x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to __________ |
Maryland | 45-2482685 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
405 Park Ave., 15th Floor, New York, NY | 10022 | |
(Address of principal executive offices) | (Zip Code) |
(212) 415-6500 |
(Registrant’s telephone number, including area code) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | (Do not check if a smaller reporting company) | Smaller reporting company o |
Page | |
June 30, 2013 | December 31, 2012 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Real estate investments, at cost: | ||||||||
Land | $ | 504,562 | $ | 249,541 | ||||
Buildings, fixtures and improvements | 2,043,270 | 1,336,726 | ||||||
Acquired intangible lease assets | 318,488 | 212,223 | ||||||
Total real estate investments, at cost | 2,866,320 | 1,798,490 | ||||||
Less: accumulated depreciation and amortization | (108,765 | ) | (56,110 | ) | ||||
Total real estate investments, net | 2,757,555 | 1,742,380 | ||||||
Cash and cash equivalents | 10,958 | 156,873 | ||||||
Investment in direct financing leases, net | 67,518 | — | ||||||
Other investments, at fair value | 9,920 | 41,654 | ||||||
Derivatives, at fair value | 10,161 | — | ||||||
Restricted cash | 1,576 | 1,108 | ||||||
Prepaid expenses and other assets | 14,626 | 7,416 | ||||||
Deferred costs, net | 38,443 | 15,356 | ||||||
Assets held for sale | 6,028 | 665 | ||||||
Total assets | $ | 2,916,785 | $ | 1,965,452 | ||||
LIABILITIES AND EQUITY | ||||||||
Mortgage notes payable | $ | 269,918 | $ | 265,118 | ||||
Senior secured revolving credit facility | — | 124,604 | ||||||
Senior corporate credit facility | 600,000 | — | ||||||
Convertible obligation to Series C Convertible Preferred stockholders | 445,000 | — | ||||||
Contingent value rights obligation to preferred and common investors, at fair value | 31,134 | — | ||||||
Derivatives, at fair value | 1,186 | 3,830 | ||||||
Accounts payable and accrued expenses | 12,060 | 9,459 | ||||||
Deferred rent and other liabilities | 5,274 | 4,336 | ||||||
Distributions payable | 1 | 9,946 | ||||||
Total liabilities | 1,364,573 | 417,293 | ||||||
Convertible preferred stock, $0.01 par value, 100,000,000 shares authorized, 828,472 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively | 8 | 8 | ||||||
Common stock, $0.01 par value, 240,000,000 shares authorized, 184,893,886 and 179,167,112 issued and outstanding at June 30, 2013 and December 31, 2012, respectively | 1,846 | 1,792 | ||||||
Additional paid-in capital | 1,801,460 | 1,653,900 | ||||||
Accumulated other comprehensive income (loss) | 8,919 | (3,934 | ) | |||||
Accumulated deficit | (379,502 | ) | (120,072 | ) | ||||
Total stockholders’ equity | 1,432,731 | 1,531,694 | ||||||
Non-controlling interests | 119,481 | 16,465 | ||||||
Total equity | 1,552,212 | 1,548,159 | ||||||
Total liabilities and equity | $ | 2,916,785 | $ | 1,965,452 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues: | ||||||||||||||||
Rental income | $ | 43,130 | $ | 11,329 | $ | 81,379 | $ | 17,412 | ||||||||
Operating expense reimbursements | 1,830 | 101 | 3,652 | 258 | ||||||||||||
Total revenues | 44,960 | 11,430 | 85,031 | 17,670 | ||||||||||||
Operating expenses: | ||||||||||||||||
Acquisition related | 15,144 | 7,814 | 20,726 | 12,599 | ||||||||||||
Merger and other transaction related | 4,680 | 20 | 142,449 | 20 | ||||||||||||
Property operating | 2,465 | 288 | 4,869 | 580 | ||||||||||||
General and administrative | 1,125 | 502 | 2,432 | 1,027 | ||||||||||||
Equity-based compensation | 3,454 | 178 | 4,330 | 324 | ||||||||||||
Depreciation and amortization | 27,806 | 6,994 | 52,829 | 10,529 | ||||||||||||
Operating fees to affiliates | — | — | — | 212 | ||||||||||||
Total operating expenses | 54,674 | 15,796 | 227,635 | 25,291 | ||||||||||||
Operating loss | (9,714 | ) | (4,366 | ) | (142,604 | ) | (7,621 | ) | ||||||||
Other income (expenses): | ||||||||||||||||
Interest expense | (11,238 | ) | (2,686 | ) | (17,454 | ) | (4,142 | ) | ||||||||
Unrealized loss on contingent value rights | (31,134 | ) | — | (31,134 | ) | — | ||||||||||
Income from investment securities | — | — | 218 | — | ||||||||||||
Gain on sale of investment securities | — | — | 451 | — | ||||||||||||
Unrealized loss on derivative instruments | (40 | ) | — | (45 | ) | — | ||||||||||
Other income (expenses) | 91 | 62 | 126 | 67 | ||||||||||||
Total other expenses, net | (42,321 | ) | (2,624 | ) | (47,838 | ) | (4,075 | ) | ||||||||
Loss from continuing operations | (52,035 | ) | (6,990 | ) | (190,442 | ) | (11,696 | ) | ||||||||
Net loss from continuing operations attributable to non-controlling interests | 322 | 72 | 756 | 72 | ||||||||||||
Net loss from continuing operations attributable to stockholders | (51,713 | ) | (6,918 | ) | (189,686 | ) | (11,624 | ) | ||||||||
Discontinued operations: | ||||||||||||||||
Net income (loss) from operations of held for sale properties | 36 | (84 | ) | 63 | (97 | ) | ||||||||||
Gain (loss) on held for sale properties | — | (82 | ) | 14 | (405 | ) | ||||||||||
Net income (loss) from discontinued operations | 36 | (166 | ) | 77 | (502 | ) | ||||||||||
Net income (loss) from discontinued operations attributable to non-controlling interests | (2 | ) | 14 | (4 | ) | 28 | ||||||||||
Net income (loss) from discontinued operations attributable to stockholders | 34 | (152 | ) | 73 | (474 | ) | ||||||||||
Net loss | (51,999 | ) | (7,156 | ) | (190,365 | ) | (12,198 | ) | ||||||||
Net loss attributable to non-controlling interests | 320 | 86 | 752 | 100 | ||||||||||||
Net loss attributable to stockholders | $ | (51,679 | ) | $ | (7,070 | ) | $ | (189,613 | ) | $ | (12,098 | ) | ||||
Other comprehensive gain (loss): | ||||||||||||||||
Designated derivatives, fair value adjustments | 14,017 | (2,236 | ) | 12,840 | (2,839 | ) | ||||||||||
Unrealized gain (loss) on investment securities, net | (80 | ) | — | 13 | — | |||||||||||
Comprehensive loss | $ | (37,742 | ) | $ | (9,306 | ) | $ | (176,760 | ) | $ | (14,937 | ) | ||||
Basic and diluted net loss per share from continuing operations attributable to common stockholders | $ | (0.32 | ) | $ | (0.10 | ) | $ | (1.20 | ) | $ | (0.25 | ) | ||||
Basic and diluted net loss per share attributable to common stockholders | $ | (0.32 | ) | $ | (0.10 | ) | $ | (1.20 | ) | $ | (0.26 | ) |
Convertible Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||
Number of Shares | Par Value | Number of Shares | Par Value | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stock-holders' Equity | Non-Controlling Interests | Total Equity | |||||||||||||||||||||||||||||
Balance December 31, 2012 | 828,472 | $ | 8 | 179,167,112 | $ | 1,792 | $ | 1,653,900 | $ | (3,934 | ) | $ | (120,072 | ) | $ | 1,531,694 | $ | 16,465 | $ | 1,548,159 | ||||||||||||||||||
Issuance of common stock | 32,035,064 | 320 | 490,264 | — | — | 490,584 | — | 490,584 | ||||||||||||||||||||||||||||||
Conversion of OP Units to common stock | — | — | 599,233 | 6 | 5,794 | — | — | 5,800 | (5,800 | ) | — | |||||||||||||||||||||||||||
Common stock issued through distribution reinvestment plan | — | — | 489,000 | 5 | 4,890 | — | — | 4,895 | — | 4,895 | ||||||||||||||||||||||||||||
Common stock repurchases | — | — | (27,739,523 | ) | (277 | ) | (350,119 | ) | — | — | (350,396 | ) | — | (350,396 | ) | |||||||||||||||||||||||
Offering costs, commissions and dealer manager fees | — | — | — | — | (3,260 | ) | — | — | (3,260 | ) | — | (3,260 | ) | |||||||||||||||||||||||||
Equity-based compensation | — | — | 343,000 | — | — | — | — | — | 3,682 | 3,682 | ||||||||||||||||||||||||||||
Amortization of restricted shares | — | — | — | — | 3,026 | — | — | 3,026 | — | 3,026 | ||||||||||||||||||||||||||||
Consideration paid for assets of Manager in excess of carryover basis | — | — | — | — | (3,035 | ) | — | — | (3,035 | ) | — | (3,035 | ) | |||||||||||||||||||||||||
Distributions declared | — | — | — | — | — | — | (69,817 | ) | (69,817 | ) | — | (69,817 | ) | |||||||||||||||||||||||||
Issuance of operating partnership units | — | — | — | — | — | — | — | — | 108,247 | 108,247 | ||||||||||||||||||||||||||||
Contributions from non-controlling interest holders | — | — | — | — | — | — | — | — | 750 | 750 | ||||||||||||||||||||||||||||
Distributions to non-controlling interest holders | — | — | — | — | — | — | — | — | (3,111 | ) | (3,111 | ) | ||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (189,613 | ) | (189,613 | ) | (752 | ) | (190,365 | ) | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 12,853 | — | 12,853 | — | 12,853 | ||||||||||||||||||||||||||||
Balance June 30, 2013 | 828,472 | $ | 8 | 184,893,886 | $ | 1,846 | $ | 1,801,460 | $ | 8,919 | $ | (379,502 | ) | $ | 1,432,731 | $ | 119,481 | $ | 1,552,212 |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (190,365 | ) | $ | (12,198 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Issuance of operating partnership units for ARCT III Merger and other transaction related expenses | 108,247 | — | ||||||
Depreciation | 42,491 | 8,676 | ||||||
Amortization of intangible lease assets | 10,511 | 1,910 | ||||||
Amortization of deferred costs | 3,409 | 619 | ||||||
Amortization of above-market lease asset | 126 | — | ||||||
Loss (gain) on held for sale properties | (14 | ) | 405 | |||||
Equity-based compensation | 6,708 | 330 | ||||||
Unrealized loss on derivative instruments | 45 | — | ||||||
Unrealized loss on contingent value rights obligations | 31,134 | — | ||||||
Gain on sale of investments | (451 | ) | — | |||||
Changes in assets and liabilities: | ||||||||
Prepaid expenses and other assets | (6,754 | ) | (1,819 | ) | ||||
Accounts payable and accrued expenses | (351 | ) | 1,721 | |||||
Deferred rent and other liabilities | 938 | 814 | ||||||
Net cash provided by operating activities | 5,674 | 458 | ||||||
Cash flows from investing activities: | ||||||||
Investments in real estate and other assets | (1,073,050 | ) | (512,024 | ) | ||||
Investment in direct financing leases | (67,518 | ) | — | |||||
Capital expenditures | (30 | ) | — | |||||
Investments in other assets | (1,041 | ) | — | |||||
Deposits for real estate investments | (665 | ) | (600 | ) | ||||
Payments for purchases of other investments | (12,000 | ) | — | |||||
Proceeds from sale of investment securities | 44,188 | — | ||||||
Net cash used in investing activities | (1,110,116 | ) | (512,624 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from mortgage notes payable | 4,800 | 139,400 | ||||||
Proceeds from senior secured revolving credit facility | — | 32,593 | ||||||
Payments on senior secured revolving credit facility | (124,604 | ) | (107 | ) | ||||
Proceeds from senior corporate credit facility | 825,000 | — | ||||||
Payments on senior corporate credit facility | (225,000 | ) | — | |||||
Payments of deferred financing costs | (25,318 | ) | (9,334 | ) | ||||
Advance from affiliate bridge loan | — | 796 | ||||||
Payment of affiliate bridge loan | — | (796 | ) | |||||
Common stock repurchases | (350,396 | ) | (116 | ) | ||||
Proceeds from issuances of preferred shares | — | 6,000 | ||||||
Proceeds from issuance of convertible obligations to Series C Convertible Preferred stockholders | 445,000 | — | ||||||
Proceeds from issuances of common stock | 490,584 | 825,246 | ||||||
Payments of offering costs and fees related to stock issuances | (808 | ) | (96,209 | ) | ||||
Consideration paid for assets of Manager in excess of carryover basis | (3,035 | ) | — | |||||
Contributions from non-controlling interest holders | 750 | — | ||||||
Distributions to non-controlling interest holders | (3,111 | ) | (179 | ) | ||||
Distributions paid | (74,867 | ) | (8,343 | ) | ||||
Advances from affiliates, net | — | (708 | ) | |||||
Premium payment on interest rate cap | — | (13 | ) | |||||
Restricted cash | (468 | ) | (1,547 | ) | ||||
Net cash provided by financing activities | 958,527 | 886,683 | ||||||
Net change in cash and cash equivalents | (145,915 | ) | 374,517 | |||||
Cash and cash equivalents, beginning of period | 156,873 | 19,331 | ||||||
Cash and cash equivalents, end of period | $ | 10,958 | $ | 393,848 | ||||
Supplemental Disclosures: | ||||||||
Cash paid for interest | $ | 10,995 | $ | 2,895 | ||||
Cash paid for income taxes | 354 | 59 | ||||||
Non-cash investing and financing activities: | ||||||||
OP units issued to acquire real estate investment | — | 6,352 | ||||||
Common stock issued through distribution reinvestment plan | 4,895 | 4,257 | ||||||
Reclassification of deferred offering costs | — | 5,875 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013(1) | 2012 | 2013(1) | 2012 | |||||||||||||
Real estate investments, at cost: | ||||||||||||||||
Land | $ | 206,282 | $ | 57,161 | $ | 256,463 | $ | 84,268 | ||||||||
Buildings, fixtures and improvements | 521,765 | 219,869 | 709,374 | 372,933 | ||||||||||||
Total tangible assets | 728,047 | 277,030 | 965,837 | 457,201 | ||||||||||||
Acquired intangibles: | ||||||||||||||||
In-place leases | 76,986 | 36,927 | 107,213 | 61,175 | ||||||||||||
Total assets acquired, net | 805,033 | 313,957 | 1,073,050 | 518,376 | ||||||||||||
OP Units issued to acquire real estate investments | — | (6,352 | ) | — | (6,352 | ) | ||||||||||
Cash paid for acquired real estate investments | $ | 805,033 | $ | 307,605 | $ | 1,073,050 | $ | 512,024 | ||||||||
Number of properties acquired | 433 | 116 | 481 | 170 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Amounts in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Pro forma revenues | $ | 56,941 | $ | 27,019 | $ | 113,882 | $ | 59,136 | ||||||||
Pro forma net loss attributable to stockholders | $ | (30,458 | ) | $ | (2,393 | ) | $ | (18,929 | ) | $ | (2,782 | ) |
Future Minimum Base Rent Payments | Future Minimum Direct Financing Lease Payments(1) | |||||||
July 1, 2013 - December 31, 2013 | $ | 106,624 | $ | 2,508 | ||||
2014 | 210,551 | 5,105 | ||||||
2015 | 207,318 | 5,019 | ||||||
2016 | 202,300 | 4,971 | ||||||
2017 | 192,725 | 4,603 | ||||||
Thereafter | 1,262,001 | 15,241 | ||||||
Total | $ | 2,181,519 | $ | 37,447 |
June 30, 2013 | ||||
Future minimum lease payments receivable | $ | 37,447 | ||
Unguaranteed residual value of property | 48,751 | |||
Unearned income | (18,680 | ) | ||
Net investment in direct financing leases | $ | 67,518 |
June 30, | ||||
Tenant | 2013 | 2012 | ||
FedEx | * | 19.9% | ||
Citizens Bank | * | 14.8% | ||
Dollar General | * | 14.4% | ||
Walgreens | * | 10.4% |
June 30, | ||||
State | 2013 | 2012 | ||
Missouri | * | 10.7% | ||
New York | * | 10.5% |
Encumbered Properties | Outstanding Loan Amount | Weighted Average Effective Interest Rate (1) | Weighted Average Maturity (2) | |||||||||
June 30, 2013 | 165 | $ | 269,918 | 4.25 | % | 4.99 | ||||||
December 31, 2012 | 164 | $ | 265,118 | 4.28 | % | 5.51 |
(1) | Mortgage notes payable have fixed rates or are fixed by way of interest rate swap arrangements. Effective interest rates range from 2.73% to 6.13% at June 30, 2013 and 3.32% to 6.13% at December 31, 2012. |
(2) | Weighted average remaining years until maturity as of June 30, 2013 and December 31, 2012, respectively. |
Year | Total | |||
July 1, 2013 - December 31, 2013 | $ | 74 | ||
2014 | 189 | |||
2015 | 13,767 | |||
2016 | 16,820 | |||
2017 | 169,768 | |||
Thereafter | 69,300 | |||
Total | $ | 269,918 |
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Investments in real estate fund as of June 30, 2013 | $ | 10,000 | $ | — | $ | (80 | ) | $ | 9,920 | |||||||
Preferred securities as of December 31, 2012 | $ | 41,747 | $ | 223 | $ | (316 | ) | $ | 41,654 |
Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | |||||||||||||
June 30, 2013: | ||||||||||||||||
Fund investments | $ | — | $ | 9,920 | $ | — | $ | 9,920 | ||||||||
Interest rate swap assets | — | 10,161 | — | 10,161 | ||||||||||||
Interest rate swap liabilities | — | (1,186 | ) | — | (1,186 | ) | ||||||||||
Convertible obligation to Series C Convertible Preferred stockholders | — | — | (445,000 | ) | (445,000 | ) | ||||||||||
Contingent value rights obligation to preferred and common investors | — | — | (31,134 | ) | (31,134 | ) | ||||||||||
December 31, 2012: | ||||||||||||||||
Preferred securities | $ | 41,654 | $ | — | $ | — | $ | 41,654 | ||||||||
Interest rate swaps | — | (3,830 | ) | — | (3,830 | ) |
Contingent value rights obligation to preferred and common investors | Convertible obligation to Series C Convertible Preferred stockholders | Total | ||||||||||
Beginning balance | $ | — | $ | — | $ | — | ||||||
Fair value at issuance | — | (445,000 | ) | (445,000 | ) | |||||||
Fair value adjustment | (31,134 | ) | — | (31,134 | ) | |||||||
Ending balance | $ | (31,134 | ) | $ | (445,000 | ) | $ | (476,134 | ) |
Carrying Amount at | Fair Value at | Carrying Amount at | Fair Value at | |||||||||||||||
Level | June 30, 2013 | June 30, 2013 | December 31, 2012 | December 31, 2012 | ||||||||||||||
Mortgage notes payable | 3 | $ | 269,918 | $ | 271,645 | $ | 265,118 | $ | 271,056 | |||||||||
Senior secured revolving credit facility | 3 | — | — | 124,604 | 124,604 | |||||||||||||
Senior corporate credit facility | 3 | 600,000 | 600,000 | — | — | |||||||||||||
Total | $ | 869,918 | $ | 871,645 | $ | 389,722 | $ | 395,660 |
Interest Rate Derivative | Number of Instruments | Notional Amount | ||||
Interest rate swaps | 10 | $ | 667,590 |
Interest Rate Derivative | Number of Instruments | Notional Amount | ||||
Interest rate swaps | 7 | $ | 152,590 | |||
Interest rate cap | 1 | 50,000 | ||||
Total | 8 | $ | 202,590 |
Derivatives Designated as Hedging Instruments | Balance Sheet Location | June 30, 2013 | December 31, 2012 | |||||||
Interest rate products | Derivative assets, at fair value | $ | 10,161 | $ | — | |||||
Interest rate products | Derivative liabilities, at fair value | $ | (1,186 | ) | $ | (3,830 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Derivatives in Cash Flow Hedging Relationships | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion) | $ | 12,748 | $ | (2,485 | ) | $ | 10,889 | $ | (3,174 | ) | ||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense (effective portion) | $ | (1,269 | ) | $ | (249 | ) | $ | (1,951 | ) | $ | (335 | ) | ||||
Amount of gain (loss) recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) | $ | (23 | ) | $ | — | $ | (23 | ) | $ | — |
Offsetting of Derivative Assets and Liabilities | ||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Assets | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Assets Presented in the Consolidated Balance Sheet | Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | Financial Instruments | Cash Collateral Received | Net Amount | |||||||||||||||||||||||||
June 30, 2013 | $ | 10,161 | $ | (1,186 | ) | $ | — | $ | 10,161 | $ | (1,186 | ) | $ | — | $ | — | $ | 8,975 | ||||||||||||||
December 31, 2012 | $ | — | $ | (3,830 | ) | $ | — | $ | — | $ | (3,830 | ) | $ | — | $ | — | $ | (3,830 | ) |
AOCI Component | Amount Reclassified from AOCI | Affected Line Items in the Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
Unrealized loss on investment securities, net | $ | — | $ | — | $ | 93 | $ | — | Gain on sale of investment securities | |||||||||
Designated derivatives, fair value adjustment | (1,269 | ) | (249 | ) | (1,951 | ) | (335 | ) | Interest expense |
Issue | Date Issued | Units | Gross Proceeds (In thousands) | Liquidation Preference | Dividend/Interest Rate | ||||||||||||
Shares classified as Equity: | |||||||||||||||||
Series A Convertible Preferred Stock(1) | May 11, 2012 | 545,454 | $ | 6,000 | $ | 11.00 | $ | 0.77 | |||||||||
Series B Convertible Preferred Stock(2) | July 24, 2012 | 283,018 | 3,000 | 10.60 | 0.74 | ||||||||||||
Shares classified as Liabilities: | |||||||||||||||||
Series C Convertible Preferred Stock (3) | June 7, 2013 | 28,398,213 | $ | 445,000 | $ | 15.67 | 5.81 | % |
Type of offering | Closing Date | Number of Shares(1) | Gross Proceeds | ||||||
Registered follow on offering | January 29, 2013 | 2,070,000 | $ | 26.7 | |||||
ATM | January 1 - June 30, 2013 | 553,300 | 8.9 | ||||||
Private placement offering | June 7, 2013 | 29,411,764 | 455.0 | ||||||
Total | 32,035,064 | $ | 490.6 |
Dividend increase declaration date | Annualized dividend per share | Effective date | ||
March 17, 2013 | $0.91 | June 8, 2013 | ||
May 28, 2013 | $0.94 | * |
Equity Plan | RSP & Director Stock Plan | |||||||||||||
Number of Restricted Common Shares | Weighted-Average Issue Price | Number of Restricted Common Shares | Weighted-Average Issue Price | |||||||||||
Awarded December 31, 2012 | 259,909 | $ | 11.84 | 30,300 | $ | 10.68 | ||||||||
Granted | 325,000 | 13.88 | 18,000 | 14.58 | ||||||||||
Forfeited | — | — | — | — | ||||||||||
Awarded June 30, 2013 | 584,909 | $ | 12.95 | 48,300 | $ | 12.13 |
Equity Share Plan | RSP & Director Stock Plan | |||||||||||||
Number of Restricted Common Shares | Weighted-Average Issue Price | Number of Restricted Common Shares | Weighted-Average Issue Price | |||||||||||
Unvested, December 31, 2012 | 186,403 | $ | 11.62 | 27,930 | $ | 10.58 | ||||||||
Granted | 325,000 | 13.83 | 18,000 | 14.58 | ||||||||||
Vested | (186,403 | ) | (11.62 | ) | (27,930 | ) | (10.58 | ) | ||||||
Forfeited | — | — | — | — | ||||||||||
Unvested, June 30, 2013 | 325,000 | $ | 13.83 | 18,000 | $ | 14.58 |
• | Absolute Component: 4.0% of any excess Total Return attained above an absolute hurdle of 7.0% for each annual measurement period, non-compounded, 14.0% for the interim measurement period and 21.0% for the full performance period; and |
• | Relative Component: 4.0% of any excess Total Return attained above the Total Return for the performance period of a peer group comprised of the following companies: CapLease, Inc.; EPR Properties; Getty Realty Corporation; Lexington Realty Trust; National Retail Properties, Inc.; and Realty Income Corporation. |
• | 100.0% will be earned if the Company attains a median Total Return of at least 6.0% for each annual measurement period, non-compounded, at least 12% for the interim measurement period, and at least 18.0% for the full performance period; |
• | 50.0% will be earned if the Company attains a median Total Return of at least 0.0% for each measurement period; |
• | 0.0% will be earned if the Company attains a median Total Return of less than 0.0% for each measurement period; and |
• | A percentage from 50.0% to 100.0% calculated by linear interpolation will be earned if the Company's median Total Return is between 0.0% and the percentage set for each measurement period. |
Future Minimum Base Rent Payments | ||||
July 1, 2013 - December 31, 2013 | $ | 174 | ||
2014 | 348 | |||
2015 | 349 | |||
2016 | 349 | |||
2017 | 353 | |||
Thereafter | 2,477 | |||
Total | $ | 4,050 |
Three Months Ended June 30, | Six Months Ended June 30, | Payable as of | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | June 30, 2013 | December 31, 2012 | |||||||||||||||||||
Total commissions and fees paid to RCS | $ | — | $ | 57,914 | $ | — | $ | 79,791 | $ | — | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | Payable as of | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | June 30, 2013 | December 31, 2012 | |||||||||||||||||||
Offering expense and other significant transactions reimbursements | $ | 499 | $ | 12,869 | $ | 1,114 | $ | 20,231 | $ | 100 | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | Payable as of | ||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | June 30, 2013 | December 31, 2012 | |||||||||||||||||||||||||||||||||||
Incurred | Forgiven | Incurred | Forgiven | Incurred | Forgiven | Incurred | Forgiven | |||||||||||||||||||||||||||||||||
One-time fees: | ||||||||||||||||||||||||||||||||||||||||
Acquisition fees (1) | $ | 510 | $ | — | $ | 3,138 | $ | — | $ | 3,104 | $ | — | $ | 5,183 | $ | — | $ | — | $ | 364 | ||||||||||||||||||||
Financing fees and related cost reimbursements | — | — | 601 | — | 7,500 | — | 1,259 | — | — | — | ||||||||||||||||||||||||||||||
Other expense reimbursements | 6,545 | — | 2,396 | — | 8,317 | — | 3,913 | — | — | 18 | ||||||||||||||||||||||||||||||
On-going fees: | ||||||||||||||||||||||||||||||||||||||||
Base management fees (2) | 2,000 | 2,000 | 966 | 966 | 4,654 | 2,370 | 1,447 | 1,235 | — | — | ||||||||||||||||||||||||||||||
Transfer agent fees | 77 | — | — | — | 190 | — | — | — | 23 | — | ||||||||||||||||||||||||||||||
Property management and leasing fees (2) | — | — | 148 | 148 | 799 | 799 | 211 | 211 | — | — | ||||||||||||||||||||||||||||||
Total operational fees and reimbursements | $ | 9,132 | $ | 2,000 | $ | 7,249 | $ | 1,114 | $ | 24,564 | $ | 3,169 | $ | 12,013 | $ | 1,446 | $ | 23 | $ | 382 |
Three Months Ended June 30, | Six Months Ended June 30, | Receivable as of | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | June 30, 2013 | December 31, 2012 | |||||||||||||||||||
General and administrative expenses absorbed | $ | — | $ | 80 | $ | — | $ | 164 | $ | — | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net loss from continuing operations attributable to stockholders | $ | (51,713 | ) | $ | (6,918 | ) | $ | (189,686 | ) | $ | (11,624 | ) | ||||
Less: dividends declared on preferred shares | (158 | ) | (70 | ) | (315 | ) | (70 | ) | ||||||||
Net loss from continuing operations attributable to common stockholders | (51,871 | ) | (6,988 | ) | (190,001 | ) | (11,694 | ) | ||||||||
Net income (loss) from discontinued operations attributable to common stockholders | 34 | (152 | ) | 73 | (474 | ) | ||||||||||
Net loss attributable to common stockholders | $ | (51,837 | ) | $ | (7,140 | ) | $ | (189,928 | ) | $ | (12,168 | ) | ||||
Weighted average common shares outstanding (1) | 162,368,538 | 68,312,582 | 157,904,082 | 45,961,046 | ||||||||||||
Basic and diluted net loss per share from continuing operations attributable to common stockholders | $ | (0.32 | ) | $ | (0.10 | ) | $ | (1.20 | ) | $ | (0.25 | ) | ||||
Basic and diluted net loss per share from discontinued operations attributable to common stockholders | $ | — | $ | — | $ | — | $ | (0.01 | ) | |||||||
Basic and diluted net loss per share attributable to common stockholders | $ | (0.32 | ) | $ | (0.10 | ) | $ | (1.20 | ) | $ | (0.26 | ) |
No. of Buildings | Square Feet | Base Purchase Price (1) | ||||||||
Total Portfolio – June 30, 2013 (2) | 1,181 | 19,404,596 | $ | 2,939,004 | ||||||
Acquisitions | 26 | 218,590 | 25,317 | |||||||
Total portfolio – August 2, 2013 (2) | 1,207 | 19,623,186 | $ | 2,964,321 |
(2) | Total portfolio excludes one vacant property contributed in September 2011 which was classified as held for sale at June 30, 2013. |
• | We and our Manager have a limited operating history and our Manager has limited experience operating a public company. This inexperience makes our future performance difficult to predict. |
• | All of our executive officers are also officers, managers or holders of a direct or indirect controlling interest in our Manager, the affiliated dealer manager of our initial public offering (our “IPO”), Realty Capital Securities, LLC (“RCS” or the “affiliated Dealer Manager”) and other American Realty Capital-affiliated entities. As a result, our executive officers, our Manager and its affiliates face conflicts of interest, including significant conflicts created by our Manager's compensation arrangements with us and other investors advised by American Realty Capital affiliates and conflicts in allocating time among these investors and us. These conflicts could result in unanticipated actions. |
• | Because investment opportunities that are suitable for us may also be suitable for other American Realty Capital-advised programs or investors, our Manager and its affiliates face conflicts of interest relating to the purchase of properties and other investments and such conflicts may not be resolved in our favor, meaning that we could invest in less attractive assets, which could reduce the investment return to our stockholders. |
• | The competition for the type of properties we desire to acquire may cause our dividends and the long-term returns of our investors to be lower than they otherwise would be. |
• | We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all, which could have a material adverse effect on our financial condition, results of operations, cash flow, cash available for dividends to our stockholders, per share trading price of our common stock and our ability to satisfy our debt service obligations. |
• | We depend on tenants for our revenue, and, accordingly, our revenue is dependent upon the success and economic viability of our tenants. |
• | Failure by any major tenant with leases in multiple locations to make rental payments to us, because of a deterioration of its financial condition or otherwise, or the termination or non-renewal of a lease by a major tenant, would have a material adverse effect on us. |
• | We are subject to tenant industry concentrations that make us more susceptible to adverse events with respect to certain industries. |
• | Increases in interest rates could increase the amount of our debt payments and limit our ability to pay dividends to our stockholders. |
• | We may be unable to make scheduled payments on our debt obligations. |
• | We may not generate cash flows sufficient to pay our dividends to stockholders, and as such we may be forced to borrow at higher rates or depend on our Manager to waive reimbursement of certain expenses and fees to fund our operations. |
• | We may be unable to pay or maintain cash dividends or increase dividends over time. |
• | We are obligated to pay substantial fees to our Manager. |
• | We may not be able to realize fully, or at all, the anticipated benefits of the ARCT III Merger, which was consummated on February 28, 2013, and may encounter substantial difficulties and expenses in integrating ARCT III's properties and systems into our operations and systems, resulting in disruption to our ongoing business and the business of the combined company; |
• | We may not be able to consummate the CapLease Merger, or the ARCT IV Merger; |
• | We may be unable to integrate into our existing portfolio the portfolio of 447 properties we purchased from certain affiliates of GE Capital Corp., or the GE Capital Portfolio, on June 27, 2013, which could negatively impact our future business and financial results; |
• | We may fail to qualify to be treated as a real estate investment trust for U.S. federal income tax purposes (“REIT”). |
• | We may be deemed to be an investment company under the Investment Company Act of 1940, as amended, (the “Investment Company Act”) and thus subject to regulation under the Investment Company Act. |
Portfolio | Number of Properties | Square Feet | Remaining Lease Term (1)(6) | Base Purchase Price (2) | Capitalization Rate (3) | Annualized Rental Income/NOI (4) | Annualized Rental Income/NOI per Square Foot | |||||||||||||||||
Portfolio as of December 31, 2012 | 653 | 15,421,465 | 11.4 | $ | 1,798,435 | 7.97 | % | $ | 143,397 | $ | 9.30 | |||||||||||||
Acquisitions for the three months ended March 31, 2013: | ||||||||||||||||||||||||
Academy Sports | 1 | 62,033 | 16.9 | 7,785 | 7.81 | % | 608 | 9.80 | ||||||||||||||||
Advance Auto | 6 | 41,695 | 8.1 | 6,003 | 7.73 | % | 464 | 11.13 | ||||||||||||||||
AMCOR | 1 | 221,035 | 10.3 | 17,540 | 8.44 | % | 1,480 | 6.70 | ||||||||||||||||
Ameriprise | 1 | 145,003 | 11.8 | 17,233 | 7.36 | % | 1,269 | 8.75 | ||||||||||||||||
BJ's Warehouse | 1 | 108,532 | 10.6 | 10,772 | 8.20 | % | 883 | 8.14 | ||||||||||||||||
Bojangles | 1 | 3,792 | 13.3 | 1,951 | 6.87 | % | 134 | 35.34 | ||||||||||||||||
Citizens Bank | 1 | 3,478 | 9.3 | 1,134 | 7.41 | % | 84 | 24.15 | ||||||||||||||||
CVS | 5 | 54,767 | 7.0 | 13,726 | 8.76 | % | 1,202 | 21.95 | ||||||||||||||||
DaVita Dialysis | 1 | 4,275 | 15.0 | 1,553 | 8.89 | % | 138 | 32.28 | ||||||||||||||||
Dollar General | 6 | 54,651 | 15.0 | 6,684 | 7.72 | % | 516 | 9.44 | ||||||||||||||||
Family Dollar | 4 | 34,680 | 9.1 | 4,415 | 9.04 | % | 399 | 11.51 | ||||||||||||||||
FedEx | 3 | 82,633 | 7.9 | 12,746 | 8.53 | % | 1,087 | 13.15 | ||||||||||||||||
Fresenius | 2 | 19,100 | 5.8 | 2,670 | 9.89 | % | 264 | 13.82 | ||||||||||||||||
Kaiser Foundation | 1 | 100,352 | 9.9 | 62,501 | 6.77 | % | 4,233 | 42.18 | ||||||||||||||||
Kohl's | 1 | 88,408 | 10.8 | 12,441 | 6.90 | % | 858 | 9.71 | ||||||||||||||||
Kum & Go | 1 | 4,958 | 20.0 | 2,901 | 7.82 | % | 227 | 45.78 | ||||||||||||||||
Mattress Firm | 1 | 3,971 | 10.8 | 1,872 | 8.44 | % | 158 | 39.79 | ||||||||||||||||
Pilot Flying | 1 | 17,480 | 5.7 | 10,350 | 9.37 | % | 970 | 55.49 | ||||||||||||||||
Qdoba | 2 | 5,000 | 10.0 | 2,454 | 8.52 | % | 209 | 41.80 | ||||||||||||||||
TD Bank | 1 | 143,030 | 11.8 | 31,000 | 8.87 | % | 2,750 | 19.23 | ||||||||||||||||
Walgreens | 7 | 100,869 | 11.4 | 34,565 | 7.64 | % | 2,640 | 26.17 | ||||||||||||||||
Total acquisitions for the three months ended March 31, 2013 | 48 | 1,299,742 | 10.6 | 262,296 | 7.84 | % | 20,573 | 15.83 | ||||||||||||||||
Acquisitions for the three months ended June 30, 2013: | ||||||||||||||||||||||||
3432, LLC | 1 | 4,283 | 14.2 | 949 | 9.38 | % | 89 | 20.78 | ||||||||||||||||
ADF Companies Group | 1 | 2,626 | 2.0 | 911 | 7.24 | % | 66 | 25.13 | ||||||||||||||||
Advance Auto | 9 | 61,536 | 7.0 | 9,845 | 8.15 | % | 802 | 13.03 | ||||||||||||||||
Advanced Dental Implant and Denture Center, LLC | 1 | 2,775 | 11.0 | 342 | 11.70 | % | 40 | 14.41 | ||||||||||||||||
AFC Enterprises | 1 | 1,564 | 0.7 | 481 | 6.24 | % | 30 | 19.18 | ||||||||||||||||
Ale House Management | 3 | 18,807 | 4.8 | 12,790 | 4.97 | % | 636 | 33.82 | ||||||||||||||||
AM-PM Enterprises III, Inc. | 1 | 3,530 | 19.1 | 593 | 7.08 | % | 42 | 11.90 | ||||||||||||||||
Ann Ching Chen | 1 | 6,948 | 1.3 | 792 | 11.62 | % | 92 | 13.24 | ||||||||||||||||
Arbed Tosa 100 | 1 | 5,712 | 11.9 | 1,585 | 10.85 | % | 172 | 30.11 | ||||||||||||||||
Arby's Restaurant Group, Inc. | 35 | 104,229 | 5.1 | 51,614 | 7.27 | % | 3,753 | 36.01 | ||||||||||||||||
Auto Zone | 1 | 6,782 | 15.5 | 2,000 | 7.60 | % | 152 | 22.41 | ||||||||||||||||
Baxters Steakhouse | 1 | 5,186 | 3.0 | 419 | 10.02 | % | 42 | 8.10 | ||||||||||||||||
Bee Mac Enterprises | 2 | 4,232 | 4.6 | 2,188 | 6.86 | % | 150 | 35.44 | ||||||||||||||||
Bighorn Associates | 1 | 3,600 | 3.5 | 1,211 | 9.99 | % | 121 | 33.61 | ||||||||||||||||
Black Angus Steakhouse, LLC | 1 | 6,552 | 5.9 | 3,434 | 8.59 | % | 295 | 45.02 | ||||||||||||||||
Bloomin Apple | 1 | 4,234 | 5.5 | 2,815 | 7.10 | % | 200 | 47.24 | ||||||||||||||||
Boston Market Corporation | 4 | 13,713 | 5.4 | 6,418 | 5.75 | % | 369 | 26.91 | ||||||||||||||||
Brinker International | 2 | 10,640 | 3.5 | 5,178 | 7.49 | % | 388 | 36.47 | ||||||||||||||||
Bruegger's Enterprises | 2 | 5,265 | 6.0 | 1,418 | 7.97 | % | 113 | 21.46 |
Portfolio | Number of Properties | Square Feet | Remaining Lease Term (1)(6) | Base Purchase Price (2) | Capitalization Rate (3) | Annualized Rental Income/NOI (4) | Annualized Rental Income/NOI per Square Foot | |||||||||||||||||
Buca | 2 | 14,885 | 5.0 | 3,307 | 11.61 | % | 384 | 25.80 | ||||||||||||||||
Bullard Restaurants | 1 | 2,693 | 4.4 | 1,715 | 6.30 | % | 108 | 40.10 | ||||||||||||||||
Bullitt Ventures, Inc. | 1 | 5,325 | 10.2 | 1,023 | 8.31 | % | 85 | 15.96 | ||||||||||||||||
Burger King | 1 | 2,800 | 11.2 | 997 | 8.53 | % | 85 | 30.36 | ||||||||||||||||
Burgerbusters, LLC | 6 | 12,903 | 5.7 | 9,563 | 6.04 | % | 578 | 44.80 | ||||||||||||||||
Caribou Coffee | 1 | 1,625 | 1.9 | 1,186 | 7.67 | % | 91 | 56.00 | ||||||||||||||||
Carlos O'Kelly's | 9 | 47,349 | 4.5 | 16,213 | 8.64 | % | 1,401 | 29.59 | ||||||||||||||||
Carrols | 18 | 61,000 | 7.6 | 32,878 | 6.03 | % | 1,982 | 32.49 | ||||||||||||||||
Charlestons | 1 | 6,874 | 1.7 | 3,448 | 3.54 | % | 122 | 17.75 | ||||||||||||||||
Checkers Drive-In Restaurants | 12 | 9,540 | 12.0 | 19,033 | 5.98 | % | 1,139 | 119.39 | ||||||||||||||||
Cherryden | 1 | 7,213 | 6.7 | 3,081 | 7.24 | % | 223 | 30.92 | ||||||||||||||||
Chi-Co., Inc. | 1 | 2,751 | 4.5 | 965 | 7.67 | % | 74 | 26.90 | ||||||||||||||||
Citizens Bank | 2 | 7,800 | 9.5 | 2,960 | 8.75 | % | 259 | 33.21 | ||||||||||||||||
CKE Restaurants | 7 | 24,841 | 6.9 | 8,672 | 6.55 | % | 568 | 22.87 | ||||||||||||||||
Corral Group | 1 | 2,968 | 8.0 | 985 | 6.40 | % | 63 | 21.23 | ||||||||||||||||
CVS | 1 | 10,880 | 11.6 | 3,797 | 7.24 | % | 275 | 25.28 | ||||||||||||||||
Darrin Cobb | 1 | 5,180 | 8.4 | 852 | 8.10 | % | 69 | 13.32 | ||||||||||||||||
Davco Restaurants | 1 | 3,471 | 12.5 | 1,843 | 7.22 | % | 133 | 38.32 | ||||||||||||||||
Den Columbia | 1 | 2,730 | 3.6 | 1,736 | 7.72 | % | 134 | 49.08 | ||||||||||||||||
Denny's Corporation | 7 | 30,193 | 3.6 | 9,826 | 7.08 | % | 696 | 23.05 | ||||||||||||||||
Den-Tex Centra | 4 | 21,098 | 6.9 | 6,441 | 7.84 | % | 505 | 23.94 | ||||||||||||||||
DineEquity Inc. | 38 | 183,400 | 6.6 | 75,816 | 7.12 | % | 5,397 | 29.43 | ||||||||||||||||
Dunkin' Brands | 1 | 2,880 | 11.2 | 1,185 | 7.76 | % | 92 | 31.94 | ||||||||||||||||
Dynamic Management LLC | 1 | 3,263 | 5.2 | 784 | 7.78 | % | 61 | 18.69 | ||||||||||||||||
Einstein/Noah Bagel | 1 | 3,875 | 8.8 | 1,016 | 7.58 | % | 77 | 19.87 | ||||||||||||||||
Enterprises, LLC | 1 | 2,759 | 9.7 | 174 | 25.86 | % | 45 | 16.31 | ||||||||||||||||
Fal Co L.L.C | 3 | 6,240 | 9.2 | 562 | 8.36 | % | 47 | 7.53 | ||||||||||||||||
Family Dollar | 5 | 45,860 | 7.9 | 6,805 | 9.46 | % | 644 | 14.04 | ||||||||||||||||
FedEx | 1 | 17,517 | 4.6 | 1,388 | 9.15 | % | 127 | 7.25 | ||||||||||||||||
Frandeli Group | 11 | 237,898 | 3.6 | 21,257 | 6.91 | % | 1,469 | 6.17 | ||||||||||||||||
Fresenius | 4 | 39,321 | 11.8 | 8,283 | 8.04 | % | 666 | 16.94 | ||||||||||||||||
Fresh Creations, LLC | 2 | 11,315 | 9.9 | 1,835 | 12.64 | % | 232 | 20.50 | ||||||||||||||||
Garden Fresh Restaurant | 1 | 7,411 | 10.8 | 2,652 | 6.79 | % | 180 | 24.29 | ||||||||||||||||
GBM, LLC | 2 | 5,700 | 6.1 | 1,781 | 6.68 | % | 119 | 20.88 | ||||||||||||||||
GDK Development | 1 | 3,682 | 3.3 | 1,387 | 4.04 | % | 56 | 15.21 | ||||||||||||||||
Geko | 1 | 5,012 | 16.8 | 1,212 | 8.83 | % | 107 | 21.35 | ||||||||||||||||
Georgetowne Affiliates | 1 | 3,102 | 7.1 | 1,149 | 5.92 | % | 68 | 21.92 | ||||||||||||||||
Globamax Restaurants | 1 | 3,600 | 13.4 | 785 | 9.04 | % | 71 | 19.72 | ||||||||||||||||
GMRI, Inc. | 2 | 12,190 | 2.8 | 5,199 | 7.35 | % | 382 | 31.34 | ||||||||||||||||
Golden Corral | 18 | 175,150 | 1.6 | 52,152 | 6.12 | % | 3,191 | 18.22 | ||||||||||||||||
Grandys | 5 | 20,584 | 3.5 | 3,473 | 9.07 | % | 315 | 15.30 | ||||||||||||||||
H & K Partners | 1 | 2,000 | 13.9 | 1,353 | 7.32 | % | 99 | 49.50 | ||||||||||||||||
HB Boys | 1 | 2,437 | 23.9 | 1,426 | 7.64 | % | 109 | 44.73 | ||||||||||||||||
Heartland | 2 | 6,139 | 2.8 | 3,656 | 7.74 | % | 283 | 46.10 | ||||||||||||||||
Hometown Folks | 2 | 6,252 | 19.2 | 4,995 | 4.08 | % | 204 | 32.63 | ||||||||||||||||
Houlihan's Restaurant Group | 1 | 10,089 | 3.9 | 3,215 | 8.49 | % | 273 | 27.06 | ||||||||||||||||
Hy-Vee | 1 | 40,461 | 10.5 | 4,721 | 6.91 | % | 326 | 8.06 | ||||||||||||||||
Interfoods of America | 3 | 6,440 | 4.7 | 2,960 | 7.84 | % | 232 | 36.02 | ||||||||||||||||
J.C. Corral, Inc. | 1 | 9,952 | 6.1 | 2,962 | 5.47 | % | 162 | 16.28 | ||||||||||||||||
Jack In The Box, Inc. | 45 | 120,417 | 3.6 | 89,622 | 5.80 | % | 5,202 | 43.20 |
Portfolio | Number of Properties | Square Feet | Remaining Lease Term (1)(6) | Base Purchase Price (2) | Capitalization Rate (3) | Annualized Rental Income/NOI (4) | Annualized Rental Income/NOI per Square Foot | |||||||||||||||||
JCS Holdings, Inc. | 3 | 16,718 | 6.1 | 6,637 | 7.55 | % | 501 | 29.97 | ||||||||||||||||
John C. Brown | 1 | 6,002 | — | 445 | 9.44 | % | 42 | 7.00 | ||||||||||||||||
Ker Management Services, LLC | 2 | 14,105 | 9.3 | 2,429 | 9.72 | % | 236 | 16.73 | ||||||||||||||||
Key Bank | 1 | 3,575 | 9.51 | 1,307 | 7.50 | % | 98 | 27.41 | ||||||||||||||||
K-MAC Holdings Corp | 1 | 2,121 | 1.1 | 1,729 | 6.65 | % | 115 | 54.22 | ||||||||||||||||
Koning Restaurants International | 2 | 5,860 | 7.3 | 1,636 | 6.48 | % | 106 | 18.09 | ||||||||||||||||
Krystal | 4 | 8,926 | 4.9 | 5,823 | 7.37 | % | 429 | 48.06 | ||||||||||||||||
Leeann Chin | 3 | 9,051 | 7.9 | 3,570 | 7.37 | % | 263 | 29.06 | ||||||||||||||||
Little General Store, Inc. | 1 | 1,940 | 9.4 | 1,470 | 3.33 | % | 49 | 25.26 | ||||||||||||||||
Logan's Roadhouse | 6 | 48,406 | 13.4 | 31,922 | 5.70 | % | 1,821 | 37.62 | ||||||||||||||||
Meritage Group | 1 | 2,606 | 2.7 | 1,636 | 6.48 | % | 106 | 40.68 | ||||||||||||||||
Metro Corral Partners | 1 | 12,260 | 10.9 | 5,371 | 7.32 | % | 393 | 32.06 | ||||||||||||||||
Michael Callahan | 1 | 3,206 | 1.2 | 1,376 | 6.10 | % | 84 | 26.20 | ||||||||||||||||
Michigan Mult-King | 1 | 2,036 | 2.8 | 991 | 8.88 | % | 88 | 43.22 | ||||||||||||||||
Midwest BBQ Ventures, LLC | 1 | 5,803 | — | 1,167 | 17.31 | % | 202 | 34.81 | ||||||||||||||||
Mountain Range Restaurants | 1 | 5,985 | 6.6 | 1,425 | 6.39 | % | 91 | 15.20 | ||||||||||||||||
MrEats Corral, LLC | 1 | 9,952 | 0.8 | 4,421 | 5.00 | % | 221 | 22.21 | ||||||||||||||||
NBI Food Services | 1 | 2,900 | 11.9 | 1,693 | 5.73 | % | 97 | 33.45 | ||||||||||||||||
NEA-BBQ, LLC | 3 | 16,920 | 4.9 | 5,368 | 7.75 | % | 416 | 24.59 | ||||||||||||||||
North Country Management | 1 | 3,400 | 5.5 | 1,302 | 5.30 | % | 69 | 20.29 | ||||||||||||||||
Ohio Valley Bistros | 1 | 8,242 | 5.0 | 4,788 | 6.95 | % | 333 | 40.40 | ||||||||||||||||
Ok Apple, Inc. | 1 | 4,761 | 11.0 | 3,034 | 7.35 | % | 223 | 46.84 | ||||||||||||||||
Pacific Bells | 3 | 6,594 | 10.7 | 5,541 | 7.65 | % | 424 | 64.30 | ||||||||||||||||
Pennant Foods Corp. | 10 | 29,417 | 4.6 | 13,043 | 7.11 | % | 928 | 31.55 | ||||||||||||||||
Platinum Corral, LLC | 2 | 22,382 | 2.1 | 6,538 | 6.59 | % | 431 | 19.26 | ||||||||||||||||
Prometheus Partners | 11 | 27,601 | 8.4 | 18,470 | 7.27 | % | 1,342 | 48.62 | ||||||||||||||||
Quality Dining | 4 | 19,573 | 6.6 | 4,880 | 7.64 | % | 373 | 19.06 | ||||||||||||||||
Razzoos | 1 | 6,607 | 2.7 | 2,490 | 8.07 | % | 201 | 30.42 | ||||||||||||||||
Real Mex Restaurants | 2 | 15,563 | 9.5 | 5,754 | 7.25 | % | 417 | 26.79 | ||||||||||||||||
Restaurant Management Co. | 6 | 14,536 | 3.2 | 3,897 | 7.36 | % | 287 | 19.74 | ||||||||||||||||
Roger K Osborne | 1 | 2,850 | 7.1 | 1,726 | 5.50 | % | 95 | 33.33 | ||||||||||||||||
Royal Capital | 5 | 27,418 | 9.6 | 6,374 | 10.46 | % | 667 | 24.33 | ||||||||||||||||
Rubio's Restaurants | 1 | 2,379 | 1.2 | 1,241 | 9.67 | % | 120 | 50.44 | ||||||||||||||||
Ruby Tuesday, Inc. | 6 | 30,851 | 5.6 | 11,385 | 7.37 | % | 839 | 27.20 | ||||||||||||||||
Run Restaurants | 1 | 6,356 | 11.7 | 2,097 | 7.77 | % | 163 | 25.65 | ||||||||||||||||
Saulat Enterprises | 10 | 36,844 | 6.0 | 6,595 | 6.82 | % | 450 | 12.21 | ||||||||||||||||
Shoney's | 6 | 31,939 | 9.6 | 4,403 | 8.52 | % | 375 | 11.74 | ||||||||||||||||
Shoot the Moon | 1 | 5,208 | 3.5 | 1,291 | 9.91 | % | 128 | 24.58 | ||||||||||||||||
Shorest, LLC | 5 | 26,512 | 10.2 | 4,383 | 10.47 | % | 459 | 17.31 | ||||||||||||||||
Sonfish | 2 | 6,737 | 10.4 | 1,543 | 13.22 | % | 204 | 30.28 | ||||||||||||||||
Southeast New Mexico Foods | 2 | 4,346 | 19.2 | 1,885 | 6.47 | % | 122 | 28.07 | ||||||||||||||||
Southern Boys Restaurant Group | 2 | 10,283 | 2.3 | 2,058 | 8.31 | % | 171 | 16.63 | ||||||||||||||||
Southern Rock Restaurants, LLC | 1 | 3,389 | 4.6 | 1,126 | 5.86 | % | 66 | 19.47 | ||||||||||||||||
Southern Star Management Group | 1 | 2,763 | 5.3 | 737 | 8.14 | % | 60 | 21.72 | ||||||||||||||||
Subhash Gupta | 1 | 2,591 | 3.8 | 1,339 | 4.93 | % | 66 | 25.47 | ||||||||||||||||
Subway Restaurants | 1 | 2,485 | 9.4 | 556 | 6.29 | % | 35 | 14.08 | ||||||||||||||||
Tacala | 2 | 4,220 | 5.8 | 3,400 | 5.85 | % | 199 | 47.16 | ||||||||||||||||
Talbots | 1 | 313,000 | 19.9 | 37,500 | 10.14 | % | 3,803 | 12.15 | ||||||||||||||||
Tally Ho Partners | 1 | 2,608 | 6.9 | 1,716 | 3.55 | % | 61 | 23.39 | ||||||||||||||||
TCF National Bank | 1 | 5,654 | 17.1 | 1,414 | 7.28 | % | 103 | 18.22 |
Portfolio | Number of Properties | Square Feet | Remaining Lease Term (1)(6) | Base Purchase Price (2) | Capitalization Rate (3) | Annualized Rental Income/NOI (4) | Annualized Rental Income/NOI per Square Foot | |||||||||||||||||
Texas Roadhouse, Inc. | 9 | 59,852 | 2.5 | 24,118 | 6.78 | % | 1,635 | 27.32 | ||||||||||||||||
The Bailey Company | 1 | 3,477 | 3.2 | 1,784 | 7.34 | % | 131 | 37.68 | ||||||||||||||||
Top Line Restaurants | 1 | 7,025 | 16.4 | 1,641 | 7.62 | % | 125 | 17.79 | ||||||||||||||||
Tractor Supply | 1 | 19,080 | 14.3 | 2,078 | 8.33 | % | 173 | 9.07 | ||||||||||||||||
Tripoli | 1 | 4,558 | 2.7 | 2,597 | 6.31 | % | 164 | 35.98 | ||||||||||||||||
Twin Dragon LLC | 1 | 6,400 | 3.5 | 1,126 | 9.41 | % | 106 | 16.56 | ||||||||||||||||
United States Beef | 5 | 14,725 | 5.4 | 4,748 | 6.72 | % | 319 | 21.66 | ||||||||||||||||
Valenti Management | 1 | 2,535 | 8.3 | 1,745 | 8.48 | % | 148 | 58.38 | ||||||||||||||||
Vitamin Shoppe | 1 | 3,500 | 9.4 | 2,100 | 7.90 | % | 166 | 47.43 | ||||||||||||||||
Vsgh Partners | 2 | 4,802 | 0.5 | 1,344 | 4.69 | % | 63 | 13.12 | ||||||||||||||||
Walgreens | 5 | 71,820 | 12.5 | 21,517 | 7.91 | % | 1,702 | 23.70 | ||||||||||||||||
Wendab Associates | 4 | 11,831 | 12.7 | 7,336 | 8.15 | % | 598 | 50.55 | ||||||||||||||||
Wendy's Company | 1 | 3,199 | 8.5 | 1,789 | 6.04 | % | 108 | 33.76 | ||||||||||||||||
Woodland Group | 9 | 43,623 | 5.2 | 17,751 | 7.39 | % | 1,311 | 30.05 | ||||||||||||||||
Yum! Brands | 1 | 2,900 | 6.8 | 2,124 | 5.27 | % | 112 | 38.62 | ||||||||||||||||
Z & H Foods, Inc. | 3 | 5,295 | 1.6 | 1,943 | 7.05 | % | 137 | 25.87 | ||||||||||||||||
Zee&Son, LLC | 1 | 2,007 | 19.2 | 301 | 8.97 | % | 27 | 13.45 | ||||||||||||||||
Total acquisitions for the three months ended June 30, 2013 | 480 | 2,683,389 | 7.3 | 878,273 | 7.10 | % | 62,359 | 23.24 | ||||||||||||||||
Total acquisitions for the six months ended June 30, 2013 | 528 | 3,983,131 | 8.1 | 1,140,569 | 7.27 | % | 82,932 | 20.82 | ||||||||||||||||
Portfolio as of June 30, 2013(5) | 1,181 | 19,404,596 | 9.9 | $ | 2,939,004 | 7.70 | % | $ | 226,329 | $ | 11.66 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net loss attributable to stockholders (in accordance with U.S. GAAP) | $ | (51,679 | ) | $ | (7,070 | ) | $ | (189,613 | ) | $ | (12,098 | ) | ||||
Merger and other transaction costs | 4,680 | 20 | 142,449 | 20 | ||||||||||||
Loss on contingent valuation rights | 31,134 | — | 31,134 | — | ||||||||||||
(Gain) loss on held for sale properties | — | 82 | (14 | ) | 405 | |||||||||||
Gain on sale of investment securities | — | — | (451 | ) | — | |||||||||||
Loss on derivative instruments | 40 | — | 45 | — | ||||||||||||
Interest on convertible obligation to preferred investors | 1,630 | — | 1,630 | — | ||||||||||||
Depreciation and amortization | 27,806 | 6,994 | 52,829 | 10,529 | ||||||||||||
FFO | 13,611 | 26 | 38,009 | (1,144 | ) | |||||||||||
Acquisition and transaction related costs | 15,144 | 7,814 | 20,726 | 12,599 | ||||||||||||
Amortization of above-market lease | 63 | — | 126 | — | ||||||||||||
Amortization of deferred financing costs | 2,166 | 385 | 3,274 | 596 | ||||||||||||
Straight-line rent | (1,605 | ) | (352 | ) | (2,975 | ) | (565 | ) | ||||||||
Non-cash equity compensation expense | 3,454 | 178 | 4,330 | 324 | ||||||||||||
AFFO | $ | 32,833 | $ | 8,051 | $ | 63,490 | $ | 11,810 |
Type of offering | Closing Date | Number of Shares | Gross Proceeds | ||||||
Registered follow on offering | January 29, 2013 | 2,070,000 | $ | 26.7 | |||||
ATM | January 1 - June 30, 2013 | 553,300 | 8.9 | ||||||
Private placement offering | June 7, 2013 | 29,411,764 | 455.0 | ||||||
Total | 32,035,064 | $ | 490.6 |
Three Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||
March 31, 2013 | June 30, 2013 | June 30, 2013 | |||||||||||||||||||
Dividends | % of Dividends | Dividends | % of Dividends | Dividends | % of Dividends | ||||||||||||||||
Dividends: | |||||||||||||||||||||
Distributions paid in cash | $ | 27,409 | $ | 37,088 | $ | 64,497 | |||||||||||||||
Distributions reinvested | 4,895 | — | 4,895 | ||||||||||||||||||
$ | 32,304 | $ | 37,088 | $ | 69,392 | ||||||||||||||||
Source of dividends: | |||||||||||||||||||||
Cash flows provided by operations | $ | — | 0.0 | % | $ | 5,674 | 15.3 | % | $ | 5,674 | 8.2 | % | |||||||||
Proceeds from financing activities | 27,409 | 84.8 | % | 31,414 | 84.7 | % | 58,823 | 84.8 | % | ||||||||||||
Common stock issued under the DRIP | 4,895 | 15.2 | % | — | 0.0 | % | 4,895 | 7.0 | % | ||||||||||||
Total sources of dividends | $ | 32,304 | 100.0 | % | $ | 37,088 | 100.0 | % | $ | 69,392 | 100.0 | % | |||||||||
Net loss attributable to stockholders (in accordance with U.S. GAAP) | $ | (137,934 | ) | $ | (51,679 | ) | $ | (189,613 | ) |
Total | July 1, 2013 - December 31, 2013 | 2014 – 2015 | 2016 – 2017 | Thereafter | ||||||||||||||||
Principal payments due on mortgage notes payable | $ | 269,918 | $ | 74 | $ | 13,956 | $ | 186,588 | $ | 69,300 | ||||||||||
Interest payments due on mortgage notes payable | 61,498 | 5,795 | 22,689 | 16,592 | 16,422 | |||||||||||||||
Principal payments due on senior corporate credit facility | 600,000 | — | — | — | 600,000 | |||||||||||||||
Interest payments due on senior corporate credit facility | 74,406 | 8,044 | 32,176 | 32,176 | 2,010 | |||||||||||||||
Principal obligation to Series C Convertible Preferred stockholders, at fair value | 445,000 | 445,000 | — | — | — | |||||||||||||||
Interest payments due on obligation to Series C Convertible Preferred Stock | 13,038 | 13,038 | — | — | — | |||||||||||||||
Contingent value rights obligation to preferred and common investors, at fair value | 31,134 | 31,134 | — | — | — | |||||||||||||||
Payments due on ground lease obligations | 4,050 | 174 | 697 | 702 | 2,477 | |||||||||||||||
Total | $ | 1,499,044 | $ | 503,259 | $ | 69,518 | $ | 236,058 | $ | 690,209 |
AMERICAN REALTY CAPITAL PROPERTIES, INC. | ||
By: /s/ NICHOLAS S. SCHORSCH | ||
Nicholas S. Schorsch | ||
Chief Executive Officer and Chairman of the Board of Directors | ||
(Principal Executive Officer) | ||
By: /s/ BRIAN S. BLOCK | ||
Brian S. Block | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) |
Exhibit No. | Description | |
1.1 (7) | Underwriting Agreement, dated July 23, 2013, by and among American Realty Capital Properties, Inc., ARC Properties Operating Partnership, L.P., J.P. Morgan Securities LLC and Citigroup Global Markets Inc., as representatives of the several underwriters listed therein. | |
2.1 (1) | Agreement and Plan of Merger, dated as of May 28, 2013, among American Realty Capital Properties, Inc., ARC Properties Operating Partnership, L.P., Safari Acquisition, LLC, CapLease, Inc., Caplease, LP, and CLF OP General Partner LLC | |
2.2 (5) | Agreement and Plan of Merger, dated as of July 1, 2013, among American Realty Capital Properties, Inc., American Realty Capital Trust IV, Inc., Thunder Acquisition, LLC, ARC Properties Operating Partnership, L.P. and American Realty Capital Operating Partnership IV, L.P. | |
3.5 (4) | Articles Supplementary for the Series C Convertible Preferred Stock of American Realty Capital Properties, Inc., dated June 6, 2013 | |
3.6 (6) | Articles of Amendment to Articles of Amendment and Restatement of American Realty Capital Properties, Inc., effective July 2, 2013 | |
4.1 (7) | Indenture, dated as of July 29, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee | |
4.2 (7) | First Supplemental Indenture, dated as of July 29, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee | |
4.3 (7) | Form of 3.00% Convertible Senior Notes due 2018 (included in Exhibit 4.2) | |
10.49 (1) | Voting Agreement, dated as of May 28, 2013, by and among American Realty Capital Properties, Inc., Paul H. McDowell, William R. Pollert, Shawn P. Seale, Robert C. Blanz and Paul C. Hughes | |
10.50 (1) | Management Letter Agreement, dated as of May 28, 2013, among American Realty Capital Properties, Inc., Paul H. McDowell, William R. Pollert, Shawn P. Seale, Robert C. Blanz, Michael J. Heneghan and Paul C. Hughes | |
10.51 (2) | Securities Purchase Agreement, dated as of June 4, 2013, between American Realty Capital Properties, Inc. and investors party thereto | |
10.52(2) | Convertible Preferred Stock Purchase Agreement, dated as of June 4, 2013, between American Realty Capital Properties, Inc. and investors party thereto | |
10.53(3) | Purchase and Sale Agreement, dated as of May 31, 2013, among American Realty Capital Properties, Inc., ARC Properties Operating Partnership, L.P., CNL APF Partners, LP, USRP (SFGP), LLC, CNL Funding 2000-A, LLC, Net Lease Funding 2005, LLC and CNL Restaurant Capital Corp. | |
10.54(4) | Form of Common Stock CVR Agreement | |
10.55(4) | Form of Convertible Preferred Stock CVR Agreement | |
10.56(5) | Letter Agreement, dated as of July 1, 2013, among American Realty Capital Properties, Inc., American Realty Capital Trust IV, Inc., American Realty Capital Operating Partnership IV, L.P., American Realty Capital Trust IV Special Limited Partner, LLC, American Realty Capital Advisors IV, LLC and American Realty Capital Properties IV, LLC | |
10.57(5) | Asset Purchase and Sale Agreement, dated as of July 1, 2013, between ARC Properties Operating Partnership, L.P. and American Realty Capital Advisors IV, LLC | |
10.58* | Augmenting Lender and Increasing Lender Supplement and Incremental Amendment, dated as of March 28, 2013, to the Credit Agreement, among ARC Properties Operating Partnership, L.P., Tiger Acquisition, LLC, American Realty Capital Properties, Inc., the lenders party thereto and Wells Fargo Bank, National Association | |
10.59* | Third Amendment to Credit Agreement, by and among ARC Properties Operating Partnership, L.P., Tiger Acquisition, LLC, American Realty Capital Properties, Inc., the Lenders party thereto, and Wells Fargo Bank, National Association, dated as of May 28, 2013 | |
10.60* | Fourth Amendment to Credit Agreement, by and among ARC Properties Operating Partnership, L.P., Tiger Acquisition, LLC, American Realty Capital Properties, Inc., the Lenders party thereto, and Wells Fargo Bank, National Association, dated as of July 22, 2013 | |
10.61* | Augmenting Lender and Increasing Lender Supplement and Incremental Amendment to the Credit Agreement, dated as of August 1, 2013, among ARC Properties Operating Partnership, L.P., Tiger Acquisition, LLC, American Realty Capital Properties, Inc., the Lenders party thereto and Wells Fargo Bank, National Association | |
31.1 * | Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 * | Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32 * | Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
Exhibit No. | Description | |
101 * | XBRL (eXtensible Business Reporting Language). The following materials from American Realty Capital Properties, Inc.'s Quarterly Report on Form 10-Q for the three months ended June 30, 2013, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purpose of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934. |
EXECUTION COPY
AUGMENTING LENDER AND INCREASING LENDER SUPPLEMENT AND INCREMENTAL AMENDMENT
THIS AUGMENTING LENDER AND INCREASING LENDER SUPPLEMENT AND INCREMENTAL AMENDMENT, dated as of March 28, 2013 (this “Supplement”), to the Credit Agreement, dated as of February 14, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among ARC Properties Operating Partnership, L.P. (as successor to American Realty Capital Operating Partnership III, L.P., the “Borrower”), Tiger Acquisition, LLC (as successor to American Realty Capital Trust III, Inc.), American Realty Capital Properties, Inc., the Lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”).
W I T N E S S E T H
WHEREAS, the Credit Agreement provides in Section 2.15 thereof that any bank, financial institution or other entity may extend Revolving Commitments and participate in tranches of Incremental Term Loans under the Credit Agreement subject to the approval of the Borrower, the Issuing Bank, the Swingline Lender and the Administrative Agent, by executing and delivering to the Borrower and the Administrative Agent documentation acceptable to the Administrative Agent; and
WHEREAS, the undersigned Increasing Lenders are currently party to the Credit Agreement and now desire to increase their respective Revolving Commitments and extend Incremental Term Loans;
WHEREAS, the undersigned Augmenting Lender has committed to provide a Revolving Commitment of $100,000,000 on the date hereof, subject to the terms and conditions of this Supplement;
WHEREAS, to implement the increase in the Revolving Commitments and the Incremental Term Loans pursuant to this Supplement, the parties hereto hereby agree to amend the Credit Agreement in accordance with Section 2.15 of the Credit Agreement;
NOW, THEREFORE, each of the parties hereto hereby agrees as follows:
1. Increasing Lenders. As of the effective date of this Supplement pursuant to Section 4 below, each undersigned Increasing Lender agrees to increase its Revolving Commitment and extend a commitment with respect to Incremental Term Loans, in each case, in such amounts as set forth on Exhibit B hereto (each Increasing Lender extending a commitment for Incremental Term Loans, a “March 2013 Incremental Term Loan Lender”, such commitments to extend Incremental Term Loans, the “March 2013 Incremental Term Loan Commitments” and such Incremental Term Loans, the “March 2013 Incremental Term Loans”). Unless otherwise specified in this Supplement, for all purposes of the Credit Agreement (as amended hereby), the March 2013 Incremental Term Loans, the March 2013 Incremental Term Loan Lenders and the March 2013 Incremental Term Loan Commitments shall be deemed to constitute “Term Loans,” “Term Loan Lenders” and “Term Loan Commitments,” respectively.
2. Augmenting Lender.
a. The undersigned Augmenting Lender agrees to be bound by the provisions of the Credit Agreement and agrees that it shall, on the effective date of this Supplement pursuant to Section 4 below, become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with a Revolving Commitment of $100,000,000.
b. The undersigned Augmenting Lender (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and has reviewed such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.
3. Amendments to Credit Agreement. As of the date hereof, the Credit Agreement is amended as follows:
a. The definition of “Applicable Term Loan Percentage” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
“Applicable Term Loan Percentage” means, as to each Term Loan Lender, the ratio, expressed as a percentage of (a) at any time any Availability Period shall be in effect, (i) (x) the amount of such Lender’s Term Loan Commitment plus (y) the amount of such Lender’s outstanding Term Loans to (ii) (x) the aggregate amount of the Term Loan Commitments of all Term Loan Lenders plus (y) aggregate amount of all outstanding Term Loans and (b) at any time no Availability Period shall be in effect, (i) the amount of such Lender’s outstanding Term Loans to (ii) the aggregate amount of all outstanding Term Loans.
b. The definition of “Availability Period” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
“Availability Period” means, (a) with respect to Term Loans other than March 2013 Incremental Term Loans, the period from and including the Effective Date to the earlier of (i) the date of termination of the Term Loan Commitments other than March 2013 Incremental Term Loan Commitments pursuant to Section 2.06(b), and (ii) the date of termination of the commitment of each Lender to make Loans pursuant to Section 9.02 (the “Initial Availability Period”) and (b) with respect to March 2013 Incremental Term Loans, the period from and including the Initial Term Loan Commitment Expiration Date to the earlier of (i) the date of termination of the March 2013 Incremental Term Loan Commitments pursuant to Section 2.06(b), and (ii) the date of termination of the commitment of each Lender to make Loans pursuant to Section 9.02 (the “March 2013 Availability Period”).
c. The definition of “Term Loan Commitment” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
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“Term Loan Commitment” means, as to each Term Loan Lender, such Lender’s obligation to make Term Loans during the applicable Availability Period pursuant to Section 2.01(b), in an amount up to, but not exceeding, the amount set forth for such Lender on Schedule 2.01 as such Lender’s “Initial Term Loan Commitment Amount” or “March 2013 Term Loan Commitment Amount”, as applicable, as such Schedule 2.01 may be modified from time to time in accordance with the terms hereof.
d. Section 1.01 of the Credit Agreement is hereby amended by inserting in appropriate alphabetical order the following new definition:
“Applicable Initial Term Loan Percentage” means, as to each Term Loan Lender during the Initial Availability Period, the ratio, expressed as a percentage of (a) (i) the amount of such Lender’s Initial Term Loan Commitment plus (ii) the amount of such Lender’s outstanding Initial Term Loans to (b) (i) the aggregate amount of the Initial Term Loan Commitments of all Term Loan Lenders plus (ii) aggregate amount of all outstanding Initial Term Loans.
“Applicable March 2013 Incremental Term Loan Percentage” means, as to each Term Loan Lender during the March 2013 Availability Period, the ratio, expressed as a percentage of (a) (i) the amount of such Term Loan Lender’s March 2013 Incremental Term Loan Commitment plus (ii) the amount of such Lender’s outstanding March 2013 Incremental Term Loans to (b) (i) the aggregate amount of the March 2013 Incremental Term Loan Commitments of all Term Loan Lenders plus (ii) aggregate amount of all outstanding March 2013 Incremental Term Loans.
“Initial Term Loan Commitments” means the Term Loan Commitments other than (a) the March 2013 Incremental Term Loan Commitments and (b) any other commitments for Incremental Term Loans initially made after February 28, 2013.
“Initial Term Loan Commitment Expiration Date” means the date occurring on the earlier of (a) the date on which the Initial Term Loan Commitments are reduced to zero in accordance with the first sentence of Section 2.06(b) and (b) the six (6) month anniversary of the Effective Date.
“Initial Term Loans” means the Term Loans other than (a) the March 2013 Incremental Term Loans and (b) any other Incremental Term Loans made pursuant to commitments which were initially made after February 28, 2013.
“March 2013 Incremental Term Loan Effective Date” means March 28, 2013.
e. Section 2.01(b) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
(b) Term Loans. Subject to the terms and conditions set forth herein, including without limitation, Section 2.14, each Term Loan Lender severally and not jointly agrees to make Term Loans to Borrower from time to time, on any Business Day during the applicable Availability Period (each such date, a “Term Loan Borrowing Date”) in an aggregate amount not to exceed such Term Loan Lender’s applicable Term Loan Commitment; provided that Borrower shall not be permitted to request (x) a Borrowing of Term Loans on more than three (3) occasions during the Initial Availability
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Period and (y) a Borrowing of March 2013 Incremental Term Loans on more than three (3) occasions during the March 2013 Availability Period. The Borrowings of Term Loans may be ratable Floating Rate Borrowings or ratable Fixed Rate Borrowings. Amounts repaid or prepaid in respect of the Term Loans may not be reborrowed.
f. Section 2.02(b) of the Credit Agreement is hereby amended by deleting the first sentence thereof in its entirety and replacing it with the following:
(b) Following receipt of a Loan Notice, Administrative Agent shall promptly notify each Lender of the amount of its Applicable Revolving Percentage, Applicable Initial Term Loan Percentage or Applicable March 2013 Incremental Term Loan Percentage, as applicable, of the applicable Loans, and if no timely notice of a conversion or continuation is provided by Borrower, Administrative Agent shall notify each Lender of the details of any automatic continuation described in the preceding subsection.
g. Section 2.06(b) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
(b) Term Loan Commitments. The applicable Term Loan Commitment of each Term Loan Lender shall be immediately and permanently reduced on each Term Loan Borrowing Date upon such Term Loan Lender making a Term Loan to Borrower on such Term Loan Borrowing Date in an amount corresponding to such Term Loan Lender’s Applicable Initial Term Loan Percentage or Applicable March 2013 Incremental Term Loan Percentage, as applicable, of the aggregate principal amount of the Term Loans made by the applicable Term Loan Lenders to Borrower on such Term Loan Borrowing Date. The aggregate remaining Term Loan Commitments other than the March 2013 Incremental Term Loan Commitments shall terminate at 5:00 p.m. on the six (6) month anniversary of the Effective Date. The aggregate remaining March 2013 Incremental Term Loan Commitments shall terminate at 5:00 p.m. on the six (6) month anniversary of the March 2013 Incremental Term Loan Effective Date.
h. Section 2.09(c) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
(c) Term Loan Facility Fees. During the period (i) with respect to the Term Loan Commitments other than the March 2013 Incremental Term Loan Commitments, from the Effective Date and until the termination of the Initial Availability Period and (ii) with respect to the March 2013 Incremental Term Loan Commitments, from the March 2013 Incremental Term Loan Effective Date and until the termination of the March 2013 Availability Period, Borrower agrees to pay to Administrative Agent for the account of the applicable Term Loan Lenders an unused term loan facility fee equal to (x) the amount by which the aggregate amount of the applicable Term Loan Commitments exceeds the average daily amount of the aggregate outstanding principal balance of applicable Term Loans multiplied by (y) a rate per annum equal to 0.25%. Such fee shall be computed on a daily basis and payable monthly in arrears on the last Business Day of each calendar month ending after the Effective Date during the term of the applicable Availability Period and on the last day of the applicable Availability Period (or, if earlier, on the date the applicable Term Loan Commitments shall have been reduced to zero in accordance with Section 2.06(b) or otherwise terminated).
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i. Schedule 2.01 to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 2.01 attached hereto as Exhibit B.
4. This Supplement shall become effective upon (a) the satisfaction of the conditions precedent specified in Section 2.15 of the Credit Agreement, which shall occur no later than March 28, 2013 (the “Termination Date”) and (b) receipt on or prior to the Termination Date by the undersigned Augmenting Lender and each undersigned Increasing Lender of such fees as are due and owing to such Augmenting Lender or Increasing Lender in connection with the increase of commitments pursuant to this Supplement.
5. The Borrower hereby elects to increase the Revolving Commitments and enter into one or more tranches of Incremental Term Loans and has delivered to the Administrative Agent a certificate signed by a Responsible Officer of the Borrower pursuant to Section 2.15 of the Credit Agreement, substantially in the form attached hereto as Exhibit A.
6. This Supplement shall constitute a Loan Document.
7. Capitalized terms defined in the Credit Agreement shall have their defined meanings when used herein.
8. This Supplement shall be governed by, and construed in accordance with, the laws of the State of New York.
9. This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.
[remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.
BARCLAYS BANK PLC,
as Augmenting Lender
By: /s/ Craig Malloy
Name: Craig Malloy
Title: Director
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
BANK OF AMERICA, N.A.,
as Increasing Lender
By: /s/ Michael W. Edwards
Name: Michael W. Edwards
Title: Senior Vice President
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Increasing Lender
By: /s/ D. Bryan Gregory
Name: D. Bryan Gregory
Title: Director
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
Accepted
and agreed to as of the date first written above:
ARC PROPERTIES OPERATING PARTNERSHIP, L.P.
By: /s/ Jesse C. Galloway
Name: Jesse C. Galloway
Title: Authorized Signatory
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
Accepted and agreed to as of the date first written above:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Issuing Bank and Swingline Lender
By: /s/ D. Bryan Gregory
Name: D. Bryan Gregory
Title: Director
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
EXHIBIT A
OFFICER’S CERTIFICATE
March 28, 2013
The undersigned, Brian Block of ARC Properties Operating Partnership, L.P., a Delaware limited partnership (“ARCPOP”), in connection with (i) that certain Credit Agreement dated as of February 14th, 2013 (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Credit Agreement”) by and among ARCPOP (as successor to American Realty Capital Operating Partnership III, L.P., the “Borrower”), Tiger Acquisition, LLC (as successor to American Realty Capital Trust III, Inc.), American Realty Capital Properties, Inc., Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent (the “Administrative Agent”) and the Lenders from time to time party thereto, and (ii) that certain Augmenting Lender and Increasing Lender Supplement and Incremental Amendment, dated as of March 28, 2013 to the Credit Agreement (the “Supplement”), among the Borrower, certain Augmenting Lenders, certain Increasing Lenders and Wells Fargo, as administrative agent, Issuing Bank and Swingline Lender, hereby certifies as follows (terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement or, if not defined therein, in the Supplement):
1. No consents, licenses or approvals are required in connection with the execution and delivery of the Supplement or performance of the Loan Documents (including the Supplement).
2. The conditions specified in Sections 5.02(a) and (b) of the Credit Agreement have been satisfied.
3. After giving effect to the increase in the Revolving Commitments, the Incremental Term Loan Commitment and the Incremental Term Loans to be made on the date hereof, the sum of (a) Total Outstandings plus (b) Total Bridge Facility Outstandings will not exceed the Borrowing Base.
4. ARCPOP is in pro forma compliance with the covenants set forth in Section 8.14 of the Credit Agreement after giving effect to the Loans to be made on the date hereof and the application of the proceeds therefrom as if made and applied on the date hereof, as evidenced by the calculations in Schedule 1 attached hereto.
ARC PROPERTIES OPERATING PARTNERSHIP, L.P.
By:_________________________________
Brian Block
Chief Financial Officer
Schedule 1
Calculations showing Pro-Forma Compliance
EXHIBIT B
SCHEDULE 2.01
COMMITMENTS
Lender | Revolving Loan Commitment |
Initial Term Loan Commitment |
March 2013 Incremental Term Loan Commitment |
Wells Fargo Bank | $120,000,000 | $75,000,000 | $105,000,000 |
Bank of America, N.A. | $120,000,000 | $75,000,000 | $105,000,000 |
Regions Bank | $48,000,000 | $72,000,000 | $0 |
RBS Citizens, N.A. | $40,000,000 | $60,000,000 | $0 |
JPMorgan Chase Bank, N.A. | $48,000,000 | $72,000,000 | $0 |
Capital One, N.A. | $40,000,000 | $60,000,000 | $0 |
Barclays Bank PLC | $100,000,000 | $0 | $0 |
TD Bank, N.A. | $30,000,000 | $45,000,000 | $0 |
U.S. Bank National Association | $30,000,000 | $45,000,000 | $0 |
Union Bank, National Association | $30,000,000 | $45,000,000 | $0 |
UBS AG, Stamford Branch | $16,000,000 | $24,000,000 | $0 |
Comerica Bank | $12,000,000 | $18,000,000 | $0 |
First Tennessee Bank National Association | $6,000,000 | $9,000,000 | $0 |
Total | $640,000,000 | $600,000,000 | $210,000,000 |
EXECUTION COPY
THIRD AMENDMENT TO
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third Amendment”) is made and entered into as of this 28th day of May, 2013 by and among ARC Properties Operating Partnership, L.P. (as successor to American Realty Capital Operating Partnership III, L.P.), a Delaware limited partnership (“Borrower”), TIGER ACQUISITION, LLC (as successor to American Realty Capital Trust III, Inc.), a Delaware limited liability company (“Tiger”), AMERICAN REALTY CAPITAL PROPERTIES, INC., a Maryland corporation (“ARCP”), the Lenders party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent for the benefit of the Lenders (in such capacity, the “Administrative Agent”), as Issuing Bank and as Swingline Lender.
WITNESSETH:
WHEREAS, Borrower, Tiger, ARCP, the Administrative Agent and the Lenders are parties to a certain Credit Agreement dated as of February 14, 2013 (as amended by a First Amendment dated as of March 18, 2013 and an Augmenting Lender and Increasing Lender Supplement and Incremental Amendment dated as of March 28, 2013, together with any other modifications and amendments, collectively, the “Credit Agreement”);
WHEREAS, Borrower has requested that the Administrative Agent and the Lenders amend certain terms and conditions of the Credit Agreement as described herein; and
WHEREAS, the Administrative Agent and the Lenders party to this Third Amendment have agreed to so amend certain terms and conditions of the Credit Agreement, all on the terms and conditions set forth below in this Third Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. | Definitions. All capitalized undefined terms used in this Third Amendment shall have the meanings ascribed thereto in the Credit Agreement, as amended hereby. |
2. | Amendments to Credit Agreement. As of the date hereof, the Credit Agreement is amended as follows: |
a. | Section 1.01 of the Credit Agreement is hereby amended by inserting in appropriate alphabetical order the following new definition: |
“Fundamental Change” has the meaning specified in Section 8.03.
b. | Section 8.02 of the Credit Agreement is hereby amended by (i) deleting the “and” now appearing at the end of clause (j) thereof and (ii) inserting the following new clauses (l) and (m) immediately after clause (k) thereof: |
(l) | any Fundamental Change to the extent permitted under Section 8.03; and |
(m) Investments in the ordinary course of business constituting (i) all of the Equity Interests of any Person the assets of which (other than immaterial assets) constitute real property assets and which Investments do not constitute or include the assumption of Indebtedness of such Person or a Guarantee of Indebtedness of such Person (in each case other than Non-Recourse Indebtedness) or (ii) all of the Equity Interests in any other Person the assets of which (other than immaterial assets) constitute real property assets so long as (A) immediately prior thereto, and immediately thereafter and after giving effect thereto, no Default or Event of Default has occurred or would result therefrom and (B) prior to consummating such Investment, Borrower shall have delivered to the Administrative Agent for distribution to each of the Lenders a Compliance Certificate, calculated on a pro forma basis based on information then available to the Borrower, evidencing the continued compliance by the Loan Parties with the terms and conditions of this Agreement and the other Loan Documents, including without limitation, the financial covenants contained in Section 8.14, after giving effect to such Investment;
c. | Section 8.03 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
8.03 Fundamental Changes. Each of Parent and Borrower shall not, nor shall it permit any other Loan Party to, directly or indirectly, merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person (any such transaction, a “Fundamental Change”), except that, so long as no Event of Default has occurred and is continuing or would result therefrom:
(a) any Loan Party (other than Parent or Borrower) may merge with (i) Parent or Borrower, provided that Parent or Borrower, as applicable, shall be the continuing or surviving Person, or (ii) any other Loan Party, or (iii) any other Person provided that, if it owns a Borrowing Base Property and is not the surviving entity, then Borrower has complied with Section 4.09 to remove such Borrowing Base Property from the Borrowing Base;
(b) any Loan Party (other than Parent or Borrower) may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to another Loan Party;
(c) any Loan Party may Dispose of a Property owned by such Loan Party in the ordinary course of business and for fair value; provided that if such Property is a Borrowing Base Property, then Borrower shall have complied with Section 4.09;
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(d) Parent or Borrower may, directly or indirectly, merge or consolidate with any other Person so long as (i) Parent or Borrower shall be the survivor thereof; (ii) Borrower shall have given the Administrative Agent and the Lenders at least 30 days’ prior written notice of such consolidation or merger; (iii) immediately prior thereto, and immediately thereafter and after giving effect thereto, no Default or Event of Default has occurred or would result therefrom; (iv) at the time Borrower gives notice pursuant to clause (ii) of this subsection, Borrower shall have delivered to the Administrative Agent for distribution to each of the Lenders a Compliance Certificate, calculated on a pro forma basis based on information then available to the Borrower, evidencing the continued compliance by the Loan Parties with the terms and conditions of this Agreement and the other Loan Documents, including without limitation, the financial covenants contained in Section 8.14, after giving effect to such consolidation or merger and (v) Borrower obtains the prior written consent in writing of the Required Lenders in their sole discretion (which consent was granted by the Required Lenders pursuant to the terms of the Third Amendment to this Agreement dated May 28, 2013); and
(e) Parent and Borrower may consummate the Permitted Merger Transaction.
Nothing in this Section shall be deemed to prohibit the sale or leasing of Property or portions of Property in the ordinary course of business.
d. | Section 8.05 of the Credit Agreement is hereby amended by (i) deleting the “and” now appearing at the end of clause (h) thereof, (ii) deleting the period (“.”) now appearing at the end of clause (i) thereof and substituting the following therefor: “; and”; and (iii) inserting the following new clause (j) immediately after clause (i) thereof: |
(j) Parent, Borrower or any Loan Party may declare and make any Restricted Payment of non-core assets (or the Equity Interest of any Subsidiary the sole assets of which are non-core assets) acquired in a Fundamental Change; provided that (i) such Restricted Payment shall be made within 360 days of such Fundamental Change, (ii) immediately prior thereto, and immediately thereafter and after giving effect thereto, no Default or Event of Default has occurred or would result therefrom and (iii) Borrower and Parent will remain in pro forma compliance with the covenants set forth in Section 8.14 after giving effect to such Restricted Payment.
e. | Section 8.06 of the Credit Agreement is hereby amended to add “(other than Sections 8.02(l) and (m))” immediately after “Except for Investments permitted under Section 8.02” contained therein. |
-3- |
3. | Required Lender Consent and Waiver. Each of the Lenders party hereto hereby consents to any Fundamental Change that shall have satisfied the requirements of clauses (i) through (iv) of Section 8.03(d) of the Credit Agreement as amended by this Third Amendment and, solely in connection with that certain acquisition by Parent, Borrower and its Subsidiaries of an entity identified to the Lenders under the code name “Cowboy” and/or its affiliates (the “Company”) pursuant to that certain Agreement and Plan of Merger to be entered into on or about the date hereof, by and among Parent, Borrower, a subsidiary of the Parent established for the purposes of the Cowboy Acquisition, the Company and certain subsidiaries of the Company (the “Cowboy Acquisition”), the Required Lenders hereby solely waive the requirements of Section 8.03(d)(ii) and (iv) in respect of the Cowboy Acquisition; provided, with respect to the waiver of Section 8.03(d)(iv), that Borrower deliver the Compliance Certificate referred to therein on or prior to the date the Cowboy Acquisition is consummated. |
4. | Conditions to Effectiveness. This Third Amendment shall not be effective until the Administrative Agent shall have received counterparts of this Third Amendment duly executed and delivered by the Borrower and the other Loan Parties, the Administrative Agent, the Issuing Bank, the Swingline Lender and the Required Lenders. |
5. | Representations and Warranties. The representations and warranties of Borrower and each other Loan Party, contained in Article VI of the Credit Agreement or any other Loan Document are true and correct in all material respects (except to the extent that any such representation and warranty is qualified as to “materiality,” “Material Adverse Effect” or similar language, in which case it shall be true and correct in all respects (after giving effect to any such qualification)) on and as of the date hereof; provided, if any such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects (except to the extent that any such representation and warranty is qualified as to “materiality,” “Material Adverse Effect” or similar language, in which case it shall be true and correct in all respects (after giving effect to any such qualification)) as of such earlier date. |
6. | Limited Amendment; Ratification of Loan Documents. Except as specifically amended hereby, the terms and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect, and are hereby ratified and affirmed in all respects. This Third Amendment shall not be deemed a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Credit Agreement or any other Loan Document, except as expressly set forth herein. |
7. | Governing Law. This Third Amendment shall be governed by and construed in accordance with the laws of the State of New York. |
8. | Miscellaneous. This Third Amendment may be executed in any number of counterparts, which shall together constitute an entire original agreement, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Third Amendment expresses the entire understanding of the parties with respect to |
-4- |
the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof. Any determination that any provision of this Third Amendment or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality, or enforceability of any other provisions of this Third Amendment. The Loan Parties represent and warrant that they have consulted with independent legal counsel of their selection in connection herewith and are not relying on any representations or warranties of the Administrative Agent or the Lenders or their counsel in entering into this Third Amendment. This Third Amendment shall constitute a Loan Document.
[remainder of page left intentionally blank]
-5- |
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed as of the day and year first above written.
ARC Properties Operating Partnership, L.P., | ||
a Delaware limited partnership | ||
By: | /s/ Brian S. Block | |
Name: Brian S. Block | ||
Title: EVP and Chief Financial Officer | ||
AMERICAN REALTY CAPITAL PROPERTIES, INC., a Maryland corporation | ||
By: | /s/ Brian S. Block | |
Name: Brian S. Block | ||
Title: EVP and Chief Financial Officer | ||
TIGER ACQUISITION, LLC, a Delaware limited liability company | ||
By: | /s/ Brian S. Block | |
Name: Brian S. Block | ||
Title: EVP and Chief Financial Officer |
Signature Page to Third Amendment to Credit Agreement |
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, SwingLine Lender, Issuing Bank and as a Lender | ||
By: | /s/ Matt Ricketts | |
Name: Matt Ricketts | ||
Title: Managing Director |
Signature Page to Third Amendment to Credit Agreement |
BARCLAYS BANK PLC, | ||
as a Lender | ||
By: | /s/ Noam Azachi | |
Name: NOAM AZACHI | ||
Title: VICE PRESIDENT |
Signature Page to Third Amendment to Credit Agreement |
BANK OF AMERICA, N.A. | ||
as a Lender | ||
By: | /s/ Michael W. Edwards | |
Name: Michael W. Edwards | ||
Title: Senior Vice President |
Signature Page to Third Amendment to Credit Agreement |
JPMORGAN CHASE BANK, N.A., | ||
as a Lender | ||
By: | /s/ Rita Lai | |
Name: Rita Lai | ||
Title: Senior Credit Banker |
Signature Page to Third Amendment to Credit Agreement |
Each of the undersigned, as Guarantor under that certain Amended and Restated Parent Guaranty Agreement dated as of February 28, 2013, hereby consents to the foregoing Third Amendment to Credit Agreement and acknowledges and agrees that the Amended and Restated Parent Guaranty Agreement executed by the undersigned dated as of February 28, 2013 remains in full force and effect.
AMERICAN REALTY CAPITAL PROPERTIES, INC., a Maryland corporation | ||
By: | /s/ Nicholas S. Schorsch | |
Name: Nicholas S. Schorsch | ||
Title: CEO & Chairman | ||
TIGER ACQUISITION, LLC, a Delaware limited liability company | ||
By: | /s/ Nicholas S. Schorsch | |
Name: Nicholas S. Schorsch | ||
Title: Authorized Signatory |
Signature Page to Third Amendment to Credit Agreement |
Each of the undersigned, as Guarantor under that certain Subsidiary Guaranty Agreement dated as of February 14, 2013 (as amended and in effect from time to time) hereby consents to the foregoing Third Amendment to Credit Agreement and acknowledges and agrees that the Subsidiary Guaranty Agreement and each Pledge Agreement executed by the undersigned remains in full force and effect.
ARC INCOME PROPERTIES, LLC | ||
By: | /s/ Jesse C. Galloway | |
Name: Jesse C. Galloway | ||
Title: Authorized Signatory |
Signature Page to Third Amendment to Credit Agreement |
Each of the undersigned, as Guarantor under that certain Subsidiary Guaranty Agreement dated as of February 14, 2013 (as amended and in effect from time to time) hereby consents to the foregoing Third Amendment to Credit Agreement and acknowledges and agrees that the Subsidiary Guaranty Agreement and each Pledge Agreement executed by the undersigned remains in full force and effect.
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ARC GSGLOVA001, LLC
ARC GSMOBAL001, LLC
ARC GSSPRAZ001, LLC
ARC GSSPRMO001, LLC
ARC HBRHLNC001, LLC
ARC IMCLBOH001, LLC
ARC KFCPTCA001, LLC
ARC KGBTVAR001, LLC
ARC KGCYNWY001, LLC
ARC KGFTNCO001, LLC
ARC KGLWLAR001, LLC
ARC KGMCTIA001, LLC
ARC KGMMTCO001, LLC
ARC KGOTMIA001, LLC
ARC KGPGDAR001, LLC
ARC KGRGSAR001, LLC
ARC KGSWDAR001, LLC
ARC KGTGAND001, LLC
ARC KLABYGA001, LLC
ARC KLATLGA001, LLC
ARC KLATLGA002, LLC
ARC KLAUGGA001, LLC
ARC KLCBSGA001, LLC
ARC KLCTNTN001, LLC
ARC KLEPTGA001, LLC
ARC KLGFPMS001, LLC
ARC KLJACFL001, LLC
ARC KLJAKMS001, LLC
ARC KLJAKMS002, LLC
ARC KLKNXTN001, LLC
ARC KLMCNGA001, LLC
ARC KLMDGGA001, LLC
ARC KLMGYAL001, LLC
ARC KLORLFL001, LLC
ARC KLORLFL002, LLC
ARC KLPHCAL001, LLC
ARC KLPLCFL001, LLC
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ARC KLPRLMS001, LLC
ARC KLSAGFL001, LLC
ARC KLSNVGA001, LLC
ARC KLTCLAL001, LLC
ARC MFBSEID001, LLC
ARC MFCBSIN001, LLC
ARC MFFNCSC001, LLC
ARC MFNDLTX001, LLC
ARC MFRLHNC001, LLC
ARC MFWSNNC001, LLC
ARC NTMRWGA001, LLC
ARC NTSTLMO001, LLC
ARC ORLMIWY001, LLC
ARC ORONAAL001, LLC
ARC PFCNLGA001, LLC
ARC PRRCRNY001, LLC
ARC PSCLSNC001, LLC
ARC PSCLTNC001, LLC
ARC PSCLTNC002, LLC
ARC PSCLTNC003, LLC
ARC PSCLTNC004, LLC
ARC PSCNRNC001, LLC
ARC PSFMLSC001, LLC
ARC PSLTNNC001, LLC
ARC PSMGYAL001, LLC
ARC PSMTSNC001, LLC
ARC PSTVLNC001, LLC
ARC RAHTNWV001, LLC
ARC RAJFVIN001, LLC
ARC RALMAOH001, LLC
ARC RALNGKY001, LLC
ARC RALVLOH001, LLC
ARC RALXNKY001, LLC
ARC RAMAROH001, LLC
ARC RAPRSKY001, LLC
ARC RASFDKY001, LLC
ARC RASVLKY001, LLC
ARC RMWFDKS002, LLC
ARC SBTPAFL001, LLC
ARC SEGCTVA001, LLC
ARC SEHPNVA001, LLC
ARC SEHPNVA002, LLC
ARC SESSAFL001, LLC
ARC SSPMTMA001, LLC
ARC STORROH001, LLC
ARC STORROH002, LLC
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ARC STORROH003, LLC
ARC TDFMTME001, LLC
ARC TRSEAWA001, LLC
ARC TSGRYLA001, LLC
ARC TSNGNMI001, LLC
ARC TSPYMNH001, LLC
ARC WGABOPR001, LLC
ARC WGACWGA002, LLC
ARC WGANDIN001, LLC
ARC WGCDVTN001, LLC
ARC WGCGOIL001, LLC
ARC WGCGOIL002, LLC
ARC WGCLBMS001, LLC
ARC WGCTPMI001, LLC
ARC WGESYSC001, LLC
ARC WGETNOH001, LLC
ARC WGGVLSC001, LLC
ARC WGLNPMI001, LLC
ARC WGLVSNV001, LLC
ARC WGMEMTN001, LLC
ARC WGNCNSC001, LLC
ARC WGPORAZ001, LLC
ARC WGTLQOK001, LLC
ARC WGTRYMI001, LLC
ARC WGWRNMI001, LLC
ARC WMDVLVA001, LLC
ARC3 DGADYTX01, LLC
ARC3 DGBKLMO01, LLC
ARC3 DGLKCLA001, LLC
ARC3 DGNCZMS001, LLC
ARC3 DGNHNMO01, LLC
ARC3 DGWMRLA001, LLC
ARC3 FDHLKMS01, LLC
ARC3 FEEWCWA001, LLC
ARC3 FEKKMIN01, LLC
ARC3 FEPBGWV001, LLC
ARC3 FEQNCIL01, LLC
ARC3 GSSTUFL001, LLC
ARC3WGSTNNY001, LLC
ARCP AAFNTMI001, LLC
ARCP AAYLNMI001, LLC
ARCP DGAFTAR01, LLC
ARCP DGAPCMO001, LLC
ARCP DGASDMO001, LLC
ARCP DGASGMO001, LLC
ARCP DGBLFMO001, LLC
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ARCP DGBRNMO001, LLC
ARCP DGCCDMO01, LLC
ARCP DGCMROK001, LLC
ARCP DGCNYKS01, LLC
ARCP DGCRLAR001, LLC
ARCP DGCTNMO001, LLC
ARCP DGCVRMO01, LLC
ARCP DGDMDMO001, LLC
ARCP DGFPNAR01, LLC
ARCP DGGFDMO01, LLC
ARCP DGGRFAR001, LLC
ARCP DGHVLMO01, LLC
ARCP DGJNBIL001, LLC
ARCP DGLSNMO001, LLC
ARCP DGNWTOK01, LLC
ARCP DGOGVMO01, LLC
ARCP DGPCYFL01, LLC
ARCP DGPMRMO001, LLC
ARCP DGSJSMO01, LLC
ARCP DGSNCMO01, LLC
ARCP DGSNTMO01, LLC
ARCP DGWNAMO01, LLC
ARCP DGWSGMO01, LLC
ARCP GSFRENY001, LLC
ARCP GSPLTNY01, LLC
ARCP GSWARPA001, LLC
ARCP JDDPTIA01, LLC
ARCP MBDLSTX01, LLC
ARCP TSRGCTX01, LLC
ARCPWGEPTMI001, LLC
ARCPWGMRBSC001, LLC
CRE JV Mixed Five CT Branch Holdings LLC
CRE JV Mixed Five DE Branch Holdings LLC
CRE JV Mixed Five IL 3 Branch Holdings LLC
CRE JV Mixed Five IL 4 Branch Holdings LLC
CRE JV Mixed Five IL 5 Branch Holdings LLC
CRE JV Mixed Five MI 1 Branch Holdings LLC
CRE JV Mixed Five MI 2 Branch Holdings LLC
CRE JV Mixed Five MI 3 Branch Holdings LLC
CRE JV Mixed Five MI 4 Branch Holdings LLC
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CRE JV Mixed Five MI 5 Branch Holdings LLC
CRE JV Mixed Five MI 6 Branch Holdings LLC
CRE JV Mixed Five MI 7 Branch Holdings LLC
CRE JVMixed Five NH Branch Holdings LLC
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CRE JV Mixed Five OH 1 Branch Holdings LLC
CRE JV Mixed Five OH 2 Branch Holdings LLC
CRE JV Mixed Five OH 3 Branch Holdings LLC
CRE JV Mixed Five OH 4 Branch Holdings LLC
CRE JV Mixed Five OH 5 Branch Holdings LLC
CRE JV Mixed Five OH 6 Branch Holdings LLC
CRE JV Mixed Five OH 7 Branch Holdings LLC
CRE JV Mixed Five VT Branch Holdings LLC
ARC AABBVKY001, LLC
ARC AAMSEMI001, LLC
ARC AASNAKS001, LLC
ARC AALBYKY001, LLC
ARC AZCGOIL001, LLC
ARC CBSFDMA001, LLC
ARC CVSCDFL001, LLC
ARC DDOSCAR001, LLC
ARC FDDRTMI003, LLC
ARC FDKBYID001, LLC
ARC FDSTLMO002, LLC
ARC FMABLNC001, LLC
ARC FMAGRNC001, LLC
ARC FMABONC001, LLC
ARC FMTVLNC001, LLC
ARC HVVMNSD001, LLC
ARC KHHWLMI001, LLC
ARC KGWKEIA001, LLC
ARC QBFNTMI001, LLC
ARC TBHGHMA001, LLC
ARC TSOCTAL001, LLC
ARC VSEPKIL001, LLC
ARC WGDBNMI001, LLC
ARC WGLPSPR001, LLC
ARC WGLVSNV001, LLC
ARC WGLVNMI001, LLC
ARC WGPHXAZ001, LLC
By: /s/ Jesse C. Galloway____
Name:
Title:
Signature Page to Third Amendment to Credit Agreement |
EXECUTION COPY
FOURTH AMENDMENT TO
CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”) is made and entered into as of this 22nd day of July, 2013 by and among ARC Properties Operating Partnership, L.P. (as successor to American Realty Capital Operating Partnership III, L.P.), a Delaware limited partnership (“Borrower”), TIGER ACQUISITION, LLC (as successor to American Realty Capital Trust III, Inc.), a Delaware limited liability company (“Tiger”), AMERICAN REALTY CAPITAL PROPERTIES, INC., a Maryland corporation (“ARCP”), the Lenders party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent for the benefit of the Lenders (in such capacity, the “Administrative Agent”), as Issuing Bank and as Swingline Lender.
W I T N E S S E T H:
WHEREAS, Borrower, Tiger, ARCP, the Administrative Agent and the Lenders are parties to a certain Credit Agreement dated as of February 14, 2013 (as amended by (i) the First Amendment dated as of March 18, 2013, (ii) the Augmenting Lender and Increasing Lender Supplement and Incremental Amendment dated as of March 28, 2013 and (iii) the Third Amendment dated as of May 28, 2013, together with any other modifications and amendments, collectively, the “Credit Agreement”);
WHEREAS, Borrower has requested that the Administrative Agent and the Lenders amend certain terms and conditions of the Credit Agreement as described herein; and
WHEREAS, the Administrative Agent and the Lenders party to this Fourth Amendment have agreed to so amend certain terms and conditions of the Credit Agreement and to consent and approve the Additional Properties (as defined below) as Acceptable Properties, all on the terms and conditions set forth below in this Fourth Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. | Definitions. All capitalized undefined terms used in this Fourth Amendment shall have the meanings ascribed thereto in the Credit Agreement, as amended hereby. |
2. | Amendments to Credit Agreement. Effective as set forth in Section 4 below, the Credit Agreement is amended as follows: |
a. | Section 1.01 of the Credit Agreement is hereby amended by inserting in appropriate alphabetical order the following new definition: |
“Eligible Cash“ means, as of any date of determination, all balance sheet cash and Cash Equivalents of the Borrower and the Guarantors in excess of $25,000,000 (after deducting, without duplication, from such balance sheet cash (to the extent such items are included in such balance sheet cash): encumbered cash (other than cash subject to customary rights of set-off), tenant security and other restricted cash and deposits shown on the balance sheet and cash and Cash Equivalents that the Borrower and the Guarantors are unable to access within
thirty (30) days and net of related tax obligations for repatriation and transaction costs and expenses related thereto); provided that in no event shall Eligible Cash exceed the aggregate outstanding principal amount of all Indebtedness of the Consolidated Group in respect of which all payments of principal (including any contingent payments of principal in respect thereof and whether at final maturity or otherwise) shall be due on or before the 12-month anniversary of such date of determination.
“Series C Convertible Preferred Stock” shall mean Parent’s Series C Convertible Preferred Stock, par value $0.01 per share.
b. | Section 1.01 of the Credit Agreement is hereby amended by restating the following definitions in their entirety and inserting them in appropriate alphabetical order: |
“Adjusted Borrowing Base NOI” means, as of any date of determination for any Borrowing Base Property, (i) Borrowing Base NOI for such Borrowing Base Property for the fiscal quarter most recently ended on or prior to such date of determination, multiplied by four, less (ii) the Capital Reserve for such Borrowing Base Property.
“Borrowing Base Asset Value” means, as of any date of determination, the sum of (a) (i) the aggregate Adjusted Borrowing Base NOI from Borrowing Base Properties owned for the entire fiscal quarter most recently ended on or prior to such date of determination divided by (ii) the Capitalization Rate, plus (b) the aggregate acquisition cost of all Borrowing Base Properties owned as of the last day of the fiscal quarter most recently ended on or prior to such date of determination for a period less than such fiscal quarter; provided that (a) the aggregate Borrowing Base Asset Value from Borrowing Base Properties owned pursuant to an Acceptable Ground Lease shall not exceed twenty percent (20%) of the aggregate Borrowing Base Asset Value, and (b) the aggregate Borrowing Base Asset Value from Borrowing Base Properties which are convenience stores shall not exceed five percent (5.0%) of the aggregate Borrowing Base Asset Value.
“Borrowing Base Asset Value Ratio” means, as of any date of determination, the ratio of (a) Borrowing Base Asset Value to (b) the sum of (i) (x) the Total Outstandings plus (y) from and after the occurrence of the Permitted Bridge Credit Agreement Transaction, the Total Bridge Facility Outstandings plus (z) the aggregate unsecured Indebtedness of the Consolidated Group minus (ii) Eligible Cash as of such date of determination.
“Consolidated Interest Expense” means, for any Person for any period, the total interest expense (including that attributable to Capital Lease Obligations) of such Person for such period with respect to all outstanding Total Funded Debt (including all commissions, discounts and other fees and charges owed by such
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Person with respect to letters of credit and bankers’ acceptance financing and net costs of such Person under Swap Contracts in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP). Consolidated Interest Expenses shall exclude (a) interest rate hedge termination payments or receipts, (b) loan prepayment costs, (c) upfront loan fees, (d) interest expense covered by an interest reserve established under a loan facility, (e) any interest expense under any construction loan or construction activity that under GAAP is required to be capitalized and (f) any interest expense in respect of any Indebtedness convertible into the Equity Interests of the Parent or cash or any combination of cash and Equity Interests of the Parent in excess of the cash coupon on such Indebtedness.
“Consolidated Net Income” means, for any Person for any period, the consolidated net income (or loss) of such Person for such period, determined on a consolidated basis in accordance with GAAP; provided that in calculating Consolidated Net Income of Parent for any period, there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with Parent or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Company) in which any Company has an ownership interest, except to the extent that any such income is actually received by such Company in the form of dividends or similar distributions, (c) the undistributed earnings of any Subsidiary of any Company to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document) or requirement of Law applicable to such Subsidiary and (d) any interest expense in respect of any Indebtedness convertible into the Equity Interests of the Parent or cash or any combination of cash and Equity Interests of the Parent in excess of the cash coupon on such Indebtedness.
“Funds From Operations” shall have the meaning promulgated by the National Association of Real Estate Investment Trusts at the time of closing (or, if approved by Borrower and Administrative Agent, as such meaning may be updated from time to time) which is the basis of Parent’s publicly filed financial statements, as adjusted by real estate acquisition costs and expenses for acquisitions that were consummated and impairment of real estate assets for the Consolidated Group, plus any interest expense in respect of any Indebtedness convertible into the Equity Interests of the Parent or cash or any combination of cash and Equity Interests of the Parent in excess of the cash coupon on such Indebtedness.
“Total Asset Value” means, as of any date of determination, the sum of (a) Consolidated Group’s pro rata share of NOI for the fiscal quarter most recently ended on or prior to such date of determination, multiplied by four, and divided by the Capitalization Rate (excluding the Consolidated Group’s pro rata
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share of the NOI for any Property not owned for the entire fiscal quarter most recently ended on or prior to such date of determination), (b) the acquisition price paid for any Property acquired during the fiscal quarter most recently ended on or prior to such date of determination and owned as of the last day of such fiscal quarter, (c) cash and Cash Equivalents as of the end of the fiscal quarter most recently ended on or prior to such date of determination, (d) vacant land owned as of the last day of the fiscal quarter most recently ended on or prior to such date of determination, at cost, (e) mortgage notes receivable at GAAP as of the last day of the fiscal quarter most recently ended on or prior to such date of determination, and (f) Construction In Progress owned as of the last day of the fiscal quarter most recently ended on or prior to such date of determination, at cost. Borrower’s Ownership Share of assets held by Unconsolidated Affiliates (excluding assets of the type described in the immediately preceding clause (c)) will be included in the calculation of Total Asset Value consistent with the above described treatment for wholly owned assets.
c. | Section 8.02 of the Credit Agreement is hereby amended by (i) deleting the “and” now appearing at the end of clause (l) thereof, (ii) adding “and” at the end of clause (m) thereof and (iii) inserting the following new clause (n) immediately following clause (m) thereof: |
(n) Indebtedness of the Borrower owing to the Parent provided that such Indebtedness is subordinated to the Obligations in a manner satisfactory to Administrative Agent;
d. | Section 8.05 of the Credit Agreement is hereby amended by (i) deleting the “ and” now appearing at the end of clause (i) thereof, (ii) deleting the “.” now appearing at the end of clause (j) thereof and substituting the following therefor: “;” and (iii) inserting the following new clauses (k) and (l) immediately following clause (j) thereof: |
(k) Parent may make, and Borrower may make dividends or distributions to Parent to allow Parent to make, any (i) mandatory redemption payments pursuant to the terms of, or any payments that may be required in connection with the conversion of, the Series C Convertible Preferred Stock and (ii) any dividends on the Series C Convertible Preferred Stock that may be required to be paid, in each case, pursuant to the terms thereof as in effect as of June 4, 2013 (or as amended in any manner that does not increase the payment obligations of the Parent in respect thereof); and
(l) Parent or Borrower may make, and Borrower may make dividends or distributions to Parent to allow Parent to make, any (i) redemption or cash settlement payments and (ii) any cash interest payments, in each case, in accordance with the terms of any series of Indebtedness convertible into Equity Interests or cash or any combination of cash and Equity Interests of the Parent and
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issued by Parent or Borrower and otherwise permitted hereunder. For the avoidance of doubt, the dividends and distributions under this clause (l) shall be permitted so long as no Default shall have occurred and be continuing at the time of the issuance of the relevant Indebtedness.
e. | Section 8.14(b) of the Credit Agreement is hereby amended and restated in its entirety as follows: |
(b) Maximum Secured Recourse Indebtedness. Recourse Indebtedness of Parent and Borrower (excluding unsecured Indebtedness and any Indebtedness under this Agreement and, from and after the occurrence of the Permitted Bridge Credit Agreement Transaction, the Bridge Credit Agreement) to exceed ten percent (10%) of Total Asset Value of the Companies.
f. | Section 9.01 of the Credit Agreement is hereby amended to add the following at the end of the clause (f) thereof: |
; provided that this clause (f) shall not apply to any redemption, conversion or settlement of any such Indebtedness that is convertible into Equity Interests in the Parent (and cash in lieu of fractional shares or units) and/or cash (in lieu of such Equity Interests in an amount determined by reference to the price of the common stock of the Parent at the time of such redemption, conversion or settlement) pursuant to its terms unless such redemption, conversion or settlement results from a default thereunder or an event of a type that constitutes an Event of Default
3. | Consent. The Borrower has informed the Administrative Agent and the Lenders of the acquisition by the Borrower and certain of its Subsidiaries of the Properties identified on Schedule I attached hereto (the “Additional Properties”). Subject to the satisfaction or waiver of the conditions precedent set forth in Section 4 below, solely for the purposes of calculating the financial covenants set forth in Section 8.14 of the Credit Agreement, the Administrative Agent and the Lenders party hereto acknowledge and approve that each of the Additional Properties shall be Acceptable Properties, effective as of June 27, 2013, so long as on or before July 26, 2013 (or such later date as the Administrative Agent may determine in its sole discretion) the requirements set forth in clauses (i) through (iii) of the definition of “Acceptable Properties” in the Credit Agreement shall have been satisfied with respect to each such Additional Property. Notwithstanding the foregoing, it us understood and agreed that, except as expressly set forth in the preceding sentence, no Additional Property shall be included in the calculation of the Borrowing Base under the Credit Agreement (including, without limitation, for purposes of Section 2.14(b) of the Credit Agreement), unless and until the requirements set forth in clauses (i) through (iii) of the definition of “Acceptable Properties” in the Credit Agreement shall have been satisfied with respect to such Additional Property, and the failure to satisfy such requirements with respect to the Additional Properties on or before July 26, 2013 (or such |
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later date as the Administrative Agent may determine in its sole discretion) shall constitute an Event of Default. |
4. | Conditions to Effectiveness. This Fourth Amendment shall not be effective until the Administrative Agent shall have received counterparts of this Fourth Amendment duly executed and delivered by the Borrower and the other Loan Parties, the Administrative Agent, the Issuing Bank, the Swingline Lender and the Required Lenders; provided that upon this Fourth Amendment becoming effective the provisions of Section 2 hereof shall be deemed to be effective as of June 4, 2013. |
5. | Representations and Warranties. The representations and warranties of Borrower and each other Loan Party, contained in Article VI of the Credit Agreement or any other Loan Document are true and correct in all material respects (except to the extent that any such representation and warranty is qualified as to “materiality,” “Material Adverse Effect” or similar language, in which case it shall be true and correct in all respects (after giving effect to any such qualification)) on and as of the date hereof; provided, if any such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects (except to the extent that any such representation and warranty is qualified as to “materiality,” “Material Adverse Effect” or similar language, in which case it shall be true and correct in all respects (after giving effect to any such qualification)) as of such earlier date. |
6. | Limited Amendment; Ratification of Loan Documents. Except as specifically amended or modified hereby, the terms and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect, and are hereby ratified and affirmed in all respects. This Fourth Amendment shall not be deemed a waiver of, or consent to, or a modification or amendment of, any other term or condition of the Credit Agreement or any other Loan Document, except as expressly set forth herein. |
7. | Governing Law. This Fourth Amendment shall be governed by and construed in accordance with the laws of the State of New York. |
8. | Miscellaneous. This Fourth Amendment may be executed in any number of counterparts, which shall together constitute an entire original agreement, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Fourth Amendment expresses the entire understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof. Any determination that any provision of this Fourth Amendment or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality, or enforceability of any other provisions of this Fourth Amendment. The Loan Parties represent and warrant that they have consulted with independent legal counsel of their selection in connection herewith and are not relying on any representations or warranties of the Administrative |
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Agent or the Lenders or their counsel in entering into this Fourth Amendment. This Fourth Amendment shall constitute a Loan Document. |
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IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be duly executed as of the day and year first above written.
ARC Properties Operating Partnership, L.P., a Delaware limited partnership
By: /s/ Jesse C. Galloway_________
Title: Authorized Signatory
| |
AMERICAN REALTY CAPITAL PROPERTIES, INC., a Maryland corporation
By/s/ Jesse C. Galloway_________
Title: Authorized Signatory
TIGER ACQUISITION, LLC, a Delaware limited liability company
By/s/ Jesse C. Galloway_________
Title: Authorized Signatory | |
Signature Page to
Fourth Amendment to Credit Agreement
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as
Administrative Agent, SwingLine
Lender, Issuing Bank and as a Lender
By: /s/ Matthew Ricketts___________________
Name: Matthew Ricketts
Title: Managing Director
Signature Page to
Fourth Amendment to Credit Agreement
BARCLAYS BANK PLC,
as a Lender
By: /s/ Noam Azachi______________________
Name: Noam Azachi
Title: Vice President
Signature Page to
Fourth Amendment to Credit Agreement
BANK OF AMERICA, N.A.,
as a Lender
By: /s/ Michael W. Edwards________________
Name: Michael W. Edwards
Title: Senior Vice President
Signature Page to
Fourth Amendment to Credit Agreement
JPMORGAN CHASE BANK, N.A.
as a Lender
By: /s/ Rita Lai_____________________
Name: Rita Lai
Title: Senior Credit Banker
Signature Page to
Fourth Amendment to Credit Agreement
RBS CITIZENS NA,
as a Lender
By: /s/ Donald Woods__________________
Name: Donald Woods
Title: SVP
Signature Page to
Fourth Amendment to Credit Agreement
Capital One, N.A.,
as a Lender
By: /s/ Frederick H. Denecke________________
Name: Frederick H. Denecke
Title: Vice President
Signature Page to
Fourth Amendment to Credit Agreement
RAYMOND JAMES BANK, N.A.,
as a Lender
By: /s/ James M. Armstrong_______________
Name: James M. Armstrong
Title: Senior Vice President
Signature Page to
Fourth Amendment to Credit Agreement
COMERICA BANK,
as a Lender
By: /s/ Charles Weddell__________________
Name: Charles Weddell
Title: Vice President
Signature Page to
Fourth Amendment to Credit Agreement
Each of the undersigned, as Guarantor under that certain Amended and Restated Parent Guaranty Agreement dated as of February 28, 2013, hereby consents to the foregoing Fourth Amendment to Credit Agreement and acknowledges and agrees that the Amended and Restated Parent Guaranty Agreement executed by the undersigned dated as of February 28, 2013 remains in full force and effect.
AMERICAN REALTY CAPITAL PROPERTIES, INC., a Maryland corporation
By: /s/ Jesse C. Galloway_________
Name: Jesse C. Galloway
Title: Authorized Signatory
TIGER ACQUISITION, LLC, a Delaware limited liability company
By: /s/ Jesse C. Galloway_________
Name: Jesse C. Galloway
Title: Authorized Signatory
Signature Page to
Fourth Amendment to Credit Agreement
Each of the undersigned, as Guarantor under that certain Subsidiary Guaranty Agreement dated as of February 14, 2013 (as amended and in effect from time to time) hereby consents to the foregoing Fourth Amendment to Credit Agreement and acknowledges and agrees that the Subsidiary Guaranty Agreement and each Pledge Agreement executed by the undersigned remains in full force and effect.
ARC AAABYGA001, LLC
ARC AAATNTX001, LLC
ARC AABDNKY001, LLC
ARC AABHMAL001, LLC
ARC AABHMAL002, LLC
ARC AABNBKY001, LLC
ARC AACFDSC001, LLC
ARC AACLRAL001, LLC
ARC AACMBPA001, LLC
ARC AACPNSC001, LLC
ARC AACROGA001, LLC
ARC AADTNAL001, LLC
ARC AAEPSAL001, LLC
ARC AAFLNOH001, LLC
ARC AAFTWIN001, LLC
ARC AAFTWIN002, LLC
ARC AAGFSNC001, LLC
ARC AAHNBKY001, LLC
ARC AAHUSTX003, LLC
ARC AAHVLGA001, LLC
ARC AAHZHGA001, LLC
ARC AAINZKY001, LLC
ARC AAKNAWI001, LLC
ARC AALFDKY001, LLC
ARC AALWDNJ001, LLC
ARC AAOKCOK001, LLC
ARC AAPRYGA001, LLC
ARC AAPSDTX001, LLC
ARC AASMSWV001, LLC
ARC AASPDOH001, LLC
ARC AASWRTN001, LLC
By: /s/ Jesse C. Galloway____________
Name: Jesse C. Galloway
Title: Authorized Signatory
Signature Page to
Fourth Amendment to Credit Agreement
ARC AATVLGA001, LLC
ARC AATVLPA001, LLC
ARC AAWBYNJ001, LLC
ARC ACAWBWI001, LLC
ARC ACLSHIL001, LLC
ARC AMAHBCA001, LLC
ARC ASDTNGA001, LLC
ARC ASFVLAR001, LLC
ARC BBSTNCA001, LLC
ARC BJBNENC001, LLC
ARC BJBSCNC001, LLC
ARC BJCPNSC001, LLC
ARC BJCTNSC001, LLC
ARC BJDBNNC001, LLC
ARC BJGWDSC001, LLC
ARC BJITLNC001, LLC
ARC BJMGNNC001, LLC
ARC BJMKCSC001, LLC
ARC BJRRDNC001, LLC
ARC BJSPTNC001, LLC
ARC BJWDRGA001, LLC
ARC BJWTBSC001, LLC
ARC BOLLSNM001, LLC
ARC BWNCNOH001, LLC
ARC CBALPPA001, LLC
ARC CBALYPA001, LLC
ARC CBATAPA001, LLC
ARC CBBMNGA001, LLC
ARC CBBRFPA001, LLC
ARC CBBSNGA001, LLC
ARC CBCTRCT001, LLC
ARC CBCVNRI001, LLC
ARC CBDLBPA001, LLC
ARC CBDLSPA001, LLC
ARC CBDRRCT001, LLC
ARC CBDXHPA001, LLC
ARC CBELMCT001, LLC
By: /s/ Jesse C. Galloway____________
Name: Jesse C. Galloway
Title: Authorized Signatory
Signature Page to
Fourth Amendment to Credit Agreement
ARC CBEPRVA001, LLC
ARC CBEREPA001, LLC
ARC CBFLNOH001, LLC
ARC CBHMNCT001, LLC
ARC CBHSTPA001, LLC
ARC CBHTNPA001, LLC
ARC CBJTNRI001, LLC
ARC CBKNENH001, LLC
ARC CBKSNPA001, LLC
ARC CBLBLPA001, LLC
ARC CBLCRPA002, LLC
ARC CBLDLMA001, LLC
ARC CBLTBPA001, LLC
ARC CBLWSDE001, LLC
ARC CBMBGPA001, LLC
ARC CBMBNNC001, LLC
ARC CBMBYVT001, LLC
ARC CBMCRNH001, LLC
ARC CBMCRNH002, LLC
ARC CBMCRPA001, LLC
ARC CBMDFMA001, LLC
ARC CBMDNMA001, LLC
ARC CBMDNMA002, LLC
ARC CBMFDPA001, LLC
ARC CBMRSPA001, LLC
ARC CBMTLPA001, LLC
ARC CBMTPPA001, LLC
ARC CBMVLCT001, LLC
ARC CBNBDMA001, LLC
ARC CBNPRRI001, LLC
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ARC CBPBGPA006, LLC
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ARC CBPBGPA009, LLC
ARC CBPBGPA011, LLC
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Name: Jesse C. Galloway
Title: Authorized Signatory
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ARC CBPDAPA003, LLC
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ARC CBSDSMA001, LLC
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ARC DDBVLTX001, LLC
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ARC DGGDLAL001, LLC
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ARC DGMNDAR001, LLC
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ARC DGMPRTX001, LLC
ARC DGMPTTX001, LLC
ARC DGMRHMO001, LLC
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ARC DGSNTTX001, LLC
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ARC DGSRTLA001, LLC
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Name: Jesse C. Galloway
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ARC FDSSGNV001, LLC
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Name: Jesse C. Galloway
Title: Authorized Signatory
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ARC GSSPRAZ001, LLC
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ARC HBRHLNC001, LLC
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Name: Jesse C. Galloway
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ARC KLSNVGA001, LLC
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By: /s/ Jesse C. Galloway____________
Name: Jesse C. Galloway
Title: Authorized Signatory
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ARC SEGCTVA001, LLC
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ARC WMDVLVA001, LLC
ARC3 DGADYTX01, LLC
ARC3 DGBKLMO01, LLC
ARC3 DGLKCLA001, LLC
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By: /s/ Jesse C. Galloway____________
Name: Jesse C. Galloway
Title: Authorized Signatory
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ARC3 DGNHNMO01, LLC
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ARC3 FDHLKMS01, LLC
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ARCP AAFNTMI001, LLC
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ARCP DGCMROK001, LLC
ARCP DGCNYKS01, LLC
ARCP DGCRLAR001, LLC
ARCP DGCTNMO001, LLC
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ARCP DGFPNAR01, LLC
ARCP DGGFDMO01, LLC
ARCP DGGRFAR001, LLC
ARCP DGHVLMO01, LLC
ARCP DGJNBIL001, LLC
ARCP DGLSNMO001, LLC
ARCP DGNWTOK01, LLC
ARCP DGOGVMO01, LLC
ARCP DGPCYFL01, LLC
ARCP DGPMRMO001, LLC
ARCP DGSJSMO01, LLC
ARCP DGSNCMO01, LLC
By: /s/ Jesse C. Galloway____________
Name: Jesse C. Galloway
Title: Authorized Signatory
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ARCP DGSNTMO01, LLC
ARCP DGWNAMO01, LLC
ARCP DGWSGMO01, LLC
ARCP GSFRENY001, LLC
ARCP GSPLTNY01, LLC
ARCP GSWARPA001, LLC
ARCP JDDPTIA01, LLC
ARCP MBDLSTX01, LLC
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ARCP WGMRBSC001, LLC
CRE JV Mixed Five IL 2 Branch Holdings LLC
CRE JV Mixed Five IL 3 Branch Holdings LLC
CRE JV Mixed Five IL 5 Branch Holdings LLC
CRE JV Mixed Five MI 1 Branch Holdings LLC
CRE JV Mixed Five MI 2 Branch Holdings LLC
CRE JV Mixed Five MI 3 Branch Holdings LLC
CRE JV Mixed Five MI 4 Branch Holdings LLC
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CRE JV Mixed Five MI 6 Branch Holdings LLC
CRE JV Mixed Five MI 7 Branch Holdings LLC
CRE JV Mixed Five NH Branch Holdings LLC
CRE JV Mixed Five OH 1 Branch Holdings LLC
CRE JV Mixed Five OH 2 Branch Holdings LLC
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Name: Jesse C. Galloway
Title: Authorized Signatory
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CRE JV Mixed Five OH 3 Branch Holdings LLC
CRE JV Mixed Five OH 4 Branch Holdings LLC
CRE JV Mixed Five OH 5 Branch Holdings LLC
CRE JV Mixed Five OH 6 Branch Holdings LLC
CRE JV Mixed Five OH 7 Branch Holdings LLC
CRE JV Mixed Five VT Branch Holdings LLC
ARC AABBVKY001, LLC
ARC AAMSEMI001, LLC
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ARC AZCGOIL001, LLC
ARC CBSFDMA001, LLC
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ARC FDKBYID001, LLC
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ARC WGLVNMI001, LLC
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ARC WGPHXAZ001, LLC
ARC INCOME PROPERTIES, LLC
By: /s/ Jesse C. Galloway____________
Name: Jesse C. Galloway
Title: Authorized Signatory
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EXECUTION COPY
AUGMENTING LENDER AND INCREASING LENDER SUPPLEMENT AND INCREMENTAL AMENDMENT
THIS AUGMENTING LENDER AND INCREASING LENDER SUPPLEMENT AND INCREMENTAL AMENDMENT, dated as of August 1, 2013 (this “Supplement”), to the Credit Agreement, dated as of February 14, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among ARC Properties Operating Partnership, L.P. (as successor to American Realty Capital Operating Partnership III, L.P., the “Borrower”), Tiger Acquisition, LLC (as successor to American Realty Capital Trust III, Inc.), American Realty Capital Properties, Inc., the Lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”), Issuing Bank and Swingline Lender.
WITNESSETH
WHEREAS, the Credit Agreement provides in Section 2.15 thereof that any bank, financial institution or other entity may extend Revolving Commitments and participate in tranches of Incremental Term Loans under the Credit Agreement subject to the approval of the Borrower, the Issuing Bank, the Swingline Lender and the Administrative Agent, by executing and delivering to the Borrower and the Administrative Agent documentation acceptable to the Administrative Agent; and
WHEREAS, the undersigned Increasing Lender is currently party to the Credit Agreement and now desires to provide Incremental Term Loans of $50,000,000, subject to the terms and conditions of this Supplement;
WHEREAS, the undersigned Augmenting Lender has committed to provide a Revolving Commitment of $120,000,000 on the date hereof and to provide Incremental Term Loans of $80,000,000, subject to the terms and conditions of this Supplement;
WHEREAS, to implement the increase in the Revolving Commitments and the Incremental Term Loans pursuant to this Supplement, the parties hereto hereby agree to amend the Credit Agreement in accordance with Section 2.15 of the Credit Agreement;
NOW, THEREFORE, each of the parties hereto hereby agrees as follows:
1. Increasing Lender. As of the effective date of this Supplement pursuant to Section 4 below, the undersigned Increasing Lender agrees to extend a commitment with respect to Incremental Term Loans, in such amounts as set forth on Exhibit B hereto.
2. Augmenting Lender.
a. The undersigned Augmenting Lender agrees to be bound by the provisions of the Credit Agreement and agrees that it shall, on the effective date of this Supplement pursuant to Section 4 below, become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with a Revolving Commitment and with a commitment for Incremental Term Loans (with respect to such Incremental Term Loans and the Incremental Term Loans provided by the undersigned Increasing Lender, the “August 2013 Incremental Term Loan Lenders”, such commitments to extend Incremental Term Loans, the “August 2013 Incremental Term Loan Commitments”, and such Incremental Term Loans, the “August 2013 Incremental Term Loans”), in each case, in such amounts as set forth on Exhibit B hereto. Unless otherwise specified in this Supplement, for all purposes of the Credit Agreement (as amended hereby), the August 2013 Incremental Term Loans, the August 2013 Incremental
Term Loan Lenders and the August 2013 Incremental Term Loan Commitments shall be deemed to constitute “Term Loans,” “Term Loan Lenders” and “Term Loan Commitments,” respectively, under and as defined in the Credit Agreement.
b. The undersigned Augmenting Lender (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and has reviewed such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.
3. Amendments to Credit Agreement. As of the date hereof, the Credit Agreement is amended as follows:
a. The definition of “Availability Period” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
“Availability Period” means, (a) with respect to Term Loans other than March 2013 Incremental Term Loans and August 2013 Incremental Term Loans, the period from and including the Effective Date to the earlier of (i) the date of termination of the Initial Term Loan Commitments pursuant to Section 2.06(b), and (ii) the date of termination of the commitment of each Lender to make Loans pursuant to Section 9.02 (the “Initial Availability Period”), (b) with respect to March 2013 Incremental Term Loans, the period from and including the Initial Term Loan Commitment Expiration Date to the earlier of (i) the date of termination of the March 2013 Incremental Term Loan Commitments pursuant to Section 2.06(b), and (ii) the date of termination of the commitment of each Lender to make Loans pursuant to Section 9.02 (the “March 2013 Availability Period”) and (c) with respect to August 2013 Incremental Term Loans, the period from and including the March 2013 Incremental Term Loan Commitment Expiration Date to the earlier of (i) the date of termination of the August 2013 Incremental Term Loan Commitment pursuant to Section 2.06(b), and (ii) the date of termination of the commitment of each Lender to make Loans pursuant to Section 9.02 (the “August 2013 Availability Period”).
b. The definition of “Term Loan Commitment” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:
“Term Loan Commitment” means, as to each Term Loan Lender, such Lender’s obligation to make Term Loans during the applicable Availability Period pursuant to Section 2.01(b), in an amount up to, but not exceeding, the amount set forth for such Lender on Schedule 2.01 as such Lender’s “Initial Term Loan Commitment
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Amount”, “March 2013 Term Loan Commitment Amount” or “August 2013 Term Loan Commitment Amount”, as applicable, as such Schedule 2.01 may be modified from time to time in accordance with the terms hereof.
c. Section 1.01 of the Credit Agreement is hereby amended by inserting in appropriate alphabetical order the following new definitions:
“Applicable August 2013 Incremental Term Loan Percentage” means, as to each Term Loan Lender during the August 2013 Availability Period, the ratio, expressed as a percentage of (a) (i) the amount of such Term Loan Lender’s August 2013 Incremental Term Loan Commitment plus (ii) the amount of such Lender’s outstanding August 2013 Incremental Term Loans to (b) (i) the aggregate amount of the August 2013 Incremental Term Loan Commitment of all Term Loan Lenders plus (ii) aggregate amount of all outstanding August 2013 Incremental Term Loans.
“August 2013 Incremental Term Loans” has the meaning set forth in that certain Augmenting Lender and Increasing Lender Supplement and Incremental Amendment hereto dated as of August 1, 2013.
“August 2013 Incremental Term Loan Commitment” has the meaning set forth in that certain Augmenting Lender and Increasing Lender Supplement and Incremental Amendment hereto dated as of August 1, 2013.
“August 2013 Incremental Term Loan Effective Date” means August 1, 2013.
“March 2013 Incremental Term Loans” has the meaning set forth in that certain Augmenting Lender and Increasing Lender Supplement and Incremental Amendment hereto dated as of March 28, 2013.
“March 2013 Incremental Term Loan Commitments” has the meaning set forth in that certain Augmenting Lender and Increasing Lender Supplement and Incremental Amendment hereto dated as of March 28, 2013.
“March 2013 Incremental Term Loan Commitment Expiration Date” means the date occurring on the earlier of (a) the date on which the March 2013 Incremental Term Loan Commitments are reduced to zero in accordance with the first sentence of Section 2.06(b) and (b) the six (6) month anniversary of the March 2013 Incremental Term Loan Effective Date.
d. Section 2.01(b) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
(b) Term Loans. Subject to the terms and conditions set forth herein, including without limitation, Section 2.14, each Term Loan Lender severally and not jointly agrees to make Term Loans to Borrower from time to time, on any Business Day during the applicable Availability Period (each such date, a “Term Loan Borrowing Date”) in an aggregate amount not to exceed such Term Loan Lender’s applicable Term Loan Commitment; provided that Borrower shall not be permitted to request a Borrowing of Term Loans on more than three (3) occasions during the Availability Period applicable to such Term Loans. The Borrowings of Term Loans may be ratable Floating Rate
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Borrowings or ratable Fixed Rate Borrowings. Amounts repaid or prepaid in respect of the Term Loans may not be reborrowed.
e. Section 2.02(b) of the Credit Agreement is hereby amended by deleting the first sentence thereof in its entirety and replacing it with the following:
(b) Following receipt of a Loan Notice, Administrative Agent shall promptly notify each Lender of the amount of its Applicable Revolving Percentage, Applicable Initial Term Loan Percentage, Applicable March 2013 Incremental Term Loan Percentage or Applicable August 2013 Incremental Term Loan Percentage, as applicable, of the applicable Loans, and if no timely notice of a conversion or continuation is provided by Borrower, Administrative Agent shall notify each Lender of the details of any automatic continuation described in the preceding subsection.
f. Section 2.06(b) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
(b) Term Loan Commitments. The applicable Term Loan Commitment of each Term Loan Lender shall be immediately and permanently reduced on each Term Loan Borrowing Date upon such Term Loan Lender making a Term Loan to Borrower on such Term Loan Borrowing Date in an amount corresponding to such Term Loan Lender’s Applicable Initial Term Loan Percentage, Applicable March 2013 Incremental Term Loan Percentage or Applicable August 2013 Incremental Term Loan Percentage, as applicable, of the aggregate principal amount of the Term Loans made by the applicable Term Loan Lenders to Borrower on such Term Loan Borrowing Date. The aggregate remaining Initial Term Loan Commitments shall terminate at 5:00 p.m. on the six (6) month anniversary of the Effective Date. The aggregate remaining March 2013 Incremental Term Loan Commitments shall terminate at 5:00 p.m. on the six (6) month anniversary of the March 2013 Incremental Term Loan Effective Date. The aggregate remaining August 2013 Incremental Term Loan Commitment shall terminate at 5:00 p.m. on the six (6) month anniversary of the August 2013 Incremental Term Loan Effective Date.
g. Section 2.09(c) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
(c) Term Loan Facility Fees. During the period (i) with respect to the Initial Term Loan Commitments, from the Effective Date and until the termination of the Initial Availability Period, (ii) with respect to the March 2013 Incremental Term Loan Commitments, from the March 2013 Incremental Term Loan Effective Date and until the termination of the March 2013 Availability Period and (iii) with respect to the August 2013 Incremental Term Loan Commitment, from the August 2013 Incremental Term Loan Effective Date and until the termination of the August 2013 Availability Period, Borrower agrees to pay to Administrative Agent for the account of the applicable Term Loan Lenders an unused term loan facility fee equal to (x) the amount by which the aggregate amount of the applicable Term Loan Commitments exceeds the average daily amount of the aggregate outstanding principal balance of applicable Term Loans multiplied by (y) a rate per annum equal to 0.25%. Such fee shall be computed on a daily basis and payable monthly in arrears on the last Business Day of each calendar month ending after the Effective Date during the term of the applicable Availability Period and on the last day of the applicable Availability Period (or, if earlier, on the date the
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applicable Term Loan Commitments shall have been reduced to zero in accordance with Section 2.06(b) or otherwise terminated).
h. Schedule 2.01 to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 2.01 attached hereto as Exhibit B.
4. This Supplement shall become effective upon (a) the satisfaction of the conditions precedent specified in Section 2.15 of the Credit Agreement, which shall occur no later than August 1, 2013 (the “Termination Date”) and (b) receipt on or prior to the Termination Date by the undersigned Augmenting Lender and the undersigned Increasing Lender of such fees as are due and owing to such Augmenting Lender or Increasing Lender in connection with the increase of commitments pursuant to this Supplement.
5. The Borrower hereby elects to increase the Revolving Commitments and enter into one or more tranches of Incremental Term Loans and has delivered to the Administrative Agent a certificate signed by a Responsible Officer of the Borrower pursuant to Section 2.15 of the Credit Agreement, substantially in the form attached hereto as Exhibit A.
6. This Supplement shall constitute a Loan Document.
7. Capitalized terms defined in the Credit Agreement shall have their defined meanings when used herein.
8. This Supplement shall be governed by, and construed in accordance with, the laws of the State of New York.
9. This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.
[remainder of this page intentionally left blank]
5 |
IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.
BARCLAYS BANK PLC, | ||
as an Increasing Lender | ||
By: | /s/ Noam Azachi | |
Name: Noam Azachi | ||
Title: Vice President |
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.
CITIBANK, N.A., | ||
as Augmenting Lender | ||
By: | /s/ John C. Rowland | |
Name: John C. Rowland | ||
Title: Vice President |
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
Accepted and agreed to as of the date first written above:
ARC PROPERTIES OPERATING PARTNERSHIP, L.P.
By: | /s/ James A. Tanaka | |
Name: | James A. Tanaka | |
Title: | Authorized Signatory |
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
Accepted and agreed to as of the date first written above:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Issuing Bank and Swingline Lender
By: | /s/ D. Bryan Gregory | |
Name: | D. Bryan Gregory | |
Title: | Director |
Signature Page to
Augmenting Lender and Increasing Lender Supplement and Incremental Amendment
EXHIBIT A
OFFICER’S CERTIFICATE
August 1, 2013
The undersigned, Brian Block of ARC Properties Operating Partnership, L.P., a Delaware limited partnership (“ARCPOP”), in connection with (i) that certain Credit Agreement dated as of February 14th, 2013 (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Credit Agreement”) by and among ARCPOP (as successor to American Realty Capital Operating Partnership III, L.P., the “Borrower”), Tiger Acquisition, LLC (as successor to American Realty Capital Trust III, Inc.), American Realty Capital Properties, Inc., Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent (the “Administrative Agent”) and the Lenders from time to time party thereto, and (ii) that certain Augmenting Lender and Increasing Lender Supplement and Incremental Amendment, dated as of August 1, 2013 to the Credit Agreement (the “Supplement”), among the Borrower, Citibank, N.A., as an Augmenting Lender, Barclays Bank PLC, as an Increasing Lender, and Wells Fargo, as administrative agent, Issuing Bank and Swingline Lender, hereby certifies as follows (terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement or, if not defined therein, in the Supplement):
1. No consents, licenses or approvals are required in connection with the execution and delivery of the Supplement or performance of the Loan Documents (including the Supplement).
2. The conditions specified in Sections 5.02(a) and (b) of the Credit Agreement have been satisfied.
3. After giving effect to the increase in the Revolving Commitments, the Incremental Term Loan Commitment and the Incremental Term Loans to be made on the date hereof, the sum of (a) Total Outstandings plus (b) Total Bridge Facility Outstandings will not exceed the Borrowing Base.
4. ARCPOP is in pro forma compliance with the covenants set forth in Section 8.14 of the Credit Agreement after giving effect to the Loans to be made on the date hereof and the application of the proceeds therefrom as if made and applied on the date hereof, as evidenced by the calculations in Schedule 1 attached hereto.
ARC PROPERTIES OPERATING PARTNERSHIP, L.P. | ||
By: | ||
Brian Block | ||
Chief Financial Officer |
Schedule 1
Calculations showing Pro-Forma Compliance
EXHIBIT B
SCHEDULE 2.01
COMMITMENTS
Lender | Revolving Loan Commitment | Initial Term Loan Commitment | March 2013 Incremental Term Loan Commitment | August 2013 Incremental Term Loan Commitment | ||||||||||||
Wells Fargo Bank | $ | 100,000,000 | $ | 50,000,000 | $ | 75,000,000 | $ | 0 | ||||||||
Bank of America, N.A. | $ | 100,000,000 | $ | 75,000,000 | $ | 75,000,000 | $ | 0 | ||||||||
Citibank, N.A. | $ | 120,000,000 | $ | 0 | $ | 0 | $ | 80,000,000 | ||||||||
Regions Bank | $ | 48,000,000 | $ | 72,000,000 | $ | 0 | $ | 0 | ||||||||
RBS Citizens, N.A. | $ | 40,000,000 | $ | 60,000,000 | $ | 0 | $ | 0 | ||||||||
JPMorgan Chase Bank, N.A. | $ | 88,000,000 | $ | 72,000,000 | $ | 60,000,000 | $ | 0 | ||||||||
Capital One, N.A. | $ | 40,000,000 | $ | 60,000,000 | $ | 0 | $ | 0 | ||||||||
Barclays Bank PLC | $ | 100,000,000 | $ | 0 | $ | 0 | $ | 50,000,000 | ||||||||
TD Bank, N.A. | $ | 30,000,000 | $ | 45,000,000 | $ | 0 | $ | 0 | ||||||||
U.S. Bank National Association | $ | 30,000,000 | $ | 70,000,000 | $ | 0 | $ | 0 | ||||||||
Union Bank, National Association | $ | 30,000,000 | $ | 45,000,000 | $ | 0 | $ | 0 | ||||||||
Raymond James Bank, FSB | $ | 14,800,000 | $ | 22,200,000 | $ | 0 | $ | 0 | ||||||||
Comerica Bank | $ | 12,000,000 | $ | 18,000,000 | $ | 0 | $ | 0 | ||||||||
First Tennessee Bank National Association | $ | 7,200,000 | $ | 10,800,000 | $ | 0 | $ | 0 | ||||||||
Total | $ | 760,000,000 | $ | 600,000,000 | $ | 210,000,000 | $ | 130,000,000 |
1. | I have reviewed this Quarterly Report on Form 10-Q of American Realty Capital Properties, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated this 6th day of August, 2013 | /s/ Nicholas S. Schorsch | |
Nicholas S. Schorsch | ||
Chief Executive Officer and | ||
Chairman of the Board of Directors (Principal Executive Officer) | ||
1. | I have reviewed this Quarterly Report on Form 10-Q of American Realty Capital Properties Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated this 6th day of August, 2013 | /s/ Brian S. Block | |
Brian S. Block Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) | ||
Dated this 6th day of August, 2013 | ||
/s/ Nicholas S. Schorsch | ||
Nicholas S. Schorsch | ||
Chief Executive Officer and Chairman of the Board of Directors | ||
(Principal Executive Officer) | ||
/s/ Brian S. Block | ||
Brian S. Block | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) | ||
Common Stock
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock Increases in Authorized Common Stock On July 2, 2013, the Company filed articles of amendment to its charter to increase the number of authorized shares of common stock to 750,000,000 shares. Offerings On August 1, 2012, the Company filed a $500 million universal shelf registration statement and a resale registration statement with the SEC. Each registration statement became effective on August 17, 2012. As of June 30, 2013, the Company had issued 2.1 million shares of common stock under the $500 million universal shelf registration statement. No preferred stock, debt or equity-linked security had been issued under this $500 million universal shelf registration statement. The resale registration statement, as amended, registers the resale of up to 1,882,248 shares of common stock issued in connection with any future conversion of certain currently outstanding restricted shares, convertible preferred stock or limited partnership interests in the OP. On March 13, 2013, the Company filed a universal automatic shelf registration statement that was automatically declared effective and achieved well-known seasoned issuer (“WKSI”) status. The Company intends to maintain both the $500 million universal shelf registration statement and the WKSI universal automatic shelf registration statement. In January 2013, the Company commenced its “at the market” equity offering program (“ATM”) in which it may from time to time offer and sell shares of its common stock having an aggregate offering proceeds of up to $60.0 million. The shares will be issued pursuant to the Company's $500.0 million universal shelf registration statement. The following are the Company's equity offerings of common stock during the six months ended June 30, 2013 (dollar amounts in millions):
_______________________________________________ (1) Excludes 140.7 million shares of common stock that were issued to the stockholders of ARCT III's common stock in conjunction with the ARCT III Merger. Upon the closing of the ARCT III Merger, 29.2 million shares of the then outstanding shares of ARCT III's common stock were paid in cash at $12.00 per share, which equals 27.7 million shares of the Company's common stock after the application of the ARCT III Exchange Ratio. In addition, upon closing of the ARCT III Merger, 148.1 million shares of ARCT III's common stock were converted to shares of Company's common stock at the ARCT III Exchange Ratio, resulting in an additional 140.7 million shares of the Company's common stock outstanding after the exchange. Dividends The Company's board of directors has authorized, and the Company began paying, dividends since October 2011 on the fifteenth day of each month to stockholders of record on the eight day of such month. During the six months ended June 30, 2013, the board of directors of the Company has authorized the following increases in the Company's dividend.
_______________________________________________ * The dividend increase is contingent upon, and effective with, the earlier of the close of the ARCT IV Merger or the close of the CapLease Merger. The annualized dividend rate at June 30, 2013 was $0.910 per share. |
Common Stock (Details) (USD $)
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0 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||||
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May 28, 2013
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Jun. 30, 2013
|
Jun. 30, 2013
|
Jun. 30, 2012
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Jul. 02, 2013
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Dec. 31, 2012
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Aug. 01, 2012
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Jun. 30, 2013
Common Stock [Member]
|
Jun. 30, 2013
ARCP [Member]
|
Jun. 30, 2013
Follow on Offering [Member]
|
Jan. 28, 2013
Follow on Offering [Member]
|
Jun. 30, 2013
At the Market Offering [Member]
|
Jun. 30, 2013
Private Placement [Member]
|
Jun. 30, 2013
Registration Payment Arrangement, Arrangement [Domain]
|
Feb. 28, 2013
Cash [Member]
Option Two [Member]
ARCP Merger [Member]
|
Feb. 28, 2013
Cash [Member]
Option Two [Member]
ARCP shares converted from ARCT III shares [Member]
|
Feb. 28, 2013
Common Stock [Member]
Option One [Member]
ARCP Merger [Member]
|
Jun. 30, 2013
Common Stock [Member]
|
Dec. 31, 2012
Common Stock [Member]
|
Jun. 30, 2013
Shares Issued under the universal shelf registration
Common Stock [Member]
|
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Class of Stock [Line Items] | ||||||||||||||||||||
Maximum Amount of Offering from Universal Shelf Registration Statement | $ 500,000,000 | $ 60,000,000 | ||||||||||||||||||
Shares issued (in shares) | 32,035,064 | 2,100,000 | ||||||||||||||||||
Common stock, shares authorized | 240,000,000 | 240,000,000 | 750,000,000 | 240,000,000 | 1,882,248 | |||||||||||||||
Common stock, issued | 184,893,886 | 184,893,886 | 179,167,112 | 32,035,064 | 2,070,000 | 553,300 | 140,700,000 | |||||||||||||
Proceeds from issuances of common stock | $ 490,584,000 | $ 825,246,000 | $ 490,600,000 | $ 26,700,000 | $ 8,900,000 | $ 455,000,000 | ||||||||||||||
Shares, Outstanding | 29,200,000 | 27,700,000 | 148,113,788.5 | 184,893,886 | 179,167,112 | |||||||||||||||
Convertible stock issued during period, value | $ 12.00 | |||||||||||||||||||
Dividends declared, in dollars per share | $ 0.94 | $ 0.910 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Rental income | $ 43,130,000 | $ 11,329,000 | $ 81,379,000 | $ 17,412,000 |
Operating expense reimbursements | 1,830,000 | 101,000 | 3,652,000 | 258,000 |
Total revenues | 44,960,000 | 11,430,000 | 85,031,000 | 17,670,000 |
Operating expenses: | ||||
Acquisition related | 15,144,000 | 7,814,000 | 20,726,000 | 12,599,000 |
Merger and other transaction related | 4,680,000 | 20,000 | 142,449,000 | 20,000 |
Property operating | 2,465,000 | 288,000 | 4,869,000 | 580,000 |
General and administrative | 1,125,000 | 502,000 | 2,432,000 | 1,027,000 |
Equity-based compensation | 3,454,000 | 178,000 | 4,330,000 | 324,000 |
Depreciation and amortization | 27,806,000 | 6,994,000 | 52,829,000 | 10,529,000 |
Operating fees to affiliates | 0 | 0 | 0 | 212,000 |
Total operating expenses | 54,674,000 | 15,796,000 | 227,635,000 | 25,291,000 |
Operating loss | (9,714,000) | (4,366,000) | (142,604,000) | (7,621,000) |
Other income (expenses): | ||||
Interest expense | (11,238,000) | (2,686,000) | (17,454,000) | (4,142,000) |
Unrealized loss on contingent value rights | (31,134,000) | 0 | (31,134,000) | 0 |
Income from investment securities | 0 | 0 | 218,000 | 0 |
Gain on sale of investment securities | 0 | 0 | 451,000 | 0 |
Unrealized loss on derivative instruments | (40,000) | 0 | (45,000) | 0 |
Other income (expenses) | 91,000 | 62,000 | 126,000 | 67,000 |
Total other expenses, net | (42,321,000) | (2,624,000) | (47,838,000) | (4,075,000) |
Loss from continuing operations | (52,035,000) | (6,990,000) | (190,442,000) | (11,696,000) |
Net loss from continuing operations attributable to non-controlling interests | 322,000 | 72,000 | 756,000 | 72,000 |
Net loss from continuing operations attributable to stockholders | (51,713,000) | (6,918,000) | (189,686,000) | (11,624,000) |
Discontinued operations: | ||||
Net income (loss) from operations of held for sale properties | 36,000 | (84,000) | 63,000 | (97,000) |
Gain (loss) on held for sale properties | 0 | (82,000) | 14,000 | (405,000) |
Net income (loss) from discontinued operations | 36,000 | (166,000) | 77,000 | (502,000) |
Net income (loss) from discontinued operations attributable to non-controlling interests | (2,000) | 14,000 | (4,000) | 28,000 |
Net income (loss) from discontinued operations attributable to stockholders | 34,000 | (152,000) | 73,000 | (474,000) |
Net loss | (51,999,000) | (7,156,000) | (190,365,000) | (12,198,000) |
Net loss attributable to non-controlling interests | 320,000 | 86,000 | 752,000 | 100,000 |
Net loss attributable to stockholders | (51,679,000) | (7,070,000) | (189,613,000) | (12,098,000) |
Other comprehensive gain (loss): | ||||
Designated derivatives, fair value adjustments | 14,017,000 | (2,236,000) | 12,840,000 | (2,839,000) |
Unrealized gain (loss) on investment securities, net | (80,000) | 0 | 13,000 | 0 |
Comprehensive loss | $ (37,742,000) | $ (9,306,000) | $ (176,760,000) | $ (14,937,000) |
Basic and diluted net loss per share from continuing operations attributable to common stockholders | $ (0.32) | $ (0.10) | $ (1.20) | $ (0.25) |
Basic and diluted net loss per share attributable to common stockholders | $ (0.32) | $ (0.10) | $ (1.20) | $ (0.26) |
Real Estate Investments
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Jun. 30, 2013
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Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investments | Real Estate Investments The following table presents the allocation of the assets acquired during the periods presented (dollar amounts in thousands):
_______________________________________________ (1) Excludes 47 properties comprised of $67.5 million of net investments subject to direct financing leases. Land, buildings, fixtures and improvements, in-place lease intangibles and investments in direct financing leases include $774.0 million, comprised of $193.1 million, $450.5 million, $62.9 million and $67.5 million, respectively, provisionally assigned to each class of asset, pending receipt of the final appraisals and other information being prepared by a third-party specialist. During the three months ended June 30, 2013, the Company classified a Shaw's Supermarket in Plymouth, MA, as a held for sale property. As of June 30, 2013, the Company owned two properties which were classified as held for sale, including one vacant property. The following table presents unaudited pro forma information as if the acquisitions during the three and six months ended June 30, 2013 had been consummated on January 1, 2012. Additionally, the unaudited pro forma net loss attributable to stockholders was adjusted to exclude acquisition related expenses of $15.1 million and $7.8 million for the three months ended June 30, 2013 and 2012, respectively, and merger and other transaction expenses of $4.7 million for the three months ended June 30, 2013. The unaudited pro forma net loss attributable to stockholders was adjusted to exclude acquisition related expenses of $20.7 million and $12.6 million for the six months ended June 30, 2013 and 2012, respectively, and merger and other transaction expenses of $142.4 million for the six months ended June 30, 2013.
Future Lease Payments The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (amounts in thousands):
_______________________________________________ (1) 47 properties are subject to direct financing leases and, therefore, for accounting purposes, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the cash rent on these respective properties. Net Investment in Direct Financing Leases The components of the Company's net investment in direct financing leases are as follows (in thousands):
Tenant Concentration The following table lists the tenants of the Company whose annualized rental income on a straight-line basis represented greater than 10% of consolidated annualized rental income on a straight-line basis as of June 30, 2013 and 2012. Annualized rental income for net leases is rental income on a straight-line basis as of June 30, 2013, which includes the effect of tenant concessions such as free rent, as applicable.
_______________________________________________ * The tenants' annualized rental income was not greater than 10% of total consolidated annualized rental income for all portfolio properties as of the period specified. No other tenant represents more than 10% of total consolidated annualized rental income for the periods presented. Geographic Concentration The following table lists the states where the Company has concentrations of properties where annual rental income for properties in that state, on a straight-line basis represented greater than 10% of consolidated annualized rental income on a straight-line basis as of June 30, 2013 and 2012:
_______________________________________________ * The annualized rental income from the state was not greater than 10% of total consolidated annualized rental income for all portfolio properties as of the period specified. |
Subsequent Events
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements except for the following: Convertible Senior Note Offering On July 29, 2013, the Company issued $300.0 million of 3.00% Convertible Senior Notes (“Notes”) due 2018 in an underwritten public offering. The Notes will mature on August 1, 2018. The Notes may be converted into cash, common stock or a combination thereof in limited circumstances prior to February 1, 2018 and may be converted into such consideration at any time on or after February 1, 2018. Additionally, the underwriters were granted a 30-day option to purchase up to an additional $30.0 million of Notes to cover over allotments. The over-allotment was exercised in part and the Company issued an additional $10.0 million of Notes pursuant to such over-allotment option on August 1, 2013. The Company intends to use the net proceeds of the offering (a) to repay outstanding indebtedness under its existing senior secured revolving credit facility (which will increase the availability of funds under such credit facility) and (b) for other general corporate purposes which includes investing in properties in accordance with its investment objectives. Completion of Acquisition of Assets The following table presents certain information about the properties that the Company acquired from July 1, 2013 to August 2, 2013 (dollar amounts in thousands):
____________________________ (1)Contract purchase price, excluding acquisition and transaction related costs.
Pending Portfolio Acquisitions The Company has entered into various definitive agreements for portfolio purchases, one of which is to acquire 121 properties for an aggregate purchase price of approximately $604.1 million, exclusive of closing costs. The portfolio is entirely free standing single tenant net leased properties aggregating 6.2 million square feet, 100% leased to 16 tenants, 35.4% of which are investment grade rated, with average remaining lease terms of 13.8 years . The properties are geographically diverse, located in 30 states. |
Related Party Transactions and Arrangements (Details) (USD $)
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6 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 2 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||||||||||||||
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Jun. 30, 2013
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Jun. 30, 2012
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Feb. 28, 2014
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Feb. 28, 2013
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Dec. 31, 2012
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Sep. 06, 2012
Sponsor [Member]
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Feb. 28, 2013
Special Limited Partner [Member]
|
Jun. 30, 2013
ARC Real Estate Partners, LLC [Member]
Operating Partnership Unit [Member]
|
Dec. 31, 2012
ARC Real Estate Partners, LLC [Member]
Operating Partnership Unit [Member]
|
Jun. 30, 2013
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
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Feb. 28, 2013
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Dec. 31, 2012
ARC Advisory Services, LLC [Member]
|
Feb. 28, 2013
Sale of ARCT III OP Units [Member]
|
Jun. 30, 2013
Class B Units [Member]
|
Feb. 28, 2013
Class B Units [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Dec. 31, 2012
Class B Units [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Feb. 28, 2013
ARCT III Merger [Member]
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Feb. 28, 2013
ARCT III Merger [Member]
ARCP [Member]
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Feb. 28, 2013
ARCP Merger [Member]
Post-Conversion [Member]
American Realty Capital III Special Limited Partnership, LLC [Member]
Common Stock [Member]
Entity Wholly Owned by Sponsor [Member]
|
Feb. 28, 2013
ARCP Merger [Member]
Post-Conversion [Member]
Class B Units [Member]
American Realty Capital III Special Limited Partnership, LLC [Member]
Common Stock [Member]
Entity Wholly Owned by Sponsor [Member]
|
Feb. 28, 2013
ARCP Merger [Member]
Pre-Conversion [Member]
American Realty Capital III Special Limited Partnership, LLC [Member]
Common Stock [Member]
Entity Wholly Owned by Sponsor [Member]
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Dec. 31, 2012
Legal Services [Member]
ARC Advisory Services, LLC [Member]
|
Jun. 30, 2013
Financial Advisory Services [Member]
Realty Captial Securities, LLC and American Realty Capital Advisors, LLC [Member]
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Dec. 31, 2012
Financial Advisory Services [Member]
Realty Captial Securities, LLC and American Realty Capital Advisors, LLC [Member]
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Jun. 30, 2013
Gross Proceeds, Initial Public Offering [Member]
Realty Capital Securities, LLC [Member]
Dealer Manager [Member]
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Sep. 07, 2011
Gross Proceeds, Initial Public Offering [Member]
Realty Capital Securities, LLC [Member]
Dealer Manager [Member]
|
Feb. 28, 2013
Pre-tax Non-compounded Return on Capital Contribution [Member]
Annual Targeted Investor Return [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Dec. 31, 2012
Pre-tax Non-compounded Return on Capital Contribution [Member]
Annual Targeted Investor Return [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Feb. 28, 2013
Pre-tax Non-compounded Return on Capital Contribution [Member]
Asset Management Fees [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Dec. 31, 2012
Average Invested Assets [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Sep. 30, 2012
Amount Available or Outstanding Under Financing Arrangement [Member]
ARC Properties Advisors, LLC [Member]
Manager [Member]
|
Dec. 31, 2012
Contract Purchase Price [Member]
ARC Properties Advisors, LLC [Member]
Manager [Member]
|
Dec. 31, 2012
Gross Revenue, Stand-alone Single-tenant Net Leased Properties [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Dec. 31, 2012
Gross Revenue, Excluding Stand-alone Single-tenant Net Leased Properties [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Jun. 30, 2013
Gross Proceeds, Common Stock [Member]
Realty Capital Securities, LLC [Member]
Dealer Manager [Member]
|
Sep. 07, 2011
Gross Proceeds, Common Stock [Member]
Realty Capital Securities, LLC [Member]
Dealer Manager [Member]
|
Feb. 28, 2013
Maximum [Member]
ARCT III Merger [Member]
ARCP [Member]
|
Dec. 31, 2012
Maximum [Member]
Gross Revenue, Managed Properties [Member]
American Realty Capital Advisors III LLC [Member]
Advisor [Member]
|
Jun. 30, 2013
Class of Stock [Domain]
|
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Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||
Common stock held by related party, percent | 4.82% | 1.39% | |||||||||||||||||||||||||||||||||||||
Related Party Transaction, Sales Commissions Earned by Related Party, Percentage of Benchmark | 7.00% | 6.00% | 3.00% | 2.00% | |||||||||||||||||||||||||||||||||||
Related Party Transaction, Acquisition Fees Earned by Related Party, Percentage of Benchmark | 1.00% | ||||||||||||||||||||||||||||||||||||||
Related Party Transaction, Financing Coordination Fees Earned by Related Party, Percentage of Benchmark | 0.75% | ||||||||||||||||||||||||||||||||||||||
Asset Management Fee Percentage, Option 1 | 0.50% | ||||||||||||||||||||||||||||||||||||||
Asset Management Fee Percentage, Option 2 | 0.40% | ||||||||||||||||||||||||||||||||||||||
Unadjusted Book Value of Assets | $ 3,000,000,000 | ||||||||||||||||||||||||||||||||||||||
Related Party Transaction, Asset Management Fees Earned by Related Party, Percentage of Benchmark | 0.75% | ||||||||||||||||||||||||||||||||||||||
Related Party Transaction, Cumulative Capital Investment Return, as a Percentage of Benchmark | 6.00% | 6.00% | |||||||||||||||||||||||||||||||||||||
Antidilutive securtities excluded from computation of earnings per share | 9,051,661 | 283,018 | 603,599 | 145,022 | |||||||||||||||||||||||||||||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 2,284,298 | 9,900,000.0 | |||||||||||||||||||||||||||||||||||||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest, Issuance of Units | 7,300,000 | 711,190 | 7,600,000 | ||||||||||||||||||||||||||||||||||||
Related Party Transaction, Property Management Fees Earned by Related Party, Percentage of Benchmark | 2.00% | 4.00% | |||||||||||||||||||||||||||||||||||||
Related Party Transaction, Oversight Fees Earned by Related Party, Percentage of Benchmark | 1.00% | ||||||||||||||||||||||||||||||||||||||
Related Party Transactions, Property Management Services Service Period Extension, Days | 60 days | ||||||||||||||||||||||||||||||||||||||
Administrative Support Agreement Period, Years | 1 year | ||||||||||||||||||||||||||||||||||||||
Merger and other transaction related | 200,000 | 500,000 | 500,000 | 100,000 | |||||||||||||||||||||||||||||||||||
Merger Expenses Agreed To | 600,000 | ||||||||||||||||||||||||||||||||||||||
Business Acquisition, Cost of Acquired Entity, Purchase Price | 5,800,000 | ||||||||||||||||||||||||||||||||||||||
Related Party Transaction, Cumulative Capital Investment Return | 557,300,000 | ||||||||||||||||||||||||||||||||||||||
Related Party Transaction, Proceeds from Related Party | 98,400,000 | ||||||||||||||||||||||||||||||||||||||
Equity Ownership Holding Period, Years | 1 year | ||||||||||||||||||||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 1,000,000 | ||||||||||||||||||||||||||||||||||||||
Contributions from non-controlling interest holders | 0 | (708,000) | 800,000 | ||||||||||||||||||||||||||||||||||||
ARCP OP Units Issued to Special Limited Partnership | 56,797 | ||||||||||||||||||||||||||||||||||||||
Available-for-sale Debt Securities, Amortized Cost Basis | 10,000,000 | ||||||||||||||||||||||||||||||||||||||
Other investments, at fair value | $ 9,920,000 | $ 41,654,000 | $ 9,920,000 |
Share-Based Compensation
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation Equity Plan The Company has adopted the American Realty Capital Properties, Inc. Equity Plan (the “Equity Plan”), which provides for the grant of stock options, restricted shares of common stock, restricted stock units, dividend equivalent rights and other equity-based awards to the Manager, non-executive directors, officers and other employees and independent contractors, including employees or directors of the Manager and its affiliates who are providing services to the Company. The Company authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of common stock (on a fully diluted basis assuming the redemption of all OP Units for shares of common stock) to be issued at any time under the Equity Plan for equity incentive awards excluding an initial grant of 167,400 shares to the Manager in connection with the IPO. All such awards of shares will vest ratably on a quarterly or annual basis over a three-year period beginning on the first anniversary of the date of grant and shall provide for “distribution equivalents” with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as dividends are paid to the stockholders. In February 2013, the Company granted 325,000 restricted shares of common stock to the Manager and certain employees. These shares did not vest upon the consummation of the ARCT III Merger but will vest ratably over a three-year period and shall provide for “distribution equivalents” with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as dividends are paid to the stockholders. Director Stock Plan The Company has adopted the American Realty Capital Properties, Inc. Non-Executive Director Stock Plan (the “Director Stock Plan”), which provides for the grant of restricted shares of common stock to each of the Company's independent directors, each of whom is a non-executive director. Awards of restricted stock will vest ratably over a five-year period following the first anniversary of the date of grant in increments of 20.0% per annum, subject to the director’s continued service on the board of directors, and shall provide for “distribution equivalents” with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as distributions are paid to the stockholders. At June 30, 2013, a total of 99,000 shares of common stock are reserved for issuance under the Director Stock Plan. The fair value of restricted common stock awards under the Equity Plan and Director Stock Plan is determined on the grant date using the closing stock price on NASDAQ that day. The fair value of restricted common stock under the Equity Plan is updated at the end of each quarter based on quarter end closing stock price through the final vesting date. ARCT III Restricted Share Plan ARCT III had an employee and director incentive restricted share plan (the “RSP”), which provided for the automatic grant of 3,000 restricted shares of common stock to each of its independent directors, without any further action by ARCT III’s board of directors or its stockholders, on the date of initial election to the board of directors and on the date of each annual stockholder’s meeting thereafter. Restricted stock issued to independent directors vested over a five-year period following the first anniversary of the date of grant in increments of 20.0% per annum. The RSP provided ARCT III with the ability to grant awards of restricted shares to its directors, officers and employees (if ARCT III ever had employees), employees of ARCT III's Advisor and its affiliates, employees of entities that provided services to ARCT III, directors of the ARCT III Advisor or of entities that provided services to ARCT III, certain consultants to ARCT III and the ARCT III Advisor and its affiliates or to entities that provided services to ARCT III. Immediately prior to the effective time of the ARCT III Merger, each then-outstanding share of ARCT III restricted stock fully vested. All shares of ARCT III common stock then-outstanding as a result of the full vesting of shares of ARCT III restricted stock, and the satisfaction of any applicable withholding taxes, had the right to receive a number of shares of the Company's common stock based on the ARCT III Exchange Ratio. The following tables detail the restricted shares activity within the Equity Plan, Director Stock Plan and RSP during the three and six months ended June 30, 2013: Restricted Share Awards
Unvested Restricted Shares
In connection with the ARCT III Merger, each share of the Company's and ARCT III's restricted stock outstanding as of immediately prior to the effective date of the ARCT III Merger became fully vested. For the three months ended June 30, 2013 and 2012, compensation expense for restricted shares was $0.2 million, respectively. For the six months ended June 30, 2013 and 2012, compensation expense for restricted shares was $0.6 million and $0.4 million, respectively. Compensation expense for the accelerated vesting of restricted shares in conjunction with the ARCT III Merger restricted shares of $2.2 million during the three and six months ended June 30, 2013 was recorded as Merger costs. In July 2013, the Company granted 300,000 restricted shares of common stock to the Manager and certain employees at a grant date price of $14.80 per share. These shares will vest ratably over a three-year period and shall provide for “distribution equivalents” with respect to these restricted shares, whether or not vested, at the same time and in the same amounts as dividends are paid to the stockholders. Multi-Year Performance Plan Upon consummation of the ARCT III Merger, the Company entered into the 2013 Advisor Multi-Year Outperformance Agreement (the “OPP”) with the Manager, whereby the Manager will be able to potentially earn compensation upon the attainment of stockholder value creation targets. Under the OPP, the manager was granted 8,241,101 long term incentive plan units (“LTIP Units”) of the OP, which will be earned or forfeited based on the Company's total return to stockholders (including both share price appreciation and common stock distributions) (“Total Return”), for the three year period consisting of:
The award will be funded (“OPP Pool”) up to a maximum award opportunity equal to 5% of the Company's equity market capitalization at the ARCT III Merger date of $2.1 billion (the “OPP Cap”). Awards under the OPP are dependent on achieving an annual hurdle that commenced December 11, 2012, an interim (two-year) hurdle and then the aforementioned three-year hurdle ending on December 31, 2015. In order to further ensure that the interests of the Manager are aligned with the Company's investors, the Relative Component is subject to a ratable sliding scale factor as follows:
For each year during the performance period a portion of the OPP Cap equal to a maximum of up to 1.25% of the Company's equity market capitalization of $2.1 billion will be “locked-in” based upon the attainment of the performance hurdles set forth above for each annual measurement period. In addition, a portion of the OPP Cap equal to a maximum of up to 3.0% of the Company's equity market capitalization will be “locked-in” based upon the attainment of the performance hurdles set forth above for the interim measurement period, which if achieved, will supersede and negate any prior “locked-in” portion based upon annual performance through December 31, 2013 and 2014 (i.e., a maximum award opportunity equal to a maximum of up to 3.0% of the Company's equity market capitalization may be “locked-in” through December 31, 2014). Following the performance period, the Absolute Component and the Relative Component will be calculated separately and then added together to determine the aggregate award earned under the OPP, which will be the lesser of the sum of the two components and the OPP Cap. The OPP Pool will be used to determine the number of LTIP units that vest. Any unvested LTIP units will be immediately forfeited on December 31, 2015. At June 30, 2013, 100% of the pool has been allocated. The Manager will be entitled to convert 33.3% of the LTIP units earned into OP Units on each of December 31, 2015, 2016 and 2017 and within 30 days following such date. In addition, the OPP provides for accelerated earning and vesting of LTIP Units and redemption of vested LTIP Units for cash if the Manager is terminated or if the Company experiences a change in control. The Manager will be entitled to receive a tax gross-up in the event that any amounts paid to it under the OPP constitute “parachute payments” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”). The fair value of the LTIP Units granted are being amortized over the performance period. During the three and six months ended June 30, 2013, the Company has recorded expense of $3.1 million and $3.7 million, respectively, for the OPP. |
Derivatives and Hedging Activities (Schedule of Interest Rate Derivatives) (Details) (Derivative Financial Instruments, Liabilities [Member], Cash Flow Hedging [Member], Designated as Hedging Instrument [Member], USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
derivative
|
Dec. 31, 2012
derivative
|
---|---|---|
Derivative [Line Items] | ||
Number of Interest Rate Derivatives Held | 8 | |
Derivative, Notional Amount | $ 202,590 | |
Swap [Member]
|
||
Derivative [Line Items] | ||
Number of Interest Rate Derivatives Held | 10 | 7 |
Derivative, Notional Amount | 667,590 | |
Notional Amount of Interest Rate Derivatives (Deprecated 2013-01-31) | 152,590 | |
Interest Rate Cap [Member]
|
||
Derivative [Line Items] | ||
Number of Interest Rate Derivatives Held | 1 | |
Derivative, Notional Amount | $ 50,000 |
Related Party Transactions and Arrangements (Schedule of Selling Commissions and Dealer Manager Fees) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2013
Dealer Manager [Member]
Realty Capital Securities, LLC [Member]
Sales Commissions and Fees [Member] (Deprecated 2013-01-31)
|
Jun. 30, 2012
Dealer Manager [Member]
Realty Capital Securities, LLC [Member]
Sales Commissions and Fees [Member] (Deprecated 2013-01-31)
|
Jun. 30, 2013
Dealer Manager [Member]
Realty Capital Securities, LLC [Member]
Sales Commissions and Fees [Member] (Deprecated 2013-01-31)
|
Jun. 30, 2012
Dealer Manager [Member]
Realty Capital Securities, LLC [Member]
Sales Commissions and Fees [Member] (Deprecated 2013-01-31)
|
Jun. 30, 2013
Payable [Member]
Advisor and Dealer Manager [Member]
Fees and Expense Reimbursement, Stock Offering [Member]
|
Dec. 31, 2012
Payable [Member]
Advisor and Dealer Manager [Member]
American Realty Capital Properties Advisors, LLC and Realty Capital Securities, LLC [Member] [Member]
Fees and Expense Reimbursement, Stock Offering [Member]
|
|
Schedule of Selleing Commission and Dealer Manager Fees [Line Items] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 0 | $ 57,914,000 | $ 0 | $ 79,791,000 | $ 0 | $ 0 |
Organization (Details)
|
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
property
|
Jun. 30, 2012
property
|
Jun. 30, 2013
property
|
Jun. 30, 2012
property
|
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Operations [Line Items] | ||||||||
Number of Properties Acquired | 433 | [1] | 116 | 481 | [1] | 170 | ||
General Partner [Member] | ARC Properties Operating Partnership, L.P. [Member]
|
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Operations [Line Items] | ||||||||
General partner ownership interest in OP, Percent | 95.30% | |||||||
Affiliated Entity [Member] | Contributor [Member] | ARC Real Estate Partners, LLC [Member]
|
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Operations [Line Items] | ||||||||
Limited partner ownership interest in OP, Percent | 4.30% | |||||||
Unaffiliated Third Party [Member]
|
||||||||
Operations [Line Items] | ||||||||
Limited partner ownership interest in OP, Percent | 0.40% | |||||||
GE Capital Portfolio [Member]
|
||||||||
Operations [Line Items] | ||||||||
Number of Properties Acquired | 447 | |||||||
Minimum [Member]
|
||||||||
Operations [Line Items] | ||||||||
Real Estate Property, Weighted Average Remaining Lease Term | 10 years | 10 years | ||||||
Maximum [Member]
|
||||||||
Operations [Line Items] | ||||||||
Real Estate Property, Weighted Average Remaining Lease Term | 12 years | 12 years | ||||||
Long Term [Member]
|
||||||||
Operations [Line Items] | ||||||||
Real Estate Portfolio, Property Concentration, Percentage | 70.00% | 70.00% | ||||||
Short Term [Member] [Member]
|
||||||||
Operations [Line Items] | ||||||||
Real Estate Portfolio, Property Concentration, Percentage | 30.00% | 30.00% | ||||||
|
Mortgage Note Payable (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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Notes Payable [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Mortgage Notes Payable | The Company’s mortgage notes payable consist of the following as of June 30, 2013 and December 31, 2012 (dollar amounts in thousands):
_______________________________________________
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Aggregate Principal Payments Of Mortgages | The following table summarizes the scheduled aggregate principal repayments subsequent to June 30, 2013 (amounts in thousands):
|
Real Estate Investments (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The following table presents the allocation of the assets acquired during the periods presented (dollar amounts in thousands):
_______________________________________________ (1) Excludes 47 properties comprised of $67.5 million of net investments subject to direct financing leases. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | The following table presents unaudited pro forma information as if the acquisitions during the three and six months ended June 30, 2013 had been consummated on January 1, 2012. Additionally, the unaudited pro forma net loss attributable to stockholders was adjusted to exclude acquisition related expenses of $15.1 million and $7.8 million for the three months ended June 30, 2013 and 2012, respectively, and merger and other transaction expenses of $4.7 million for the three months ended June 30, 2013. The unaudited pro forma net loss attributable to stockholders was adjusted to exclude acquisition related expenses of $20.7 million and $12.6 million for the six months ended June 30, 2013 and 2012, respectively, and merger and other transaction expenses of $142.4 million for the six months ended June 30, 2013.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (amounts in thousands):
_______________________________________________ (1) 47 properties are subject to direct financing leases and, therefore, for accounting purposes, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the cash rent on these respective properties. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases | The components of the Company's net investment in direct financing leases are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Annualized Rental Income by Major Tenants | The following table lists the tenants of the Company whose annualized rental income on a straight-line basis represented greater than 10% of consolidated annualized rental income on a straight-line basis as of June 30, 2013 and 2012. Annualized rental income for net leases is rental income on a straight-line basis as of June 30, 2013, which includes the effect of tenant concessions such as free rent, as applicable.
_______________________________________________ * The tenants' annualized rental income was not greater than 10% of total consolidated annualized rental income for all portfolio properties as of the period specified. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following table lists the states where the Company has concentrations of properties where annual rental income for properties in that state, on a straight-line basis represented greater than 10% of consolidated annualized rental income on a straight-line basis as of June 30, 2013 and 2012:
_______________________________________________ * The annualized rental income from the state was not greater than 10% of total consolidated annualized rental income for all portfolio properties as of the period specified. |
Fair Value of Financial Instruments (Fair Value, by Balance Sheet Grouping) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | $ 9,920 | $ 41,654 |
Derivative Asset | 10,161 | 0 |
Derivatives, at fair value | 10,161 | 0 |
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 1,186 | 3,830 |
Derivatives, at fair value | 1,186 | 3,830 |
Fair Value, Inputs, Level 3 [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 869,918 | 389,722 |
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 871,645 | 395,660 |
Mortgages Notes Payable [Member] | Fair Value, Inputs, Level 3 [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 269,918 | 265,118 |
Mortgages Notes Payable [Member] | Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 271,645 | 271,056 |
Senior Secured Credit Facility [Member] | Fair Value, Inputs, Level 3 [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 0 | 124,604 |
Senior Secured Credit Facility [Member] | Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 0 | 124,604 |
Unsecured Debt [Member] | Fair Value, Inputs, Level 3 [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 600,000 | 0 |
Unsecured Debt [Member] | Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 600,000 | 0 |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | 0 | |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | 9,920 | |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | 0 | |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | 9,920 | |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 0 | |
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 0 | 0 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivatives, at fair value | (10,161) | |
Derivatives, at fair value | 1,186 | (3,830) |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 0 | |
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 0 | 0 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | (10,161) | |
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | (1,186) | (3,830) |
Convertible Debt [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | (445,000) | |
Convertible Debt [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 0 | |
Convertible Debt [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 0 | |
Convertible Debt [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | (445,000) | |
Contingent Valuation Rights [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | (31,134) | |
Contingent Valuation Rights [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 0 | |
Contingent Valuation Rights [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 0 | |
Contingent Valuation Rights [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | (31,134) | |
Preferred Stock and Senior Notes [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | 0 | |
Preferred Stock and Senior Notes [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | 0 | |
Preferred Stock and Senior Notes [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | 41,654 | |
Preferred Stock and Senior Notes [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other investments, at fair value | $ 41,654 |
Commitments and Contingencies (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Contractual Obligation, Fiscal Year Maturity Schedule | The following table reflects the minimum base rental cash payments due from the Company over the next five years and thereafter for ground lease arrangements (amounts in thousands):
|
Summary of Significant Accounting Policies (Details) (USD $)
|
3 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 07, 2013
|
Dec. 31, 2012
|
||||
Class of Stock [Line Items] | ||||||
Convertible preferred stock, issued | 828,472 | 828,472 | ||||
Limitation on the Issuance of Common Stock, Percent | 19.90% | |||||
Common stock, Contingent Value Rights Issued | 29,411,764 | |||||
Common stock, issued | 184,893,886 | 179,167,112 | ||||
Series C Preferred Stock [Member]
|
||||||
Class of Stock [Line Items] | ||||||
Convertible preferred stock, issued | 28,398,213 | |||||
Issuance of common stock | $ 445,000,000 | [1] | ||||
Percent of liquidation preference | 102.00% | |||||
Value of liquidation preference | $ 15.67 | |||||
Contingent Value Right, Cash Payment, Amount | 2.00 | |||||
Convertible Preferred Stock, Terms of Conversion | 15.67 | |||||
Private Placement [Member]
|
||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Contingent Value Rights Issued | 28,400,000 | |||||
Private Placement [Member]
|
||||||
Class of Stock [Line Items] | ||||||
Contingent Value Right, Cash Payment, Amount | $ 1.50 | |||||
Sale of Stock, Price Per Share | $ 15.47 | |||||
Maximum amount of additional shares allowed to be issued [Member]
|
||||||
Class of Stock [Line Items] | ||||||
Common stock, issued | 3,300,000 | |||||
|
Convertible Preferred Stock (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Convertible Preferred Stock [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Preferred Units | The Company has the following classes of convertible preferred stock outstanding at June 30, 2013:
_______________________________________________ (1)The Series A Convertible Preferred Stock may be redeemed at the option of the Company in whole or in part after the issuance date at $11.00 per share. (2)The Series B Convertible Preferred Stock may be redeemed at the option of the Company in whole or in part after the issuance date at $10.60 per share. (3)The Series C Convertible Preferred Stock is mandatorily redeemable or exchangeable for shares of common stock at the option of the Company within three business days following the earliest to occur of (A) the closing of the CapLease Merger (B) the first trading day following (a) an announcement that CapLease has accepted a competing offer (which did not occur within the time specified in the CapLease Merger Agreement) or (b) the CapLease Merger Agreement is otherwise terminated, and (C) December 31, 2013, the Company will have the option to: (I) convert all shares of Series C Convertible Preferred Stock into such number of shares of the Company’s common stock equal to the par value of the Series C Convertible Preferred Stock divided by the lowest of (i) a 2% discount to the VWAP of the Company’s common stock for the 10 prior trading days, (ii) a 2% discount to the closing price on such date and (iii) $15.67, as adjusted from time to time or (II) redeem all shares of the Company’s Series C Convertible Preferred Stock in cash at 120% of its par value. As of June 30, 2013, the Company is limited, without the approval of holders of the Company's common stock and Series C Convertible Preferred Stock to amend the Series C Articles Supplementary, to issuing no more than 3.3 million shares of common stock upon conversion of shares of Series C Convertible Preferred Stock due to limitations imposed by the articles supplementary for the Series C Convertible Preferred Stock. Therefore, upon the required conversion the Company will cancel any remaining Series C Convertible Preferred Stock in exchange for cash in lieu of common stock in an amount equal to the greater of the product of such number of excess shares into which the shares of Series C stock would have been convertible and (i) 120% of the liquidation preference, which is $15.67, as may be adjusted from time to time, and (ii) the Conversion Price valued at the one-day VWAP of the common stock on the applicable date. |
Subsequent Events (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 1 Months Ended | 3 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2013
|
Jun. 30, 2013
property
|
Jun. 30, 2012
property
|
Jun. 30, 2013
property
|
Jun. 30, 2012
property
|
Jul. 29, 2013
|
Aug. 02, 2013
2013 Acquisitons [Member]
property
sqft
|
Aug. 02, 2013
Future Portfolio Acquisition [Member]
property
|
Aug. 02, 2013
Property Acquisition [Member]
property
sqft
|
Aug. 02, 2013
Future Portfolio Acquisition [Member]
tenant
state
sqft
|
Jun. 30, 2013
Total Portfolio, As of Document End Date [Member]
property
sqft
|
Sep. 30, 2013
Underwriter's Option to Purchase Addtional Notes, Proceeds [Member]
|
Sep. 30, 2013
Underwriter's Option to Purchase Addtional Notes, Proceeds [Member]
|
|||||
Subsequent Event [Line Items] | |||||||||||||||||
Proceeds from issuance of convertible obligations to Series C Convertible Preferred stockholders | $ 300,000,000 | $ 445,000,000 | $ 0 | $ 30,000,000.0 | $ 10,000,000 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | ||||||||||||||||
Number of Real Estate Properties | 1,207 | 121 | 1,181 | ||||||||||||||
Number of Properties Acquired | 433 | [1] | 116 | 481 | [1] | 170 | 26 | ||||||||||
Square feet of property | 19,623,186 | 19,404,596 | |||||||||||||||
Square feet of acquired property | 218,590 | 6,200,000.0 | |||||||||||||||
Real Estate Investment, Aggregate Purchase Price | 2,964,321,000 | 2,939,004,000 | |||||||||||||||
Real Estate Investment Property, at Cost, Acquisitions | $ 25,317,000 | $ 604,100,000.0 | |||||||||||||||
Occupancy Rate, Percent | 100.00% | ||||||||||||||||
Real Estate Tenants, Number | 16 | ||||||||||||||||
Investment Grade Income, Percent | 35.40% | ||||||||||||||||
Average Remaining Lease Life | 13 years 9 months 18 days | ||||||||||||||||
Geographical Disclosure, Number of States with Real Estate Properties | 30 | ||||||||||||||||
|
Mortgage Note Payable (Schedule of Mortgage Notes Payable) (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Feb. 14, 2013
|
Dec. 31, 2012
|
Jun. 30, 2013
Mortgages [Member]
|
Dec. 31, 2012
Mortgages [Member]
|
Jun. 30, 2013
Minimum [Member]
Mortgages [Member]
|
Dec. 31, 2012
Minimum [Member]
Mortgages [Member]
|
Jun. 30, 2013
Maximum [Member]
Mortgages [Member]
|
Dec. 31, 2012
Maximum [Member]
Mortgages [Member]
|
|||||||
Mortgage Loans on Real Estate [Line Items] | |||||||||||||||
Encumbered Properties | 165 | 164 | |||||||||||||
Outstanding Loan Amount | $ 269,918 | $ 265,118 | $ 269,918 | $ 265,118 | |||||||||||
Debt, Weighted Average Interest Rate | 4.25% | [1] | 4.28% | [1] | |||||||||||
Debt, Weighted Average Maturity Term | 4 years 11 months 25 days | [2] | 5 years 6 months 3 days | [2] | |||||||||||
Effective interest rate | 0.00% | 2.73% | 3.32% | 6.13% | 6.13% | ||||||||||
|
Summary of Significant Accounting Policies (Policies)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy | Recent Accounting Pronouncements In December 2011, the Financial Accounting Standards Board (“FASB”) issued guidance regarding disclosures about offsetting assets and liabilities, which requires entities to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The guidance is effective for fiscal years and interim periods beginning on or after January 1, 2013 with retrospective application for all comparative periods presented. The adoption of this guidance, which is related to disclosure only, did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. Refer to Note 9 — Derivatives and Hedging Activities for the Company's disclosure of information about offsetting and related arrangements. In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets for impairment. The amendments will allow an entity first to assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity will no longer be required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative test unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption was permitted. The adoption of this guidance did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. In February 2013, the FASB issued guidance which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. The guidance is effective for annual and interim periods beginning after December 15, 2012 with early adoption permitted. The adoption of this guidance, which is related to disclosure only, did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. Refer to Note 9 — Derivatives and Hedging Activities for the Company's disclosure of the information about the amounts reclassified out of accumulated other comprehensive income by component. In February 2013, the FASB issued new accounting guidance clarifying the accounting and disclosure requirements for obligations resulting from joint and several liability arrangements for which the total amount under the arrangement is fixed at the reporting date. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company does not expect the adoption of this guidance to have a material impact on the Company's consolidated financial position, results of operations or cash flows. |
Mergers and Acquisitions
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6 Months Ended |
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Jun. 30, 2013
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Merger Agreement [Abstract] | |
Mergers and Acquisitions | Mergers and Acquisitions Completed Mergers and Significant Acquisitions American Realty Capital Trust III Merger On December 14, 2012, the Company entered into an Agreement and Plan of Merger (the “ARCT III Merger Agreement”) with ARCT III and certain subsidiaries of each company. The ARCT III Merger Agreement provided for the merger of ARCT III with and into a subsidiary of the Company (the “ARCT III Merger”). The ARCT III Merger was consummated on February 28, 2013. Pursuant to the terms and subject to the conditions set forth in the ARCT III Merger Agreement, each outstanding share of common stock of ARCT III was converted into the right to receive (i) 0.95 of a share of the Company's common stock, (the “ARCT III Exchange Ratio”) or (ii) $12.00 in cash. In addition, each outstanding unit of equity ownership of the ARCT III OP was converted into the right to receive 0.95 of the same class of unit of equity ownership in the OP. Upon the closing of the ARCT III Merger, on February 28, 2013, 29.2 million shares, or 16.5% of the then outstanding shares of ARCT III's common stock, were paid in cash at $12.00 per share, which is equivalent to 27.7 million shares of the Company's common stock based on the ARCT III Exchange Ratio. In addition, 148.1 million shares of ARCT III's common stock were converted to shares of the Company's common stock at the Exchange Ratio, resulting in an additional 140.7 million shares of the Company's common stock outstanding after the exchange. Upon the consummation of the ARCT III Merger, American Realty Capital III Special Limited Partnership, LLC, the holder of the special limited partner interest in the ARCT III OP, was entitled to subordinated distributions of net sales proceeds from ARCT III OP which resulted in the issuance of units of limited partner interests in the ARCT III OP, when after applying the ARCT III Exchange Ratio, resulting in the issuance of an additional 7.3 million OP Units. The parties have agreed that such OP Units will be subject to a minimum one-year holding period from the date of issuance before being exchangeable into the Company's common stock. Upon consummation of the ARCT III Merger, the vesting of the shares of the Company's and ARCT III's outstanding restricted stock was accelerated. In connection with the ARCT III Merger, the Company also had entered into an agreement with the Sponsor and its affiliates to internalize certain functions performed by them prior to the ARCT III Merger, at no cost to the Company, including selected acquisition, accounting and portfolio management services (the “Internalization”). In connection with the Internalization, (i) the Company and its Sponsor terminated the acquisition and capital services agreement dated September 6, 2011, between the parties, which eliminated acquisition and financing fees payable by the Company and (ii) the Manager reduced asset management fees from an annualized 0.50% of the unadjusted book value of all of the Company's assets to (a) 0.50% for up to $3.0 billion of unadjusted book value of assets and (b) 0.40% of unadjusted book value of assets greater than $3.0 billion. In addition, the Company paid $4.1 million for certain furniture, fixtures, equipment, and $1.7 million for certain costs associated with the ARCT III Merger. The Company, the Sponsor and their affiliates are considered entities under common control, as such, the assets acquired from the Advisor were recorded by the Company at their carryover basis of $1.0 million. Accounting Treatment of the ARCT III Merger The Company and ARCT III, to the ARCT III Merger date, were considered to be entities under common control. Both entities' advisors were wholly owned subsidiaries of the Sponsor. The Sponsor and its related parties have significant ownership interests in the Company and had significant ownership of ARCT III through the ownership of shares of common stock and other equity interests. In addition, the advisors of both entities were contractually eligible to charge potential fees for their services to both of the companies including asset management fees, incentive fees and other fees and continue to charge fees to the Company. Due to the significance of these fees, the advisors and ultimately the Sponsor is determined to have a significant economic interest in both companies in addition to having the power to direct the activities of the companies through advisory/management agreements, which qualifies them as affiliated companies under common control in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The acquisition of an entity under common control is accounted for on the carryover basis of accounting whereby the assets and liabilities of the companies are recorded upon the merger on the same basis as they were carried by the companies on the ARCT III Merger date. In addition, U.S. GAAP requires the Company to present historical financial information as if the entities were combined for each period presented, therefore all financial statements including the notes thereto are presented combining ARCP and ARCT III historical financial information. Credit Facility The Company and the OP are parties to a credit agreement, dated February 14, 2013, for a senior corporate credit facility (as amended, supplemented or otherwise modified from time to time, the (“Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto. The Company and the OP succeeded to the Credit Facility upon the consummation of the ARCT III Merger. Additionally, upon consummation of the ARCT III Merger, two senior secured revolving credit facilities of up to $150.0 million in the aggregate were paid in full and terminated. See Note 5 — Credit Facility for further description of the Credit Facility and repayments and terminations of facilities upon the consummation of the ARCT III Merger. GE Capital Portfolio Acquisition On June 27, 2013, the Company, through its OP, acquired from certain affiliates of GE Capital Corp., the equity interests in the entities that own a real estate portfolio comprised of 447 properties, which include three other revenue generating assets (the “GE Capital Portfolio”) for consideration of $774.0 million exclusive of closing costs; no liabilities were assumed. The 447 properties are subject to 400 property operating leases, which will be accounted for on the straight-line rent basis of accounting, and 47 direct financing leases, which are accounted for as a receivable at a discount to the remaining lease payments and estimated residual values of the related properties. Income on the direct financing leases are recorded using the effective interest method. In addition, the Company has recorded the fair value of the expected residual value of the property for property under direct financing leases, which will be periodically reevaluated. Pending Mergers CapLease, Inc. Merger On May 28, 2013, the Company entered into an Agreement and Plan of Merger (the “CapLease Merger Agreement”) with CapLease, Inc., a Maryland corporation (“CapLease”), and certain subsidiaries of each company. The CapLease Merger Agreement provides for the merger of CapLease with and into a subsidiary of the Company (the “CapLease Merger”). Pursuant to the terms and subject to the conditions set forth in the CapLease Merger Agreement, at the effective time of the CapLease Merger, each outstanding share of common stock of CapLease, other than shares owned by the Company, CapLease or any of their respective wholly owned subsidiaries, will be converted into the right to receive $8.50 in cash without interest. Each outstanding share of preferred stock of CapLease, other than shares owned by the Company, CapLease or any of their respective wholly owned subsidiaries, will be converted into the right to receive an amount in cash, without interest, equal to the sum of $25.00 plus all accrued and unpaid dividends on such shares of preferred stock. In addition, in connection with the merger of CapLease, LP with and into the OP (the “CapLease Partnership Merger”), each outstanding unit of equity ownership of the CapLease's operating partnership other than units owned by CapLease or any wholly owned subsidiary of CapLease will be converted into the right to receive $8.50 in cash, without interest. Upon consummation of the CapLease Merger, the vesting of the shares of the CapLease's outstanding restricted stock will be accelerated and become fully vested, and restricted stock and any outstanding performance shares will be fully earned and have the right to receive $8.50 per share. The CapLease Merger is expected to close in the third or fourth quarter of 2013. However, as of the filing of this Quarterly Report on Form 10-Q, the consummation of the CapLease Merger has not yet occurred and, although the Company believes that the completion of the CapLease Merger is probable, the closing of the CapLease Merger is subject to a vote by the CapLease common stockholders and other customary conditions, and therefore there can be no assurance that the CapLease Merger will be consummated. Accordingly, the Company cannot assure that the CapLease Merger will be completed based on the terms of the CapLease Merger Agreement or at all. American Realty Capital Trust IV Merger On July 1, 2013, the Company entered into an Agreement and Plan of Merger (the “ARCT IV Merger Agreement”) with American Realty Capital Trust IV, Inc., a Maryland corporation (“ARCT IV”), and certain subsidiaries of each company. The ARCT IV Merger Agreement provides for the merger of ARCT IV with and into a subsidiary of the Company (the “ARCT IV Merger”). Pursuant to the terms and subject to the conditions set forth in the ARCT IV Merger Agreement, at the effective time of the ARCT IV Merger, each outstanding share of common stock of ARCT IV will be converted into the right to receive (i) $30.00 in cash, but in no event will the aggregate consideration paid in cash be paid on more than 25% of the shares of ARCT IV's common stock issued and outstanding as of immediately prior to the closing of the ARCT IV Merger or, in the Company’s discretion, (ii) either (A) a number of shares of the Company common stock equal to the ARCT IV Exchange Ratio (as defined below) or (B) only if the Market Price (as defined below) is less than $14.94, 2.05 shares of the Company common stock and an amount in cash equal to the product obtained by multiplying the excess of the ARCT IV Exchange Ratio over 2.05 by the Market Price. “ARCT IV Exchange Ratio” means (1) if the volume weighted average closing sale price of a share of the Company common stock over the five (5) consecutive trading days on the NASDAQ Global Select Market ending on the trading day immediately prior to the closing date of the ARCT IV Merger, as reported in The Wall Street Journal (the “Market Price”), is equal to or greater than $14.94, then 2.05, and (2) if the Market Price is less than $14.94, then the quotient (rounded to the nearest one-hundredth) obtained by dividing $30.62 by the Market Price. If the aggregate elections for payment in cash exceed 25% of the number of shares of ARCT IV's common stock issued and outstanding as of immediately prior to the closing of the ARCT IV Merger, then the amount of cash consideration paid on cash elections will be reduced on a pro rata basis with the remaining consideration paid in Company common stock and cash, if applicable. In addition, each outstanding unit of equity ownership of the ARCT IV will be converted into the right to receive a number of OP Units equal to the ARCT IV Exchange Ratio. In addition, on the date of the ARCT IV Merger, all outstanding restricted common stock of ARCT IV date will become fully vested and exchanged for shares of Company common stock based on the ARCT IV Exchange Ratio. In connection with the ARCT IV Merger, ARCT IV's external advisor has agreed to waive a portion of the real estate commissions contractually due to it from the Company upon the sale of properties in an amount equal to the lesser of (i) 2.0% of the sales price of the properties and (ii) one-half of the competitive real estate commissions if a third party broker is also involved. ARCT IV's external advisor and ARCT IV agreed that ARCT IV's external advisor will be entitled to a reduced real estate commission of $8.4 million. The Company has also entered into an agreement to purchase certain assets from ARCT IV's external advisor and reimburse ARCT IV's external advisor for certain expenses related to the ARCT IV Merger totaling $5.8 million. ARCT IV's external advisor will be entitled to subordinated distributions of net sales proceeds in an amount estimated to be approximately $65.2 million, assuming an implied price of ARCT IV's common stock of $30.47 per share in the ARCT IV Merger (which assumes that 75% of the ARCT IV's common stock is exchanged for shares of ARCP common stock, based on a per share price of $30.62 (representing the floor for stock consideration) and 25% of the ARCT IV's common stock is exchanged for cash). Such subordinated distributions of net sales proceeds will be payable in the form of equity units of ARCT IV that will automatically convert into OP Units upon consummation of the ARCT IV Merger and will be subject to a minimum one-year holding period from the date of issuance before being exchangeable into Company common stock. The actual amount of consideration to be paid for subordinated distributions of net sales proceeds will be based, in part, on the market price of Company common stock on the date of the ARCT IV Merger and will not be known until the ARCT IV Merger Agreement date. Accounting Treatment for the ARCT IV Merger The Company and ARCT IV are considered to be entities under common control. Both entities' advisors are wholly owned subsidiaries of the Sponsor. The Sponsor and its related parties have ownership interests in the Company and ARCT IV through the ownership of shares of common stock and other equity interests. In addition, the advisors of both entities are contractually eligible to charge potential fees for their services to both of the companies including asset management fees, incentive fees and other fees and will continue to charge fees to the Company following the ARCT IV Merger. Due to the significance of these fees, the advisors and ultimately the Sponsor is determined to have a significant economic interest in both companies in addition to having the power to direct the activities of the companies through advisory/management agreements, which qualifies them as affiliated companies under common control in accordance with U.S. GAAP. The acquisition of an entity under common control is accounted for on the carryover basis of accounting whereby the assets and liabilities of the companies are recorded upon the merger on the same basis as they were carried by the companies on the ARCT IV Merger date. In addition, U.S. GAAP requires the Company to present historical financial information as if the entities were combined for each period presented once the ARCT IV Merger is consummated. The ARCT IV Merger is expected to close in the third or fourth quarter of 2013. However, as of the filing of this Quarterly Report on Form 10-Q, the consummation of the ARCT IV Merger has not yet occurred and, although the Company believes that the completion of the ARCT IV Merger is probable, the closing of the ARCT IV Merger is subject to a vote by the common stockholders of both ARCT IV and the Company and other customary conditions, and therefore there can be no assurance that the ARCT IV Merger will be consummated. Accordingly, the Company cannot assure that the ARCT IV Merger will be completed based on the terms of the ARCT IV Merger or at all. |
Credit Facilities
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6 Months Ended |
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Jun. 30, 2013
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Line of Credit Facility [Abstract] | |
Credit Facilities | Credit Facility Credit Facility The Company and the OP are parties to the Credit Facility with Wells Fargo, National Association, as administrative agent and other lenders party thereto. The Company and the OP succeeded to the Credit Facility upon the consummation of the ARCT III Merger. At June 30, 2013, the Credit Facility has commitments of $1.45 billion. The Credit Facility has an accordion feature, which, if exercised in full, would allow the Company to increase borrowings under the Credit Facility to $2.5 billion, subject to additional lender commitments and borrowing base availability. At June 30, 2013, the Credit Facility contains an $810.0 million term loan facility and a $640.0 million revolving credit facility. Loans under the Credit Facility are priced at the applicable rate (at the Company's election, either a floating interest rate based on one month LIBOR, determined on a daily basis) plus 1.60% to 2.20%, or a prime-based interest rate, based upon the Company’s current leverage. To the extent that the Company receives an investment grade credit rating as determined by a major credit rating agency, at the Company's election, advances under the Credit Facility will be priced at their applicable rate plus 0.90% to 1.75% and term loans will be priced at a floating interest rate of LIBOR plus 1.15% to 2.00%, based upon the Company’s then current investment grade credit rating. The Company may also make fixed rate borrowings under the Credit Facility. As of August 6, 2013, additional commitments from lenders increased available borrowing under the Credit Facility to $1.7 billion, comprised of a $940.0 million term loan facility and a $760.0 million revolving credit facility. The Credit Facility provides for monthly interest payments. In the event of a default, each lender has the right to terminate its obligations under the Credit Facility, and to accelerate the payment on any unpaid principal amount of all outstanding loans. The Company has guaranteed the obligations under the Credit Facility. The revolving credit facility will terminate on February 14, 2017, unless extended, to which the term loan facility will terminate on February 14, 2018. The Company may prepay borrowings under the Credit Facility and, to the extent that borrowings are unused under the revolving credit facility and the term loan facility, the Company incurs an unused fee of 0.15% to 0.25% per annum on the unused amount depending on the unused balance as a percentage of the total facility and the type of funding. The Credit Facility also requires the Company to maintain certain property available for collateral as a condition to funding. As of June 30, 2013, there was $600.0 million outstanding on the Credit Facility, of which $85.0 million bore a floating interest rate of 1.95%, and $515.0 million was fixed at 2.80% through the use of derivative instruments, which are used to hedge against interest rate volatility. At June 30, 2013, there was up to $1.9 billion available to the Company for future borrowings, subject to borrowing availability. The Credit Facility requires the maintenance of financial covenants, as well as restrictions on corporate guarantees, the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) as well as the maintenance of a minimum net worth. At June 30, 2013, the Company was in compliance with the debt covenants under the Credit Facility. Repayment of Previous Credit Facilities On February 28, 2013, the Company repaid all of the outstanding borrowings under its previous senior secured revolving credit facility in the amount of $124.6 million, and the credit agreement for such facility was terminated. The average interest rate on the borrowings during the period the balance was outstanding was 3.11%. On February 14, 2013, simultaneous with entering into the Credit Facility, the Company terminated its secured credit facility agreement, which had been unused. |
Summary of Significant Accounting Policies
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6 Months Ended |
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Jun. 30, 2013
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Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The consolidated financial statements of the Company included herein were prepared in conformity with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results for the entire year or any subsequent interim period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2012 of the Company, which are included on Form 8-K/A filed with the Securities and Exchange Commission (“SEC”) on May 8, 2013. There have been no significant changes to these policies during the six months ended June 30, 2013, other than the updates described below. Reclassification Certain reclassifications have been made to the previously issued historical financial statements of the Company to conform to this presentation. Investment in Direct Financing Leases The Company has acquired certain properties that are subject to leases that qualify as direct financing leases in accordance with U.S. GAAP due to the significance of the lease payments from the inception of the leases compared to the fair value of the property. Investments in direct financing leases represent the fair value of the remaining lease payments on the leases and the estimated fair value of any expected residual property value at the end of the lease term. The fair value of the remaining lease payments is estimated using a discounted cash flow based on interest rates that would represent the Company's incremental borrowing rate for similar types of debt. The expected residual property value at the end of the lease term is estimated using market data and assessments of the remaining useful lives of the properties at the end of the lease terms, among other factors. Income from direct financing leases is calculated using the effective interest method over the remaining term of the lease. Convertible Obligation to Series C Convertible Preferred Stockholders On June 7, 2013, the Company issued 28.4 million shares of Series C Convertible Preferred Stock (the “Series C Convertible Preferred Stock”) for gross proceeds of $445.0 million. Due to an unconditional obligation to either redeem or convert the Series C Convertible Preferred Stock into a variable number of shares of common stock predominantly based on a fixed monetary amount, the preferred securities are classified as an obligation under U.S. GAAP and are presented on the consolidated balance sheet as a liability. In addition, without the approval of the holders of the Company's common stock and Series C Convertible Preferred Stock, to amend the Company's articles supplementary designating the Series C Convertible Preferred Stock (the “Series C Articles Supplementary”) and to permit the issuance of additional shares of common stock, the sum of the number of shares issued pursuant to the June 7, 2013 private placement of common stock and the conversion of Series C Convertible Preferred Stock may not exceed 19.9% of the number of shares of Company common stock outstanding immediately prior to the closing of the June 7, 2013 private placement. As a result the Company is limited, after consideration of the previously issued 29.4 million shares of common stock in the June 7, 2013 private placement, to the issuance of an additional 3.3 million shares of its common stock, with the balance of the Series C Convertible Preferred Stock to be cancelled in exchange for cash in lieu of such common stock in an amount equal to the greater of the product of such number of excess shares into which the shares of Series C Convertible Preferred Stock would have been convertible and (i) 102% of the liquidation preference, which is $15.67, as may be adjusted from time to time (the “Conversion Price”), and (ii) the Conversion Price valued at the one-day volume-weighted average trading price (“VWAP”) of the common stock on the applicable date. Therefore upon conversion, absent a shareholder vote permitting the issuance of common stock for the conversion, a portion of the shares can be converted to common stock and the remaining shares will be cancelled for cash at a premium as specified in the Series C Articles Supplementary. The preferred shares liability is recorded at fair value at June 30, 2013, which is considered to approximate the gross proceeds received. The preferred shares liability will be carried at fair value and adjusted on a quarterly basis. Contingent Valuation Rights In connection with the private placement transactions described above, on June 7, 2013, the Company issued to the common stock investors 29.4 million contingent value rights (“Common Stock CVR's”), and to the Series C Convertible Preferred Stock investors 28.4 million contingent value rights (“Preferred Stock CVR's”), which may entitle the holders of Common Stock CVR's to a cash payment of up to $1.50, equal to the difference of the $15.47 purchase price and the CVR Period VWAP, per Common Stock CVR and the holders of Preferred Stock CVR's to a cash payment of up to $2.00, equal to the difference between the Conversion Price of $15.67 and the CVR Period VWAP, per Preferred Stock CVR in the future depending on the future performance of the Company's common stock, subject to certain limits. Payments to the common and Series C Convertible Preferred contingent value rights holders will be based on a comparison of the issuance price of each class of security to the VWAP of the Company's common stock for 30 trading days beginning on thirtieth trading day after the issuance of the common stock on June 7, 2013 for the common stockholder, and for the Series C Convertible Preferred stockholders, the payment will be based on the VWAP of the Company's common stock for 30 trading days beginning on ninetieth trading day after the earliest to occur of: (i) the closing of the CapLease Merger; (ii) the trading day after (a) the date of an announcement that CapLease, Inc. has accepted a competing offer (which did not occur) or (b) the CapLease Merger is otherwise terminated; and (iii) December 31, 2013. Depending on the VWAP during the respective measurement periods described above, the amount to be paid out for the contingent value rights, if any, will not be known until the end of the measurement periods. The Company has recorded a liability for its obligations to settle the contingent value rights, at fair value. The Company has estimated the fair value of the contingent value rights at June 30, 2013, using the input of third-party valuation specialists and management's own judgment, based primarily on the volatility of the Company's historical stock prices, the effect of certain economic scenarios and the Company's stock price as of June 30, 2013. Changes in the fair value of the contingent valuation rights are recorded in the consolidated statement of operations and comprehensive loss as an unrealized gain or loss in the period incurred. Contingent Rental Income The Company owns certain properties that have associated leases that require the tenant to pay contingent rental income based on a percentage of the tenant's sales after the achievement of certain sales thresholds, which may be monthly, quarterly or annual targets. As a lessor, the Company defers the recognition of contingent rental income until the specified target that triggered the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. Non-Controlling Interests As described in Note 1— Organization, certain affiliates and non-affiliated third parties have been issued OP Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest is reflected as an addition to equity on the consolidated balance sheet. In addition, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentage. Furthermore, upon conversion of OP Units to common stock, any gain or loss attributable to the OP Unit Holders is recorded as a component of equity. Recent Accounting Pronouncements In December 2011, the Financial Accounting Standards Board (“FASB”) issued guidance regarding disclosures about offsetting assets and liabilities, which requires entities to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The guidance is effective for fiscal years and interim periods beginning on or after January 1, 2013 with retrospective application for all comparative periods presented. The adoption of this guidance, which is related to disclosure only, did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. Refer to Note 9 — Derivatives and Hedging Activities for the Company's disclosure of information about offsetting and related arrangements. In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets for impairment. The amendments will allow an entity first to assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity will no longer be required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative test unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption was permitted. The adoption of this guidance did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. In February 2013, the FASB issued guidance which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. The guidance is effective for annual and interim periods beginning after December 15, 2012 with early adoption permitted. The adoption of this guidance, which is related to disclosure only, did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. Refer to Note 9 — Derivatives and Hedging Activities for the Company's disclosure of the information about the amounts reclassified out of accumulated other comprehensive income by component. In February 2013, the FASB issued new accounting guidance clarifying the accounting and disclosure requirements for obligations resulting from joint and several liability arrangements for which the total amount under the arrangement is fixed at the reporting date. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2013. The Company does not expect the adoption of this guidance to have a material impact on the Company's consolidated financial position, results of operations or cash flows. |
Real Estate Investments (Details) (USD $)
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3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||||||||||||||||||||||||
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Jun. 30, 2013
property
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Jun. 30, 2012
property
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Jun. 30, 2013
property
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Jun. 30, 2012
property
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Dec. 31, 2012
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Jun. 30, 2013
Leases, Acquired-in-Place [Member]
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Jun. 30, 2012
Leases, Acquired-in-Place [Member]
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Jun. 30, 2013
Leases, Acquired-in-Place [Member]
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Jun. 30, 2012
Leases, Acquired-in-Place [Member]
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Jun. 30, 2012
MICHIGAN
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Jun. 30, 2012
NEW YORK
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Jun. 30, 2012
Dollar General [Member]
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Jun. 30, 2012
Citizens Bank [Member]
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Jun. 30, 2012
FedEx [Member]
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Jun. 30, 2012
Walgreens [Member]
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Jun. 30, 2013
Geographic Concentration Risk [Member]
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Jun. 30, 2013
Customer Concentration Risk [Member]
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Jun. 30, 2013
GE Capital Portfolio [Member]
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Jun. 30, 2013
GE Capital Portfolio [Member]
property
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Jun. 27, 2013
GE Capital Portfolio [Member]
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Jun. 30, 2013
Direct Financing Lease [Member]
GE Capital Portfolio [Member]
property
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Entity Wide Revenue, Major State, Percentage | 10.70% | 10.50% | |||||||||||||||||||||||||||||||||||||
Business Acquisition, Purchase Price Allocation, Land Acquired in Period | $ 206,282,000 | [1] | $ 57,161,000 | $ 256,463,000 | [1] | $ 84,268,000 | $ 193,100,000 | ||||||||||||||||||||||||||||||||
Business Acquisition, Purchase Price Allocation, Buildings, Fixtures and Improvements Acquired in Period | 521,765,000 | [1] | 219,869,000 | 709,374,000 | [1] | 372,933,000 | 450,500,000 | ||||||||||||||||||||||||||||||||
Business Acquisition, Purchase Price Allocation, Tangible Assets Acquired in Period | 728,047,000 | [1] | 277,030,000 | 965,837,000 | [1] | 457,201,000 | |||||||||||||||||||||||||||||||||
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets Acquired in Period | 76,986,000 | [1] | 36,927,000 | 107,213,000 | [1] | 61,175,000 | 62,900,000 | ||||||||||||||||||||||||||||||||
Business Acquisition, Purchase Price Allocation, Assets Acquired in Period, Net | 805,033,000 | [1] | 313,957,000 | 1,073,050,000 | [1] | 518,376,000 | |||||||||||||||||||||||||||||||||
OP units issued to acquire real estate investment | 0 | [1] | (6,352,000) | 0 | [1] | (6,352,000) | |||||||||||||||||||||||||||||||||
Payments to Acquire Real Estate | 805,033,000 | [1],[2] | 307,605,000 | [1],[2] | 1,073,050,000 | [1],[2] | 512,024,000 | [1],[2] | |||||||||||||||||||||||||||||||
Number of Properties Acquired | 433 | [1] | 116 | 481 | [1] | 170 | 447 | 47 | |||||||||||||||||||||||||||||||
Investment in direct financing leases, net | 67,518,000 | 67,518,000 | 0 | ||||||||||||||||||||||||||||||||||||
Real Estate Investment, Aggregate Purchase Price | 773,971,451.000 | ||||||||||||||||||||||||||||||||||||||
Real Estate Investment, Purchase Price Allocation, Direct Financing Leases | 67,500,000 | ||||||||||||||||||||||||||||||||||||||
Costs of Real Estate Services and Land Sales | 15,144,000 | 7,814,000 | 20,726,000 | 12,599,000 | |||||||||||||||||||||||||||||||||||
Merger and other transaction related | 4,680,000 | 20,000 | 142,449,000 | 20,000 | |||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Revenue | 56,941,000 | 27,019,000 | 113,882,000 | 59,136,000 | |||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Net Income (Loss) | (30,458,000) | (2,393,000) | (18,929,000) | (2,782,000) | |||||||||||||||||||||||||||||||||||
Future Minimum Payments, July 1, 2013 - December 31, 2013 | 106,624,000 | 106,624,000 | |||||||||||||||||||||||||||||||||||||
Future MinimumDirect Financing Lease Payments, July 1, 2013 - December 31, 2013 | 2,508,000 | [3] | 2,508,000 | [3] | |||||||||||||||||||||||||||||||||||
Future Minimum Payments, 2014 | 210,551,000 | 210,551,000 | |||||||||||||||||||||||||||||||||||||
Future Minimum Direct Financing Lease Payments, 2014 | 5,105,000 | [3] | 5,105,000 | [3] | |||||||||||||||||||||||||||||||||||
Future Minimum Payments, 2015 | 207,318,000 | 207,318,000 | |||||||||||||||||||||||||||||||||||||
Future Minimum Direct Financing Lease Payments, 2015 | 5,019,000 | [3] | 5,019,000 | [3] | |||||||||||||||||||||||||||||||||||
Future Minimum Payments, 2016 | 202,300,000 | 202,300,000 | |||||||||||||||||||||||||||||||||||||
Future Minimum Direct Financing Lease Payments, 2016 | 4,971,000 | [3] | 4,971,000 | [3] | |||||||||||||||||||||||||||||||||||
Future Minimum Payments, 2017 | 192,725,000 | 192,725,000 | |||||||||||||||||||||||||||||||||||||
Future Minimum Direct Financing Lease Payments, 2017 | 4,603,000 | [3] | 4,603,000 | [3] | |||||||||||||||||||||||||||||||||||
Future Minimum Payments, Thereafter | 1,262,001,000 | 1,262,001,000 | |||||||||||||||||||||||||||||||||||||
Future Minimum Direct Financing Lease Payments, Thereafter | 15,241,000 | [3] | 15,241,000 | [3] | |||||||||||||||||||||||||||||||||||
Future Minimum Payments, Total | 2,181,519,000 | 2,181,519,000 | |||||||||||||||||||||||||||||||||||||
Future Minimum Direct Financing Lease Payments, Total | 37,447,000 | [3] | 37,447,000 | [3] | |||||||||||||||||||||||||||||||||||
Capital Leases, Net Investment in Direct Financing Leases, Unguaranteed Residual Values of Leased Property | 48,751,000 | 48,751,000 | |||||||||||||||||||||||||||||||||||||
Capital Leases, Net Investment in Direct Financing Leases, Deferred Income | $ (18,680,000) | $ (18,680,000) | |||||||||||||||||||||||||||||||||||||
Concentration Risk, Percentage | 14.40% | 14.80% | 19.90% | 0.00% | 10.00% | [4],[5] | 10.00% | [4] | |||||||||||||||||||||||||||||||
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Other Investments (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Investments, All Other Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities Reconciliation | The following table details the unrealized gains and losses on investment securities as of June 30, 2013 and December 31, 2012 (amounts in thousands):
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Common Stock Common Stock (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Common Stock Offerings | The following are the Company's equity offerings of common stock during the six months ended June 30, 2013 (dollar amounts in millions):
_______________________________________________ (1) Excludes 140.7 million shares of common stock that were issued to the stockholders of ARCT III's common stock in conjunction with the ARCT III Merger. |
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Schedule of Dividends Authorized and Paid |
_______________________________________________ * The dividend increase is contingent upon, and effective with, the earlier of the close of the ARCT IV Merger or the close of the CapLease Merger. The annualized dividend rate at June 30, 2013 was $0.910 per share. |
Subsequent Events (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Subsequent Events | The following table presents certain information about the properties that the Company acquired from July 1, 2013 to August 2, 2013 (dollar amounts in thousands):
____________________________ (1)Contract purchase price, excluding acquisition and transaction related costs.
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Commitments and Contingencies Future Obligations (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Unrecorded Unconditional Purchase Obligation [Line Items] | |
July 1, 2013 - December 31, 2013 | $ 174 |
2014 | 348 |
2015 | 349 |
2016 | 349 |
2017 | 353 |
Thereafter | 2,477 |
Total | $ 4,050 |