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Section 1: 8-K (8-K)

Document
falsefalse8002020-06-178-K2325 E. Camelback Road, 9th FloorPhoenix,85016AZ00015073850001528059606-3610 0001507385 ver:VEREITOperatingPartnershipL.P.Member 2020-06-17 2020-06-17 0001507385 2020-06-17 2020-06-17


 

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): June 17, 2020
VEREIT, INC.
VEREIT OPERATING PARTNERSHIP, L.P.
(Exact name of Registrant as specified in its charter)
 
 
 
 
 
 
 
 
 
Maryland
 
001-35263
 
45-2482685
Delaware
 
333-197780
 
45-1255683
(State or other jurisdiction of incorporation)
       (Commission File Number)
(I.R.S. Employer Identification No.)
2325 E. Camelback Road, 9th Floor
Phoenix,
AZ
85016
 
(Address of principal executive offices, including zip code)
(800)
 
606-3610
(Registrant’s telephone number, including area code)
________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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

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

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

     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each class:
Trading symbol(s):
Name of each exchange on which registered:
Common Stock
 $0.01 par value per share (VEREIT, Inc.)
VER
New York Stock Exchange
6.70% Series F Cumulative Redeemable Preferred Stock
 $0.01 par value per share (VEREIT, Inc.)
VER PF
New York Stock Exchange
 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
VEREIT, Inc.
 
VEREIT Operating Partnership, L.P.
 
Emerging growth 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.   
VEREIT, Inc. ¨ VEREIT Operating Partnership, L.P. o
 





Item 7.01 Regulation FD Disclosure.
On June 17, 2020, VEREIT, Inc. together with its operating partnership, VEREIT Operating Partnership, L.P. (collectively, the “Company”), furnished the following documents: (i) a press release announcing updated information with respect to the Company’s real estate portfolio and balance sheet in response to the ongoing coronavirus (COVID-19) pandemic, attached hereto as Exhibit 99.1; and (ii) a presentation describing the Company’s business and real estate portfolio, attached hereto as Exhibit 99.2. The information set forth in this Item 7.01 and in the attached Exhibits 99.1 and 99.2, is deemed to be “furnished” and shall not be deemed to be “filed” for 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 set forth in this Item 7.01, including Exhibits 99.1 and 99.2, 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
On June 17, 2020, the Company provided the following updates with respect to its real estate portfolio and balance sheet:
As of June 16, 2020, VEREIT had received approximately 84% of April rent, 84% of May rent and 82% of June rent, which includes approximately 2% to be paid in arrears by a Government agency tenant. The Company is in ongoing discussions with tenants regarding unpaid rent. The property type breakdown is as follows:
Property Type
April
May
June
Total Retail
86%
86%
86%
Casual Dining
27%
37%
29%
Quick Service
78%
77%
78%
Total Restaurant
49%
54%
50%
Total Office
98%
96%
96%
Total Industrial
99%
99%
94%


Rent relief requests have been received from tenants representing approximately 33% of rental income on an annualized basis as of June 16, 2020, including some tenants that paid April, May and/or June rent. As of June 16, 2020, of the 33% (i) 16% had been approved by the Company, (ii) 6% are in negotiation, and (iii) 11% have either been denied by the Company or the Company has not taken formal action. These requests vary in time frame, but are concentrated within the two to four month range. The property type breakdown is as follows:
Property Type
 
Total Retail
28%
Casual Dining
81%
Quick Service
52%
Total Restaurant
69%
Total Office
8%
Total Industrial
28%


As of June 16, 2020 VEREIT had corporate liquidity of approximately $1.2 billion comprised of $101.0 million in cash and cash equivalents and $1.1 billion of availability under its credit facility.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
 
Description
99.1
 
99.2
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document).





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

 
VEREIT, INC.
 
 
 
By:
/s/ Michael J. Bartolotta
 
Name:
Michael J. Bartolotta
 
Title:
Executive Vice President and Chief Financial Officer
 
VEREIT OPERATING PARTNERSHIP, L.P.
By: VEREIT, Inc., its sole general partner
 
 
 
By:
/s/ Michael J. Bartolotta
 
Name:
Michael J. Bartolotta
 
Title:
Executive Vice President and Chief Financial Officer

Date: June 17, 2020



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1

404361048_rgbhorzvereitlogo093018a11.jpg
FOR IMMEDIATE RELEASE

VEREIT® Provides Company and COVID-19 Update

PHOENIX, AZ, June 17, 2020 -- VEREIT, Inc. (NYSE: VER) ("VEREIT" or the "Company") today announced updated information on its real estate portfolio and balance sheet in response to the ongoing coronavirus (COVID-19) pandemic.

Real Estate Portfolio Update

As of June 16, 2020, VEREIT had received approximately 84% of April rent, 84% of May rent and 82% of June rent, which includes approximately 2% to be paid in arrears by a Government agency tenant. VEREIT is in ongoing discussions with tenants regarding unpaid rent. The property type breakdown is as follows:
Property Type
April
May
June
Total Retail
86%
86%
86%
Casual Dining
27%
37%
29%
Quick Service
78%
77%
78%
Total Restaurant
49%
54%
50%
Total Office
98%
96%
96%
Total Industrial
99%
99%
94%
Similar to prior months, VEREIT expects to collect additional rent through the end of June which may increase the total percentage collected for the month.

VEREIT continues to have one of the highest collection rates as compared to its peers and other retail segments driven by its property type diversification, industry breakdown, investment-grade tenancy, public versus private ownership, and geographic diversity. Our combined allocation in excess of 80% to single-tenant Office & Industrial, High Collection/Necessity based Retail and Quick-Service Restaurants has provided a good baseline for rental collection during this uncertain environment. We are also seeing some positive movement in certain categories as parts of the country reopen and are coordinating rental payments with some tenants.

Nareit Sector Comparison
Property Type
April
May
Free-Standing Retail
71.4%
70.1%
Shopping Center
45.6%
47.7%
Office
93.3%
92.1%
Industrial
98.6%
95.7%
Note: June data not available at this time





Rent relief requests have been received from tenants representing approximately 33% of rental income on an annualized basis as of June 16, 2020, including some tenants that paid April, May and/or June rent. These requests vary in time frame, but are concentrated within the two to four month range. The property type breakdown is as follows:
Property Type
 
Total Retail
28%
Casual Dining
81%
Quick Service
52%
Total Restaurant
69%
Total Office
8%
Total Industrial
28%

Further rent collection and relief request details can be found in VEREIT's investor presentation filed today and available on VEREIT's corporate website at http://ir.vereit.com/Presentations.

Balance Sheet Update
As of June 16, 2020 VEREIT had corporate liquidity of approximately $1.2 billion comprised of $101.0 million in cash and cash equivalents and $1.1 billion of availability under its credit facility.

Credit Rating Agency Update
VEREIT has investment-grade ratings from all three credit agencies as described below with Fitch completing a review in March 2020 with no changes, Moody's in June 2020 with no changes and S&P maintaining its prior rating with no changes:
Rating Agency
Rating
Outlook
Fitch
BBB
Stable
Moody's
Baa3
Positive
S&P
BBB-
Stable








About the Company
VEREIT is a full-service real estate operating company which owns and manages one of the largest portfolios of single-tenant commercial properties in the U.S.  The Company has total real estate investments of $14.8 billion including approximately 3,900 properties and 89.5 million square feet. VEREIT's business model provides equity capital to creditworthy corporations in return for long-term leases on their properties. VEREIT is a publicly traded Maryland corporation listed on the New York Stock Exchange. VEREIT uses, and intends to continue to use, its Investor Relations website, which can be found at www.VEREIT.com, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD.  Additional information about VEREIT can be found through social media platforms such as Twitter and LinkedIn.






About the Data
Rent collection percentages disclosed are based on contractual rent and recoveries paid by tenants to cover estimated tax, insurance and common area maintenance expenses, including the Company's pro rata share of such amounts related to properties owned by unconsolidated joint ventures. Amounts exclude any tenants in bankruptcy.
Nareit Data
The comparison table shows the estimated REIT rent collections in April and May as a share of typical rent collections. The results are displayed by property sector and are weighted by respondent REIT equity market capitalization. Further details and research methodology can be found through Nareit's REIT Industry May 2020 Rent Collections research.

Forward-Looking Statements
Information set forth herein contains “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), which reflect the Company’s expectations and projections regarding future events and plans, the Company’s future financial condition, results of operations, liquidity and business, including acquisitions, rent receipts, rent relief requests, debt levels, the payment of future dividends and the impact of COVID-19 on the Company’s business. Generally, the words “anticipates,” “assumes,” “believes,” “continues,” “could,” “estimates,” “expects,” “goals,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “targets,” “will,” variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available and involve a number of known and unknown assumptions and risks, uncertainties and other factors, which may be difficult to predict and beyond the Company’s control, that could cause actual events and plans or could cause the Company’s business, financial condition, liquidity and results of operations to differ materially from those expressed or implied in the forward-looking statements. Further, information regarding historical rent collections should not serve as an indication of future rent collections.
The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the duration and extent of the impact of COVID-19 on our business and the businesses of our tenants (including their ability to timely make rent payments) and the economy generally; federal or state legislation or regulation that could impact the timely payment of rent by tenants in light of COVID-19; the Company’s plans, market and other expectations, objectives, intentions and other statements that are not historical facts; the Company’s ability to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all; risks associated with tenant, geographic and industry concentrations with respect to the Company’s properties; risks accompanying the management of its industrial partnership and office partnership; the impact of impairment charges in respect of certain of the Company’s properties; unexpected costs or liabilities that may arise from potential dispositions, including related to limited partnership, tenant-in-common and Delaware statutory trust real estate programs and the Company’s management with respect to such programs; competition in the acquisition and disposition of properties and in the leasing of its properties including that the Company may be unable to acquire, dispose of, or lease properties on advantageous terms or at all; risks associated with bankruptcies or insolvencies of tenants, from tenant defaults generally or from the unpredictability of the business plans and financial condition of the Company’s tenants, which are heightened as a result of the COVID-19 pandemic; risks associated with the Company’s substantial indebtedness, including that such indebtedness may affect the Company’s ability to pay dividends and that the terms and restrictions within the agreements governing the Company’s indebtedness may restrict its borrowing and operating flexibility; the ability to retain or





hire key personnel; and continuation or deterioration of current market conditions. Additional factors that may affect future results are contained in the Company’s filings with the SEC, which are available at the SEC’s website at www.sec.gov. The Company disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as required by law.

Media Contact
Parke Chapman
Rubenstein Associates
212.843.8489 | [email protected]

Investor Contact
Bonni Rosen, Senior Vice President, Investor Relations
VEREIT
877.405.2653 | [email protected]



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Section 3: EX-99.2 (EXHIBIT 99.2)

junecovid19updateinvesto
Exhibit 99.2 COVID-19 Update June 2020


 
About the Data INVESTOR REVIEW This data and other information described herein are based on March 31, 2020 Annualized Rental Income ("ARI"), unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with the financial statements and the Management's Discussion and Analysis of Financial Condition and Results of Operations sections contained in VEREIT, Inc.'s (the "Company," "VEREIT," "us," "our" and "we") Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the three months ended March 31, 2020, filed with the Securities and Exchange Commission. Rent collection percentages disclosed in this presentation are based on contractual rent and recoveries paid by tenants to cover estimated tax, insurance and common area maintenance expenses, including the Company's pro rata share of such amounts related to properties owned by unconsolidated joint ventures. Amounts exclude tenants in bankruptcy. Tenants, Trademarks and Logos VEREIT is not affiliated with, is not endorsed by, does not endorse and is not sponsored by or a sponsor of the products or services pictured or mentioned. The names, logos and all related product and service names, design marks and slogans are the trademarks or service marks of their respective companies. 2 www.VEREIT.com | NYSE: VER | © 2020 VEREIT, Inc.


 
Forward-Looking Statements INVESTOR REVIEW Information set forth herein contains “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), which reflect the Company’s expectations and projections regarding future events and plans, the Company’s future financial condition, results of operations, liquidity and business, including acquisitions, rent receipts, rent relief requests, debt levels, the payment of future dividends and the impact of Coronavirus (COVID-19) on the Company’s business. Generally, the words “anticipates,” “assumes,” “believes,” “continues,” “could,” “estimates,” “expects,” “goals,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “targets,” “will,” variations of such words and similar expressions identify forward-looking statements. These forward-looking statements are based on information currently available and involve a number of known and unknown assumptions and risks, uncertainties and other factors, which may be difficult to predict and beyond the Company’s control, that could cause actual events and plans or could cause the Company’s business, financial condition, liquidity and results of operations to differ materially from those expressed or implied in the forward-looking statements. Further, information provided regarding historical rent collections should not serve as an indication of future rent collections. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the duration and extent of the impact of COVID-19 on our business and the businesses of our tenants (including their ability to timely make rent payments) and the economy generally; federal or state legislation or regulation that could impact the timely payment of rent by tenants in light of COVID-19; the Company’s plans, market and other expectations, objectives, intentions and other statements that are not historical facts; the Company’s ability to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all; risks associated with tenant, geographic and industry concentrations with respect to the Company’s properties; risks accompanying the management of its industrial partnership and office partnership; the impact of impairment charges in respect of certain of the Company’s properties; unexpected costs or liabilities that may arise from potential dispositions, including related to limited partnership, tenant-in- common and Delaware statutory trust real estate programs and the Company’s management with respect to such programs; competition in the acquisition and disposition of properties and in the leasing of its properties including that the Company may be unable to acquire, dispose of, or lease properties on advantageous terms or at all; risks associated with bankruptcies or insolvencies of tenants, from tenant defaults generally or from the unpredictability of the business plans and financial condition of the Company’s tenants, which are heightened as a result of the COVID-19 pandemic; risks associated with the Company’s substantial indebtedness, including that such indebtedness may affect the Company’s ability to pay dividends and that the terms and restrictions within the agreements governing the Company’s indebtedness may restrict its borrowing and operating flexibility; the ability to retain or hire key personnel; and continuation or deterioration of current market conditions. Additional factors that may affect future results are contained in the Company’s filings with the SEC, which are available at the SEC’s website at www.sec.gov. The Company disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as required by law. 3 www.VEREIT.com | NYSE: VER | © 2020 VEREIT, Inc.


 
Rent Collection and Relief Requests: Overview1 COVID-19 IMPACTS ◦ Collected 84% of April rent. COVID-19 IMPACTS ◦ Collected 84% of May rent. ◦ Collected 82% of June rent. ◦ Tenants representing 33% of total ARI have requested rent relief. Property Type Rent Collection Rent Relief Requests2 April May June Total 84% 84% 82% 33% Investment Grade 99% 98% 99% 7% Public 95% 94% 93% 20% Retail 86% 86% 86% 28% Investment Grade 100% 99% 99% 9% Public 92% 90% 92% 19% Restaurant 49% 54% 50% 69% Investment Grade 100% 96% 96% —% Public 79% 87% 82% 53% Industrial 99% 99% 94% 28% Investment Grade 100% 99% 99% 11% Public 100% 100% 96% 27% Office 98% 96% 96% 8% Investment Grade 99% 96% 100% 2% Public 100% 100% 96% 2% 1) Rent collection and rent relief data as of June 16, 2020 and includes June rent expected to be received from a Government agency tenant that pays in arrears of approximately 2%. 2) Represents the portion of the % ARI that corresponds to the tenants that submitted requests for rent relief. 4 www.VEREIT.com | NYSE: VER | © 2020 VEREIT, Inc.


 
Rent Collection and Relief Requests: Overview1 COVID-19 IMPACTS • VEREIT has been in communication • 8 of VEREIT's top 10 tenants have paid April rent, with all tenants who have requested representing 78% of top 10 tenant rent. rent relief to discuss the impact of • 8 of VEREIT's top 10 tenants have paid May rent, COVID-19 on their businesses. representing 77% of top 10 tenant rent. • 8 of VEREIT's top 10 tenants have paid June rent, • VEREIT is evaluating tenant relief representing 77% of top 10 tenant rent. requests on a case-by-case basis with close attention to the tenants' • 17 of VEREIT's top 20 tenants have paid April rent, ongoing operations, unit coverage, representing 82% of top 20 tenant rent. liquidity and financial health. • 17 of VEREIT's top 20 tenants have paid May rent, representing 81% of top 20 tenant rent. • Rent relief requests generally range • 17 of VEREIT's top 20 tenants have paid June rent, from 2 to 4 months and would be representing 80% of top 20 tenant rent. expected to be paid back within 12 months. • VEREIT received rent relief requests from tenants representing approximately 33% of ARI. • Of the 33%: - 16% were approved, - 6% are in negotiations, and - 11% have either been denied or VEREIT has not yet taken action. 1) Rent collection and rent relief data as of June 16, 2020 and includes June rent expected to be received from a Government agency tenant that pays in arrears of approximately 2%. 5 www.VEREIT.com | NYSE: VER | © 2020 VEREIT, Inc.


 
Rent Collection and Relief Requests by Industry1 Industry designations based on NAICS categorization COVID-19 IMPACTS 2 Rent Relief April Rent May Rent June Rent Industry Group % ARI Requests3 Collected Collected Collected Retail - Discount 8.1% 11% 96% 96% 96% Retail - Pharmacy 5.6% —% 99% 100% 100% Retail - Grocery & Supermarket 3.8% —% 100% 100% 100% Entertainment & Recreation 3.6% 99% 32% 30% 26% Retail - Home & Garden 3.5% 15% 98% 85% 85% Retail - Gas & Convenience 3.0% 2% 100% 100% 100% Retail - Motor Vehicle 2.9% 28% 93% 95% 95% Retail - Home Furnishings 2.8% 61% 27% 27% 46% Retail - Sporting Goods 2.1% 82% 48% 62% 42% Finance 1.9% 9% 100% 100% 98% Retail - Warehouse Clubs 1.7% —% 100% 100% 100% Retail - Medical Services 1.1% 2% 97% 98% 97% Retail - Pet Supply 1.0% 100% 97% 89% 81% Retail - Department Stores 0.7% 92% 95% 95% 100% Retail - Electronics & Appliances 0.7% 96% 100% 100% 100% Rental 0.6% 26% 100% 100% 100% Retail - Hobby, Books & Music 0.5% 4% 95% 94% 98% Retail - Specialty (Other) 0.4% 53% 78% 81% 75% Retail - Apparel & Jewelry 0.3% 81% 46% 46% 92% All Other 0.4% 56% 69% 75% 74% Total Retail 44.7% 28% 86% 86% 86% 1) Rent collection and rent relief data as of June Casual Dining 11.8% 81% 27% 37% 29% 16, 2020 and includes June rent expected to be Quick Service 8.7% 52% 78% 77% 78% received from a Government agency tenant that pays in arrears of approximately 2%. Total Restaurant 20.5% 69% 49% 54% 50% 2) Total includes 0.1% for redevelopment property, billboards, construction in progress, Total Industrial 16.6% 28% 99% 99% 94% land and parking lots. 3) Represents the portion of the % ARI that corresponds to the tenants that submitted Total Office 18.1% 8% 98% 96% 96% requests for rent relief. Total 100%2 33% 84% 84% 82% 6 www.VEREIT.com | NYSE: VER | © 2020 VEREIT, Inc.


 
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