Current Report Filing (8-k)
March 21 2022 - 6:10AM
Edgar (US Regulatory)
0001568162
false
true
0001568162
2022-03-18
2022-03-18
0001568162
us-gaap:CommonStockMember
2022-03-18
2022-03-18
0001568162
us-gaap:SeriesAPreferredStockMember
2022-03-18
2022-03-18
0001568162
us-gaap:SeriesCPreferredStockMember
2022-03-18
2022-03-18
0001568162
RTL:PreferredStockPurchaseRightsMember
2022-03-18
2022-03-18
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 18, 2022
The Necessity Retail REIT, Inc.
(Exact Name of Registrant as Specified in
Charter)
Maryland |
|
001-38597 |
|
90-0929989 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer
Identification No.) |
650 Fifth Avenue, 30th Floor
New York, New York 10019 |
(Address, including zip code, of Principal
Executive Offices)
Registrant’s telephone number,
including area code: (212) 415-6500 |
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to section 12(b) of the Act:
Title of each class |
|
Trading
Symbol(s) |
|
Name of each exchange on which registered |
Class
A Common Stock, $0.01 par value |
|
RTL |
|
The Nasdaq Global Select Market |
7.50% Series A Cumulative Redeemable
Perpetual Preferred Stock, $0.01 par value |
|
RTLPP |
|
The Nasdaq Global Select Market |
7.375% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share |
|
RTLPO |
|
The Nasdaq Global Select Market |
Preferred Stock Purchase Rights |
|
|
|
The Nasdaq Global Select Market |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.01 Completion
of Acquisition or Disposition of Assets
On
March 18, 2022, The Necessity Retail REIT, Inc., a Maryland corporation (the “Company”), through wholly
owned subsidiaries of The Necessity Retail REIT Operating Partnership, L.P., the Company’s operating partnership (the “Operating
Partnership”), acquired 2 properties (the “Third Closing Properties”) from certain
subsidiaries of CIM Real Estate Finance Trust, Inc. (the “Sellers”) pursuant
to the previously disclosed purchase and sale agreement among the Company, the Operating Partnership and the Sellers. The Third Closing
Properties consist of 2 power centers and grocery-anchored multi-tenant retail centers and represent the third tranche of the Company’s
previously announced acquisition of 81 properties (together, the “CIM Portfolio”) from the Sellers. As of September
30, 2021, those leases had a weighted average remaining lease term of 4.5 years. As
previously reported on the Company’s Current Reports on Form 8-K filed with the Securities
and Exchange Commission (the “SEC”) on February 14, 2022 and February 28, 2022, the Company has acquired 54 power centers
and grocery-anchored multi-tenant retail centers and a detention pond parcel at an aggregate purchase price of $768.2 million, excluding
closing costs. Neither the Sellers nor CIM Real Estate Finance Trust have a material relationship with the Company, the Operating
Partnership or any of their respective subsidiaries and the acquisition was not an affiliated transaction.
The
aggregate purchase price of the Third Closing Properties was $33.0 million, excluding closing costs. The Company funded the purchase price
of the Third Closing Properties from a $33.0 million draw under the Company’s credit facility. The Third
Closing Properties contain approximately 326,717 rentable square feet, where 85%
leased to 26 tenants and had a weighted average remaining lease term of 4.5
years as of September 30, 2021.
The following table lists information about
the Third Closing Properties:
Portfolio | |
Number of Properties | | |
Rentable Square Feet | | |
Remaining Lease Term(1) | | |
Percentage Leased(2) | |
Almeda Crossing
| |
1 | | |
| 223,223 | | |
4.0 | | |
| 80 | % |
Boston Commons
| |
1 | | |
| 103,494 | | |
5.7 | | |
| 96 | % |
| |
| | |
| | | |
| | |
| | |
Total | |
2 | | |
| 326,717 | | |
4.5 | | |
| 85 | % |
| (1) | Remaining lease term in years as of September 30, 2021. Because
the portfolio has multiple properties with varying lease expirations, remaining lease term is calculated as a weighted-average based on
annualized rental income on a straight-line basis. |
| (2) | Occupancy data as of September 30, 2021. |
The Company expects to complete
the acquisition of the remaining properties in the CIM Portfolio in the second quarter of 2022. There can be no assurance that any subsequent
closing will occur, or of the timing of any such closing.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
On March 18, 2022, the Company, through the Operating
Partnership, drew $33.0 million from its existing credit facility with BMO Harris Bank, N.A. in connection with the acquisition of the Third
Closing Properties. A description of the credit facility is included in the Company’s Current Report on Form 8-K filed with the
SEC on October 4, 2021. The description is a summary and is qualified in its entirety by the terms of the credit agreement relating to
the credit facility, which was filed with the SEC as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC
on October 4, 2021 and is incorporated by reference herein. In total, the Company has drawn $378.0 million from its existing credit facility
in relation to the acquisition.
The
statements contained in this Current Report on Form 8-K that are not historical facts may be forward-looking statements. These
forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. In addition,
words such as “anticipates,” “believes,” “expects,” “estimates,”
“projects,” “plans,” “intends,” “seek,” “may,” “would” and
similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these
identifying words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside
of the Company’s control, which could cause actual results to differ materially from the results contemplated by the
forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global COVID-19
pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company’s tenants and the global economy
and financial markets as well as those set forth in the Company’s Current Reports on Form 8-K dated December 20, 2021,
February 14, 2022 and February 28, 2022 describing additional facts and risk factors relating to the transaction described in this
filing and the Risk Factors section of the Company’s most recent Annual Report on Form 10-K for the year ended
December 31, 2021 filed on February 24, 2022 and all other filings with the SEC after that date, as such risks,
uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. In
particular, the transactions described are subject to closing conditions, including conditions that are outside of the
Company’s control, and the transactions described may not be completed on the contemplated terms, or at all, or they may be
delayed. The Company may not be able to obtain financing to acquire the remaining properties. Forward looking statements speak only
as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect
changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by
law.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Properties Acquired.
The financial
statements required to be filed under Item 9.01(a) of this Current Report on Form 8-K will be filed by amendment to this Current Report
on Form 8-K no later than 71 days after the date the initial report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The pro
forma financial information required to be filed under Item 9.01(b) of this Current Report on Form 8-K will be filed by amendment to this
Current Report on Form 8-K no later than 71 days after the date the initial report on Form 8-K is required to be filed.
(d) Exhibits.
Exhibit
Number |
|
Description |
10.1 |
|
Agreement of Purchase and Sale, dated as of December 17, 2021, by and between the Sellers identified therein and American Finance Operating Partnership, L.P. (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 20, 2021). |
|
|
|
10.2 |
|
First Amendment to Agreement of Purchase and Sale, dated January 3, 2022, by and between the Sellers identified therein and American Finance Operating Partnership (incorporated herein by reference to Exhibit 10.45 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022). |
|
|
|
10.3 |
|
Second Amendment to Agreement of Purchase and Sale, dated January 10, 2022, by and between the Sellers identified therein and American Finance Operating Partnership (incorporated herein by reference to Exhibit 10.46 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022). |
|
|
|
10.4 |
|
Third Amendment to Agreement of Purchase and Sale, dated January 14, 2022, by and between the Sellers identified therein and American Finance Operating Partnership (incorporated herein by reference to Exhibit 10.47 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022). |
|
|
|
10.5 |
|
Fourth Amendment to Agreement of Purchase and Sale, dated January 19, 2022, by and between the Sellers identified therein and American Finance Operating Partnership (incorporated herein by reference to Exhibit 10.48 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022). |
|
|
|
10.6 |
|
Fifth Amendment to Agreement of Purchase and Sale, dated January 21, 2022, by and between the Sellers identified therein and American Finance Operating Partnership (incorporated herein by reference to Exhibit 10.49 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022). |
|
|
|
10.7 |
|
Leasing Earnout Side Letter Agreement, dated February 9, 2022, by and between the Sellers identified therein and American Finance Operating Partnership (incorporated herein by reference to Exhibit 10.50 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022). |
|
|
|
10.8 |
|
Sixth Amendment to Agreement of Purchase and Sale, dated February 10, 2022, by and between the Sellers identified therein and American Finance Operating Partnership (incorporated herein by reference to Exhibit 10.51 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022). |
|
|
|
10.9 |
|
Seventh Amendment to Agreement of Purchase and Sale, dated February 11, 2022, by and between the Sellers identified therein and American Finance Operating Partnership (incorporated herein by reference to Exhibit 10.52 to the Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 24, 2022). |
|
|
|
104 |
|
Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
THE NECESSITY RETAIL REIT, INC. |
|
|
|
Date: March 21, 2022 |
By: |
/s/ Edward M. Weil, Jr. |
|
|
Name: Edward M. Weil, Jr. |
|
|
Title: Chief Executive Officer and President |
Necessity Retail REIT (NASDAQ:RTLPO)
Historical Stock Chart
From Jul 2024 to Aug 2024
Necessity Retail REIT (NASDAQ:RTLPO)
Historical Stock Chart
From Aug 2023 to Aug 2024