8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 10, 2019

American Finance Trust, Inc.

(Exact Name of Registrant as Specified in Charter)

Maryland	001-38597	90-0929989
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

405 Park Avenue, 3^rd Floor
New York, New York 10022

(Address, including zip code, of Principal Executive Offices)

Registrant’s telephone number, including area code: (212) 415-6500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 7.01. Regulation FD Disclosure.

Press Release

On April 10, 2019, American Finance Trust, Inc. (the “Company”) issued a press release, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Such press release shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in Item 7.01, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.

Item 8.01. Other Events.

Recent Acquisition and Disposition Activity

The Company previously reported that during the period from January 1, 2019 to March 7, 2019, the date on which it filed its Annual Report on Form 10-K (the “Form 10-K”) with the Securities and Exchange Commission, it had purchased 58 properties with an aggregate contract purchase price of approximately $96.2 million, excluding acquisition related costs, and had entered into definitive purchase agreements to acquire an additional eight properties for an aggregate contract purchase price of approximately $23.1 million.

During the quarter ended March 31, 2019, the Company purchased 64 properties with an aggregate contract purchase price of approximately $113.3 million, excluding acquisition related costs. As of March 31, 2019, the Company has entered into definitive purchase agreements to acquire an additional 14 properties for an aggregate contract purchase price of approximately $39.3 million. The purchase agreements are subject to conditions and there can be no assurance that the Company will complete any of these acquisitions on their contemplated terms or at all.

During the quarter ended March 31, 2019, the Company sold eight properties (seven leased to SunTrust Bank, Inc. (“SunTrust”)) with an aggregate contract sale price of approximately $15.1 million, excluding disposition related costs. In connection with these sales, the Company repaid approximately $11.6 million of mortgage debt. As of March 31, 2019, the Company has entered into definitive purchase agreements to dispose of an additional nine properties (seven leased to SunTrust) for an aggregate contract sale price of approximately $61.6 million. The purchase agreements are subject to conditions and there can be no assurance that the Company will complete any of these dispositions on their contemplated terms or at all.

During the period from January 1, 2019 to March 7, 2019, the date on which the Company filed its Form 10-K with the Securities and Exchange Commission, the Company sold five properties with an aggregate contract sale price of approximately $10.4 million, excluding disposition related costs, of which approximately $9.7 million was used to repay related debt, and had entered into definitive purchase agreements to dispose of an additional 11 properties (nine leased to SunTrust), for an aggregate contract sale price of approximately $66.4 million, instead of the $25.9 million previously reported in the section entitled “Liquidity and Capital Resources—Acquisitions and Dispositions” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Form 10-K.

Forward-Looking Statements

The statements in this Current Report on Form 8-K include statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “strives,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements, including as a result of those factors set forth in the Risk Factors section of the Form 10-K for the year ended December 31, 2018 filed on March 7, 2019 and all other filings with the Securities and Exchange Commission after that date, as such risks, uncertainties and other important factors may be updated from time to time in Company’s subsequent reports. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required by law.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No	Description
99.1	Press Release dated April 10, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 10, 2019	By:	/s/ Edward M. Weil, Jr.
	Name:	Edward M. Weil, Jr.
	Title:	Chief Executive Officer and President

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

American Finance Trust Provides Update on Acquisitions and Dispositions Closed during the First Quarter

NEW YORK, April 10, 2019 /PRNewswire/– American Finance Trust, Inc. (Nasdaq: AFIN) (“AFIN” or the “Company”), a real estate investment trust focused on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution related commercial real estate properties in the U.S., today said it closed on the purchase of 64 properties, totaling approximately $113.3 million⁴, leased to four tenants in the first quarter, representing approximately 280,000 square feet, net leased at a weighted-average cash capitalization rate of 7.2%¹, and a weighted-average capitalization rate of 8.4%² with a weighted-average 17.3³ year remaining lease term.

AFIN sold seven SunTrust properties and one Academy Sports property during the first quarter for total gross proceeds of $15.1 million⁵, of which $11.6 million was used to repay related debt. Five properties had leases in place and were sold for total gross proceeds of approximately $13.4 million⁵. The remaining three properties were sold for total gross proceeds of $1.7 million⁵.

AFIN’s Chief Executive Officer Michael Weil commented, “We are pleased to have demonstrated another quarter of acquisitions which were all in line with our stated strategy of investing in primarily service retail properties leased long-term to e-commerce resistant tenants. We also continued our opportunistic disposition strategy and our SunTrust redeployment initiative and sold four more occupied branches at what we believe are attractive capitalization rates. Having already closed on $113.3 million⁴ of the $131.0 million in pipeline acquisitions identified earlier this year we are excited by the additional buying opportunities we are seeing in the marketplace today.”

Acquisitions Closed During the First Quarter

with a weighted average GAAP cap rate of 8.3%² 

Tenant	Location	Property Type	Number of Properties	Square Feet (000s)	Purchase Price4	Lease Term Remaining3
Fresenius	Multiple Locations	Service Retail	6	44	$12.7	7.4
Pizza Hut	Multiple Locations	Service Retail	31	90	$35.2	20.0
Mountain Express	Multiple Locations	Service Retail	8	28	$15.5	19.9
Mountain Express	Multiple Locations	Service Retail	13	63	$32.9	20.0
Fresenius	Alexandria, LA	Service Retail	1	9	$3.4	12.7
Mountain Express	Forest Park, GA	Service Retail	1	1	$2.6	20.0
Tractor Supply	New Cordell, OK	Traditional Retail	1	19	$3.0	12.5
Mountain Express	Multiple Locations	Service Retail	3	25	$8.0	19.9
Totals/Averages			64	279	$113.3	17.3

¹ Cash capitalization rate is calculated by dividing the annualized cash rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) and the purchase price of the property. For acquisitions, cash capitalization rate is a rate of return on a real estate investment property based on the expected, annualized cash rental income during the first year of ownership that the property will generate under its existing lease. Weighted-average cash capitalization rate is based upon square feet.

² Weighted average capitalization rate is a rate of return on a real estate investment property based on the expected, annualized straight-lined rental income that the property will generate under its existing lease. Weighted average capitalization rate is calculated by dividing the annualized straight-lined rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) and the purchase price of the property. The weighted-average capitalization rate is based upon square feet.

³ The weighted-average remaining lease term is based on rentable square feet as of the acquisition date.

⁴ Represents the contract purchase price and excludes capitalized acquisitions costs per GAAP.

⁵ Represents the contract sale price and excludes closing related costs.

About American Finance Trust

American Finance Trust, Inc. (Nasdaq: AFIN) is a publicly traded real estate investment trust listed on the Nasdaq focused on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution related commercial real estate properties in the U.S. Additional information about AFIN can be found on its website at www.americanfinancetrust.com.

Important Notice

The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. Forward-looking statements may include, but are not limited to, statements regarding stockholder liquidity and investment value and returns. The words “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “may,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those contemplated by such forward-looking statements, including those set forth in the Risk Factors section of AFIN’s Annual Report on Form 10-K for the year ended December 31, 2018 filed on March 7, 2019 and all other filings with the SEC after that date, as such risks, uncertainties and other important factors may be updated from time to time in AFIN’s subsequent reports. Further, forward looking statements speak only as of the date they are made, and AFIN undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.

Contacts:

Investor Relations

investorrelations@americanfinancetrust.com

(866) 902-0063