mr. Robert Cutlip, our president, all of our executive officers and all of our directors serve
as either directors or executive officers, or both, of Gladstone Capital Corporation and Gladstone Investment Corporation. In addition, with the exception of Mr. Cutlip and Ms. Jones, all of our executive officers and all of our directors,
serve as either directors or executive officers, or both, of Gladstone Land Corporation. In the future, our Adviser may provide investment advisory services to other companies, both public and private.
Advisory and Administration Agreements
We are externally
managed pursuant to contractual arrangements with our Adviser and our Administrator. Our Adviser and Administrator employ all of our personnel and pay their payroll, benefits and general expenses directly. We have an investment advisory agreement
with our Adviser, and an administration agreement with our Administrator, or the Administration Agreement.
Under the terms of the advisory agreement, we
are responsible for all expenses incurred for our direct benefit. Examples of these expenses include legal, accounting, interest on short-term debt and mortgages, tax preparation, directors and officers insurance, stock transfer
services, stockholder-related fees, consulting and related fees. In addition, we are also responsible for all fees charged by third parties that are directly related to our business, which include real estate brokerage fees, mortgage placement fees,
lease-up fees and transaction structuring fees (although we may be able to pass some or all of such fees on to our tenants and borrowers).
Advisory
Agreement
On July 24, 2015, we entered into an amended and restated advisory agreement, or the Amended Advisory Agreement, with the Adviser. Our
entrance into the agreement was approved unanimously by our Board of Directors, including separate and unanimous approval by the independent directors on our Board of Directors.
The calculation of the annual base management fee was revised to equal 1.5% of our total stockholders equity, (before giving effect to the base
management and incentive fee), adjusted to exclude the effect of any unrealized gains or losses that do not affect realized net income (including impairment charges) and adjusted for any one-time events and certain non-cash items (only after
approval of our Compensation Committee), or adjusted total stockholders equity. The fee is calculated and accrued quarterly as 0.375% per quarter of such adjusted total stockholders equity figure.
The calculation of the annual incentive fee was revised to reward the Adviser if our quarterly Core FFO (defined below), before giving effect to any incentive
fee, or pre-incentive fee Core FFO, exceeds 2.0%, or 8.0% annualized, of adjusted total stockholders equity (after giving effect to the base management fee but before giving effect to the incentive fee), or the new hurdle rate. The Adviser
receives 15.0% of the amount of our pre-incentive fee Core FFO that exceeds the new hurdle rate. However, in no event shall the incentive fee for a particular quarter exceed the average quarterly incentive fee paid by us for the previous four
quarters by greater than 15.0% (excluding quarters for which no incentive fee was paid). Core FFO is defined as GAAP net income (loss) available to common stockholders, excluding the incentive fee, depreciation and amortization, any unrealized
gains, losses or other non-cash items recorded in net income (loss) available to common stockholders for the period, and one-time events pursuant to changes in GAAP.
A capital gains-based incentive fee was instituted that is calculated and payable in arrears as of the end of each fiscal year (or upon termination). In
determining the capital gain fee, we will calculate aggregate realized capital gains and aggregate realized capital losses for the applicable time period. For this purpose, aggregate realized capital gains and losses, if any, equals the realized
gain or loss calculated by the difference between the sales price of the property, less any costs to sell the property and the current gross
26
value of the property (which is calculated as the original acquisition price plus any subsequent non-reimbursed capital improvements). At the end of the fiscal year, if this number is positive,
then the capital gain fee payable for such time period shall equal 15.0% of such amount.
The Amended Advisory Agreement includes a termination fee where,
in the event of a termination without cause (with 120 days prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to two times the sum of the average
annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination. A termination fee is also payable if the Adviser terminates the agreement after the Company has defaulted and applicable cure
periods have expired. The agreement may also be terminated for cause (with 30 days prior written notice and the vote of at least two-thirds of our independent directors), with no termination fee payable. Cause is defined in the agreement to
include if the Adviser breaches any material provisions of the Agreement, the bankruptcy or insolvency of the Adviser, dissolution of the Adviser and fraud or misappropriation of funds.
Management believes the Amended Advisory Agreement will facilitate our growth of FFO and distributions to stockholders in the future. Management also believes
that this agreement will allow us to become more competitive in sourcing and retaining talented investment and operations professionals at the Adviser.
Administration Agreement
Pursuant to the Administration
Agreement, we pay for our allocable portion of our Administrators overhead expenses incurred while performing its obligations to us, including, but not limited to, rent and the salaries and benefits expenses of our personnel, including our
chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrators president), and their respective staffs. Our allocable portion of the Administrators expenses is
generally derived by multiplying our Administrators total expenses by the approximate percentage of time the Administrators employees perform services for us in relation to their time spent performing services for all companies serviced
by our Administrator under contractual agreements.
Critical Accounting Policies
The preparation of our financial statements in accordance with Generally Accepted Accounting Principles in the U.S., or GAAP, requires management to make
judgments that are subjective in nature in order to make certain estimates and assumptions. Application of these accounting policies involves the exercise of judgment regarding the use of assumptions as to future uncertainties, and as a result,
actual results could materially differ from these estimates. A summary of all of our significant accounting policies is provided in Note 1 to our condensed consolidated financial statements in our 2015 Form 10-K. There were no material changes to
our critical accounting policies during the three months ended March 31, 2016.
Results of Operations
The weighted average yield on our total portfolio, which was 8.6% as of March 31, 2016 and 8.8% as of March 31, 2015, is calculated by taking the
annualized straight-line rents, reflected as rental income on our condensed consolidated statements of operations, of each acquisition as a percentage of the acquisition cost. The weighted average yield does not account for the interest expense
incurred on the mortgages placed on our properties.
27
A comparison of our operating results for the three months ended March 31, 2016 and 2015 is below
(dollars in thousands, except per share amounts)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
$ Change
|
|
|
% Change
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenue
|
|
$
|
20,657
|
|
|
$
|
19,288
|
|
|
$
|
1,369
|
|
|
|
7.1
|
%
|
Tenant recovery revenue
|
|
|
485
|
|
|
|
324
|
|
|
|
161
|
|
|
|
49.7
|
%
|
Interest income from mortgage note receivable
|
|
|
385
|
|
|
|
268
|
|
|
|
117
|
|
|
|
43.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
21,527
|
|
|
|
19,880
|
|
|
|
1,647
|
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
9,133
|
|
|
|
8,207
|
|
|
|
926
|
|
|
|
11.3
|
%
|
Property operating expenses
|
|
|
1,610
|
|
|
|
962
|
|
|
|
648
|
|
|
|
67.4
|
%
|
Acquisition related expenses
|
|
|
9
|
|
|
|
196
|
|
|
|
(187
|
)
|
|
|
-95.4
|
%
|
Base management fee
|
|
|
861
|
|
|
|
852
|
|
|
|
9
|
|
|
|
1.1
|
%
|
Incentive fee
|
|
|
618
|
|
|
|
1,673
|
|
|
|
(1,055
|
)
|
|
|
-63.1
|
%
|
Administration fee
|
|
|
404
|
|
|
|
362
|
|
|
|
42
|
|
|
|
11.6
|
%
|
General and administrative
|
|
|
579
|
|
|
|
690
|
|
|
|
(111
|
)
|
|
|
-16.1
|
%
|
Impairment charge
|
|
|
43
|
|
|
|
|
|
|
|
43
|
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses before credit to incentive fee
|
|
|
13,257
|
|
|
|
12,942
|
|
|
|
315
|
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit to incentive fee
|
|
|
|
|
|
|
(1,185
|
)
|
|
|
1,185
|
|
|
|
-100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
13,257
|
|
|
|
11,757
|
|
|
|
1,500
|
|
|
|
12.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(6,731
|
)
|
|
|
(6,771
|
)
|
|
|
40
|
|
|
|
-0.6
|
%
|
Distributions attributable to Series C mandatorily redeemable preferred stock
|
|
|
(686
|
)
|
|
|
(686
|
)
|
|
|
|
|
|
|
0.0
|
%
|
Other income
|
|
|
|
|
|
|
28
|
|
|
|
(28
|
)
|
|
|
-100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense
|
|
|
(7,417
|
)
|
|
|
(7,429
|
)
|
|
|
12
|
|
|
|
-0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
853
|
|
|
|
694
|
|
|
|
159
|
|
|
|
22.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions attributable to Series A and B preferred stock
|
|
|
(1,027
|
)
|
|
|
(1,023
|
)
|
|
|
(4
|
)
|
|
|
0.4
|
%
|
Distributions attributable to senior common stock
|
|
|
(252
|
)
|
|
|
(224
|
)
|
|
|
(28
|
)
|
|
|
12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders
|
|
$
|
(426
|
)
|
|
$
|
(553
|
)
|
|
$
|
127
|
|
|
|
-23.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders per weighted average share of common stock -
basic & diluted
|
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
|
-36.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common stockholders - basic
|
|
$
|
8,750
|
|
|
$
|
7,654
|
|
|
$
|
1,096
|
|
|
|
14.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per weighted average share of common stock - basic
|
|
$
|
0.39
|
|
|
$
|
0.38
|
|
|
$
|
0.01
|
|
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per weighted average share of common stock - diluted
|
|
$
|
0.39
|
|
|
$
|
0.38
|
|
|
$
|
0.01
|
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Diluted FFO available to common stockholders was not previously adjusted for the income impact of the assumed conversion of senior common stock, in accordance with ASC 260 (Earnings per Share). This
adjustment has increased Diluted FFO available to common stockholders for the three months ended March 31, 2015 by $0.01 per share.
|
Same Store Analysis
For the purposes of the following
discussion, same store properties are properties we owned as of January 1, 2015, which have not been subsequently vacated, or disposed of. Acquired and disposed of properties are properties which were either acquired or disposed of at any point
subsequent to December 31, 2014. Vacant properties are properties that were fully or partially vacant at any point subsequent to January 1, 2015.
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
(Dollars in Thousands)
|
|
Rental Revenues
|
|
2016
|
|
|
2015
|
|
|
$ Change
|
|
|
% Change
|
|
Same Store Properties
|
|
$
|
17,863
|
|
|
$
|
17,786
|
|
|
$
|
77
|
|
|
|
0.4
|
%
|
Acquired & Disposed Properties
|
|
|
2,100
|
|
|
|
488
|
|
|
|
1,612
|
|
|
|
330.3
|
%
|
Vacant Properties
|
|
|
694
|
|
|
|
1,014
|
|
|
|
(320
|
)
|
|
|
-31.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20,657
|
|
|
$
|
19,288
|
|
|
$
|
1,369
|
|
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenue from same store properties increased slightly for the three months ended March 31, 2016, primarily because
of additional rental income received from our lease renewals at Duncan, South Carolina
28
and Raleigh, North Carolina executed in 2015. Rental revenue increased for acquired and disposed properties for the three months ended March 31, 2016, as compared to the three months ended
March 31, 2015, because we acquired four properties subsequent to March 31, 2015, and the inclusion of a full quarter of rental revenue recorded in 2016 for two properties acquired during the three months ended March 31, 2015. Rental
revenue decreased for our vacant properties because two properties went vacant in May 2015, and remain fully vacant during the three months ended March 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
(Dollars in Thousands)
|
|
Tenant Recovery Revenue
|
|
2016
|
|
|
2015
|
|
|
$ Change
|
|
|
% Change
|
|
Same Store Properties
|
|
$
|
238
|
|
|
$
|
188
|
|
|
$
|
50
|
|
|
|
26.6
|
%
|
Acquired & Disposed Properties
|
|
|
196
|
|
|
|
51
|
|
|
|
145
|
|
|
|
284.3
|
%
|
Vacant Properties
|
|
|
51
|
|
|
|
85
|
|
|
|
(34
|
)
|
|
|
-40.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
485
|
|
|
$
|
324
|
|
|
$
|
161
|
|
|
|
49.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in same store tenant recovery revenues for the three months ended March 31, 2016, as compared to the three
months ended March 31, 2015, is a result of increased recoveries from three tenants subject to gross leases. The increase in tenant recovery revenues on acquired and disposed of properties for the three months ended March 31, 2016, as
compared to the three months ended March 31, 2015 is due to an increase in recoveries from tenants subject to a gross lease for properties acquired during and subsequent to the three months ended March 31, 2015.
Interest income from mortgage notes receivable increased for the three months ended March 31, 2016, as compared to the three months ended March 31,
2015, because of exit fee revenue earned during the three months ended March 31, 2016, coupled with interest earned on a $0.3 million interim financing note issued in April 2015.
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
(Dollars in Thousands)
|
|
Depreciation and Amortization
|
|
2016
|
|
|
2015
|
|
|
$ Change
|
|
|
% Change
|
|
Same Store Properties
|
|
$
|
7,696
|
|
|
$
|
7,566
|
|
|
$
|
130
|
|
|
|
1.7
|
%
|
Acquired & Disposed Properties
|
|
|
965
|
|
|
|
158
|
|
|
|
807
|
|
|
|
510.8
|
%
|
Vacant Properties
|
|
|
472
|
|
|
|
483
|
|
|
|
(11
|
)
|
|
|
-2.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,133
|
|
|
$
|
8,207
|
|
|
$
|
926
|
|
|
|
11.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization increased slightly for same store properties for the three months ended March 31, 2016, as
compared to the three months ended March 31, 2015 due to depreciation on capital projects which were completed subsequent to March 31, 2015, coupled with amortization on leasing commissions for renewed leases with 2015 and 2016
expirations. Depreciation and amortization expenses increased for acquired and disposed of properties during the three months ended March 31, 2016, as compared to the three months ended March 31, 2015, because of the four properties
acquired subsequent to March 31, 2015 and the inclusion of a full quarter of depreciation and amortization recorded during the three months ended March 31, 2016 for two properties acquired during the three months ended March 31, 2015.
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
(Dollars in Thousands)
|
|
Property Operating Expenses
|
|
2016
|
|
|
2015
|
|
|
$ Change
|
|
|
% Change
|
|
Same Store Properties
|
|
$
|
746
|
|
|
$
|
723
|
|
|
$
|
23
|
|
|
|
3.2
|
%
|
Acquired & Disposed Properties
|
|
|
548
|
|
|
|
100
|
|
|
|
448
|
|
|
|
448.0
|
%
|
Vacant Properties
|
|
|
316
|
|
|
|
139
|
|
|
|
177
|
|
|
|
127.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,610
|
|
|
$
|
962
|
|
|
$
|
648
|
|
|
|
67.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses consist of franchise taxes, management fees, insurance, ground lease payments, property
maintenance and repair expenses paid on behalf of certain of our properties. The increase in property operating expenses for same store properties is a result of an increase in operating expenses incurred at properties subject to a gross lease,
coupled with increased expense exposure at properties with leases subject to a cap on expenses The increase in property operating expenses for acquired and disposed of properties for the three months ended March 31, 2016 as compared to the
three months ended March 31, 2015 is primarily a result of property operating expenses incurred at properties subject to a gross lease which were acquired during and subsequent to the quarter ended March 31, 2015.
Acquisition related expenses primarily consist of legal fees and fees incurred for third-party reports prepared in connection with potential acquisitions and
our due diligence analyses related thereto. Acquisition related expenses decreased for the three months ended March 31, 2016, as compared to the three months ended March 31, 2015, because we did not acquire any properties during the three
months ended March 31, 2016. We acquired two properties during the three months ended March 31, 2015.
The base management fee paid to the
Adviser increased slightly for the three months ended March 31, 2016, as compared to the three months ended March 31, 2015, due to an increase in both total and common stockholders equity, the main components of both the amended and
previous calculations. We amended the calculation of the base management fee effective July 1, 2015. The calculation of the base management fee is described in detail above within
Advisory and Administration Agreements.
The net incentive fee paid to the Adviser increased for the three months ended March 31, 2016, as compared to the three months ended March 31,
2015, because of an increase in pre-incentive fee FFO, coupled with a reduction in the credit to incentive fee. The increase in pre-incentive fee FFO was primarily due to an increase in rental revenues from the properties acquired during and
subsequent to the three months ended March 31, 2015. We amended the Advisory Agreement, which resulted in a change to the incentive fee calculation, effective July 1, 2015. The new calculation of the incentive fee is described in detail
above within
Advisory and Administration Agreements.
The administration fee paid to the Administrator increased for the three
months ended March 31, 2016, as compared to the three months ended March 31, 2015. The increase was driven primarily by us using a higher share of our administrators resources during the three months ended March 31, 2016.
General and administrative expenses decreased for the three months ended March 31, 2016, as compared to the three months ended March 31, 2015,
primarily as a result of a decrease in bank fees coupled with a decrease in dues and subscriptions offset by a slight increase in travel and advertising costs.
The impairment loss for the three months ended March 31, 2016 was from the additional impairment recorded in connection with the Dayton, Ohio property
that is classified as held for sale.
Other Income and Expenses
Interest expense decreased slightly for the three months ended March 31, 2016, as compared to the three months ended March 31, 2015. This decrease
was primarily a result of refinanced mortgages at lower interest rates which were completed subsequent to March 31, 2015. During the previous 12 months, we have refinanced $78.7 million in mortgage debt at a weighted average interest rate of
5.7% with $43.6 million
30
of new mortgage debt at a weighted average interest rate of 2.7%, coupled with reduced interest expense on our long-term financings from amortizing and balloon principal payments made during the
past 12 months. This is offset by interest on the $28.8 million of mortgage debt issued in the past 12 months to finance new acquisitions.
Other income
decreased during the three months ended March 31, 2016, as compared to the three months ended March 31, 2015, because of the repayment of the employee note outstanding in May 2015.
Net Loss Attributable to Common Stockholders
Net loss
attributable to common stockholders decreased for the three months ended March 31, 2016, as compared to the three months ended March 31, 2015, primarily because of an increase in rental income from the properties acquired over the past 12
months.
31
Liquidity and Capital Resources
Overview
Our sources of liquidity include cash flows from
operations, cash and cash equivalents, borrowings under our Line of Credit and issuing additional equity securities. Our available liquidity, as of March 31, 2016, was $12.2 million, including $5.0 million in cash and cash equivalents and an
available borrowing capacity of $7.2 million under our Line of Credit. Our available borrowing capacity under the Line of Credit has increased to $14.9 million as of April 27, 2016.
Future Capital Needs
We actively seek conservative
investments that are likely to produce income to pay distributions to our stockholders. We intend to use the proceeds received from future equity raised and debt capital borrowed to continue to invest in industrial, and office real property and to a
lesser extent medical real property, make mortgage loans, or pay down outstanding borrowings under our Line of Credit. Accordingly, to ensure that we are able to effectively execute our business strategy, we routinely review our liquidity
requirements and continually evaluate all potential sources of liquidity. Our short-term liquidity needs include proceeds necessary to fund our distributions to stockholders, pay the debt service costs on our existing long-term mortgages and fund
our current operating costs. In addition, beginning August 31, 2016, if our Series C Term Preferred Stock is still outstanding and has not been extended or redeemed, and we have failed to meet certain conditions relating to a pending extension
or redemption thereof to the satisfaction of the lenders under our Line of Credit, the Line of Credit requires that we maintain liquidity in the amount of $38.5 million. We plan to refinance our Series C Term Preferred Stock utilizing equity prior
to July 2016. Our long-term liquidity needs include proceeds necessary to grow and maintain our portfolio of investments.
We believe that our available
liquidity is sufficient to fund our distributions to stockholders, pay the debt service costs on our existing long-term mortgages and fund our current operating costs in the near term. Additionally, to satisfy our short-term obligations, we may
request credits to our management fees that are issued from our Adviser, although our Adviser is under no obligation to provide any such credits, either in whole or in part. Historically, our Adviser has provided such partial credits to our
management fees on a quarterly basis. We further believe that our cash flow from operations coupled with the financing capital available to us in the future are sufficient to fund our long-term liquidity needs.
Equity Capital
During the three months ended
March 31, 2016, we raised net proceeds of (i) $0.9 million of common equity under our Common Stock ATM with Cantor Fitzgerald at a weighted average share price of $14.72 and (ii) $1.8 million of preferred equity under our Preferred
Stock ATM with Cantor Fitzgerald at a weighted average share price of $25.00. We used these proceeds for general corporate purposes.
As of April 27,
2016, we have the ability to raise up to $496.1 million of additional equity capital through the sale and issuance of securities that are registered under our universal shelf registration statement on Form S-3 (File No. 333-208953), or the
Universal Shelf, in one or more future public offerings. Of the $496.1 million of available capacity under our Universal Shelf, approximately $158.9 million of common stock is reserved for additional sales under our Common ATM, and approximately
$37.2 million of preferred stock is reserved for additional sales under our Preferred ATM as of April 27, 2016. We expect to use our ATM programs as a source of liquidity for 2016.
Debt Capital
As of March 31, 2016, we had mortgage
notes payable in the aggregate principal amount of $455.3 million, collateralized by a total of 75 properties with a remaining weighted average maturity of 6.3 years. The weighted-average interest rate on the mortgage notes payable as of
March 31, 2016 was 4.9%.
We continue to see banks and other non-bank lenders willing to issue mortgages. Consequently, we are focused on obtaining
mortgages through regional banks, non-bank lenders and the CMBS market.
32
We have mortgage debt in the aggregate principal amount of $69.7 million payable during the remainder of 2016 and
$53.5 million payable during 2017. The 2016 principal amounts payable include both amortizing principal payments and five balloon principal payments due throughout 2016. We anticipate being able to refinance our mortgages that come due during 2016
with a combination of new mortgage debt and the issuance of additional equity securities.
Operating Activities
Net cash provided by operating activities during the three months ended March 31, 2016, was $8.8 million, as compared to net cash provided by operating
activities of $8.9 million for the three months ended March 31, 2015. This decrease was primarily a result of an increase in leasing commissions paid, coupled with an increase in operating expenses on vacant properties partially offset by an
increase in rental receipts from acquisitions completed subsequent to March 31, 2015. The majority of cash from operating activities is generated from the rental payments and operating expense recoveries that we receive from our tenants. We
utilize this cash to fund our property-level operating expenses and use the excess cash primarily for debt and interest payments on our mortgage notes payable, interest payments on our Line of Credit and Term Loan Facility, distributions to our
stockholders, management fees to our Adviser, Administration fees to our Administrator and other entity-level operating expenses.
Investing Activities
Net cash provided by investing activities during the three months ended March 31, 2016, was $5.8 million, which primarily consisted of the
repayment of our mortgage loan coupled with receipts from lenders for funds held in escrow, partially offset by tenant improvements performed at certain of our properties as compared to net cash used in investing activities during the three months
ended March 31, 2015, of $30.7 million, which primarily consisted of the acquisition of two properties, coupled with tenant improvements performed at certain of our properties.
Financing Activities
Net cash used by financing
activities during the three months ended March 31, 2016, was $14.7 million, which primarily consisted of distributions paid to our stockholders and principal repayments on mortgage notes payable, partially offset by issuance of mortgage notes
payable coupled with proceeds from the sale of both common and preferred stock. Net cash provided by financing activities for the three months ended March 31, 2015, was $18.9 million, which primarily consisted of proceeds from the sale of
common stock and issuance of mortgage notes payable, partially offset by distributions paid to our stockholders and principal repayments on mortgage notes payable.
Line of Credit
In August 2013, we procured our Line of
Credit, with KeyBank (serving as a revolving lender, a letter of credit issuer and an administrative agent). In October 2015, we expanded our Line of Credit to $85.0 million and extended the maturity date one year through August 2018, with a one
year extension option through August 2019. The interest rate on the revolving line of credit was also reduced by 25 basis points at each of the leverage tiers and the total maximum commitment under the two facilities was increased from $100.0
million to $150.0 million. We also added three new lenders to the bank syndicate, which is now comprised of KeyBank, Comerica Bank, Fifth Third Bank, US Bank and Huntington Bank. We were subject to payment of $0.5 million for the modification of the
agreement.
In connection with the Line of Credit expansion discussed above, we added a $25.0 million five year Term Loan Facility, which matures in
October 2020. The Term Loan Facility is subject to the same leverage tiers as the Line of Credit, however the interest rate at each leverage tier is five basis points lower. We have the option to repay the Term Loan Facility in full, or in part, at
any time without penalty or premium prior to the maturity date.
33
As of March 31, 2016, there was $68.1 million outstanding under our Line of Credit and Term Loan Facility at
a weighted average interest rate of approximately 2.92% and $3.0 million outstanding under letters of credit at a weighted average interest rate of 2.5%. As of April 27, 2016, the maximum additional amount we could draw under the Line of Credit
was $14.9 million. We were in compliance with all covenants under the Line of Credit and Term Loan Facility as of March 31, 2016.
Contractual
Obligations
The following table reflects our material contractual obligations as of March 31, 2016 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
|
Contractual Obligations
|
|
Total
|
|
|
Less than 1 Year
|
|
|
1-3 Years
|
|
|
3-5 Years
|
|
|
More than 5 Years
|
|
Debt Obligations
(1)
|
|
$
|
561,918
|
|
|
$
|
127,424
|
|
|
$
|
121,050
|
|
|
$
|
82,723
|
|
|
$
|
230,721
|
|
Interest on Debt Obligations
(2)
|
|
|
108,289
|
|
|
|
23,322
|
|
|
|
34,477
|
|
|
|
25,434
|
|
|
|
25,056
|
|
Operating Lease Obligations
(3)
|
|
|
7,149
|
|
|
|
459
|
|
|
|
928
|
|
|
|
932
|
|
|
|
4,830
|
|
Purchase Obligations
(4)
|
|
|
2,571
|
|
|
|
2,385
|
|
|
|
186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
679,927
|
|
|
$
|
153,590
|
|
|
$
|
156,641
|
|
|
$
|
109,089
|
|
|
$
|
260,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Debt obligations represent borrowings under our Line of Credit, which represents $43.1 million of the debt obligation due in 2018, Term Loan Facility, which represents $25.0 million of the debt obligation due in 2020,
mortgage notes payable that were outstanding as of March 31, 2016, and amounts due to the holders of our Series C Term Preferred Stock. This figure does not include $0.3 million of premiums and (discounts) net and $6.0 million of deferred
financing costs net, which are reflected in mortgage notes payable on the consolidated balance sheet.
|
(2)
|
Interest on debt obligations includes estimated interest on our borrowings under our Line of Credit and Term Loan Facility, mortgage notes payable and interest due to the holders of our Series C Term Preferred Stock.
The balance and interest rate on our Line of Credit and Term Loan Facility is variable; thus, the amount of interest calculated for purposes of this table was based upon rates and balances as of March 31, 2016.
|
(3)
|
Operating lease obligations represent the ground lease payments due on our Tulsa, Oklahoma, Dartmouth, Massachusetts, Springfield, Missouri, and Salt Lake City, Utah properties.
|
(4)
|
Purchase obligations consist of tenant and capital improvements at 13 of our properties. These items were recognized on our balance sheet as of March 31, 2016.
|
Off-Balance Sheet Arrangements
We did not have any
off-balance sheet arrangements as of March 31, 2016.
Funds from Operations
The National Association of Real Estate Investment Trusts, or NAREIT, developed FFO as a relevant non-GAAP supplemental measure of operating performance of an
equity REIT, to recognize that income-producing real estate historically has not depreciated on the same basis determined under GAAP. FFO, as defined by NAREIT, is net income (computed in accordance with GAAP), excluding gains or losses from sales
of property and impairment losses on property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures.
FFO does not represent cash flows from operating activities in accordance with GAAP, which, unlike FFO, generally reflects all cash effects of transactions
and other events in the determination of net income and should not be considered an alternative to net income as an indication of our performance or to cash flows from operations as a measure of liquidity or ability to make distributions. Comparison
of FFO, using the NAREIT definition, to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.
FFO available to common stockholders is FFO adjusted to subtract distributions made to holders of preferred stock and senior common stock. We believe
that net income available to common stockholders is the most directly comparable GAAP measure to FFO available to common stockholders.
Basic funds from
operations per share, or Basic FFO per share, and diluted funds from operations per share, or Diluted FFO per share, is FFO available to common stockholders divided by the number of weighted average shares of common stock outstanding and FFO
available to common stockholders divided by the number of weighted average shares of common stock outstanding on a diluted basis, respectively, during a period. We believe that FFO available to common stockholders, Basic FFO per share and Diluted
FFO per
34
share are useful to investors because they provide investors with a further context for evaluating our FFO results in the same manner that investors use net income and earnings per share, or
EPS, in evaluating net income available to common stockholders. In addition, because most REITs provide FFO available to common stockholders, Basic FFO and Diluted FFO per share information to the investment community, we believe these are useful
supplemental measures when comparing us to other REITs. We believe that net income is the most directly comparable GAAP measure to FFO, Basic EPS is the most directly comparable GAAP measure to Basic FFO per share, and that Diluted EPS is the most
directly comparable GAAP measure to Diluted FFO per share.
The following table provides a reconciliation of our FFO available to common stockholders for
the three months ended March 31, 2016 and 2015, respectively, to the most directly comparable GAAP measure, net income available to common stockholders, and a computation of basic and diluted FFO per weighted average share of common stock:
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|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
(Dollars in Thousands, Except for Per Share Amounts)
|
|
|
|
2016
|
|
|
2015
|
|
Calculation of basic FFO per share of common stock
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
853
|
|
|
$
|
694
|
|
Less: Distributions attributable to preferred and senior common stock
|
|
|
(1,279
|
)
|
|
|
(1,247
|
)
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders
|
|
$
|
(426
|
)
|
|
$
|
(553
|
)
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Add: Real estate depreciation and amortization
|
|
|
9,133
|
|
|
|
8,207
|
|
Add: Impairment charge
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common stockholders - basic
|
|
$
|
8,750
|
|
|
$
|
7,654
|
|
|
|
|
Weighted average common shares outstanding - basic
|
|
|
22,545,285
|
|
|
|
20,210,975
|
|
|
|
|
Basic FFO per weighted average share of common stock
|
|
$
|
0.39
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
Calculation of diluted FFO per share of common stock
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
853
|
|
|
$
|
694
|
|
Less: Distributions attributable to preferred and senior common stock
|
|
|
(1,279
|
)
|
|
|
(1,247
|
)
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders
|
|
$
|
(426
|
)
|
|
$
|
(553
|
)
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Add: Real estate depreciation and amortization
|
|
|
9,133
|
|
|
|
8,207
|
|
Add: Impairment charge
|
|
|
43
|
|
|
|
|
|
|
|
|
Add: Income impact of assumed conversion of senior common stock
|
|
|
252
|
|
|
|
224
|
(1)
|
|
|
|
|
|
|
|
|
|
FFO available to common stockholders plus assumed conversions
|
|
$
|
9,002
|
|
|
$
|
7,878
|
|
|
|
|
Weighted average common shares outstanding - basic
|
|
|
22,545,285
|
|
|
|
20,210,975
|
|
Effect of convertible senior common stock
|
|
|
800,116
|
|
|
|
723,631
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - diluted
|
|
|
23,345,402
|
|
|
|
20,934,606
|
|
|
|
|
Diluted FFO per weighted average share of common stock
|
|
$
|
0.39
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
Distributions declared per share of common stock
|
|
$
|
0.375
|
|
|
$
|
0.375
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Diluted FFO available to common stockholders was not previously adjusted for the income impact of the assumed conversion of senior common stock, in accordance with ASC 260 (Earnings per Share). This
adjustment has increased Diluted FFO available to common stockholders for the three months ended March 31, 2015 by $0.01 per share.
|
35