Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The COVID-19 pandemic, and mitigation measures put in place by governments to slow it, have caused widespread economic disruption. The Company is headquartered in San Francisco, California and its employees have been working remotely in compliance with shelter-in-place orders mandated across the San Francisco Bay Area on March 16, 2020. The Company utilizes local, third-party property managers, and they are generally under similar shelter-in-place orders and are working remotely. The Company has business continuity and communication plans that the Company believes, although there can be no assurance, allow the Company to operate and manage its portfolio effectively during such disruptions. The Company expects that even after shelter-in-place orders have been lifted, it will, for the intermediate term, employ lower density work arrangements consistent with social distancing and the Company’s business continuity plan.

While the impact of the COVID-19 pandemic on the Company’s business is not possible to predict accurately, the Company is working with its customers who have been forced to close or otherwise limit operations or whose businesses have been adversely impacted during the pandemic to, on a case-by-case basis, provide rent deferments while those customers seek emergency funding from the U.S. Small Business Administration and other federal, state and local funding programs. For vacant space and upcoming lease expirations, the current leasing environment has slowed due to shelter-in-place orders, which will reduce revenue from what it would be in a normal leasing environment. With regard to rent billed for April 2020, the Company received, as of May 1, 2020, approximately 84% of such rent in cash and 11% by applying security deposits. As of May 1, 2020:

•170 tenants, representing 34% of the Company’s 498 total tenants’ leases had requested rent deferral or abatement. Such requests aggregated 6.5% of the Company’s annualized base rent as of April 1, 2020;

•Of the 170 requests, the Company granted rent deferrals to 49 tenants aggregating 2.0% of annualized base rent (29% of total requests by number and 31% by dollar amount). Deferrals granted represent 76% of the total dollar requests from those 49 tenants. The Company did not grant any rent abatement;

•The Company denied 67 tenant requests aggregating 2.5% of annualized base rent (39% of total requests by number and 38% by dollar amount). 46 tenants aggregating 1.2% of annualized base rent requesting rent deferral or abatement rescinded their requests (27% of requests by number and 18% by dollar amount);

•The Company is still in discussions with eight tenants who are requesting 0.2% of our annualized base rent in rent deferral or abatement (5% of requests by number and 3% by dollar amount); and

•The Company may in the future amend or enter into additional rent deferral agreements.

The acquisition and disposition markets have similarly slowed as market participants search for price discovery. The Company’s acquisition volume will remain dependent on both the quality and pricing of the opportunity set and the price of its stock relative to net asset value per share. The Company has no remaining debt maturities in 2020, an $11.6 million mortgage loan maturing in April 2021, and no balance outstanding on its $250.0 million revolving credit facility. In addition, the Company had a cash and cash equivalents balance of approximately $69.7 million as of March 31, 2020, in the accompanying consolidated balance sheets.

On April 17, 2020, the Company acquired one improved land parcel totaling 2.8 acres located in Kent, WA for a total purchase price of approximately $4.5 million. The property was acquired from an unrelated third party using existing cash on hand.

On May 5, 2020, the Company’s board of directors declared a cash dividend in the amount of $0.27 per share of its common stock payable on July 14, 2020 to the stockholders of record as of the close of business on June 30, 2020.