Form 8-K/A - Current report: [Amend]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K/A

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 4, 2024

Peakstone Realty Trust

(Exact name of registrant as specified in its charter)

Commission File Number: 001-41686

Maryland	46-4654479
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

1520 E. Grand Avenue, El Segundo, CA 90245

(Address of principal executive offices, including zip code)

(310) 606-3200

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

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

Common shares, $0.001 par value per share	PKST	New York Stock Exchange

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. ☐

Explanatory Note

On November 4, 2024, Peakstone Realty Trust filed a Current Report on Form 8-K (the “Initial Form 8-K”), which included as Exhibit 99.4 thereto certain pro forma financial information. This Current Report on Form 8-K/A is being filed solely to (i) update the amount of pro forma non-cash depreciation expense reflected in the unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2024 (updated from $80.8 million to $87.4 million) and year ended December 31, 2023 (updated from $128.0 million to $137.2 million) and (ii) make conforming adjustments to the unaudited pro forma consolidated statements of operations. This Current Report on Form 8-K/A should be read in conjunction with the Initial Form 8-K.

Item 9.01.

Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The pro forma financial information required by Item 9.01(b), with respect to completion of the Acquisition (as defined in the Initial Form 8-K), is filed herewith as Exhibit 99.1, and incorporated herein by reference.

(d) Exhibits.

Exhibit No.	Description
99.1	Unaudited Pro Forma Consolidated Financial Statements Required by Item 9.01(b).

104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

Signature(s)

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.

		Peakstone Realty Trust

Date: November 7, 2024	By:	/s/ Javier F. Bitar
		Javier F. Bitar
		Chief Financial Officer and Treasurer

Exhibit 99.1

PEAKSTONE REALTY TRUST AND SUBSIDIARIES

Unaudited Pro Forma Consolidated Financial Statements

As used in these unaudited pro forma consolidated financial statements, unless the context otherwise requires, “we,” “us,” “PKST” and the “Company” mean Peakstone Realty Trust and its consolidated subsidiaries.

On November 4, 2024, certain indirect wholly-owned subsidiaries of the Company entered into that certain Purchase and Sale Agreement (the “Purchase and Sale Agreement”), pursuant to which the we agreed to acquire from certain affiliates of Alterra Property Group, LLC a portfolio of 51 industrial outdoor storage properties (the “IOS Portfolio”) located throughout the United States. The aggregate consideration paid by us to acquire the IOS Portfolio was approximately $490.0 million, subject to proration and certain adjustments described in the Purchase and Sale Agreement.

The unaudited pro forma consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X, as amended. The unaudited pro forma consolidated balance sheet as of September 30, 2024 is based on our historical consolidated balance sheet as of that date and has been prepared to reflect (i) the IOS Portfolio acquisition, (ii) various separate financing transactions that the Company entered into in connection with the IOS Portfolio acquisition (the “Financing Transactions”) and (iii) certain other adjustments, as if such transactions and adjustments had occurred on September 30, 2024. The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2024 and the year ended December 31, 2023 are based on the Company’s historical consolidated statements of operation for those periods and have been prepared to reflect (i) the IOS Portfolio acquisition, (ii) the Financing Transactions and (iii) certain other adjustments, as if such transactions and adjustments had occurred on January 1, 2023.

The unaudited pro forma consolidated financial statements (i) are based on available information and assumptions that we deem reasonable; (ii) are presented for informational purposes only; (iii) do not purport to represent our financial position or results of operations or cash flows that would actually have occurred assuming the IOS Portfolio acquisition, the Financing Transactions and certain other adjustments had occurred on September 30, 2024 for the unaudited pro forma consolidated balance sheet or the IOS Portfolio acquisition, the Financing Transactions and certain other adjustments had occurred on January 1, 2023 for the unaudited pro forma consolidated statements of operations; and (iv) do not purport to be indicative of the Company’s future financial condition or results of operations. In management’s opinion, all adjustments necessary to reflect the effects of the transactions have been made. The unaudited pro forma consolidated financial statements and accompanying notes should be read in conjunction with the Company’s consolidated financial statements included on Form 10-K for the year ended December 31, 2023 and Quarterly Report on Form 10-Q for the nine months ended September 30, 2024.

PEAKSTONE REALTY TRUST

UNAUDITED PRO FORMA

CONSOLIDATED BALANCE SHEETS

As of September 30, 2024

(in thousands, except share and per share amounts)

	Historical Peakstone Realty Trust			IOS Portfolio			Financing Transactions and Other Transaction Accounting Adjustments		Pro forma Peakstone Realty Trust
	(A)			(B)			(C)
ASSETS
Cash and cash equivalents	$	241,550		$	(213,292	)	$	107,418	$	135,676
Restricted cash		25,181			—			—		25,181
Real estate:
Land		212,312			257,910			—		470,222
Building and improvements		1,836,900			244,898			—		2,081,798
Tenant origination and absorption cost		370,946			36,509			—		407,455
Construction in progress		1,017			—			—		1,017
Total real estate		2,421,175			539,317			—		2,960,492
Less: accumulated depreciation and amortization		(554,820	)		—			—		(554,820	)
Total real estate, net		1,866,355			539,317			—		2,405,672
Intangible assets, net		27,603			1,500			—		29,103
Deferred rent receivable		65,511			—			—		65,511
Deferred leasing costs, net		16,842			—			—		16,842
Goodwill		74,052			—			—		74,052
Right of use assets		33,369			—			—		33,369
Interest rate swap asset		12,042			—			—		12,042
Other assets		45,373			—			—		45,373
Real estate assets and other assets held for sale, net		36,456			—			—		36,456
Total assets	$	2,444,334		$	327,525		$	107,418	$	2,879,277
LIABILITIES AND EQUITY
Debt, net	$	1,168,010		$	280,000		$	107,418	$	1,555,428
Interest rate swap liability		10,255			—			—		10,255
Distributions payable		8,436			—			—		8,436
Due to related parties		589			—			—		589
Intangible liabilities, net		13,884			40,817			—		54,701
Lease liability		46,860			—			—		46,860
Accrued expenses and other liabilities		62,862			6,708			—		69,570
Liabilities held for sale		1,267			—			—		1,267
Total liabilities		1,312,163			327,525			107,418		1,747,106

Shareholders’ equity:
Common shares, $0.001 par value; 800,000,000 shares authorized; 36,377,254 and 36,377,254 shares issued and outstanding, historical and pro forma, respectively		37			—			—		37
Additional paid-in capital		2,996,900			—			—		2,996,900
Cumulative distributions		(1,100,893	)		—			—		(1,100,893	)
Accumulated deficit		(850,992	)		—			—		(850,992	)
Accumulated other comprehensive income		2,791			—			—		2,791
Total shareholders’ equity		1,047,843			—			—		1,047,843
Noncontrolling interests		84,328			—			—		84,328
Total equity		1,132,171			—			—		1,132,171
Total liabilities and equity	$	2,444,334		$	327,525		$	107,418	$	2,879,277

PEAKSTONE REALTY TRUST

UNAUDITED PRO FORMA

CONSOLIDATED STATEMENT OF OPERATIONS

Nine Months Ended September 30, 2024

(in thousands, except share and per share amounts)

	Historical Peakstone Realty Trust			IOS Portfolio			Financing Transactions and Other Transaction Accounting Adjustments			Pro forma Peakstone Realty Trust
	(AA)			(BB)			(CC)
Revenue:
Rental income	$	170,140		$	26,386		$	—		$	196,526
Expenses:
Property operating expense		18,737			1,479			—			20,216
Property tax expense		13,309			1,980			—			15,289
Property management fees		1,184			—			—			1,184
General and administrative expenses		27,918			—			—			27,918
Corporate operating expenses to related parties		476			—			—			476
Depreciation and amortization		69,155			18,256			—			87,411
Real estate impairment provision		50,774			—			—			50,774
Total expenses		181,553			21,715			—			203,268
(Loss) income before other income (expenses)		(11,413	)		4,671			—			(6,742	)
Other income (expenses):
Interest expense		(46,134	)		(4,988	)		(14,087	)		(65,209	)
Other income, net		12,802			—			—			12,802
Gain from disposition of assets		25,245			—			—			25,245
Extinguishment of debt		(508	)		—			—			(508	)
Goodwill impairment provision		(4,594	)		—			—			(4,594	)
Transaction expenses		(578	)		—			—			(578	)
Net (loss) income		(25,180	)		(317	)		(14,087	)		(39,584	)
Net loss attributable to noncontrolling interests		2,042			—			—			2,042
Net (loss) income attributable to controlling interests		(23,138	)		(317	)		(14,087	)		(37,542	)
Net (loss) income attributable to common shareholders	$	(23,138	)	$	(317	)	$	(14,087	)	$	(37,542	)
Net loss attributable to common shareholders per share, basic and diluted	$	(0.64	)							$	(1.04	)
Weighted-average number of common shares outstanding, basic and diluted		36,344,568									36,344,568

PEAKSTONE REALTY TRUST

UNAUDITED PRO FORMA

CONSOLIDATED STATEMENT OF OPERATIONS

Year Ended December 31, 2023

(in thousands, except share and per share amounts)

	Historical Peakstone Realty Trust			IOS Portfolio			Financing Transactions and Other Transaction Accounting Adjustments			Pro forma Peakstone Realty Trust
	(DD)			(EE)			(FF)
Revenue:
Rental income	$	254,284		$	35,331		$	—		$	289,615
Expenses:
Property operating expense		29,090			1,458			—			30,548
Property tax expense		21,523			2,997			—			24,520
Property management fees		1,813			—			—			1,813
General and administrative expenses		42,962			—			—			42,962
Corporate operating expenses to related parties		1,154			—			—			1,154
Real estate impairment provision		409,512			—			—			409,512
Depreciation and amortization		112,204			25,019			—			137,223
Total expenses		618,258			29,474			—			647,732
(Loss) income before other income (expenses)		(363,974	)		5,857			—			(358,117	)
Other income (expenses):
Interest expense		(65,623	)		(6,429	)		(18,766	)		(90,818	)
Other income, net		13,111			—			—			13,111
Net loss from investment in unconsolidated entity		(176,767	)		—			—			(176,767	)
Gain from disposition of assets		29,164			—			—			29,164
Goodwill impairment provision		(16,031	)		—			—			(16,031	)
Transaction expenses		(24,982	)		—			—			(24,982	)
Net (loss) income		(605,102	)		(572	)		(18,766	)		(624,440	)
Distributions to redeemable preferred shareholders		(2,375	)		—			—			(2,375	)
Preferred units redemption		(4,970	)		—			—			(4,970	)
Net loss attributable to noncontrolling interests		54,555			—			—			54,555
Net (loss) income attributable to controlling interests		(557,892	)		(572	)		(18,766	)		(577,230	)
Distributions to redeemable noncontrolling interests attributable to common shareholders		(36	)		—			—			(36	)
Net (loss) income attributable to common shareholders	$	(557,928	)	$	(572	)	$	(18,766	)	$	(577,266	)
Net (loss) income attributable to common shareholders per share, basic and diluted	$	(15.50	)							$	(16.04	)
Weighted-average number of common shares outstanding, basic and diluted		35,988,231									35,988,231

1.	Unaudited Pro Forma Consolidated Balance Sheet Adjustments

(A)	Represents the unaudited consolidated balance sheet of Peakstone Realty Trust as of September 30, 2024. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

(B)

Reflects the IOS Portfolio acquisition as if it had occurred on September 30, 2024 for aggregate consideration of approximately $490.0 million, plus an additional $10.0 million of capitalizable transaction costs. At the effective time of the transaction, the Company funded the acquisition with a $280.0 million draw on its revolving credit facility and $213.3 million of cash on hand.

The Company has performed a preliminary purchase price valuation analysis of the fair market value of the IOS Portfolio’s assets acquired and liabilities assumed, and expects to account for this transaction as an asset acquisition. Using the total consideration for the acquisition, the Company has estimated the allocations to such assets and liabilities.

The following table summarizes the allocation of the preliminary purchase price as of November 4, 2024 (in thousands):

Assets acquired:
Land	$	257,910
Building and improvements		244,898
Tenant origination and absorption cost		36,509
Total real estate		539,317
Intangible assets		1,500
Total assets acquired		540,817
Liabilities acquired:
Intangible liabilities		40,817
Total assets and liabilities acquired	$	500,000

The difference between the draw on the revolving credit facility ($280.0 million) and cash paid ($213.3 million) compared to the purchase price ($500.0 million) is comprised of the following (in thousands):

Credit for advance rent	$	1,597
Credit for security deposits		745
Credit for tax prorations		1,702
Credit for advance recoveries		17
Credit for capital items		2,647
	$	6,708

This preliminary purchase price allocation has been used to prepare the transaction accounting adjustments in the pro forma consolidated balance sheet and statements of operations. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations as described in more detail in the explanatory notes below. The final allocation is expected to be completed when the Company files its annual report on Form 10-K for the year ending December 31, 2024 and could differ materially from the preliminary allocation used in the transaction accounting adjustments. The final allocation may include (1) changes in fair values of real estate; (2) changes in allocations to intangible assets and liabilities, and (3) other changes to liabilities.

(C)

On October 31, 2024, under the Ninth Amendment to the Second Credit Agreement dated, the Company obtained an additional $175.0 million term loan (“New Term Loan”). The proceeds from the New Term Loan, less $1.1 million of commitment fees, were utilized to paydown the current balance on our revolving credit facility. In addition, the Company obtained three separate fixed-rate mortgage loans, two obtained on November 1, 2024 and one obtained on November 4, 2024, all of which are secured by assets within its existing portfolio for an aggregate principal amount of $110.3 million. We incurred financing fees for the New Term Loan of $2.1 million, inclusive of the commitment fees listed above and $1.9 million for the mortgage loans. Proceeds from these mortgage loans were used to fund a portion of the IOS Portfolio acquisition.

The following table summarizes the adjustments to reflect the additional debt obtained by the Company (in thousands):

	September 30, 2024
New Term Loan	$	175,000
Commitment fees on New Term Loan		(1,050	)
New mortgage loans		110,326
Financing fees		(2,908	)
Paydown on revolving credit facility		(173,950	)
Total change in Debt, net	$	107,418

2.	Unaudited Pro Forma Consolidated Statements of Operations Adjustments

(AA)

Represents the unaudited historical consolidated statement of operations of the Company for the nine months ended September 30, 2024. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

(BB)	Reflects the IOS Portfolio for the nine months ended September 30, 2024 as of the IOS Portfolio acquisition had occurred on January 1, 2023.

The following table presents the revenues and certain expenses of the IOS Portfolio for the nine months ended September 30, 2024, as adjusted to reflect the pro forma impact of the IOS Portfolio acquisition (in thousands):

	Nine Months Ended September 30, 2024⁽¹⁾		Adjustments				Total
Revenues
Rental revenue	$	20,171	$	1,053		⁽²⁾	$	21,224
				5,131		⁽³⁾		5,131
Miscellaneous income		31		—				31
Total revenues		20,202		6,184				26,386

Certain expenses
Operating expenses		1,149		330		⁽⁴⁾		1,479
Taxes and insurance		2,310		(330	)	⁽⁴⁾		1,980
Total certain expenses		3,459		—				3,459
Revenues in excess of expenses	$	16,743	$	6,184			$	22,927

(1)	This information is derived from statements of revenues and certain expenses of the IOS Portfolio prepared for the purposes of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

(2)	Reflects the net impact of straight-line rent.

(3)	Reflects the amortization of the net amount of above- and below-market lease intangibles based on the preliminary purchase price allocation described in Note (B).

(4)	Reflect the reclassification of insurance costs to operating expenses.

Depreciation expense is calculated, for purposes of the unaudited pro forma consolidated statement of operations based on an estimated useful life range of 1-40 years for buildings, an estimated useful life range of 1-15 years for building improvements, and the remaining contractual, in-place lease term for intangible lease assets. In utilizing these useful lives for determining the pro-forma adjustments, management considered the length of time the property had been in existence, the maintenance history and anticipated future maintenance, and any contractual stipulations that might limit the useful life.

At the effective time of the transaction, the Company drew $280.0 million on its revolving credit facility. With the additional debt, the Company’s leverage ratio was greater than or equal to 45% but less than 50%, which indicates a spread of 1.80% over SOF Rate and a 0.1% index, for a total rate of 6.60% for the revolving credit facility.

(CC)

The terms of the New Term Loan require periodic interest payments priced at SOF Rate plus a spread based on our current leverage ratio. With the additional debt required for the IOS Portfolio acquisition, our leverage ratio was greater than or equal to 45% but less than 50%, which indicates a spread of 1.75% over the SOF Rate for a total rate of 6.55% for the New Term Loan. In connection with The New Term Loan, the Company incurred approximately $2.1 million of financing fees that will be amortized over the four-year term, which includes the one-year extension option of the New Term Loan. In addition, we secured three fixed-rate mortgage loans described above in Note (C). The first fixed-rate mortgage loan for $49.6 million has a contractual rate of 5.48% and a term of seven and a half years with financing fees of $0.8 million. The second fixed-rate mortgage loan for $37.7 million has a contractual rate of 5.31% and a term of five years with financing fees of $0.5 million. The third fixed-rate mortgage loan for $23.0 million has a contractual rate of 6.51% and a term of five years with financing fees of $0.6 million. The related financing fees will be amortized over the applicable term of the loan.

The following table summarizes the adjustment to reflect the interest the Company would have incurred as a result of this additional debt for the nine months ended September 30, 2024 (in thousands):

	Nine Months Ended September 30, 2024
Interest expense	$	13,457
Deferred financing fee amortization		630
Total	$	14,087

(DD)	Represents the audited historical consolidated statement of operations of the Company for the year ended December 31, 2023. See the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

(EE)	The following table summarizes the adjustment to reflect the interest the Company would have incurred as a result of the additional debt described in Note (CC) above for the year ended December 31, 2023 (in thousands):

	Year Ended December 31, 2023
Interest expense	$	17,926
Deferred financing fee amortization		840
Total	$	18,766

(FF)	Reflects the IOS Portfolio for the year ended December 31, 2023 as of the IOS Portfolio acquisition had occurred on January 1, 2023.

The following table presents the revenues and certain expenses of the IOS Portfolio for the year ended December 31, 2023, as adjusted to reflect the pro forma impact of the IOS Portfolio acquisition (in thousands):

	Year Ended December 31, 2023⁽¹⁾			Adjustments				Total
Revenues
Rental revenue	$	24,618		$	3,823		⁽³⁾	$	28,441
					6,842		⁽⁴⁾		6,842
Miscellaneous income		48			—				48
Total revenues		24,666			10,665				35,331

Certain expenses
Operating expenses		1,116			342		⁽⁵⁾		1,458
Taxes and insurance		3,338			(342	)	⁽⁵⁾		2,996
Total certain expenses		4,455	⁽²⁾		—				4,454
Revenues in excess of expenses	$	20,211		$	10,665			$	30,877

(1)	This information is derived from statements of revenues and certain expenses of the IOS Portfolio prepared for the purposes of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act.

(2)	Amounts may not sum due to rounding.

(3)	Reflects the net impact of straight-line rent.

(4)	Reflects the amortization of the net amount of above- and below-market lease intangibles based on the preliminary purchase price allocation described in Note (B).

(5)	Reflect the reclassification of insurance costs to operating expenses.

Document and Entity Information	Nov. 04, 2024
Cover [Abstract]
Document Type	8-K/A
Amendment Flag	false
Document Period End Date	Nov. 04, 2024
Entity File Number	001-41686
Entity Registrant Name	Peakstone Realty Trust
Entity Central Index Key	0001600626
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-4654479
Entity Address, Address Line One	1520 E. Grand Avenue
Entity Address, City or Town	El Segundo
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90245
City Area Code	310
Local Phone Number	606-3200
Title of 12(b) Security	Common shares, $0.001 par value per share
Trading Symbol	PKST
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false