S-3D 1 s-3dreitii10132017.htm S-3D Document

As filed with the Securities and Exchange Commission on October 13, 2017
Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________________________________
CARTER VALIDUS MISSION CRITICAL REIT II, INC.
(Exact Name of Registrant as Specified in Its Governing Instruments)
__________________________________________
Maryland
 
46-1854011
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
4890 West Kennedy Blvd., Suite 650
Tampa, FL 33609
 
(813) 287-0101
(Address of Principal Executive Offices; Zip Code)
 
(Registrant’s Telephone Number)
John E. Carter
Carter Validus Mission Critical REIT II, Inc.
4890 West Kennedy Blvd.
Suite 650
Tampa, Florida 33609
(Name, Address, Including Zip Code and Telephone Number, Including Area Code, of Agent for Service)
___________________________________________
Copies to:
Lisa Drummond
Carter Validus Mission Critical REIT II, Inc.
4890 West Kennedy Blvd.
Suite 650
Tampa, Florida 33609
Tel: (813) 287-0101
Fax: (813) 287-0397
Heath D. Linsky, Esq.
Lauren Burnham Prevost, Esq.
Morris, Manning & Martin, LLP
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326-1044
(404) 233-7000
___________________________________________
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☒
If any of the securities registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check following box: ☒
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
☐
  
Accelerated filer
 
☐
Non-accelerated filer
 
☒ (Do not check if a smaller reporting company)
 
 
 
 
 
 
 
 
 
 
Smaller reporting company
 
☐
  
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 pursuant to Section 7(a)(2)(B) of the Securities Act. ☒
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to Be Registered
 
Amount
To Be
Registered
 
Proposed
Maximum
Offering Price Per
Share (1)
 
Proposed
Maximum
Aggregate
Offering Price (1)
 
Amount of
Registration Fee
Class A, Class I and Class T Common Stock, $0.01 par value per share
 
10,893,246
 
$9.18
 
$100,000,000
 
$12,450 (2)
(1)
The purchase prices per share will be $9.18 per Class A share, $9.18 per Class I share and $9.18 per Class T share, which are equal to the most recent estimated per share net asset value of each of our Class A shares, Class I shares and Class T shares, or Estimated Per Share NAV, as approved by our board of directors on September 28, 2017. In the event we update our Estimated Per Share NAV, we expect to update the prices per share accordingly.
(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o), promulgated under the Securities Act of 1933, as amended.
 



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Carter Validus Mission Critical REIT II, Inc.
Amended and Restated Distribution Reinvestment Plan
10,893,246 Class A Shares, Class I Shares and Class T Shares
Carter Validus Mission Critical REIT II, Inc. is a Maryland corporation that qualifies and has elected to be taxed as a real estate investment trust, or REIT. We invest primarily in quality income-producing commercial real estate, with a focus on the data center and healthcare property sectors, leased to long-term creditworthy tenants, as well as making other real estate investments that relate to such property types.
We have established a third amended and restated distribution reinvestment plan, or DRIP, designed to provide existing holders of shares of our common stock with a convenient method to designate the cash distributions paid in connection with their shares for reinvestment in additional shares of the same class of our common stock through the DRIP. Some of the significant features of the DRIP are as follows:
•
Our current stockholders may purchase additional shares, if desired, by automatically reinvesting their cash distributions in shares of the same class under the DRIP.
•
Participants in the DRIP generally are required to have the full amount of the cash distributions paid in connection with their shares reinvested in shares of the same class through the DRIP.
•
The purchase prices per share under our DRIP will be $9.18 per Class A share, $9.18 per Class I share and $9.18 per Class T share, which are equal to our most recent Estimated Per Share NAV approved by our board of directors on September 28, 2017. In the event we update our Estimated Per Share NAV, we expect to adjust the prices per share accordingly. No selling commissions, dealer manager fees or distribution and servicing fees will be paid on shares sold under the DRIP.
•
Eligible participants may participate in the DRIP by completing and executing a distribution change form. Forms may be obtained at any time by calling our Investor Relations Department at (888) 292-3178 or by writing to them at P.O. Box 219312, Kansas City, Missouri, 64121-9312. If you are already enrolled in the DRIP, no action is required.
•
Participants may terminate participation in the DRIP at any time without penalty by delivering written notice to us. To be effective for any distribution, such notice must be received by the administrator of the DRIP at least 10 days prior to the last day of the distribution period to which it relates.
•
We will offer shares pursuant to the DRIP until we sell all 10,893,246 shares in this offering; provided, however, that our board of directors may amend or terminate the DRIP for any reason, other than an amendment to provide for selling commissions or dealer manager fees to be paid for shares purchased pursuant to the DRIP, by providing 10 days’ notice to participants in the plan.
•
Cash distributions are still taxable even though they will be reinvested in shares pursuant to the DRIP.
•
There is no public trading market for the shares, and there can be no assurance that a market will develop in the future.
•
You should carefully consider the specific risks set forth under the caption “Risk Factors” under Item 1A of Part I of our most recent Annual Report on Form 10-K and Item 1A of Part II of our Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus, before making an investment decision.
The Offering:
 
 
Number of Shares Being
Offered
 
Offering Price Per
Share (1)
 
Maximum Proceeds
(Before Expenses)
Class A, Class I and Class T Common Stock, $0.01 par value per share
 
10,893,246
 
$9.18
 
$100,000,000
(1)
The purchase prices per share will be $9.18 per Class A share, $9.18 per Class I share and $9.18 per Class T share, which are equal to the most recent estimated per share net asset value, or Estimated Per Share NAV, approved by our board of directors on September 28, 2017. In the event we update our Estimated Per Share NAV, we expect to update the prices per share accordingly.
Neither the Securities and Exchange Commission, the Attorney General of the State of New York nor any other state securities regulator has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
No one is authorized to make any statement about this offering different from those that appear in this prospectus. The use of projections or forecasts in this offering is prohibited. Any representation to the contrary and any predictions, written or oral, as to the amount or certainty of any present or future cash benefit or tax consequence that may flow from an investment in this offering is not permitted.
Carter Validus Mission Critical REIT II, Inc. is not a mutual fund or any other type of investment company within the meaning of the Investment Company Act of 1940 and is not subject to regulation thereunder. 
The date of this prospectus is October 13, 2017



TABLE OF CONTENTS


SUITABILITY STANDARDS
We have established minimum suitability standards for investors interested in purchasing shares of our common stock. These minimum suitability standards require that a purchaser of shares has, excluding the value of a purchaser’s home, furnishings and automobiles, either:
•
a net worth of at least $250,000; or
•
an annual gross income of at least $70,000 and a minimum net worth of at least $70,000.
Certain states have established suitability requirements in addition to the minimum standards described above. Shares will be sold to investors in these states only if they meet the additional suitability standards set forth below:
Alabama.    In addition to the general suitability standards listed above, Alabama investors must represent that they have a liquid net worth of at least 10 times the amount in the program and its affiliates.
Iowa.    In addition to the general suitability standards listed above, an Iowa investor must have either (a) a minimum net worth of $300,000 (exclusive of home, auto and furnishings) or (b) a minimum annual income of $70,000 and a net worth of $100,000 (exclusive of home, auto and furnishings). In addition, Iowa recommends that an investor’s total investment in this Offering or any of its affiliates and any other non-exchange traded REIT, not exceed 10% of the Iowa resident’s liquid net worth. “Liquid net worth” for purposes of this investment shall consist of cash, cash equivalents and readily marketable securities.
Kansas.    It is recommended by the office of the securities commissioner of Kansas that investors limit their aggregate investment in our securities and the securities of other non-traded real estate investment trusts to not more than 10% of their liquid net worth. For these purposes, liquid net worth shall be defined as that portion of total net worth (total assets minus liabilities) that is comprised of cash, cash equivalents, and readily marketable securities, as determined in conformity with Generally Acceptable Accounting Principles.
Kentucky.    In addition to the general suitability standards listed above, no Kentucky resident can invest, in aggregate, more than 10% of their liquid net worth (cash, cash equivalents and readily marketable securities) in us or our affiliates' non-publicly traded real estate investment trusts.
Maine.    It is recommended by the Maine Office of Securities that an investor’s aggregate investment in this Offering and similar direct participation investments not exceed 10% of the investor’s liquid net worth. For this purpose, “liquid net worth” is defined as that portion of net worth that consists of cash, cash-equivalents, and readily marketable securities.
Massachusetts.    In addition to the general suitability standards listed above, Massachusetts investors may not invest more than 10% of their liquid net worth in us or in other illiquid direct participation programs.
Missouri.    In addition to the general suitability requirements listed above, no more than ten percent (10%) of any investor’s liquid net worth shall be invested in the securities registered by the Issuer for this Offering with the Securities Division.
Nebraska.   In addition to the general suitability standards listed above, Nebraska investors must limit their aggregate investment in us and in the securities of other non-publicly traded real estate investment trusts to 10% of such investor’s net worth. Accredited investors in Nebraska, as defined in 17 C.F.R. § 230.501, are not subject to this limitation.
New Jersey.    In addition to the suitability standards listed above, a New Jersey investor’s investment in us, shares of our affiliates, non-publicly traded real estate investment trusts and non-publicly traded direct participation programs (excluding unregistered, federally and state exempt private offerings) may not exceed 10% of his or her liquid net worth. For this purpose, “liquid net worth” is defined as that portion of net worth (total assets exclusive of home, home furnishings and automobiles, minus total liabilities) that consists of cash, cash equivalents and readily marketable securities.
New Mexico.    In addition to the general suitability standards listed above, a New Mexico investor may not invest more than 10% of their liquid net worth in us, our affiliates and other non-traded real estate investment programs.
North Dakota.    North Dakota investors must represent that, in addition to the stated net income and net worth standards, they have a net worth of at least ten times their investment in us.
Ohio.    It shall be unsuitable for an Ohio investor’s aggregate investment in shares of the issuer, affiliates of the issuer, and in other non-traded real estate investment trusts to exceed ten percent (10%) of his or her liquid net worth. “Liquid net worth” shall be defined as that portion of net worth (total assets exclusive of primary residence, home furnishings, and automobiles minus total liabilities) that is comprised of cash, cash equivalents, and readily marketable securities.
Oregon.    In addition to the general suitability standards listed above, an Oregon investor’s maximum investment in us and our affiliates may not exceed 10% of their liquid net worth.

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Pennsylvania.    In addition to the general suitability standards listed above, a Pennsylvania investor may not invest more than 10% of their net worth (exclusive of home, furnishings and automobiles) in us.
Tennessee.    In addition to the general suitability standards listed above, Tennessee residents must have a minimum annual gross income of $100,000 and a minimum net worth of $100,000, or a minimum net worth of $500,000 exclusive of home, home furnishings and automobiles. In addition, Tennessee residents’ investment in us must not exceed ten percent (10%) of their liquid net worth.
In the case of sales to fiduciary accounts (such as an IRA, Keogh Plan or pension or profit-sharing plan), these minimum suitability standards must be satisfied by the beneficiary, the fiduciary account, or by the donor or grantor who directly or indirectly supplies the funds to purchase our common stock if the donor or the grantor is the fiduciary. Prospective investors with investment discretion over the assets of an IRA, employee benefit plan or other retirement plan or arrangement that is covered by the Employee Retirement Income Security Act of 1974, or ERISA, as amended, or Section 4975 of the Internal Revenue Code are required to consult their own legal and tax advisors on these matters.
In the case of gifts to minors, the minimum suitability standards must be met by the custodian of the account or by the donor.
Our sponsor and each person selling shares on our behalf, including participating broker-dealers and registered investment advisors recommending the purchase of shares in this offering, are responsible for determining if investors meet the minimum suitability standards for investing in our common stock. In making this determination, our sponsor and dealer manager will reasonably rely on the participating broker-dealers and information provided by investors. In addition to the minimum suitability standards described above, our sponsor, or dealer manager and any participating broker-dealers, as our agents are required to make every reasonable effort to determine that the purchase of shares is a suitable and appropriate investment for each investor.
In making this determination, our sponsor or dealer manager and any participating broker-dealers, as our agents will, based on a review of the information provided by you, including your age, investment objectives, income, net worth, financial situation and other investments held by you, consider whether you:
•
meet the minimum income and net worth standards established in your state;
•
can reasonably benefit from an investment in our common stock based on your overall investment objectives and portfolio structure;
•
are able to bear the economic risk of the investment based on your overall financial situation; and
•
have an apparent understanding of:
•
the fundamental risks of an investment in our common stock;
•
the risk that you may lose your entire investment;
•
the lack of liquidity of our common stock;
•
the restrictions on transferability of our common stock;
•
the background and qualifications of our advisor; and
•
the tax consequences and ERISA implications of an investment in our common stock.
Such persons must maintain records for at least six years of the information used to determine that an investment in the shares is suitable and appropriate for each investor.


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Restrictions Imposed by the USA PATRIOT Act and Related Acts
In accordance with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the USA PATRIOT Act) and related acts, the shares offered hereby may not be offered, sold, transferred or delivered, directly or indirectly, to any “unacceptable investor,” which means anyone who is acting, directly or indirectly:
•
in contravention of any U.S. or international laws and regulations, including without limitation any anti-money laundering or anti-terrorist financing sanction, regulation, or law promulgated by the Office of Foreign Assets Control of the United States Department of the Treasury (OFAC) or any other U.S. governmental entity (such sanctions, regulations and laws, together with any supplement or amendment thereto, are referred to herein as the U.S. Sanctions Laws), such that the offer, sale or delivery, directly or indirectly, would contravene such U.S. Sanctions Laws; or
•
on behalf of terrorists or terrorist organizations, including those persons or entities that are included on the List of Specially Designated Nationals and Blocked Persons maintained by OFAC, as such list may be amended from time to time, or any other lists of similar import as to any non-U.S. country, individual or entity.

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Prospectus Summary
Carter Validus Mission Critical REIT II, Inc.
We are a Maryland corporation incorporated on January 11, 2013 that qualified, and elected to be treated, as a REIT for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2014. Among other requirements, REITs generally are required to distribute at least 90% of their annual REIT taxable income. Our investment objectives are to:
•
acquire well-maintained and strategically-located, quality, mission critical commercial real estate properties in high-growth sectors of the U.S. economy, including the data center and healthcare sectors, which provide current cash flow from operations;
•
pay regular cash distributions to stockholders;
•
preserve, protect and return capital contributions to stockholders;
•
realize appreciated growth in the value of our investments upon the sale of such investments in whole or part; and
•
be prudent, patient and deliberate with respect to the purchase and sale of our investments considering current and future real estate markets.
We primarily acquire quality income-producing commercial real estate with a focus on data centers and healthcare properties, preferably with long-term leases to creditworthy tenants. In the current market environment, we believe it is possible to buy quality commercial real estate at prices that we expect will provide stable, recurring income, with a potential for long-term appreciation. If attractive investment opportunities arise, we also may purchase other types of commercial real estate. Other real estate investments may include equity or debt interests, including securities, in other real estate entities; provided that we do not intend for such investments to constitute a significant portion of our assets. We intend to continue to primarily acquire assets located in the United States, however, we may also acquire assets located outside the United States.We may also invest in real estate-related debt and securities that meet our investment strategy and return criteria. We expect the size of individual properties that we purchase to vary significantly, but we expect most of the properties we acquire are likely to have a purchase price between $5 million and $200 million.
Our executive offices are located at 4890 West Kennedy Blvd., Suite 650, Tampa, Florida 33609. Our telephone number is (813) 287-0101, our fax number is (813) 287-0397 and the telephone number for our investor relations department is (888) 292-3178. Additional information about us and our affiliates may be obtained at www.cvmissioncriticalreit2.com, but the contents of that site are not incorporated by reference in or otherwise a part of this prospectus.
We commenced our initial public offering of $2,350,000,000 of shares of our common stock (the “Initial Offering”), consisting of up to $2,250,000,000 of shares in our primary offering and up to $100,000,000 of shares pursuant to our distribution reinvestment plan, on May 29, 2014. Following the termination of our Initial Offering, we may continue offering in shares of Class A common stock, shares of Class I common stock and shares of Class T common stock, in any combination with a dollar value up to the maximum amount pursuant to a registration statement on Form S-11 (SEC Registration No. 333-217579), as amended or supplemented from time to time.
As of October 11, 2017, we had accepted investors’ subscriptions for and issued approximately 80,915,000 shares of Class A common stock, 4,629,000 shares of Class I common stock and 30,096,000 shares of Class T common stock in the Offering, resulting in receipt of gross proceeds of approximately $801,255,000, $42,137,000 and $288,600,000, respectively, for total gross proceeds raised of $1,131,992,000. As of October 11, 2017, we had approximately $1,218,008,000 in Class A shares, Class I shares and Class T shares of common stock remaining in the Offering.
Our board of directors has approved the closing of the primary portion of our initial public offering on November 24, 2017. We will stop offering shares pursuant to the DRIP component of our initial public offering before we begin offering shares under this prospectus.
As of October 13, 2017, we owned 66 properties comprising 4.8 million rentable square feet of single-tenant and multi-tenant commercial space located in 36 metropolitan statistical areas and one micropolitan statistical area. As of October 13, 2017, the rentable space at these properties was 97% leased.
Our Board of Directors
We operate under the direction of our board of directors, the members of which are accountable to us and our stockholders as fiduciaries. We have five directors, three of whom are independent of us, our advisor and our sponsor. Each of our directors was recommended because of his qualifications and significant experience in the real estate industry. Each of our executive officers and two of our board members are affiliated with our advisor and its affiliates. Our charter requires, subject to limited exceptions, that a majority of our directors be independent of us, our sponsor, our advisor and all of our or their

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affiliates, and provides that our independent directors are responsible for reviewing the performance of our advisor and must approve certain other matters as set forth in our charter. Our directors will be elected annually by our stockholders. Although we have executive officers who manage our operations, we do not have any paid employees.
Our Advisor
Carter Validus Advisors II, LLC, a Delaware limited liability company formed on January 10, 2013, is our external advisor and is responsible for managing our affairs on a day-to-day basis. The agreement with our advisor is for a one-year term and is reconsidered on an annual basis by our board of directors.
Our Operating Partnership
Substantially all of our business is conducted through our operating partnership, Carter Validus Operating Partnership II, LP, a Delaware limited partnership formed on January 10, 2013. We are the sole general partner of Carter Validus Operating Partnership II, LP, and our advisor is its special limited partner.
Our Property Manager
Our property manager is Carter Validus Real Estate Management Services II, LLC, a Delaware limited liability company formed on January 11, 2013. Our property manager, which is wholly-owned by our sponsor and is an affiliate of our advisor, provides services to us in connection with the rental, leasing, operation and management of our properties.
Our REIT Status
We qualified and elected to be taxed as a REIT for federal income tax purposes beginning with the taxable year ended December 31, 2014. As a REIT, we generally will not be subject to U.S. federal income tax on income that we distribute currently to our stockholders. Under the Internal Revenue Code, a REIT is subject to numerous organizational and operational requirements, including a requirement that it generally distribute at least 90% of its annual REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gain, to its stockholders. If we fail to qualify for taxation as a REIT in any year, and the statutory relief provisions of the Internal Revenue Code do not apply, our income will be taxed at regular corporate rates, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify. Even if we qualify as a REIT, we may still be subject to state and local taxes on our income and property, U.S. federal income and excise taxes on our undistributed income and other U.S. taxes.
Terms of the Offering
We currently are offering up to 10,893,246 shares in any combination of Class A shares, Class I shares and Class T shares to our existing stockholders pursuant to the DRIP. The purchase prices per share under the DRIP will be $9.18 per Class A share, $9.18 per Class I share and $9.18 per Class T share, which are equal to our most recent Estimated Per Share NAV approved by our board of directors on September 28, 2017. In the event we update our Estimated Per Share NAV, we expect to adjust the prices per share accordingly. No selling commissions, dealer manager fees or distribution and servicing fees will be paid on shares issued under the DRIP.
We will offer shares pursuant to the DRIP until we sell all 10,893,246 shares in any combination of Class A shares, Class I shares and Class T shares in this offering; provided, however, that our board of directors may amend or terminate the DRIP for any reason, other than an amendment to provide for selling commissions or dealer manager fees to be paid for shares purchased pursuant to the DRIP or to revoke a participant’s right to terminate or modify participation in the DRIP, by providing 10 days’ notice to participants in the plan. This offering must be registered or exempt from registration in every state in which we offer or sell shares. If this offering is not exempt from registration, the required registration generally is for a period of one year. Therefore, we may have to stop selling shares in any state in which the registration is not renewed annually and the offering is not otherwise exempt from registration.
Distribution Reinvestment Plan
This prospectus describes the DRIP, which is designed to offer our existing stockholders a convenient method for purchasing additional shares of our common stock by reinvesting cash distributions without paying any selling commissions, fees or service charges. Regardless of your participation in our DRIP, you will be taxed on your distributions to the extent they constitute taxable income, and participation in our DRIP would mean that you will have to rely solely on sources other than distributions from which to pay such taxes. As a result, you may have a tax liability without receiving cash distributions to pay such liability.

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Use of Proceeds
The proceeds raised pursuant to the DRIP will be used for general corporate purposes, including, but not limited to, investment in real estate and real estate-related investments, payment of operating expenses, capital expenditures, fees and other costs, repayment of debt, and funding for our share repurchase program. We cannot predict with any certainty how much DRIP proceeds will be used for any of the above purposes, and we have no basis for estimating the number of shares that will be sold.
Incorporation by Reference
This prospectus incorporates by reference several documents previously filed with the Securities and Exchange Commission, or the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2016, our 2017 proxy statement (solely to the extent specifically incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2016), our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, as well as all future documents we file pursuant to certain sections of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These documents contain information about us which supplements the information in this prospectus. See “Incorporation of Certain Information by Reference.”
RISK FACTORS
You should carefully consider the specific risks set forth under the caption “Risk Factors” under Item 1A of Part I of our most recent Annual Report on Form 10-K and Item 1A of Part II of our most recent Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus, before making an investment decision, as the same may be updated from time to time by our future filings under the Exchange Act.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus contains forward-looking statements. Such statements include, in particular, statements about our plans, strategies and prospects. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our business and industry. You can generally identify forward-looking statements by our use of forward-looking terminology, such as “may,” “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” “would,” “could,” “should” and variations of these words and similar expressions. Discussions containing these forward-looking statements may be found, among other places, in the “Use of Proceeds” section of this prospectus and the “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections incorporated by reference from our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC, as well as any similar statements contained in future Quarterly Reports on Form 10-Q or Annual Reports on Form 10-K, which are hereby incorporated by reference upon their subsequent filing with the SEC. These forward-looking statements are or will be, as applicable, based largely on our expectations and projections about future events and future trends affecting our business. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control, that could cause actual results to differ materially from those anticipated in the forward-looking statements.
Our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this prospectus or the date of documents incorporated by reference in this prospectus that include forward-looking statements.
SUMMARY OF OUR DISTRIBUTION REINVESTMENT PLAN
Purpose of the Distribution Reinvestment Plan
The DRIP is designed generally to offer our existing stockholders a convenient method of purchasing additional shares of our common stock by reinvesting cash distributions without paying any selling commissions, fees or service charges. We will use the proceeds received from sales of the shares for general corporate purposes, including, but not limited to, investment in real estate and other real estate-related investments, payment of operating expenses, capital expenditures, fees and other costs, repayment of debt, and funding for our share repurchase program.

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How to Enroll in the Distribution Reinvestment Plan
You can participate in the DRIP if you currently own shares of our common stock and such shares are registered in your name. If you have shares registered in the name of someone else (for example, with a bank, broker or trustee), to enroll in the DRIP, you will need to arrange for that entity to transfer ownership of the shares to you.
Eligible persons may elect to participate in the DRIP by completing the subscription agreement, the enrollment form or by other written notice to the plan administrator. Forms may be obtained at any time by calling (888) 292-3178. Participation in the DRIP will commence with the next distribution payable after receipt of your election to participate, provided it is received at least 10 days prior to the last day of the fiscal quarter, month or other period to which such distribution relates. If you are already enrolled in the DRIP, no action is required.
You will remain a participant of the DRIP until you deliver to our plan administrator written notice of your desire to terminate your participation (described more fully below under the heading “Terminating Participation in the Distribution Reinvestment Plan”).
We reserve the right to prohibit qualified retirement plans and other “benefit plan investors” (as defined in ERISA) from participating in the DRIP if such participation would cause our underlying assets to constitute “plan assets” of qualified retirement plans.
Each stockholder electing to participate in the DRIP agrees that, if at any time he or she fails to meet the applicable investor suitability standards or cannot make the other investor representations or warranties set forth in the then current prospectus or subscription agreement relating to such investment, he or she will promptly notify the reinvestment agent in writing of that fact.
Terminating Participation in the Distribution Reinvestment Plan
Subscribers should note that affirmative action in the form of written notice to the reinvestment agent, which currently is us, must be taken to withdraw from participation in the DRIP. A withdrawal from participation in the DRIP will be effective with respect to distributions for a monthly distribution period only if written notice of termination is received at least 10 days prior to the end of such distribution period. In addition, a transfer of shares prior to the date our shares are listed for trading on a national securities exchange, which we have no intent to do at this time and which may never occur, will terminate participation in the DRIP with respect to such transferred shares as of the first day of the distribution period in which the transfer is effective, unless the transferee demonstrates to the reinvestment agent that the transferee meets the requirements for participation in the DRIP and affirmatively elects to participate in the plan by providing to the reinvestment agent an executed enrollment form or other written authorization required by the reinvestment agent.
Offers and sales of shares pursuant to the DRIP must be registered in every state in which such offers and sales are made. Generally, such registrations are for a period of one year. Thus, we may have to stop selling shares pursuant to the DRIP in any states in which our registration is not renewed or extended.
Source and Purchase Price of the Shares
There is no public trading market for the shares of our common stock, and there can be no assurance that a market will develop in the future. The purchase prices per share under our DRIP will be $9.18 per Class A share, $9.18 per Class I share and $9.18 per Class T share, which are equal to our most recent Estimated Per Share NAV of each of our Class A shares, Class I shares and Class T Shares approved by our board of directors on September 28, 2017. In the event we update our Estimated Per Share NAV, we expect to adjust the prices per share accordingly. No selling commissions, dealer manager fees or distribution and servicing fees will be paid on shares sold under the DRIP.
When Shares Will Be Purchased
Shares will be purchased for you under the DRIP promptly following the payment date for the distribution used to purchase the shares to the extent shares are available for purchase under the DRIP. If sufficient shares are not available to issue under the DRIP, the reinvestment agent will remit excess cash distributions to the respective DRIP participant. We intend to pay distributions monthly.
Participants generally are required to have the full amount of their cash distributions with respect to all shares owned by them reinvested pursuant to the DRIP. If you choose to participate in the DRIP, the reinvestment agent will receive all cash distributions on the shares registered in your name and will apply such distributions to purchase additional shares of the same class for you directly from us. However, the reinvestment agent has the sole discretion, upon the request of a DRIP participant, to accommodate such participant’s request for less than all of its securities to be subject to participation in the DRIP.

7

Cost of Participating in the Distribution Reinvestment Plan
You will not incur any brokerage commissions, dealer manager fees or service charges when purchasing shares under the DRIP. All costs of administration of the DRIP will be borne by us.
Reports to Participants
Within 90 days after the end of each calendar year, the reinvestment agent will mail to each participant a statement of account describing, as to such participant, the distributions received, the number of shares purchased, the purchase price for such shares and the total shares purchased on behalf of the participant during the prior year pursuant to the DRIP.
Excluded Distributions
Our board of directors may designate that certain cash or other distributions attributable to net sales proceeds will be excluded from distributions that may be reinvested in shares under the DRIP, or Excluded Distributions. Accordingly, if proceeds attributable to a potential sale transaction are distributed to stockholders as an Excluded Distribution, such amounts may not be reinvested in our shares pursuant to our DRIP. The determination of whether all or part of a distribution will be deemed to be an Excluded Distribution is separate and unrelated to our requirement to distribute 90% of our taxable REIT income. In its initial determination of whether to make a distribution and the amount of the distribution, our board of directors will consider, among other factors, our cash position and our distribution requirements as a REIT. Once our board of directors determines to make the distribution, it will then consider whether all or part of the distribution will be deemed to be an Excluded Distribution. In that event, the amount distributed to participants in our DRIP will be reinvested in additional shares of our common stock. If all or a portion of the distribution is deemed to be an Excluded Distribution, the distribution will be made to all stockholders, however, the excluded portion will not be reinvested. As a result, we would not be able to use any of the Excluded Distribution to assist in meeting future distributions and the stockholders would not be able to use the distribution to purchase additional shares of our common stock through our DRIP. We currently do not have any planned Excluded Distributions, which will only be made, if at all, in addition to, not in lieu of, regular distributions.
Federal Income Tax Considerations
Stockholders who participate in the DRIP will recognize dividend income, taxable to the extent of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), in the amount and as though they had received the cash rather than purchased shares through the DRIP, unless we have designated all or a portion of the dividend as a capital gain dividend. These deemed dividends will be treated as actual dividends and will retain the character and tax effects applicable to all dividends. To the extent you purchase shares through our DRIP at a discount to their fair market value, you will be treated for U.S. federal income tax purposes as receiving an additional distribution equal to the amount of the discount. Shares received under the DRIP will have a holding period, for tax purposes, beginning with the day after purchase, and a tax basis equal to their cost, which is the gross amount of the deemed distribution.
Book-Entry Evidence for Shares Acquired Under the Distribution Reinvestment Plan
All shares that you purchase through the DRIP are recorded in your name on our books. No stock certificates will be issued because we do not issue stock certificates. The number of shares you hold in the DRIP will be shown on your regular statement of account.
Selling Shares Acquired Under the Distribution Reinvestment Plan
You may sell the shares purchased through the DRIP, at any time, subject to any restrictions set forth in our charter or that we may impose on the sale of shares to protect our status as a REIT. However, there is currently no liquid market for our shares, and we do not expect one to develop. Consequently, there may not be a readily available buyer for your shares.
Amendment, Suspension and Termination
We reserve the right to amend any aspect of our DRIP with 10 days’ notice to participants. The reinvestment agent, which currently is us, also reserves the right to terminate a participant’s individual participation in the DRIP, and we reserve the right to suspend or terminate our DRIP itself in our sole discretion at any time, by sending 10 days’ prior written notice of suspension or termination to the suspended or terminated participant or, upon termination of the DRIP, to all participants.
Voting Rights of Shares Acquired Under the Distribution Reinvestment Plan
Shares in your DRIP account will be voted as you direct. As a stockholder, you will receive proxy information in connection with any annual or special meeting of stockholders. This proxy will apply to all shares registered in your name, including all shares credited to your DRIP account. You may also vote your shares, including those credited to your DRIP account, in person at any annual or special meeting of stockholders.

8

Our Liability Under the Distribution Reinvestment Plan
Neither our company nor the DRIP’s administrator has any responsibility or liability as to the value of the shares or any change in the value of the shares acquired for each participant’s account, and neither the company nor the plan’s administrator will be liable for any act done in good faith, or for any good faith omission to act. In addition, our charter provides that we will generally indemnify and hold harmless a director, an officer, or our advisor or any affiliate of our advisor acting as our agent and their respective officers, directors, managers and employees against any and all losses or liabilities reasonably incurred by such party in connection with or by reason of any act or omission performed or omitted to be performed on our behalf in such capacity.
We have agreed to indemnify and hold harmless our advisor and its affiliates performing services for us from specific claims and liabilities arising out of the performance of their obligations under the advisory agreement. As a result, our stockholders and we may be entitled to a more limited right of action than they and we would otherwise have if these indemnification rights were not included in the advisory agreement.
The general effect to investors of any arrangement under which we agree to insure or indemnify any persons against liability is a potential reduction in distributions resulting from our payment of premiums associated with insurance or indemnification payments in excess of amounts covered by insurance. In addition, indemnification could reduce the legal remedies available to our stockholders and us against the officers and directors.
The SEC takes the position that indemnification against liabilities arising under the Securities Act of 1933, as amended (Securities Act), is against public policy and unenforceable. Indemnification of our directors, our officers, our advisor or affiliates of our advisor will not be allowed for liabilities arising from or out of a violation of state or federal securities laws, unless one or more of the following conditions are met:
•
there has been a successful adjudication on the merits of each count involving alleged material securities law violations;
•
such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or
•
a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which our securities were offered or sold as to indemnification for violations of securities laws.
Notwithstanding the foregoing, liability under the U.S. federal securities laws cannot be waived. Similarly, we have been advised that in the opinion of certain state securities commissioners, indemnification is also contrary to public policy and therefore unenforceable.
YOU SHOULD RECOGNIZE THAT YOU MAY NOT PROFIT, AND MAY INCUR A LOSS, ON THE SHARES YOU ACQUIRE UNDER THE DISTRIBUTION REINVESTMENT PLAN.
Governing Law
The DRIP and the DRIP’s participants’ election to participate in the plan will be governed by the laws of the State of Maryland.
Contact for Documents Regarding the Distribution Reinvestment Plan
All requests for forms regarding the DRIP and documents incorporated by reference into this prospectus should be sent to:
DST Systems, Inc.
P.O. Box 219312
Kansas City, MO 64121-9312
888-292-3178
USE OF PROCEEDS
The proceeds raised pursuant to the DRIP will be used for general corporate purposes, including, but not limited to, investment in real estate and real estate-related investments, payment of operating expenses, capital expenditures, fees and other costs, repayment of debt, and funding for our share repurchase program. We cannot predict with any certainty how much DRIP proceeds will be used for any of the above purposes, and we have no basis for estimating the number of shares that will be sold.

9

We will pay actual expenses incurred in connection with the registration and offering of the DRIP shares, including but not limited to legal fees, printing expenses, mailing costs, SEC and blue sky registration fees, and other accountable offering costs, in our sole discretion. These offering costs are currently estimated to be approximately $549,950 (or less than 1% of the maximum DRIP proceeds).
PLAN OF DISTRIBUTION
We are offering a maximum of 10,893,246 shares in any combination of Class A shares, Class I shares and Class T shares to our current stockholders through the DRIP. The purchase price per share under our DRIP will be $9.18 per Class A share, $9.18 per Class I share and $9.18 per Class T share, which are equal to our most recent Estimated Per Share NAV of each of our Class A shares, Class I shares and Class T shares approved by our board of directors on September 28, 2017. In the event we update our Estimated Per Share NAV, we expect to adjust the prices per share accordingly. We have no basis for estimating the number of shares that will be sold.
We will not engage any person to participate in or facilitate the distribution of shares under the DRIP, and we will not pay any selling commissions, dealer manager fees, distribution and servicing fees or any other remuneration in connection with the sale of shares pursuant to the DRIP.
LEGAL MATTERS
Venable LLP, Baltimore, Maryland, has passed upon the legality of the common stock offered hereby.
EXPERTS
The consolidated financial statements and schedule of Carter Validus Mission Critical REIT II, Inc. as of December 31, 2016 and 2015, and for each of the years in the three-year period ended December 31, 2016, have been incorporated by reference herein from Carter Validus Mission Critical REIT II, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016 in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The historical summary of gross income and direct operating expenses of the 250 Williams Data Center for the year ended December 31, 2016, incorporated by reference in this prospectus from Carter Validus Mission Critical REIT II, Inc.'s Form 8-K/A filed with the SEC on August 31, 2017 and included in this registration statement, have been audited by Frazier & Deeter, LLC, independent auditors, as set forth in their report included herein. The historical summary of gross income and direct operating expenses is included herein in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information filed with the SEC will update and supersede this information. The documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Exchange Act until the DRIP is terminated comprise the incorporated documents:
(a)
The description of our shares contained in our Registration Statement on Form S-11 (Registration No. 333-191706) filed with the SEC on October 11, 2013, as amended;
(b)
Our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 16, 2017;
(c)
Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, filed with the SEC on May 12, 2017 and August 10, 2017, respectively.
(d)
Our Current Reports on Form 8-K and Form 8-K/A filed with the SEC on January 18, 2017, February 10, 2017, March 6, 2017, March 23, 2017, April 4, 2017, May 5, 2017, May 15, 2017, May 17, 2017, May 30, 2017, June 6, 2017, June 21, 2017, June 22, 2017, July 5, 2017, July 17, 2017, July 21, 2017, August 7, 2017, August 18, 2017, August 22, 2017, August 29, 2017, August 31, 2017, September 15, 2017, September 22, 2017, September 28, 2017, October 3, 2017 and October 10, 2017.
It is specifically noted that any information that is deemed to be “furnished,” rather than “filed,” with the SEC is not incorporated by reference into this prospectus.
We will provide to each person, including any beneficial owner, to whom a prospectus is delivered, upon written or oral request of that person and at no cost, a copy of any document incorporated by reference into this prospectus (or incorporated

10

into the documents that this prospectus incorporates by reference). Requests should be directed to Investor Relations at 4890 West Kennedy Blvd., Suite 650, Tampa, Florida 33609, or by calling (888) 292-3178.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are subject to the information requirements of the Exchange Act. Therefore, we file annual, quarterly and current reports, proxy statements and other information with the SEC. You may inspect and copy reports, proxy statements and other documents we file with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. In addition, stockholders will receive annual reports containing audited financial statements with a report thereon by our independent certified public accountants, and quarterly reports containing unaudited summary financial information for each of the first three quarters of each fiscal year. This prospectus does not contain all information set forth in the Registration Statement on Form S-3 filed with the SEC, as amended, and exhibits thereto which we have filed with the SEC under the Securities Act and to which reference is hereby made. We file information electronically with the SEC, and the SEC maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the SEC’s web site is http://www.sec.gov.

11

INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION OF
250 WILLIAMS ATLANTA DATA CENTER


F-1

INDEPENDENT AUDITORS' REPORT
Members
DCII-250 Williams Street NW, LLC
Tampa, Florida

We have audited the accompanying historical summary of gross income and direct operating expenses of 250 Williams Atlanta Data Center (the “Property”) for the year ended December 31, 2016, and the related notes to the financial statement.
Management's Responsibility for the Financial Statement
Management is responsible for the preparation and fair presentation of this financial statement in accordance with the applicable rules and regulations of the Securities and Exchange Commission as described in Note 2 to the financial statements; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a financial statement that is free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the historical summary of gross income and direct operating expenses of the Property for the year ended December 31, 2016, in accordance with the rules and regulations of the Securities and Exchange Commission.
Emphasis of Matter
We draw attention to Note 2 to the accompanying financial statement, which describes that the historical summary of gross income and direct operating expenses of the Property was prepared for the purpose of complying with the rules of the Securities and Exchange Commission (for the inclusion on Form 8-K/A of Carter Validus Mission Critical REIT II, Inc.) and is not intended to be a complete presentation of the Property’s revenues and expenses. Our opinion has not been modified with respect to this matter.

/s/ Frazier & Deeter, LLC

Atlanta, Georgia
August 31, 2017


F-2

250 Williams Atlanta Data Center
Historical Summary of Gross Income and Direct Operating Expenses
Three Months Ended March 31, 2017 (Unaudited) and Year Ended December 31, 2016
(in thousands)
 
Three Months Ended
March 31, 2017 (Unaudited)
 
Year Ended
December 31, 2016
Gross income:
 
 
 
Rental and parking income
$
5,098

 
$
19,973

Tenant reimbursement income
965

 
4,051

Total gross income
6,063

 
24,024

Direct operating expenses:
 
 
 
Operating and maintenance
2,198

 
9,291

Property taxes and insurance
571

 
2,175

Total direct operating expenses
2,769

 
11,466

Excess of gross income over direct operating expenses
$
3,294

 
$
12,558

See accompanying notes to historical summary of gross income and direct operating expenses.


F-3
250 Williams Atlanta Data Center
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Three Months Ended March 31, 2017 (Unaudited) and Year Ended December 31, 2016

Note 1—Business
On June 15, 2017, Carter Validus Mission Critical REIT II, Inc. (the “Company”) acquired the 250 Williams Atlanta Data Center, located in Atlanta, Georgia (the “Property”). The Company acquired the Property through DCII-250 Williams Street NW, LLC, an indirect wholly owned subsidiary. The contract purchase price for the Property was $166,000,000, exclusive of closing fees and costs. The acquisition was funded with a combination of (1) a loan in the aggregate principal amount of $116,200,000, which is secured by the Property, (2) net proceeds from the Company’s ongoing initial public offering and (3) proceeds from the Company's secured credit facility.
The Property is a 995,728 gross rentable square foot (unaudited) data center, located at 250 Williams Street, Atlanta, Georgia. The Property is approximately 88.3% leased to 12 tenants as of March 31, 2017.
Note 2—Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses (“Historical Summary”) has been prepared for the purpose of complying with the provisions of Article 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”) and is not intended to be a complete presentation of the Property’s revenues and expenses. The Historical Summary has been prepared on the accrual basis of accounting and requires management of the Property to make estimates and assumptions that affect the reported amounts of the revenues and expenses during the reporting period. Actual results may differ from those estimates.
The unaudited Historical Summary for the three months ended March 31, 2017 has been prepared on the accrual basis of accounting. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The Historical Summary for the three months ended March 31, 2017 is not necessarily indicative of the expected results for the entire year ended December 31, 2017.
A Historical Summary is being presented for the most recent year available instead of the three most recent years based on the following factors: (1) the Property was acquired from an unaffiliated party; and (2) based on due diligence of the Property conducted by the Company, management is not aware of any material factors relating to the Property that would cause this financial information not to be indicative of future operating results.
Note 3—Gross Income
The Property is leased to tenants under operating leases with varying terms through 2029. The Company retains substantially all of the risks and benefits of ownership of the Property. Revenue is recognized on a straight-line basis over the lease term, regardless of when payments are due.
As of March 31, 2017, the Property had four tenant concentrations that accounted for 10.0% or more of contractual rental revenue. The leases with American Cancer Society, U.S. South Communications, Inc., Internap Network Services Corporation and Georgia Lottery Corporation accounted for 28.4%, 22.7%, 21.3% and 11.8%, respectively, of contractual rental revenue for the three months ended March 31, 2017. As of December 31, 2016, the Property had four tenant concentrations that accounted for 10.0% or more of contractual rental revenue. The leases with American Cancer Society, U.S. South Communications, Inc., Internap Network Services Corporation and Georgia Lottery Corporation accounted for 27.0%, 21.8%, 20.5% and 11.5%, respectively, of contractual rental revenue for the year ended December 31, 2016.
The future minimum rent to be received from the Property under the non-cancelable operating leases for the nine months ending December 31, 2017 and for each of the next four years ending December 31 and thereafter, are as follows:
Year
 
Amount
Nine Months Ending December 31, 2017
 
$
13,180

2018
 
18,132

2019
 
18,983

2020
 
16,313

2021
 
15,239

Thereafter
 
24,228

Total
 
$
106,075


F-4
250 Williams Atlanta Data Center
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Three Months Ended March 31, 2017 (Unaudited) and Year Ended December 31, 2016

Certain operating expenses incurred in the operations of the Property are recoverable from the tenants. The recoverable amounts are based on actual expenses incurred. Expense recoveries are recognized as revenue in the period in which the applicable costs are incurred.
Note 4—Direct Operating Expenses
Direct operating expenses include only those expenses expected to be comparable to the proposed future operations of the Property. The direct operating expenses for the three months ended March 31, 2017 and for the year ended December 31, 2016, only include utilities, property taxes, insurance, repair and maintenance, and other miscellaneous operating expenses.
Note 5—Subsequent Events
Subsequent events were evaluated through August 31, 2017, the date on which the Historical Summary was issued.


F-5

SUMMARY OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS
This pro forma information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 and the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, as filed with the Securities and Exchange Commission.
The following unaudited pro forma condensed consolidated balance sheet as of March 31, 2017, has been prepared to give effect to the acquisition as if the transaction had occurred on March 31, 2017.
The following unaudited pro forma condensed consolidated statements of comprehensive income for the six months ended June 30, 2017, the three months ended March 31, 2017 and for the year ended December 31, 2016 have been prepared to give effect to the acquisition by the Company of the Property as if such acquisition had been completed on January 1, 2016.
These unaudited pro forma condensed consolidated financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the acquisition been consummated as of the respective dates indicated; however, management is not aware of any material factors that would cause historical results not to be indicative of future results.


F-6

CARTER VALIDUS MISSION CRITICAL REIT II, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 2017
(in thousands, except share data)
(Unaudited)
 
March 31, 2017 (a)
 
Pro Forma Adjustments
Acquisition of 250 Williams Atlanta Data Center
 
Pro Forma Total
March 31, 2017
ASSETS
Real estate:
 
 
 
 
 
Land
$
171,729

 
$
19,159

(b) 
$
190,888

Buildings and improvements, less accumulated depreciation of $23,781
842,469

 
129,779

(b) 
972,248

Construction in progress
26,671

 
—

 
26,671

Total real estate, net
1,040,869

 
148,938

 
1,189,807

Cash and cash equivalents
64,414

 
(53,046
)
(c) 
11,368

Acquired intangible assets, less accumulated amortization of $10,353
110,885

 
31,349

(b) 
142,234

Other assets, net
31,411

 
—

 
31,411

Total assets
$
1,247,579

 
$
127,241

 
$
1,374,820

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
 
 
 
 
 
Notes payable, net of deferred financing costs of $2,196
$
175,794

 
$
115,543

(d) 
$
291,337

Credit facility, net of deferred financing costs of $803
309,197

 
—

 
309,197

Accounts payable due to affiliates
8,672

 
—

 
8,672

Accounts payable and other liabilities
19,981

 
—

 
19,981

Intangible lease liabilities, less accumulated amortization of $768
6,739

 
11,698

(b) 
18,437

Total liabilities
520,383

 
127,241

 
647,624

Stockholders’ equity:
 
 
 
 
 
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding
—

 
—

 
—

Common stock, $0.01 par value per share, 500,000,000 shares authorized; 91,032,935 shares issued; 90,427,297 shares outstanding
904

 
—

 
904

Additional paid-in capital
790,371

 
—

 
790,371

Accumulated distributions in excess of earnings
(65,689
)
 
—

 
(65,689
)
Accumulated other comprehensive income
1,608

 
—

 
1,608

Total stockholders’ equity
727,194

 
—

 
727,194

Noncontrolling interests
2

 
—

 
2

Total equity
727,196

 
—

 
727,196

Total liabilities and stockholders’ equity
$
1,247,579

 
$
127,241

 
$
1,374,820

(a)
Historical information is derived from the unaudited condensed consolidated balance sheet included in the Company’s quarterly report on Form 10-Q as of March 31, 2017.
(b)
To record the pro forma effect of the acquisition of the Property, assuming the acquisition had occurred on March 31, 2017. The purchase price of the Property consists of the following: land $19.2 million, buildings and improvements $129.7 million, in-place lease value $29.9 million, above market lease $1.4 million and below market lease value $11.6 million.
(c)
Reflects the net change in cash and cash equivalents to consummate the transaction on March 31, 2017.

F-7

(d)
Reflects the note payable, net of deferred financing costs, associated with the acquisition of the Property.


F-8

CARTER VALIDUS MISSION CRITICAL REIT II, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2017
(in thousands, except share data and per share amounts)
(Unaudited)

 
Six Months Ended June 30, 2017 (a)
 
Pro Forma Adjustments
Acquisition of 250 Williams Atlanta Data Center
 
Pro Forma Total
Six Months Ended
June 30, 2017
Revenue:
 
 
 
 
 
Rental and parking revenue
$
43,366

 
$
10,088

(b) 
$
53,454

Tenant reimbursement revenue
8,258

 
1,812

(b) 
10,070

Total revenue
51,624

 
11,900

 
63,524

Expenses:
 
 
 
 
 
Rental and parking expenses
10,226

 
4,905

(b) 
15,131

General and administrative expenses
2,137

 
—

 
2,137

Asset management fees
4,357

 
567

(c) 
4,924

Depreciation and amortization
16,635

 
4,983

(d) 
21,618

Total expenses
33,355

 
10,455

 
43,810

Income from operations
18,269

 
1,445

 
19,714

Interest expense, net
8,837

 
2,432

(e) 
11,269

Net income (loss) attributable to common stockholders
$
9,432

 
$
(987
)
 
$
8,445

Other comprehensive income:
 
 
 
 
 
Unrealized income on interest rate swaps, net
$
62

 
$
—

 
$
62

Other comprehensive income attributable to common stockholders
62

 
—

 
62

Comprehensive income (loss) attributable to common stockholders
$
9,494

 
$
(987
)
 
$
8,507

Weighted average number of common shares outstanding:
 
 
 
 
 
Basic
90,721,343

 
—

 
90,721,343

Diluted
90,737,075

 
—

 
90,737,075

Net income per common share attributable to common stockholders:
 
 
 
 
 
Basic
$
0.10

 
 
 
$
0.09

Diluted
$
0.10

 
 
 
$
0.09

(a)
Historical financial information is derived from the unaudited condensed consolidated statement of comprehensive income included in the Company's quarterly report on Form 10-Q for the six months ended June 30, 2017.
(b)
Represents pro forma results of the Property, assuming the acquisition had occurred on January 1, 2016. The Property was purchased on June 15, 2017. Amortization of above-market leases and below-market leases of approximately $734,000 is included in the pro forma adjustments for rental and parking revenue. Above-market lease values are amortized as an adjustment of rental income over the remaining terms of the respective leases. Below-market leases are amortized as an adjustment of rental income over the remaining terms of the respective leases, including any fixed rate bargain renewal periods.
(c)
Represents the estimated asset management fee payable to Carter Validus Advisors II, LLC on a monthly basis equal to 0.0625% of the aggregate asset value as of the last day of the immediately preceding month.
(d)
Represents the estimated depreciation and amortization of real estate assets and intangible lease assets had the property been acquired on January 1, 2016. Real estate assets, other than land, are depreciated on a straight-line basis over their estimated useful lives.

F-9

Buildings and improvements
 
15 - 40 years
Identified intangible assets
 
Remaining term of related lease
(e)
Includes interest expense on the Property's note payable of $116,200,000 at an interest rate of 3.99% per annum, amortization of the deferred financing costs related to the note payable and interest expense on the proceeds from the secured credit facility, assuming the acquisition had occurred on January 1, 2016.


F-10

CARTER VALIDUS MISSION CRITICAL REIT II, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2017
(in thousands, except share data and per share amounts)
(Unaudited)
 
Three Months Ended
March 31, 2017 (a)
 
Pro Forma Adjustments
Acquisition of 250 Williams Atlanta Data Center
 
Pro Forma Total
Three Months Ended
March 31, 2017
Revenue:

 

 

Rental and parking revenue
$
19,682

 
$
5,501

(b) 
$
25,183

Tenant reimbursement revenue
4,340

 
965

(b) 
5,305

Total revenue
24,022

 
6,466

 
30,488

Expenses:

 

 

Rental and parking expenses
4,926

 
2,910

(b) 
7,836

General and administrative expenses
925

 
—

 
925

Asset management fees
2,006

 
311

(c) 
2,317

Depreciation and amortization
7,610

 
2,734

(d) 
10,344

Total expenses
15,467

 
5,955

 
21,422

Income from operations
8,555

 
511

 
9,066

Interest expense, net
3,764

 
1,310

(e) 
5,074

Net income (loss) attributable to common stockholders
$
4,791

 
$
(799
)
 
$
3,992

Other comprehensive income:
 
 
 
 
 
Unrealized income on interest rate swaps, net
$
768

 
$
—

 
$
768

Other comprehensive income attributable to common stockholders
768

 
—

 
768

Comprehensive income (loss) attributable to common stockholders
$
5,559

 
$
(799
)
 
$
4,760

Weighted average number of common shares outstanding:
 
 
 
 
 
Basic
86,482,927

 
—


86,482,927

Diluted
86,499,543

 
—


86,499,543

Net income (loss) per common share attributable to common stockholders:
 
 
 
 
 
Basic
$
0.06

 
 
 
$
0.05

Diluted
$
0.06

 
 
 
$
0.05

(a)
Historical financial information is derived from the unaudited condensed consolidated statement of comprehensive income included in the Company's quarterly report on Form 10-Q for the three months ended March 31, 2017.
(b)
Represents pro forma results of the Property, assuming the acquisition had occurred on January 1, 2016. The Property was purchased on June 15, 2017. Amortization of above-market leases and below-market leases of approximately $403,000 is included in the pro forma adjustments for rental and parking revenue. Above-market lease values are amortized as an adjustment of rental income over the remaining terms of the respective leases. Below-market leases are amortized as an adjustment of rental income over the remaining terms of the respective leases, including any fixed rate bargain renewal periods.
(c)
Represents the estimated asset management fee payable to Carter Validus Advisors II, LLC on a monthly basis equal to 0.0625% of the aggregate asset value as of the last day of the immediately preceding month.
(d)
Represents the estimated depreciation and amortization of real estate assets and intangible lease assets had the property been acquired on January 1, 2016. Real estate assets, other than land, are depreciated on a straight-line basis over their estimated useful lives.
Buildings and improvements
 
15 - 40 years
Identified intangible assets
 
Remaining term of related lease

F-11

(e)
Includes interest expense on the Property's note payable of $116,200,000 at an interest rate of 3.99% per annum, amortization of the deferred financing costs related to the note payable and interest expense on the proceeds from the secured credit facility, assuming the acquisition had occurred on January 1, 2016.


F-12

CARTER VALIDUS MISSION CRITICAL REIT II, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended December 31, 2016
(in thousands, except share data and per share amounts)
(Unaudited)
 
Year Ended
December 31, 2016 (a)
 
Pro Forma Adjustments
Acquisition of 250 Williams Atlanta Data Center
 
Pro Forma Total
Year Ended
December 31, 2016
Revenue:

 

 

Rental and parking revenue
$
49,699

 
$
21,585

(b) 
$
71,284

Tenant reimbursement revenue
6,732

 
4,051

(b) 
10,783

Total revenue
56,431

 
25,636

 
82,067

Expenses:

 

 

Rental and parking expenses
8,164

 
12,031

(b) 
20,195

General and administrative expenses
3,105

 
—

 
3,105

Acquisition related expenses
5,339

 
—

 
5,339

Asset management fees
4,925

 
1,246

(c) 
6,171

Depreciation and amortization
19,211

 
10,937

(d) 
30,148

Total expenses
40,744

 
24,214

 
64,958

Income from operations
15,687

 
1,422

 
17,109

Interest expense, net
4,390

 
5,211

(e) 
9,601

Net income (loss) attributable to common stockholders
$
11,297

 
$
(3,789
)
 
$
7,508

Other comprehensive income:
 
 
 
 
 
Unrealized income on interest rate swaps, net
$
840

 
$
—

 
$
840

Other comprehensive income attributable to common stockholders
840

 
—

 
840

Comprehensive income (loss) attributable to common stockholders
$
12,137

 
$
(3,789
)
 
$
8,348

Weighted average number of common shares outstanding:
 
 
 
 
 
Basic
66,991,294

 
—


66,991,294

Diluted
67,007,124

 
—


67,007,124

Net income (loss) per common share attributable to common stockholders:
 
 
 
 
 
Basic
$
0.17

 
 
 
$
0.11

Diluted
$
0.17

 
 
 
$
0.11

(a)
Historical financial information is derived from the consolidated statement of comprehensive income included in the Company's annual report on Form 10-K for the year ended December 31, 2016.
(b)
Represents pro forma results of the Property, assuming the acquisition had occurred on January 1, 2016. The Property was purchased on June 15, 2017. Amortization of above-market leases and below-market leases of approximately $1,612,000 is included in the pro forma adjustments for rental and parking revenue. Above-market lease values are amortized as an adjustment of rental income over the remaining terms of the respective leases. Below-market leases are amortized as an adjustment of rental income over the remaining terms of the respective leases, including any fixed rate bargain renewal periods.
(c)
Represents the estimated asset management fee payable to Carter Validus Advisors II, LLC on a monthly basis equal to 0.0625% of the aggregate asset value as of the last day of the immediately preceding month.
(d)
Represents the estimated depreciation and amortization of real estate assets and intangible lease assets had the property been acquired on January 1, 2016. Real estate assets, other than land, are depreciated on a straight-line basis over their estimated useful lives.

F-13

Buildings and improvements
 
15 - 40 years
Identified intangible assets
 
Remaining term of related lease
(e)
Includes interest expense on the Property's note payable of $116,200,000 at an interest rate of 3.99% per annum, amortization of the deferred financing costs related to the note payable and interest expense on the proceeds from the secured credit facility, assuming the acquisition had occurred on January 1, 2016.


F-14

 
cvmcriilogoa54.jpg
Carter Validus Mission Critical REIT II, Inc.
Prospectus
Distribution Reinvestment Plan
10,893,246 Shares of Class A, Class I and Class T Common Stock
 
 
We have not authorized any dealer, salesperson or other individual to give any information or to make any representations that are not contained in this prospectus. If any such information or statements are given or made, you should not rely upon such information or representation. This prospectus does not constitute an offer to sell any securities other than those to which this prospectus relates, or an offer to sell, or a solicitation of an offer to buy, to any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that the information contained or incorporated by reference herein is correct as of any time subsequent to the date of such information.
October 13, 2017













 


APPENDIX A
THIRD AMENDED AND RESTATED DISTRIBUTION REINVESTMENT PLAN
CARTER VALIDUS MISSION CRITICAL REIT II, INC.
Effective as of February 20, 2017
Carter Validus Mission Critical REIT II, Inc., a Maryland corporation (the “Company”), has adopted this Third Amended and Restated Distribution Reinvestment Plan (the “Plan”), to be administered by the Company, SC Distributors, LLC (the “Dealer Manager”) or an unaffiliated third party (the “Administrator”) as agent for participants in the Plan (“Participants”), on the terms and conditions set forth below.
1. Election to Participate.    Any purchaser of shares of common stock of the Company, par value $0.01 per share (the “Shares”), may become a Participant by making a written election to participate on such purchaser’s subscription agreement at the time of subscription for Shares. Any stockholder who has not previously elected to participate in the Plan, and subject to Section 8(b) herein, any participant in any previous or subsequent publicly offered limited partnership, real estate investment trust or other real estate program sponsored by the Company or its affiliates (an “Affiliated Program”), may so elect at any time by completing and executing an authorization form obtained from the Administrator or any other appropriate documentation as may be acceptable to the Administrator. Participants in the Plan generally are required to have the full amount of their cash distributions (other than “Excluded Distributions” as defined below) with respect to all Shares or shares of stock or shares of limited partnership interest of an Affiliated Program (collectively “Securities”) owned by them reinvested pursuant to the Plan. However, the Administrator shall have the sole discretion, upon the request of a Participant, to accommodate a Participant’s request for less than all of the Participant’s Securities to be subject to participation in the Plan.
2. Distribution Reinvestment.    The Administrator will receive all cash distributions (other than Excluded Distributions) paid by the Company or an Affiliated Participant with respect to Securities of Participants (collectively, the “Distributions”). Participation will commence with the next Distribution payable after receipt of the Participant’s election pursuant to Paragraph 1 hereof, provided it is received at least ten (10) days prior to the last day of the period to which such Distribution relates. Subject to the preceding sentence, regardless of the date of such election, a holder of Securities will become a Participant in the Plan effective on the first day of the period following such election, and the election will apply to all Distributions attributable to such period and to all periods thereafter. As used in this Plan, the term “Excluded Distributions” shall mean those cash or other distributions designated as Excluded Distributions by the board of directors of the Company or the board or general partner of an Affiliated Program, as applicable.
3. General Terms of Plan Investments.
(a) Except as otherwise set forth in the Company’s prospectus, during the time that the Company’s initial public offering, or any follow-on offering, is effective, the purchase price per Class A Share, Class I Share and Class T Share will be equal to the most recent estimated value per share of each respective class, as determined by the Company’s board of directors. The purchase price per Class A Share, Class I Share and/or Class T Share may be amended from time to time by the Company’s board of directors based upon changes in the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant. No advance notice of pricing pursuant to this Paragraph 3(a) shall be required other than to the extent the issue is a material event requiring the public filing of a Current Report on Form 8-K.
(b) Selling commissions will not be paid for the Shares purchased pursuant to the Plan.
(c) Dealer Manager fees will not be paid for the Shares purchased pursuant to the Plan.
(d) For each Participant, the Administrator will maintain an account which shall reflect for each period in which Distributions are paid (a “Distribution Period”) the Distributions received by the Administrator on behalf of such Participant. A Participant’s account shall be reduced as purchases of Shares are made on behalf of such Participant.
(e) Distributions shall be invested in Shares by the Administrator promptly following the payment date with respect to such Distributions to the extent Shares are available for purchase under the Plan. Distributions on Class A Shares will be reinvested in Class A Shares, Distributions on Class I Shares will be reinvested in Class I Shares, and Distributions on Class T Shares will be reinvested in Class T Shares. If sufficient Shares are not available, any such funds that have not been invested in Shares within 30 days after receipt by the Administrator and, in any event, by the end of the fiscal quarter in which they are received, will be distributed to Participants. Any interest earned on such accounts will be paid to the Company and will become property of the Company.
(f) Participants may acquire fractional Shares, computed to four decimal places, so that 100% of the Distributions will be used to acquire Shares. The ownership of the Shares shall be reflected on the books of Company or its transfer agent.
(g) A Participant will not be able to acquire Shares under the Plan to the extent such purchase would cause it to exceed the Ownership Limit or to violate other Share ownership restrictions imposed by the Company’s Charter. For purposes of this Plan,

A-1

“Ownership Limit” shall mean the prohibition on beneficial ownership of not more than 9.8% in value of the aggregate of the outstanding shares of stock of the Company and not more than 9.8% (in number of shares or value, whichever is more restrictive) of the outstanding shares of common stock of the Company.
4. Absence of Liability. The Company, SC Distributors, LLC and the Administrator shall not have any responsibility or liability as to the value of the Shares or any change in the value of the Shares acquired for the Participant’s account. The Company, SC Distributors, LLC and the Administrator shall not be liable for any act done in good faith, or for any good faith omission to act hereunder.
5. Suitability. Each Participant shall notify the Administrator if, at any time during his participation in the Plan, there is any material change in the Participant’s financial condition or inaccuracy of any representation under the subscription agreement for the Participant’s initial purchase of Shares. A material change shall include any anticipated or actual decrease in net worth or annual gross income or any other change in circumstances that would cause the Participant to fail to meet the suitability standards set forth in the Company’s prospectus for the Participant’s initial purchase of Shares.
6. Reports to Participants. Within ninety (90) days after the end of each calendar year, the Administrator will mail to each Participant a statement of account describing, as to such Participant, the Distributions received, the number of Shares purchased and the per Share purchase price for such Shares pursuant to the Plan during the prior year. Each statement also shall advise the Participant that, in accordance with Paragraph 5 hereof, the Participant is required to notify the Administrator if there is any material change in the Participant’s financial condition or if any representation made by the Participant under the subscription agreement for the Participant’s initial purchase of Shares becomes inaccurate. Tax information regarding a Participant’s participation in the Plan will be sent to each Participant by the company or the Administrator at least annually.
7. Taxes. Taxable Participants may incur a tax liability for Distributions even though they have elected not to receive their Distributions in cash but rather to have their Distributions reinvested in Shares under the Plan.
8. Reinvestment in Subsequent Programs.
(a) After the termination of the Company’s initial public offering of Shares pursuant to the Company’s prospectus dated (the “Initial Offering”), the Company may determine, in its sole discretion, to cause the Administrator to provide to each Participant (other than Alabama, New Jersey, North Carolina and Ohio investors) notice of the opportunity to have some or all of such Participant’s Distributions (at the discretion of the Administrator and, if applicable, the Participant) invested through the Plan in any publicly offered limited partnership, real estate investment trust or other real estate program sponsored by the Company or an Affiliated Program (a “Subsequent Program”). If the Company makes such an election, Participants may invest Distributions in equity securities issued by such Subsequent Program through the Plan only if the following conditions are satisfied:
(i) prior to the time of such reinvestment, the Participant has received the final prospectus and any supplements thereto offering interests in the Subsequent Program and such prospectus allows investment pursuant to a distribution reinvestment plan;  
(ii) a registration statement covering the interests in the Subsequent Program has been declared effective under the Securities Act of 1933, as amended (the “Securities Act”);
(iii) the offering and sale of such interests are qualified for sale under the applicable state securities laws;
(iv) the Participant executes the subscription agreement included with the prospectus for the Subsequent Program; and
(v) the Participant qualifies under applicable investor suitability standards as contained in the prospectus for the Subsequent Program.
(b) The Company may determine, in its sole discretion, to cause the Administrator to allow one or more participants of an Affiliated Program to become a “Participant.” If the Company makes such an election, such Participants may invest distributions received from the Affiliated Program in Shares through this Plan, if the following conditions are satisfied:
(i) prior to the time of such reinvestment, the Participant has received the final prospectus and any supplements thereto offering interests in the Subsequent Program and such prospectus allows investment pursuant to a distribution reinvestment plan;
(ii) a registration statement covering the interests in the Subsequent Program has been declared effective under the Securities Act;
(iii) the offering and sale of such interests are qualified for sale under the applicable state securities laws;
(iv) the Participant executes the subscription agreement included with the prospectus for the Subsequent Program; and

A-2

(v) the Participant qualifies under applicable investor suitability standards as contained in the prospectus for the Subsequent Program.
9. Termination.
(a) A Participant may terminate or modify his participation in the Plan at any time by written notice to the Administrator. To be effective for any Distribution, such notice must be received by the Administrator at least ten (10) days prior to the last day of the Distribution Period to which it relates.
(b) Prior to the listing of the Shares on a national securities exchange, a Participant’s transfer of Shares will terminate participation in the Plan with respect to such transferred Shares as of the first day of the Distribution Period in which such transfer is effective, unless the transferee of such Shares in connection with such transfer demonstrates to the Administrator that such transferee meets the requirements for participation hereunder and affirmatively elects participation by delivering an executed authorization form or other instrument required by the Administrator.
10. State Regulatory Restrictions. The Administrator is authorized to deny participation in the Plan to residents of any state or foreign jurisdiction that imposes restrictions on participation in the Plan that conflict with the general terms and provisions of this Plan, including, without limitation, any general prohibition on the payment of broker-dealer commissions for purchases under the Plan.
11. Amendment to or Suspension or Termination of the Plan.
(a) The terms and conditions of this Plan may be amended by the Company at any time, including but not limited to an amendment to the Plan to substitute a new Administrator to act as agent for the Participants, by mailing an appropriate notice at least ten (10) days prior to the effective date thereof to each Participant.  
(b) The Administrator may suspend or terminate a Participant’s individual participation in the Plan and the Company may suspend or terminate the Plan itself, at any time by providing ten (10) days’ prior written notice to a Participant, or to all Participants, as the case may be.
(c) After termination of the Plan or termination of a Participant’s participation in the Plan, the Administrator will send to each Participant a check for the amount of any Distributions in the Participant’s account that have not been invested in Shares. Any future Distributions with respect to such former Participant’s Shares made after the effective date of the termination of the Participant’s participation will be sent directly to the former Participant.
12. Participation by Limited Partners of Carter Validus Operating Partnership II, LP. For purposes of this Plan, “stockholders” shall be deemed to include limited partners of Carter Validus Operating Partnership II, LP (the “Partnership”), “Participants” shall be deemed to include limited partners of the Partnership that elect to participate in the Plan, and “Distribution,” when used with respect to a limited partner of the Partnership, shall mean cash distributions on limited partnership interests held by such limited partner.
13. Governing Law. This Plan and the Participants’ election to participate in the Plan shall be governed by the laws of the State of Maryland.
14. Notice. Any notice or other communication required or permitted to be given by any provision of this Plan shall be in writing and, if to the Administrator, addressed to, or such other address as may be specified by the Administrator by written notice to all Participants. Notices to a Participant may be given by letter addressed to the Participant at the Participant’s last address of record with the Administrator. Each Participant shall notify the Administrator promptly in writing of any changes of address.
15. Certificates. The ownership of the Shares will be in book-entry form prior to the issuance of certificates. The Company will not issue share certificates unless authorized by the board of directors of the Company.



A-3

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses to be paid in connection with the sale of common stock being registered by the Registrant, all of which will be paid by the Registrant. All amounts are estimates and assume the sale of 10,893,246 shares in any combination of Class A shares, Class I shares and Class T shares except the registration fee.
SEC Registration Fee
$
12,450

Printing and Postage Expenses
325,000

Legal Fees and Expenses
50,000

Accounting Fees and Expenses
125,000

Blue Sky Fees and Expenses
37,500

Total expenses
$
549,950

Item 15. Indemnification of Directors and Officers
The Maryland General Corporation Law, as amended (MGCL), permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains a provision that eliminates directors’ and officers’ liability for money damages to the maximum extent permitted by Maryland law, provided that certain conditions are met, and subject to the NASAA REIT Guidelines.
The MGCL requires a Maryland corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The MGCL permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under the MGCL a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses. In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed if it shall ultimately be determined that the standard of conduct was not met. It is the position of the SEC that indemnification of directors and officers for liabilities arising under the Securities Act is against public policy and is unenforceable pursuant to Section 14 of the Securities Act.
Our charter provides that we shall indemnify and hold harmless a director, officer, advisor or affiliate of our advisor against any and all losses or liabilities reasonably incurred by such director, officer, advisor or affiliate of our advisor in connection with or by reason of any act or omission performed or omitted to be performed on our behalf in such capacity. We may, with the approval of our board of directors or any duly authorized committee thereof, provide such indemnification to our employees and agents, subject to the limitations of Maryland law and the NASAA REIT Guidelines.
However, under our charter, we shall not indemnify the directors, our advisor or any affiliate of our advisor for any liability or loss suffered by the directors, our advisor or affiliates of our advisor, nor shall we provide that the directors, our advisor or affiliates of our advisor be held harmless for any loss or liability suffered by us, unless all of the following conditions are met: (i) the directors, our advisor or its affiliates have determined, in good faith, that the course of conduct which caused the loss or liability was in our best interests; (ii) the directors, our advisor or its affiliates were acting on our behalf or performing services for us; (iii) such liability or loss was not the result of (A) negligence or misconduct by the non-independent directors, our advisor or its affiliates; or (B) gross negligence or willful misconduct by the independent directors; and (iv) such indemnification or agreement to hold harmless is recoverable only out of our net assets and not from stockholders. Notwithstanding the foregoing, the directors, our advisor or its affiliates and any persons acting as a broker-dealer shall not be indemnified by us for any losses, liability or expenses arising from or out of an alleged violation of federal or state securities

II-1

laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; and (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which our securities were offered or sold as to indemnification for violations of securities laws.
Our charter provides that the advancement of funds to our directors, our advisor or affiliates of our advisor for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought is permissible only if all of the following conditions are satisfied: (i) the legal action relates to acts or omissions with respect to the performance of duties or services on our behalf; (ii) the legal action is initiated by a third party who is not a stockholder or the legal action is initiated by a stockholder acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement; (iii) the directors, our advisor or affiliates of our advisor undertake to repay the advanced funds to us together with the applicable legal rate of interest thereon, in cases in which such directors, advisor or affiliates of our advisor are found not to be entitled to indemnification; and (iv) the directors, our advisor or affiliates of our advisor provide us with written affirmation of their good faith belief that the standard of conduct necessary for indemnification has been met.
We also have purchased and maintain insurance on behalf of all of our directors and executive officers against liability asserted against or incurred by them in their official capacities with us, whether or not we are required or have the power to indemnify them against the same liability.
On September 30, 2016, we entered into an indemnification agreement with each of our current directors and executive officers, each referred to herein as an Indemnitee. Each indemnification agreement obligates us to indemnify the respective Indemnitee to the maximum extent permitted by Maryland law against all judgments, penalties, fines and amounts paid in settlement and all expenses actually and reasonably incurred by the Indemnitee or on his or her respective behalf in connection with a proceeding. Each Indemnitee is not entitled to indemnification if it is established that one of the exceptions to indemnification under Maryland law, as set forth in each indemnification agreement, exists. In addition, each indemnification agreement requires us to advance reasonable expenses incurred by or on behalf of the respective Indemnitee within ten days of our receipt of a statement from the Indemnitee requesting the advance. Each indemnification agreement also provides for procedures for the determination of entitlement to indemnification.
Item 16. Exhibits
The list of exhibits filed as part of this registration statement on Form S-3 is submitted in the Exhibit Index following the signature page.
Item 17. Undertakings
(a) The Registrant undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement (1) to include any prospectus required by Section 10(a)(3) of the Securities Act; (2) to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and (3) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that clauses (1), (2) and (3) above do not apply if the registration statement is on Form S-3 and the information required to be included in a post-effective amendment by those clauses is contained in reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(b) The Registrant undertakes (1) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof and (2) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(c) The Registrant undertakes that, for the purposes of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) under the Securities Act as part of a registration statement relating to an offering,

II-2

other than registration statements relying on Rule 430B under the Securities Act or other than prospectuses filed in reliance on Rule 430A under the Securities Act, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(d) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of any employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(e) The undersigned Registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.


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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tampa, State of Florida, this 13th day of October, 2017.
 
 
 
 
 
 
 
CARTER VALIDUS MISSION CRITICAL REIT II, INC.
 
 
 
 
 
 
By:
/s/    JOHN E. CARTER
 
 
 
John E. Carter
 
 
 
Chief Executive Officer and Chairman of the Board of Directors
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the persons whose signature appears below appoints and constitutes John Carter and Todd Sakow, and each of them, his or her true and lawful attorney-in-fact and agent, each acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to execute any and all amendments (including post-effective amendments) to the registration statement (as well as any registration statement for the same offering covered by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended), and to file the same, together with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission and such other agencies, offices and persons as may be required by applicable law, granting unto each said attorney-in-fact and agent, each acting alone, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact and agent, each acting alone may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated and on the dates indicated. 
 
Signature
 
Title
 
Date
 
 
 
 
 
 
 
/s/    JOHN E. CARTER
 
Chief Executive Officer and
 
October 13, 2017
 
John E. Carter
 
Chairman of the Board of Directors
 
 
 
 
 
(Principal Executive Officer)
 
 
 
 
 
 
 
 
 
/s/    ROBERT M. WINSLOW
 
Director
 
October 13, 2017
 
Robert M. Winslow
 
 
 
 
 
 
 
 
 
 
 
/s/    JONATHAN KUCHIN
 
Independent Director
 
October 13, 2017
 
Jonathan Kuchin
 
 
 
 
 
 
 
 
 
 
 
/s/    RANDALL GREENE
 
Independent Director
 
October 13, 2017
 
Randall Greene
 
 
 
 
 
 
 
 
 
 
 
/s/    RONALD RAYEVICH
 
Independent Director
 
October 13, 2017
 
Ronald Rayevich
 
 
 
 
 
 
 
 
 
 
 
/s/    TODD M. SAKOW
 
Chief Financial Officer and Treasurer
 
October 13, 2017
 
Todd M. Sakow
 
(Principal Accounting Officer and
 
 
 
 
 
Principal Financial Officer)
 
 


EXHIBIT INDEX 
 
 
Exhibit
No.
Description
3.1
3.2
3.3
3.4
3.5
10.1
10.2
10.3
4.1*
5.1*
23.1*
23.2*
23.3*
24.1*
 
*
Included herewith.