Toggle SGML Header (+)


Section 1: 10-Q (10-Q)

Document
Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
____________________________________________________________________________
 
FORM 10-Q 
____________________________________________________________________________
 
x    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Quarterly Period Ended March 31, 2019
 
OR
 
¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from              to              .
 
Commission file number 1-34907
 
____________________________________________________________________________
 
STAG INDUSTRIAL, INC.
(Exact name of registrant as specified in its charter)
 
____________________________________________________________________________

Maryland
27-3099608
(State or other jurisdiction
of incorporation or organization)
(IRS Employer
Identification No.)
One Federal Street, 23rd Floor
Boston, Massachusetts
02110
(Address of principal executive offices)
(Zip Code)
 
(617) 574-4777
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No ¨
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
Accelerated filer ¨
Non-accelerated filer ¨

Smaller reporting company ¨
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨  No x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common and preferred stock as of the latest practicable date.
Class
 
Outstanding at April 29, 2019
Common Stock ($0.01 par value)
 
125,652,464

6.875% Series C Cumulative Redeemable Preferred Stock ($0.01 par value)
 
3,000,000

 


Table of Contents

STAG INDUSTRIAL, INC.
Table of Contents 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


2

Table of Contents

Part I. Financial Information
Item 1.  Financial Statements

STAG Industrial, Inc.
Consolidated Balance Sheets
(unaudited, in thousands, except share data)
 
March 31, 2019

December 31, 2018
Assets
 
 
 
Rental Property:
 
 
 
Land
$
377,530


$
364,023

Buildings and improvements, net of accumulated depreciation of $321,010 and $316,930, respectively
2,392,547


2,285,663

Deferred leasing intangibles, net of accumulated amortization of $224,740 and $246,502, respectively
348,439


342,015

Total rental property, net
3,118,516


2,991,701

Cash and cash equivalents
7,857


7,968

Restricted cash
4,451


14,574

Tenant accounts receivable
44,928


42,236

Prepaid expenses and other assets
42,503


36,902

Interest rate swaps
5,214


9,151

Operating lease right-of-use assets
16,005

 

Total assets
$
3,239,474


$
3,102,532

Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Unsecured credit facility
$
115,500


$
100,500

Unsecured term loans, net
596,642


596,360

Unsecured notes, net
572,587


572,488

Mortgage notes, net
56,109


56,560

Accounts payable, accrued expenses and other liabilities
41,381


45,507

Interest rate swaps
7,060


4,011

Tenant prepaid rent and security deposits
21,254


22,153

Dividends and distributions payable
15,846


13,754

Deferred leasing intangibles, net of accumulated amortization of $10,394 and $12,764, respectively
20,468


21,567

Operating lease liabilities
17,786

 

Total liabilities
1,464,633


1,432,900

Commitments and contingencies (Note 11)
 
 
 
Equity:
 
 
 
Preferred stock, par value $0.01 per share, 15,000,000 shares authorized,
 
 
 
Series C, 3,000,000 shares (liquidation preference of $25.00 per share) issued and outstanding at March 31, 2019 and December 31, 2018
75,000


75,000

Common stock, par value $0.01 per share, 150,000,000 shares authorized, 118,174,102 and 112,165,786 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
1,182


1,122

Additional paid-in capital
2,266,695


2,118,179

Cumulative dividends in excess of earnings
(621,225
)

(584,979
)
Accumulated other comprehensive income (loss)
(2,253
)

4,481

Total stockholders’ equity
1,719,399


1,613,803

Noncontrolling interest
55,442


55,829

Total equity
1,774,841


1,669,632

Total liabilities and equity
$
3,239,474


$
3,102,532

The accompanying notes are an integral part of these consolidated financial statements.

3

Table of Contents

STAG Industrial, Inc.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
 
Three months ended March 31,
 
2019

2018
Revenue
    


    

Rental income
$
95,615


$
83,127

Other income
87


156

Total revenue
95,702


83,283

Expenses
 


 

Property
19,511


17,499

General and administrative
9,212


8,748

Depreciation and amortization
42,303


39,965

Loss on impairments
5,344


2,934

Other expenses
399


291

Total expenses
76,769


69,437

Other income (expense)
 


 

Interest and other income
16

 
6

Interest expense
(12,834
)

(11,392
)
Gain on the sales of rental property, net
1,274


22,689

Total other income (expense)
(11,544
)

11,303

Net income
$
7,389


$
25,149

Less: income attributable to noncontrolling interest after preferred stock dividends
214


954

Net income attributable to STAG Industrial, Inc.
$
7,175


$
24,195

Less: preferred stock dividends
1,289


2,448

Less: amount allocated to participating securities
79


71

Net income attributable to common stockholders
$
5,807


$
21,676

Weighted average common shares outstanding — basic
114,721


97,021

Weighted average common shares outstanding — diluted
114,993


97,323

Net income per share — basic and diluted
 


 

Net income per share attributable to common stockholders — basic
$
0.05

 
$
0.22

Net income per share attributable to common stockholders — diluted
$
0.05

 
$
0.22

The accompanying notes are an integral part of these consolidated financial statements.

4

Table of Contents

STAG Industrial, Inc.
Consolidated Statements of Comprehensive Income
(unaudited, in thousands)
 
Three months ended March 31,
 
2019
 
2018
Net income
$
7,389

 
$
25,149

Other comprehensive income (loss):
 
 
 
Income (loss) on interest rate swaps
(6,978
)
 
7,723

Other comprehensive income (loss)
(6,978
)
 
7,723

Comprehensive income
411

 
32,872

Income attributable to noncontrolling interest after preferred stock dividends
(214
)
 
(954
)
Other comprehensive (income) loss attributable to noncontrolling interest
244

 
(325
)
Comprehensive income attributable to STAG Industrial, Inc.
$
441

 
$
31,593

The accompanying notes are an integral part of these consolidated financial statements.

5

Table of Contents

STAG Industrial, Inc.
Consolidated Statements of Equity
(unaudited, in thousands, except share data)
 
Preferred Stock
 
Common Stock
 
Additional Paid-in Capital
 
Cumulative Dividends in Excess of Earnings
 
Accumulated Other Comprehensive Income (Loss)
 
Total Stockholders’ Equity
 
Noncontrolling Interest - Unit Holders in Operating Partnership
 
Total Equity
 
 
Shares
 
Amount
 
 
 
 
 
 
Three months ended March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2018
$
75,000

 
112,165,786

 
$
1,122

 
$
2,118,179

 
$
(584,979
)
 
$
4,481

 
$
1,613,803

 
$
55,829

 
$
1,669,632

Leases cumulative effect adjustment (Note 2)

 

 

 

 
(214
)
 

 
(214
)
 

 
(214
)
Proceeds from sales of common stock

 
5,441,409

 
55

 
150,134

 

 

 
150,189

 

 
150,189

Offering costs

 

 

 
(1,660
)
 

 

 
(1,660
)
 

 
(1,660
)
Dividends and distributions, net

 

 

 

 
(42,834
)
 

 
(42,834
)
 
(1,546
)
 
(44,380
)
Non-cash compensation activity, net

 
127,836

 
1

 
(1,133
)
 
(373
)
 

 
(1,505
)
 
2,368

 
863

Redemption of common units to common stock

 
439,071

 
4

 
6,024

 

 

 
6,028

 
(6,028
)
 

Rebalancing of noncontrolling interest

 

 

 
(4,849
)
 

 

 
(4,849
)
 
4,849

 

Other comprehensive loss

 

 

 

 

 
(6,734
)
 
(6,734
)
 
(244
)
 
(6,978
)
Net income

 

 

 

 
7,175

 

 
7,175

 
214

 
7,389

Balance, March 31, 2019
$
75,000

 
118,174,102

 
$
1,182

 
$
2,266,695

 
$
(621,225
)
 
$
(2,253
)
 
$
1,719,399

 
$
55,442

 
$
1,774,841

Three months ended March 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2017
$
145,000

 
97,012,543

 
$
970

 
$
1,725,825

 
$
(516,691
)
 
$
3,936

 
$
1,359,040

 
$
51,267

 
$
1,410,307

Cash flow hedging instruments cumulative effect adjustment

 

 

 

 
(258
)
 
247

 
(11
)
 
11

 

Offering costs

 

 

 
(107
)
 

 

 
(107
)
 

 
(107
)
Dividends and distributions, net

 

 

 

 
(36,966
)
 

 
(36,966
)
 
(1,813
)
 
(38,779
)
Non-cash compensation activity, net

 
71,373

 
1

 
(855
)
 
(537
)
 

 
(1,391
)
 
2,097

 
706

Redemption of common units to common stock

 
145,672

 
1

 
1,823

 

 

 
1,824

 
(1,824
)
 

Rebalancing of noncontrolling interest

 

 

 
(2,059
)
 

 

 
(2,059
)
 
2,059

 

Other comprehensive income

 

 

 

 

 
7,398

 
7,398

 
325

 
7,723

Net income

 

 

 

 
24,195

 

 
24,195

 
954

 
25,149

Balance, March 31, 2018
$
145,000

 
97,229,588

 
$
972

 
$
1,724,627

 
$
(530,257
)
 
$
11,581

 
$
1,351,923

 
$
53,076

 
$
1,404,999

The accompanying notes are an integral part of these consolidated financial statements.

6

Table of Contents

STAG Industrial, Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
 
Three months ended March 31,
 
2019
 
2018
Cash flows from operating activities:
    
 
    
Net income
$
7,389

 
$
25,149

Adjustment to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
42,303

 
39,965

Loss on impairments
5,344

 
2,934

Non-cash portion of interest expense
618

 
534

Amortization of above and below market leases, net
961

 
1,207

Straight-line rent adjustments, net
(2,256
)
 
(2,781
)
Dividends on forfeited equity compensation
6

 
7

Gain on the sales of rental property, net
(1,274
)
 
(22,689
)
Non-cash compensation expense
2,278

 
2,220

Change in assets and liabilities:
 
 
 
Tenant accounts receivable
(859
)
 
848

Prepaid expenses and other assets
(2,686
)
 
(5,531
)
Accounts payable, accrued expenses and other liabilities
(3,775
)
 
(2,720
)
Tenant prepaid rent and security deposits
(899
)
 
2,831

Total adjustments
39,761

 
16,825

Net cash provided by operating activities
47,150

 
41,974

Cash flows from investing activities:
 
 
 
Acquisitions of land and buildings and improvements
(159,969
)
 
(67,077
)
Additions of land and building and improvements
(5,058
)
 
(6,317
)
Acquisitions of other assets
(1,049
)
 

Proceeds from sales of rental property, net
16,602

 
49,631

Acquisition deposits, net
(2,997
)
 
(605
)
Acquisitions of deferred leasing intangibles
(24,345
)
 
(11,744
)
Net cash used in investing activities
(176,816
)
 
(36,112
)
Cash flows from financing activities:
 
 
 
Proceeds from unsecured credit facility
208,000

 
110,000

Repayment of unsecured credit facility
(193,000
)
 
(163,000
)
Proceeds from unsecured term loans

 
75,000

Repayment of mortgage notes
(481
)
 
(462
)
Payment of loan fees and costs

 
(3
)
Proceeds from sales of common stock
150,189

 

Offering costs
(1,544
)
 
(88
)
Dividends and distributions
(42,288
)
 
(36,200
)
Repurchase and retirement of share-based compensation
(1,444
)
 
(1,524
)
Net cash provided by (used in) financing activities
119,432

 
(16,277
)
Decrease in cash and cash equivalents and restricted cash
(10,234
)
 
(10,415
)
Cash and cash equivalents and restricted cash—beginning of period
22,542

 
28,129

Cash and cash equivalents and restricted cash—end of period
$
12,308

 
$
17,714

Supplemental disclosure:
 
 
 
Cash paid for interest, net of capitalized interest
$
10,449

 
$
11,057

Supplemental schedule of non-cash investing and financing activities
 
 
 
Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities
$
(1,094
)
 
$
1,908

Additions to building and other capital improvements from non-cash compensation
$
(14
)
 
$
(4
)
Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities
$
(116
)
 
$
(90
)
Leases cumulative effect adjustment (Note 2)
$
(214
)
 
$

Dividends and distributions accrued
$
15,846

 
$
14,460

The accompanying notes are an integral part of these consolidated financial statements.

7

Table of Contents

STAG Industrial, Inc.
Notes to Consolidated Financial Statements
(unaudited)
1. Organization and Description of Business

STAG Industrial, Inc. (the “Company”) is an industrial real estate operating company focused on the acquisition and operation of single-tenant, industrial properties throughout the United States. The Company was formed as a Maryland corporation and has elected to be treated and intends to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. The Company is structured as an umbrella partnership REIT, commonly called an UPREIT, and owns substantially all of its assets and conducts substantially all of its business through its operating partnership, STAG Industrial Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”). As of March 31, 2019 and December 31, 2018, the Company owned a 96.7% and 96.5%, respectively, common equity interest in the Operating Partnership. The Company, through its wholly owned subsidiary, is the sole general partner of the Operating Partnership. As used herein, the “Company” refers to STAG Industrial, Inc. and its consolidated subsidiaries and partnerships, including the Operating Partnership, except where context otherwise requires.

As of March 31, 2019, the Company owned 395 buildings in 38 states with approximately 78.2 million rentable square feet, consisting of 328 warehouse/distribution buildings, 58 light manufacturing buildings, and nine flex/office buildings. The Company’s buildings were approximately 95.2% leased to 359 tenants as of March 31, 2019.

2. Summary of Significant Accounting Policies

Interim Financial Information
 
The accompanying interim financial statements have been presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements include all adjustments, consisting of normal recurring items, necessary for their fair statement in conformity with GAAP. Interim results are not necessarily indicative of results for a full year. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Basis of Presentation

The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their subsidiaries. Interests in the Operating Partnership not owned by the Company are referred to as “Noncontrolling Common Units.” These Noncontrolling Common Units are held by other limited partners in the form of common units (“Other Common Units”) and long term incentive plan units (“LTIP units”) issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”). All significant intercompany balances and transactions have been eliminated in the consolidation of entities. The financial statements of the Company are presented on a consolidated basis for all periods presented.

New Accounting Standards and Reclassifications

New Accounting Standards Adopted

In July 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-11 which amends Topic 842, Leases, and provides lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under the new revenue guidance and both of the following are met: i) the timing and pattern of transfer of the non-lease component(s) and associated lease component are the same; and ii) the lease component, if accounted for separately, would be classified as an operating lease. Under this new expedient, if the non-lease components associated with the lease component are the predominant component of the combined component, a company should account for the combined component in accordance with Topic 606, Revenue from Contracts with Customers. Otherwise, the company should account for the combined component as an operating lease in accordance with Topic 842. In December 2018, the FASB issued ASU 2018-20 which amends Topic 842, Leases, and allows lessors to continue to exclude from revenue the lessor costs that are paid by lessees directly to third parties. The Company adopted Topic 842 on January 1, 2019, using the practical expedient, and i

8

Table of Contents

t did not have a material impact on the Company’s consolidated financial statements. The Company determined that for all leases where the Company is the lessor, that the timing and pattern of transfer of the non-lease components and associated lease components are the same, and that the lease components, if accounted for separately, would be classified as an operating lease. Accordingly, the Company has made an accounting policy election to recognize the combined component in accordance with Topic 842 as rental income on the accompanying Consolidated Statements of Operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), and various subsequent ASU’s, which set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). Topic 842 superseded the previous leases standard, Topic 840, Leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less are accounted for similar to the previous guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to the previous guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 impacted the Company’s consolidated financial statements as the Company has ground leases and its corporate office lease for which it is the lessee, which resulted in the recording of a right-of-use asset and the related lease liability.

The Company adopted ASU 2016-02 on January 1, 2019, using the modified retrospective transition method. The adoption of this standard resulted in a cumulative effect adjustment of approximately $0.2 million recorded as an increase to cumulative dividends in excess of earnings as of January 1, 2019 in the accompanying Consolidated Statements of Equity. The cumulative effect adjustment related to initial direct costs of leases where the Company is the lessor and that, as of January 1, 2019, had not begun to amortize and are no longer allowed to be capitalized under the new standard. On January 1, 2019, the Company recognized operating lease right-of-use assets of approximately $16.3 million and related operating lease liabilities of approximately $18.0 million on the accompanying Consolidated Balance Sheets, related to the leases where the Company is the lessee. The Company adopted the new standard using the practical expedient package which allowed the Company to (i) not reassess whether any expired or existing contracts are or contain leases; (ii) not reassess the lease classification for any expired or existing leases; and (iii) not reassess initial direct costs for any existing leases. This practical expedient allows the Company to continue to account for its ground leases as operating leases. Prospectively, any new or modified ground leases may be classified as a financing lease. The adoption of this standard by the Company has been applied prospectively, and the comparative periods have not been restated.

For leases in which the Company is the lessee, the Company recognizes a right-of-use asset and corresponding lease liability on the accompanying Consolidated Balance Sheets equal to the present value of the fixed lease payments. In determining operating right-of-use asset and lease liability for the Company’s existing operating leases upon the adoption of the new lease guidance, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. The Company utilized a market-based approach to estimate the incremental borrowing rate for each individual lease. Since the terms under the ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the estimate of this rate required significant judgment, and considered factors such as yields on outstanding public debt and other market based pricing on longer duration financing instruments.

The new leases standard requires the Company to evaluate cash basis versus accrual basis of rental income recognition based on the collectability of future lease payments.

Reclassifications

Prior period amounts have been reclassified to conform to the current year presentation due to the adoption of ASU 2016-02. Amounts previously classified as rental income and tenant recoveries in the prior period are now classified as rental income on the accompanying Consolidated Statements of Operations, as the Company has made an accounting policy election to combine these amounts that are accounted for under the new leases standard.

Restricted Cash

The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on the accompanying Consolidated Balance Sheets to amounts reported on the accompanying Consolidated Statements of Cash Flows.
Reconciliation of cash and cash equivalents and restricted cash (in thousands)
 
March 31, 2019
 
December 31, 2018
Cash and cash equivalents
 
$
7,857

 
$
7,968

Restricted cash
 
4,451

 
14,574

Total cash and cash equivalents and restricted cash
 
$
12,308

 
$
22,542


9

Table of Contents


Taxes

Federal Income Taxes

The Company’s taxable REIT subsidiaries recognized a net loss of approximately $12,000 and $36,000 for the three months ended March 31, 2019 and 2018, respectively, which has been included on the accompanying Consolidated Statements of Operations.

State and Local Income, Excise, and Franchise Tax

State and local income, excise, and franchise taxes in the amount of $0.2 million and $0.2 million have been recorded in other expenses on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018, respectively.

Uncertain Tax Positions

As of March 31, 2019 and December 31, 2018, there were no liabilities for uncertain tax positions.

Concentrations of Credit Risk

Management believes the current credit risk of the Company’s portfolio is reasonably well diversified and does not contain any unusual concentration of credit risk.

3. Rental Property

The following table summarizes the components of rental property as of March 31, 2019 and December 31, 2018.
Rental Property (in thousands)
 
March 31, 2019
 
December 31, 2018
Land
 
$
377,530

 
$
364,023

Buildings, net of accumulated depreciation of $211,755 and $199,497, respectively
 
2,180,636

 
2,082,781

Tenant improvements, net of accumulated depreciation of $21,026 and $36,450, respectively
 
31,108

 
30,704

Building and land improvements, net of accumulated depreciation of $88,229 and $80,983, respectively
 
173,715

 
168,229

Construction in progress
 
7,088

 
3,949

Deferred leasing intangibles, net of accumulated amortization of $224,740 and $246,502, respectively
 
348,439

 
342,015

Total rental property, net
 
$
3,118,516

 
$
2,991,701


Acquisitions

The following table summarizes the acquisitions of the Company during the three months ended March 31, 2019.
Market (1)
 
Date Acquired
 
Square Feet
 
Buildings
 
Purchase Price
(in thousands)
Cincinnati/Dayton, OH
 
January 24, 2019
 
176,000

 
1

 
$
9,965

Pittsburgh, PA
 
February 21, 2019
 
455,000

 
1

 
28,676

Boston, MA
 
February 21, 2019
 
349,870

 
1

 
26,483

Minneapolis/St Paul, MN
 
February 28, 2019
 
248,816

 
1

 
21,955

Greenville/Spartanburg, SC
 
March 7, 2019
 
331,845

 
1

 
24,536

Philadelphia, PA
 
March 7, 2019
 
148,300

 
1

 
10,546

Omaha/Council Bluffs, NE-IA
 
March 11, 2019
 
237,632

 
1

 
20,005

Houston, TX
 
March 28, 2019
 
132,000

 
1

 
17,307

Baltimore, MD
 
March 28, 2019
 
167,410

 
1

 
13,648

Houston, TX
 
March 28, 2019
 
116,750

 
1

 
12,242

Three months ended March 31, 2019
 
 
 
2,363,623

 
10

 
$
185,363

(1) As defined by CoStar Realty Information Inc (“CoStar”). If the building is located outside of a CoStar defined market, the city and state is reflected.


10

Table of Contents

The following table summarizes the allocation of the consideration paid at the date of acquisition during the three months ended March 31, 2019 for the acquired assets and liabilities in connection with the acquisitions identified in the table above.
Acquired Assets and Liabilities
 
Purchase Price (in thousands)
 
Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land
 
$
18,152

 
N/A
Buildings
 
127,201

 
N/A
Tenant improvements
 
1,349

 
N/A
Building and land improvements
 
11,235

 
N/A
Construction in progress
 
2,032

 
N/A
Other assets
 
1,049

 
N/A
Deferred leasing intangibles - In-place leases
 
16,743

 
7.9
Deferred leasing intangibles - Tenant relationships
 
8,404

 
11.3
Deferred leasing intangibles - Above market leases
 
327

 
4.3
Deferred leasing intangibles - Below market leases
 
(1,129
)
 
8.5
Total purchase price
 
$
185,363

 
 

The table below sets forth the results of operations for the three months ended March 31, 2019 for the buildings acquired during the three months ended March 31, 2019 included in the Company’s Consolidated Statements of Operations from the date of acquisition.
Results of Operations (in thousands)
 
Three months ended March 31, 2019
Total revenue
 
$
1,194

Net loss
 
$
145


Dispositions

During the three months ended March 31, 2019, the Company sold five buildings comprised of approximately 1.0 million square feet with a net book value of approximately $15.3 million to third parties. These buildings contributed approximately $0.1 million and $1.1 million to revenue for the three months ended March 31, 2019 and 2018, respectively. These buildings contributed approximately $(0.2) million and $0.5 million to net income (loss) (exclusive of gain on the sales of rental property, net) for the three months ended March 31, 2019 and 2018, respectively. Net proceeds from the sales of rental property were approximately $16.6 million and the Company recognized the full gain on the sales of rental property, net, of approximately $1.3 million for the three months ended March 31, 2019.

Loss on Impairments

The following table summarizes the Company's loss on impairments for assets held and used during the three months ended March 31, 2019.
Market(1)
 
Buildings
 
Event or Change in Circumstance Leading to Impairment Evaluation(2)
 
Valuation technique utilized to estimate fair value
 
Fair Value(3)
 
Loss on Impairments
(in thousands)
Rapid City, SD
 
1
 
Change in estimated hold period
 
Discounted cash flows
(4)
 
 
 
Three months ended March 31, 2019
 
 
 
$
4,373

 
$
5,344

(1)
As defined by CoStar. If the building is located outside of a CoStar defined market, the city and state is reflected.
(2)
The Company tested the asset group for impairment utilizing a probability weighted recovery analysis of certain scenarios, and it was determined that the carrying value of the property and intangibles were not recoverable from the estimated future undiscounted cash flows.
(3)
The estimated fair value of the property is based on Level 3 inputs and is a non-recurring fair value measurement. Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
(4)
Level 3 inputs used to determine fair value for the property impaired for the three months ended March 31, 2019: discount rate of 12.0% and exit capitalization rate of 12.0%.


11

Table of Contents

Deferred Leasing Intangibles

The following table sets forth the deferred leasing intangibles on the accompanying Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018.
 
 
March 31, 2019
 
December 31, 2018
Deferred Leasing Intangibles (in thousands)
 
Gross
 
Accumulated Amortization
 
Net
 
Gross
 
Accumulated Amortization
 
Net
Above market leases
 
$
70,961

 
$
(30,409
)
 
$
40,552

 
$
73,122

 
$
(31,059
)
 
$
42,063

Other intangible lease assets
 
502,218

 
(194,331
)
 
307,887

 
515,395

 
(215,443
)
 
299,952

Total deferred leasing intangible assets
 
$
573,179

 
$
(224,740
)
 
$
348,439

 
$
588,517

 
$
(246,502
)
 
$
342,015

 
 
 
 
 
 
 
 
 
 
 
 
 
Below market leases
 
$
30,862

 
$
(10,394
)
 
$
20,468

 
$
34,331

 
$
(12,764
)
 
$
21,567

Total deferred leasing intangible liabilities
 
$
30,862

 
$
(10,394
)
 
$
20,468

 
$
34,331

 
$
(12,764
)
 
$
21,567


The following table sets forth the amortization expense and the net decrease to rental income for the amortization of deferred leasing intangibles during the three months ended March 31, 2019 and 2018.
 
 
Three months ended March 31,
Deferred Leasing Intangibles Amortization (in thousands)
 
2019
 
2018
Net decrease to rental income related to above and below market lease amortization
 
$
967

 
$
1,207

Amortization expense related to other intangible lease assets
 
$
16,814

 
$
18,100


The following table sets forth the amortization of deferred leasing intangibles over the next five calendar years beginning with 2019 as of March 31, 2019.
Year
 
Amortization Expense Related to Other Intangible Lease Assets (in thousands)
 
Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands)
Remainder of 2019
 
$
48,278

 
$
2,900

2020
 
$
54,265

 
$
3,546

2021
 
$
43,369

 
$
2,221

2022
 
$
35,017

 
$
1,361

2023
 
$
28,732

 
$
1,363



12

Table of Contents

4. Debt

The following table sets forth a summary of the Company’s outstanding indebtedness, including borrowings under the Company’s unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes as of March 31, 2019 and December 31, 2018.
Loan

Principal Outstanding as of March 31, 2019 (in thousands)
    
Principal Outstanding as of December 31, 2018 (in thousands)
 
Interest 
Rate
(1)(2)
    
Maturity Date
 
Prepayment Terms (3) 
Unsecured credit facility:


 

 





Unsecured Credit Facility (4)

$
115,500

  
$
100,500

 
L + 0.90%


Jan-15-2023

i
Total unsecured credit facility

115,500

  
100,500

 
 


 

 
 


 

 





Unsecured term loans:

 

  


 
 


 

 
Unsecured Term Loan C

150,000

 
150,000

 
2.39
%

Sep-29-2020

i
Unsecured Term Loan B

150,000

  
150,000

 
3.05
%

Mar-21-2021

i
Unsecured Term Loan A

150,000

  
150,000

 
2.70
%

Mar-31-2022

i
Unsecured Term Loan D
 
150,000

  
150,000

 
2.85
%
 
Jan-04-2023
 
i
Unsecured Term Loan E (5)
 

 

 
3.92
%
 
Jan-15-2024
 
i
Total unsecured term loans

600,000

 
600,000

 






Less: Total unamortized deferred financing fees and debt issuance costs

(3,358
)
 
(3,640
)
 






Total carrying value unsecured term loans, net

596,642

  
596,360

 
 


 

 
 


 

 





Unsecured notes:

 

  


 
 


 

 
Series F Unsecured Notes

100,000

 
100,000

 
3.98
%

Jan-05-2023

ii
Series A Unsecured Notes

50,000

  
50,000

 
4.98
%

Oct-1-2024

ii
Series D Unsecured Notes

100,000

  
100,000

 
4.32
%

Feb-20-2025

ii
Series G Unsecured Notes
 
75,000

 
75,000

 
4.10
%
 
Jun-13-2025
 
ii
Series B Unsecured Notes

50,000

  
50,000

 
4.98
%

Jul-1-2026

ii
Series C Unsecured Notes

80,000

  
80,000

 
4.42
%

Dec-30-2026

ii
Series E Unsecured Notes

20,000

  
20,000

 
4.42
%

Feb-20-2027

ii
Series H Unsecured Notes
 
100,000

 
100,000

 
4.27
%
 
Jun-13-2028
 
ii
Total unsecured notes

575,000

 
575,000

 






Less: Total unamortized deferred financing fees and debt issuance costs

(2,413
)
 
(2,512
)
 






Total carrying value unsecured notes, net

572,587

  
572,488

  
 


 

 
 


 

 





Mortgage notes (secured debt):

 

 


 
 


 

 
Wells Fargo Bank, National Association CMBS Loan

52,763

  
53,216

 
4.31
%

Dec-1-2022

iii
Thrivent Financial for Lutherans
 
3,767

 
3,795

 
4.78
%
 
Dec-15-2023
 
iv
Total mortgage notes

56,530

  
57,011

 
 





Add: Total unamortized fair market value premiums

48

 
50

 
 





Less: Total unamortized deferred financing fees and debt issuance costs 

(469
)
 
(501
)
 






Total carrying value mortgage notes, net

56,109

  
56,560

 
 





Total / weighted average interest rate (6)

$
1,340,838

  
$
1,325,908

 
3.56
%




(1)
Interest rate as of March 31, 2019. At March 31, 2019, the one-month LIBOR (“L”) was 2.49450%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums. The spread over the applicable rate for the Company’s unsecured credit facility and unsecured term loans is based on the Company’s debt rating, as defined in the respective loan agreements.
(2)
As of March 31, 2019, one-month LIBOR for the unsecured term loans A, B, C, D, and E was swapped to a fixed rate of 1.70%, 2.05%, 1.39%, 1.85%, and 2.92%, respectively.
(3)
Prepayment terms consist of (i) pre-payable with no penalty; (ii) pre-payable with penalty; (iii) pre-payable without penalty three months prior to the maturity date, however can be defeased; and (iv) pre-payable without penalty three months prior to the maturity date.
(4)
The capacity of the unsecured credit facility is $500.0 million. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately $3.0 million and $3.2 million is included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018, respectively.
(5)
Capacity of $175.0 million, which the Company has until July 25, 2019 to draw.
(6)
The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $600.0 million of debt, and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums.

The aggregate undrawn nominal commitment on the unsecured credit facility and unsecured term loans as of March 31, 2019 was approximately $553.9 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less and is restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the Company’s indebtedness was approximately $7.7 million and $5.9 million as of March 31, 2019 and December 31, 2018, respectively, and is included in accounts payable, accrued expenses and other liabilities on the accompanying Consolidated Balance Sheets.

13

Table of Contents


The table below sets forth the costs included in interest expense related to the Company’s debt arrangements on the accompanying Consolidated Statement of Operations for the three months ended March 31, 2019 and 2018.
 
 
Three months ended March 31,
Costs Included in Interest Expense (in thousands)
 
2019
 
2018
Amortization of deferred financing fees and debt issuance costs and fair market value premiums
 
$
618

 
$
534

Facility, unused, and other fees
 
$
383

 
$
339


Financial Covenant Considerations

The Company was in compliance with all financial and other covenants as of March 31, 2019 and December 31, 2018 related to its unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes. The real estate net book value of the properties that are collateral for the Company’s debt arrangements was approximately $87.2 million and $88.2 million at March 31, 2019 and December 31, 2018, respectively, and is limited to senior, property-level secured debt financing arrangements.

Fair Value of Debt

The following table presents the aggregate principal outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of March 31, 2019 and December 31, 2018 (in thousands).
 
 
March 31, 2019
 
December 31, 2018
 
 
Principal Outstanding
 
Fair Value
 
Principal Outstanding
 
Fair Value
Unsecured credit facility
 
$
115,500

 
$
115,500

 
$
100,500

 
$
100,500

Unsecured term loans
 
600,000

 
600,000

 
600,000

 
600,000

Unsecured notes
 
575,000

 
596,833

 
575,000

 
585,292

Mortgage notes
 
56,530

 
57,494

 
57,011

 
57,289

Total principal amount
 
1,347,030

 
$
1,369,827

 
1,332,511

 
$
1,343,081

Add: Total unamortized fair market value premiums
 
48

 
 
 
50

 
 
Less: Total unamortized deferred financing fees and debt issuance costs
 
(6,240
)
 
 
 
(6,653
)
 
 
Total carrying value
 
$
1,340,838

 
 
 
$
1,325,908

 
 

The applicable fair value guidance establishes a three tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value of the Company’s debt is based on Level 3 inputs.

5. Use of Derivative Financial Instruments

Risk Management Objective of Using Derivatives

The Company’s use of derivative instruments is limited to the utilization of interest rate swaps to manage interest rate risk exposure on existing and future liabilities and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and related costs associated with the Company’s operating and financial structure.


14

Table of Contents

The following table details the Company’s outstanding interest rate swaps as of March 31, 2019. All of the Company’s interest rate swaps are designated as qualifying cash flow hedges.
Interest Rate
Derivative Counterparty
 
Trade Date    
 
Effective Date
 
Notional Amount
(in thousands)
 
Fair Value
(in thousands)
 
Pay Fixed Interest Rate
 
Receive Variable Interest Rate
 
Maturity Date
Regions Bank
 
Mar-01-2013
 
Mar-01-2013
 
$
25,000

 
$
235

 
1.3300
%
 
One-month L
 
Feb-14-2020 
Capital One, N.A.
 
Jun-13-2013
 
Jul-01-2013
 
$
50,000

 
$
316

 
1.6810
%
 
One-month L
 
Feb-14-2020 
Capital One, N.A.
 
Jun-13-2013
 
Aug-01-2013
 
$
25,000

 
$
153

 
1.7030
%
 
One-month L
 
Feb-14-2020 
Regions Bank
 
Sep-30-2013
 
Feb-03-2014
 
$
25,000

 
$
90

 
1.9925
%
 
One-month L
 
Feb-14-2020 
The Toronto-Dominion Bank
 
Oct-14-2015
 
Sep-29-2016
 
$
25,000

 
$
342

 
1.3830
%
 
One-month L
 
Sep-29-2020
PNC Bank, N.A.
 
Oct-14-2015
 
Sep-29-2016
 
$
50,000

 
$
678

 
1.3906
%
 
One-month L
 
Sep-29-2020
Regions Bank
 
Oct-14-2015
 
Sep-29-2016
 
$
35,000

 
$
477

 
1.3858
%
 
One-month L
 
Sep-29-2020
U.S. Bank, N.A.
 
Oct-14-2015
 
Sep-29-2016
 
$
25,000

 
$
338

 
1.3950
%
 
One-month L
 
Sep-29-2020
Capital One, N.A.
 
Oct-14-2015
 
Sep-29-2016
 
$
15,000

 
$
202

 
1.3950
%
 
One-month L
 
Sep-29-2020
Royal Bank of Canada
 
Jan-08-2015
 
Mar-20-2015
 
$
25,000

 
$
256

 
1.7090
%
 
One-month L
 
Mar-21-2021
The Toronto-Dominion Bank
 
Jan-08-2015
 
Mar-20-2015
 
$
25,000

 
$
255

 
1.7105
%
 
One-month L
 
Mar-21-2021
The Toronto-Dominion Bank
 
Jan-08-2015
 
Sep-10-2017
 
$
100,000

 
$
18

 
2.2255
%
 
One-month L
 
Mar-21-2021
Wells Fargo, N.A.
 
Jan-08-2015
 
Mar-20-2015
 
$
25,000

 
$
243

 
1.8280
%
 
One-month L
 
Mar-31-2022
The Toronto-Dominion Bank
 
Jan-08-2015
 
Feb-14-2020
 
$
25,000

 
$
(204
)
 
2.4535
%
 
One-month L
 
Mar-31-2022
Regions Bank
 
Jan-08-2015
 
Feb-14-2020
 
$
50,000

 
$
(430
)
 
2.4750
%
 
One-month L
 
Mar-31-2022
Capital One, N.A.
 
Jan-08-2015
 
Feb-14-2020
 
$
50,000

 
$
(487
)
 
2.5300
%
 
One-month L
 
Mar-31-2022
The Toronto-Dominion Bank
 
Jul-20-2017
 
Oct-30-2017
 
$
25,000

 
$
269

 
1.8485
%
 
One-month L
 
Jan-04-2023
Royal Bank of Canada
 
Jul-20-2017
 
Oct-30-2017
 
$
25,000

 
$
267

 
1.8505
%
 
One-month L
 
Jan-04-2023
Wells Fargo, N.A.
 
Jul-20-2017
 
Oct-30-2017
 
$
25,000

 
$
267

 
1.8505
%
 
One-month L
 
Jan-04-2023
PNC Bank, N.A.
 
Jul-20-2017
 
Oct-30-2017
 
$
25,000

 
$
269

 
1.8485
%
 
One-month L
 
Jan-04-2023
PNC Bank, N.A.
 
Jul-20-2017
 
Oct-30-2017
 
$
50,000

 
$
539

 
1.8475
%
 
One-month L
 
Jan-04-2023
The Toronto-Dominion Bank
 
Jul-24-2018
 
Jul-26-2019
 
$
50,000

 
$
(1,696
)
 
2.9180
%
 
One-month L
 
Jan-12-2024
PNC Bank, N.A.
 
Jul-24-2018
 
Jul-26-2019
 
$
50,000

 
$
(1,699
)
 
2.9190
%
 
One-month L
 
Jan-12-2024
Bank of Montreal
 
Jul-24-2018
 
Jul-26-2019
 
$
50,000

 
$
(1,696
)
 
2.9190
%
 
One-month L
 
Jan-12-2024
U.S. Bank, N.A.
 
Jul-24-2018
 
Jul-26-2019
 
$
25,000

 
$
(848
)
 
2.9190
%
 
One-month L
 
Jan-12-2024

The fair value of the interest rate swaps outstanding as of March 31, 2019 and December 31, 2018 was as follows.
Balance Sheet Line Item (in thousands)
 
Notional Amount March 31, 2019
 
Fair Value
March 31, 2019
 
Notional Amount December 31, 2018
 
Fair Value December 31, 2018
Interest rate swaps-Asset
 
$
600,000

 
$
5,214

 
$
600,000

 
$
9,151

Interest rate swaps-Liability
 
$
300,000

 
$
(7,060
)
 
$
300,000

 
$
(4,011
)

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements. 

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings.

Amounts reported in accumulated other comprehensive income (loss) related to derivatives designated as qualifying cash flow hedges will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. The Company estimates that approximately $3.0 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense over the next 12 months.

The table below presents the effect of cash flow hedge accounting and the location in the consolidated financial statements for the three months ended March 31, 2019 and 2018.
 
 
Three months ended March 31,
Effect of Cash Flow Hedge Accounting (in thousands)
 
2019
 
2018
Income (loss) recognized in accumulated other comprehensive income (loss) on interest rate swaps
 
$
(5,856
)
 
$
7,493

Income (loss) reclassified from accumulated other comprehensive income into income (loss) as interest expense
 
$
1,122

 
$
(230
)
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
 
$
12,834

 
$
11,392



15

Table of Contents

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.

As of March 31, 2019, derivatives that were in a net liability position by counterparty and subject to credit-risk-related contingent features had a termination value of approximately $3.5 million, which includes accrued interest but excludes any adjustment for nonperformance risk. As of March 31, 2019, the Company had not breached the provisions of these agreements and had not posted any collateral related to these agreements. If the Company had breached any of these provisions at March 31, 2019, it could have been required to settle its obligations under the agreement of the interest rate swaps in a liability position plus accrued interest for approximately $3.5 million.

Fair Value of Interest Rate Swaps

The Company’s valuation of the interest rate swaps is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs including interest rate curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2019 and December 31, 2018, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The following sets forth the Company’s financial instruments that are accounted for at fair value on a recurring basis as of March 31, 2019 and December 31, 2018
 
 
 
 
Fair Value Measurements as of
March 31, 2019 Using
Balance Sheet Line Item (in thousands)
 
Fair Value
March 31, 2019
 
Level 1
 
Level 2
 
Level 3
Interest rate swaps-Asset
 
$
5,214

 
$

 
$
5,214

 
$

Interest rate swaps-Liability
 
$
(7,060
)
 
$

 
$
(7,060
)
 
$


 
 
 
 
Fair Value Measurements as of
December 31, 2018 Using
Balance Sheet Line Item (in thousands)
 
Fair Value December 31, 2018
 
Level 1
 
Level 2
 
Level 3
Interest rate swaps-Asset
 
$
9,151

 
$

 
$
9,151

 
$

Interest rate swaps-Liability
 
$
(4,011
)
 
$

 
$
(4,011
)
 
$


6. Equity

Preferred Stock

The table below sets forth the Company’s outstanding preferred stock issuances as of March 31, 2019.
Preferred Stock Issuances
 
Issuance Date
 
Number of Shares
 
Liquidation Value Per Share
 
Interest Rate
6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock")
 
March 17, 2016
 
3,000,000

 
$
25.00

 
6.875
%


16

Table of Contents

The tables below set forth the dividends attributable to the Company’s outstanding preferred stock issuances during the three months ended March 31, 2019 and the year ended December 31, 2018.
Quarter Ended 2019
 
Declaration Date
 
Series C
Preferred Stock Per Share
 
Payment Date
March 31
 
January 10, 2019
 
$
0.4296875

 
April 1, 2019
Total
 
 

$
0.4296875


 
Quarter Ended 2018
 
Declaration Date
 
Series B
Preferred Stock Per Share
 
Series C
Preferred Stock Per Share
 
Payment Date
December 31
 
October 10, 2018
 
$

 
$
0.4296875

 
December 31, 2018
September 30
 
July 11, 2018
 
0.0460069

(1) 
0.4296875

 
October 1, 2018
June 30
 
April 10, 2018
 
0.4140625

 
0.4296875

 
July 2, 2018
March 31
 
February 14, 2018
 
0.4140625

 
0.4296875

 
April 2, 2018
Total
 
 
 
$
0.8741319

 
$
1.7187500

 
 
(1)
On June 11, 2018, the Company gave notice to redeem all 2,800,000 issued and outstanding shares of the 6.625% Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”). On July 11, 2018, the Company redeemed all of the Series B Preferred Stock at a cash redemption price of $25.00 per share, plus accrued and unpaid dividends to but excluding the redemption date, without interest.

On April 9, 2019, the Company’s board of directors declared the Series C Preferred Stock dividends for the quarter ending June 30, 2019 at a quarterly rate of $0.4296875 per share.

Common Stock

The following table sets forth the terms of the Company’s at-the market (“ATM”) common stock offering program as of March 31, 2019.
ATM Common Stock Offering Program
 
Date
 
Maximum Aggregate Offering Price (in thousands)

Aggregate Common Stock Available as of
March 31, 2019 (in thousands)
2019 $600 million ATM
 
February 14, 2019
 
$
600,000

 
$
449,811


The tables below set forth the activity under the ATM common stock offering programs during the three months ended March 31, 2019 and year ended December 31, 2018 (in thousands, except share data).
 
 
Three months ended March 31, 2019
ATM Common Stock Offering Program
 
Shares
Sold
 
Weighted Average Price Per Share
 
Gross
Proceeds
 
Sales
Agents’ Fee
 
Net
Proceeds
2019 $600 million ATM
 
5,441,409

 
$
27.60

 
$
150,189

 
$
1,302

 
$
148,887

Total/weighted average
 
5,441,409

 
$
27.60

 
$
150,189

 
$
1,302

 
$
148,887

 
 
Year ended December 31, 2018
ATM Common Stock Offering Program
 
Shares
Sold
 
Weighted Average Price Per Share
 
Gross
Proceeds
 
Sales
Agents’ Fee
 
Net
Proceeds
2017 $500 million ATM (1)
 
14,724,614

 
$
26.52

 
$
390,447

 
$
4,040

 
$
386,407

Total/weighted average
 
14,724,614

 
$
26.52

 
$
390,447

 
$
4,040

 
$
386,407

(1) This program ended before March 31, 2019.


17

Table of Contents

The tables below sets forth the dividends attributable to the Company’s outstanding shares of common stock that were declared during the three months ended March 31, 2019 and the year ended December 31, 2018.
Month Ended 2019

Declaration Date
 
Record Date
 
Per Share
 
Payment Date
March 31

January 10, 2019

March 29, 2019

$
0.119167


April 15, 2019
February 28

January 10, 2019

February 28, 2019

0.119167


March 15, 2019
January 31

January 10, 2019

January 31, 2019

0.119167


February 15, 2019
Total

 
 
 

$
0.357501


 
Month Ended 2018
 
Declaration Date
 
Record Date
 
Per Share
 
Payment Date
December 31
 
October 10, 2018
 
December 31, 2018
 
$
0.118333

 
January 15, 2019
November 30
 
October 10, 2018
 
November 30, 2018
 
0.118333

 
December 17, 2018
October 31
 
October 10, 2018
 
October 31, 2018
 
0.118333

 
November 15, 2018
September 30
 
July 11, 2018
 
September 28, 2018
 
0.118333

 
October 15, 2018
August 31
 
July 11, 2018
 
August 31, 2018
 
0.118333

 
September 17, 2018
July 31
 
July 11, 2018
 
July 31, 2018
 
0.118333

 
August 15, 2018
June 30
 
April 10, 2018
 
June 29, 2018
 
0.118333

 
July 16, 2018
May 31
 
April 10, 2018
 
May 31, 2018
 
0.118333

 
June 15, 2018
April 30
 
April 10, 2018
 
April 30, 2018
 
0.118333

 
May 15, 2018
March 31
 
November 2, 2017
 
March 29, 2018
 
0.118333

 
April 16, 2018
February 28
 
November 2, 2017
 
February 28, 2018
 
0.118333

 
March 15, 2018
January 31
 
November 2, 2017
 
January 31, 2018
 
0.118333

 
February 15, 2018
Total
 
 
 
 
 
$
1.419996

 
 

On April 9, 2019, the Company’s board of directors declared the common stock dividends for the months ending April 30, 2019, May 31, 2019 and June 30, 2019 at a monthly rate of $0.119167 per share of common stock.

Restricted Shares of Common Stock

Restricted shares of common stock granted on January 7, 2019 to certain employees of the Company, subject to the recipient’s continued employment, will vest in four equal instal