(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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 Act: | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit No. | Description | |||||||
Press release dated August 2, 2023 | ||||||||
Quarterly supplemental information for the quarter ended June 30, 2023 | ||||||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL Document. |
THE NECESSITY RETAIL REIT, INC. | ||||||||
By: | /s/ Edward M. Weil, Jr. | |||||||
Edward M. Weil, Jr. | ||||||||
Chief Executive Officer and President (Principal Executive Officer) |
Three Months Ended June 30, | ||||||||||||||
(In thousands, except per share data) | 2023 | 2022 | ||||||||||||
Revenue from tenants | $ | 106,700 | $ | 116,929 | ||||||||||
Net loss attributable to common stockholders | $ | (53,468) | $ | (56,259) | ||||||||||
Net loss per common share (a) | $ | (0.40) | $ | (0.43) | ||||||||||
FFO attributable to common stockholders | $ | 458 | $ | 35,717 | ||||||||||
FFO per common share (a) | $ | — | $ | 0.27 | ||||||||||
AFFO attributable to common stockholders | $ | 27,923 | $ | 38,485 | ||||||||||
AFFO per common share (a) | $ | 0.21 | $ | 0.29 |
June 30, 2023 | December 31, 2022 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Real estate investments, at cost: | |||||||||||
Land | $ | 956,506 | $ | 996,293 | |||||||
Buildings, fixtures and improvements | 3,369,177 | 3,467,463 | |||||||||
Acquired intangible lease assets | 567,722 | 644,553 | |||||||||
Total real estate investments, at cost | 4,893,405 | 5,108,309 | |||||||||
Less: accumulated depreciation and amortization | (810,727) | (784,946) | |||||||||
Total real estate investments, net | 4,082,678 | 4,323,363 | |||||||||
Cash and cash equivalents | 59,172 | 70,795 | |||||||||
Restricted cash | 23,373 | 17,956 | |||||||||
Deferred costs, net | 25,050 | 22,893 | |||||||||
Straight-line rent receivable | 59,890 | 66,657 | |||||||||
Operating lease right-of-use assets | 17,587 | 17,839 | |||||||||
Prepaid expenses and other assets (including $2,651 of prepayments to related parties as of June 30, 2023) | 67,510 | 66,551 | |||||||||
Total assets | $ | 4,335,260 | $ | 4,586,054 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Mortgage notes payable, net | $ | 1,553,688 | $ | 1,808,433 | |||||||
Credit facility | 604,000 | 458,000 | |||||||||
Senior notes, net | 492,987 | 492,319 | |||||||||
Below market lease liabilities, net | 123,900 | 133,876 | |||||||||
Accounts payable and accrued expenses (including $901 and $1,838 due to related parties as of June 30, 2023 and December 31, 2022, respectively) | 54,804 | 64,169 | |||||||||
Operating lease liabilities | 19,088 | 19,132 | |||||||||
Deferred rent and other liabilities | 16,531 | 16,815 | |||||||||
Dividends payable | 5,837 | 5,837 | |||||||||
Total liabilities | 2,870,835 | 2,998,581 | |||||||||
7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 12,796,000 shares authorized, 7,933,711 shares issued and outstanding as of June 30, 2023 and December 31, 2022 | 79 | 79 | |||||||||
7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 11,536,000 shares authorized, 4,595,175 shares issued and outstanding as of June 30, 2023 and December 31, 2022 | 46 | 46 | |||||||||
Common stock, $0.01 par value per share, 300,000,000 shares authorized, 134,535,442 and 134,224,313 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 1,345 | 1,342 | |||||||||
Additional paid-in capital | 2,999,565 | 2,999,163 | |||||||||
Distributions in excess of accumulated earnings | (1,565,425) | (1,435,794) | |||||||||
Total stockholders’ equity | 1,435,610 | 1,564,836 | |||||||||
Non-controlling interests | 28,815 | 22,637 | |||||||||
Total equity | 1,464,425 | 1,587,473 | |||||||||
Total liabilities and equity | $ | 4,335,260 | $ | 4,586,054 |
Three Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Revenue from tenants | $ | 106,700 | $ | 116,929 | |||||||
Operating expenses: | |||||||||||
Asset management fees to related parties | 7,972 | 8,296 | |||||||||
Property operating expenses | 25,082 | 27,520 | |||||||||
Impairments of real estate investments | — | 58,954 | |||||||||
Merger, transaction and other costs | 4,931 | 206 | |||||||||
Settlement costs | 8,800 | — | |||||||||
Equity-based compensation [1] | 3,519 | 3,523 | |||||||||
General and administrative | 14,744 | 8,390 | |||||||||
Depreciation and amortization | 59,466 | 46,573 | |||||||||
Total operating expenses | 124,514 | 153,462 | |||||||||
Operating income before gain on sale of real estate investments | (17,814) | (36,533) | |||||||||
Gain on sale of real estate investments | 5,471 | 13,438 | |||||||||
Operating income | (12,343) | (23,095) | |||||||||
Other (expense) income: | |||||||||||
Interest expense | (35,945) | (28,329) | |||||||||
Other income | 596 | 944 | |||||||||
Gain on non-designated derivative | — | — | |||||||||
Total other expense, net | (35,349) | (27,385) | |||||||||
Net loss | (47,692) | (50,480) | |||||||||
Net loss attributable to non-controlling interests | 61 | 58 | |||||||||
Allocation for preferred stock | (5,837) | (5,837) | |||||||||
Net loss attributable to common stockholders | $ | (53,468) | $ | (56,259) | |||||||
Basic and Diluted Net Loss Per Share: | |||||||||||
Net loss per share attributable to common stockholders — Basic and Diluted | $ | (0.40) | $ | (0.43) | |||||||
Weighted-average shares outstanding — Basic and Diluted | 133,800,130 | 132,629,704 | |||||||||
Three Months Ended June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Adjusted EBITDA | ||||||||||||||
Net loss | $ | (47,692) | $ | (50,480) | ||||||||||
Depreciation and amortization | 59,466 | 46,573 | ||||||||||||
Interest expense | 35,945 | 28,329 | ||||||||||||
Impairments of real estate investments | — | 58,954 | ||||||||||||
Merger, transaction and other costs | 4,931 | 206 | ||||||||||||
Settlement costs | 8,800 | — | ||||||||||||
Equity-based compensation [1] | 3,519 | 3,523 | ||||||||||||
Gains on sales of real estate investments | (5,471) | (13,438) | ||||||||||||
Other income | (596) | (944) | ||||||||||||
Gain on non-designated derivatives | — | — | ||||||||||||
Expenses attributable to 2023 proxy contest and related litigation [2] | 7,205 | — | ||||||||||||
Adjusted EBITDA | 66,107 | 72,723 | ||||||||||||
Asset management fees to related parties | 7,972 | 8,296 | ||||||||||||
General and administrative | 14,744 | 8,390 | ||||||||||||
Expenses attributable to 2023 proxy contest and related litigation [2] | (7,205) | — | ||||||||||||
NOI | 81,618 | 89,409 | ||||||||||||
Amortization of market lease and other intangibles, net | (1,780) | (1,582) | ||||||||||||
Straight-line rent | 1,429 | (1,509) | ||||||||||||
Cash NOI | $ | 81,267 | $ | 86,318 | ||||||||||
Cash Paid for Interest: | ||||||||||||||
Interest expense | $ | 35,945 | $ | 28,329 | ||||||||||
Amortization of deferred financing costs, net | (3,607) | (3,236) | ||||||||||||
Amortization of mortgage premiums and discounts on borrowings, net | (329) | (174) | ||||||||||||
Total cash paid for interest | $ | 32,009 | $ | 24,919 |
Three Months Ended June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net loss attributable to common stockholders (in accordance with GAAP) | $ | (53,468) | $ | (56,259) | ||||||||||
Impairment of real estate investments | — | 58,954 | ||||||||||||
Depreciation and amortization | 59,466 | 46,573 | ||||||||||||
Gain on sale of real estate investments | (5,471) | (13,438) | ||||||||||||
Proportionate share of adjustments for non-controlling interest to arrive at FFO | (69) | (113) | ||||||||||||
FFO attributable to common stockholders [1] | 458 | 35,717 | ||||||||||||
Merger, transaction and other costs [2] | 4,931 | 206 | ||||||||||||
Settlement costs [3] | 8,800 | — | ||||||||||||
Legal fees and expenses — COVID-19 lease disputes [4] | — | 58 | ||||||||||||
Amortization of market lease and other intangibles, net | (1,780) | (1,582) | ||||||||||||
Straight-line rent | 1,429 | (1,509) | ||||||||||||
Straight-line rent (rent deferral agreements) [5] | (4) | (446) | ||||||||||||
Amortization of mortgage (premiums) and discounts on borrowings, net | 329 | 174 | ||||||||||||
Gain on non-designated derivatives | — | — | ||||||||||||
Equity-based compensation [6] | 3,518 | 3,523 | ||||||||||||
Amortization of deferred financing costs, net | 3,607 | 3,236 | ||||||||||||
Expenses attributable to 2023 proxy contest and related litigation [7] | 7,205 | — | ||||||||||||
Proportionate share of adjustments for non-controlling interest to arrive at AFFO | (25) | (5) | ||||||||||||
AFFO attributable to common stockholders [1] | $ | 27,923 | $ | 38,485 |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Table of Contents | ||||||||
Item | Page | |||||||
Non-GAAP Definitions | 4 | |||||||
Key Metrics | 7 | |||||||
Consolidated Balance Sheets | 9 | |||||||
Consolidated Statements of Operations | 10 | |||||||
Non-GAAP Measures | 11 | |||||||
Debt Overview | 13 | |||||||
Future Minimum Lease Rents | 14 | |||||||
Top Ten Tenants | 15 | |||||||
Diversification by Property Type | 16 | |||||||
Diversification by Geography | 17 | |||||||
Lease Expirations | 18 | |||||||
Please note that totals may not add due to rounding. |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Financial Results (Amounts in thousands, except per share data) | ||||||||
Revenue from tenants | $ | 106,700 | ||||||
Net loss attributable to common stockholders | $ | (53,468) | ||||||
Basic and diluted net loss per share attributable to common stockholders | $ | (0.40) | ||||||
Cash NOI [1] | $ | 81,267 | ||||||
Adjusted EBITDA [1] | $ | 66,107 | ||||||
AFFO attributable to common stockholders [1] | $ | 27,923 | ||||||
Dividends declared on common stock [2] | $ | 28,521 | ||||||
Balance Sheet and Capitalization (Amounts in thousands, except ratios and percentages) | ||||||||
Gross asset value [3] | $ | 5,145,987 | ||||||
Net debt [4] [5] | $ | 2,625,725 | ||||||
Total consolidated debt [5] | $ | 2,684,897 | ||||||
Total assets | $ | 4,335,260 | ||||||
Liquidity [6] | $ | 101,507 | ||||||
Common shares outstanding as of March 31, 2023 | 134,535 | |||||||
Net debt to gross asset value | 51.0 | % | ||||||
Net debt to adjusted EBITDA [1] (annualized based on quarterly results) | 9.9 | x | ||||||
Weighted-average interest rate cost [7] | 4.7 | % | ||||||
Weighted-average debt maturity (years) [8] | 3.9 | |||||||
Interest Coverage Ratio [9] | 2.1 | x |
Real Estate Portfolio | Single-Tenant Portfolio | Multi-Tenant Portfolio | Total Portfolio | |||||||||||||||||
Portfolio Metrics: | ||||||||||||||||||||
Real estate investments, at cost (in billions) | $ | 2.2 | $ | 2.7 | $ | 4.9 | ||||||||||||||
Number of properties | 882 | 109 | 991 | |||||||||||||||||
Square footage (in millions) | 11.0 | 16.4 | 27.4 | |||||||||||||||||
Annualized straight-line rent (in millions) [10] | $ | 161.3 | $ | 201.9 | $ | 363.2 | ||||||||||||||
Annualized straight-line rent per leased square foot | $ | 15.3 | $ | 13.7 | $ | 14.4 | ||||||||||||||
Occupancy [11] | 97.5 | % | 89.5 | % | 92.7 | % | ||||||||||||||
Weighted-average remaining lease term (years) [12] | 9.3 | 4.9 | 6.9 | |||||||||||||||||
% investment grade [13] | 65.9 | % | N/A | N/A | ||||||||||||||||
% of anchor tenants in multi-tenant portfolio that are investment grade [13] [14] | N/A | 36.5 | % | N/A | ||||||||||||||||
% of leases with rent escalators [15] | 85.2 | % | 48.1 | % | 64.9 | % | ||||||||||||||
Average annual rent escalator [15] | 1.4 | % | 0.7 | % | 1.0 | % |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 |
June 30, 2023 | December 31, 2022 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Real estate investments, at cost: | |||||||||||
Land | $ | 956,506 | $ | 996,293 | |||||||
Buildings, fixtures and improvements | 3,369,177 | 3,467,463 | |||||||||
Acquired intangible lease assets | 567,722 | 644,553 | |||||||||
Total real estate investments, at cost | 4,893,405 | 5,108,309 | |||||||||
Less: accumulated depreciation and amortization | (810,727) | (784,946) | |||||||||
Total real estate investments, net | 4,082,678 | 4,323,363 | |||||||||
Cash and cash equivalents | 59,172 | 70,795 | |||||||||
Restricted cash | 23,373 | 17,956 | |||||||||
Deferred costs, net | 25,050 | 22,893 | |||||||||
Straight-line rent receivable | 59,890 | 66,657 | |||||||||
Operating lease right-of-use assets | 17,587 | 17,839 | |||||||||
Prepaid expenses and other assets (including $2,651 of prepayments to related parties as of June 30, 2023) | 67,510 | 66,551 | |||||||||
Total assets | $ | 4,335,260 | $ | 4,586,054 | |||||||
LIABILITIES, MEZZANINE EQUITY AND EQUITY | |||||||||||
Mortgage notes payable, net | $ | 1,553,688 | $ | 1,808,433 | |||||||
Credit facility | 604,000 | 458,000 | |||||||||
Senior notes, net | 492,987 | 492,319 | |||||||||
Below market lease liabilities, net | 123,900 | 133,876 | |||||||||
Accounts payable and accrued expenses (including $901 and $1,838 due to related parties as of June 30, 2023 and December 31, 2022, respectively) | 54,804 | 64,169 | |||||||||
Operating lease liabilities | 19,088 | 19,132 | |||||||||
Derivative liabilities, at fair value | — | — | |||||||||
Deferred rent and other liabilities | 16,531 | 16,815 | |||||||||
Dividends payable | 5,837 | 5,837 | |||||||||
Total liabilities | 2,870,835 | 2,998,581 | |||||||||
Mezzanine Equity: | |||||||||||
7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 12,796,000 shares authorized, 7,933,711 shares issued and outstanding as of June 30, 2023 and December 31, 2022 | 79 | 79 | |||||||||
7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 11,536,000 shares authorized, 4,595,175 shares issued and outstanding as of June 30, 2023 and December 31, 2022 | 46 | 46 | |||||||||
Common stock, $0.01 par value per share, 300,000,000 shares authorized, 134,535,442 and 134,224,313 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 1,345 | 1,342 | |||||||||
Additional paid-in capital | 2,999,565 | 2,999,163 | |||||||||
Accumulated other comprehensive income (loss) | — | — | |||||||||
Distributions in excess of accumulated earnings | (1,565,425) | (1,435,794) | |||||||||
Total stockholders' equity | 1,435,610 | 1,564,836 | |||||||||
Non-controlling interests | 28,815 | 22,637 | |||||||||
Total equity | 1,464,425 | 1,587,473 | |||||||||
Total liabilities, mezzanine equity and total equity | $ | 4,335,260 | $ | 4,586,054 |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Three Months Ended | ||||||||||||||||||||||||||
June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||
Revenue from tenants | $ | 106,700 | $ | 113,594 | $ | 118,390 | $ | 116,176 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Asset management fees to related parties | 7,972 | 7,956 | 7,965 | 7,939 | ||||||||||||||||||||||
Property operating expenses | 25,082 | 26,913 | 26,848 | 28,051 | ||||||||||||||||||||||
Impairments of real estate investments | — | — | 2,323 | 30,046 | ||||||||||||||||||||||
Merger, transaction and other costs | 4,931 | 565 | 526 | 210 | ||||||||||||||||||||||
Settlement costs | 8,800 | — | — | — | ||||||||||||||||||||||
Equity-based compensation [1] | 3,519 | 3,567 | 3,555 | 3,857 | ||||||||||||||||||||||
General and administrative | 14,744 | 10,492 | 8,643 | 8,499 | ||||||||||||||||||||||
Depreciation and amortization | 59,466 | 54,182 | 54,099 | 57,494 | ||||||||||||||||||||||
Total operating expenses | 124,514 | 103,675 | 103,959 | 136,096 | ||||||||||||||||||||||
Operating (loss) income before gains on sales of real estate investments | (17,814) | 9,919 | 14,431 | (19,920) | ||||||||||||||||||||||
Gains (losses) on sale of real estate investments | 5,471 | 11,792 | (7,247) | 1,608 | ||||||||||||||||||||||
Operating (loss) income | (12,343) | 21,711 | 7,184 | (18,312) | ||||||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||
Interest expense | (35,945) | (34,675) | (34,454) | (32,402) | ||||||||||||||||||||||
Other income | 596 | 27 | 1 | 25 | ||||||||||||||||||||||
Total other expense, net | (35,349) | (34,648) | (34,453) | (32,377) | ||||||||||||||||||||||
Net loss | (47,692) | (12,937) | (27,269) | (50,689) | ||||||||||||||||||||||
Net loss attributable to non-controlling interests | 61 | 17 | 43 | 60 | ||||||||||||||||||||||
Allocation for preferred stock | (5,837) | (5,837) | (5,837) | (5,837) | ||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (53,468) | $ | (18,757) | $ | (33,063) | $ | (56,466) | ||||||||||||||||||
Basic and Diluted Net Loss Per Share: | ||||||||||||||||||||||||||
Net loss per share attributable to common stockholders — Basic and Diluted | $ | (0.40) | $ | (0.14) | $ | (0.25) | $ | (0.43) | ||||||||||||||||||
Weighted-average shares outstanding — Basic and Diluted | 133,800,130 | 133,715,627 | 133,716,340 | 133,115,729 | ||||||||||||||||||||||
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Three Months Ended | ||||||||||||||||||||||||||
June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||
EBITDA: | ||||||||||||||||||||||||||
Net loss | $ | (47,692) | $ | (12,937) | $ | (27,269) | $ | (50,689) | ||||||||||||||||||
Depreciation and amortization | 59,466 | 54,182 | 54,099 | 57,494 | ||||||||||||||||||||||
Interest expense | 35,945 | 34,675 | 34,454 | 32,402 | ||||||||||||||||||||||
EBITDA | 47,719 | 75,920 | 61,284 | 39,207 | ||||||||||||||||||||||
Impairment of real estate investments | — | — | 2,323 | 30,046 | ||||||||||||||||||||||
Merger, transaction and other costs | 4,931 | 565 | 526 | 210 | ||||||||||||||||||||||
Settlement costs | 8,800 | — | — | — | ||||||||||||||||||||||
Equity-based compensation [1] | 3,519 | 3,567 | 3,555 | 3,857 | ||||||||||||||||||||||
(Gain) loss on sale of real estate investments | (5,471) | (11,792) | 7,247 | (1,608) | ||||||||||||||||||||||
Other income | (596) | (27) | (1) | (25) | ||||||||||||||||||||||
Expenses attributable to 2023 proxy contest and related litigation [2] | 7,205 | 2,181 | 788 | — | ||||||||||||||||||||||
Adjusted EBITDA | 66,107 | 70,414 | 75,722 | 71,687 | ||||||||||||||||||||||
Asset management fees to related party | 7,972 | 7,956 | 7,965 | 7,939 | ||||||||||||||||||||||
General and administrative | 14,744 | 10,492 | 8,643 | 8,499 | ||||||||||||||||||||||
Expenses attributable to 2023 proxy contest and related litigation [2] | (7,205) | (2,181) | (788) | — | ||||||||||||||||||||||
NOI | 81,618 | 86,681 | 91,542 | 88,125 | ||||||||||||||||||||||
Amortization of market lease and other intangibles, net | (1,780) | (2,476) | (1,042) | (574) | ||||||||||||||||||||||
Straight-line rent | 1,429 | (1,121) | (2,794) | (2,586) | ||||||||||||||||||||||
Cash NOI | $ | 81,267 | $ | 83,084 | $ | 87,706 | $ | 84,965 | ||||||||||||||||||
Cash Paid for Interest: | ||||||||||||||||||||||||||
Interest expense | $ | 35,945 | $ | 34,675 | $ | 34,454 | $ | 32,402 | ||||||||||||||||||
Amortization of deferred financing costs, net | (3,607) | (3,760) | (3,498) | (3,474) | ||||||||||||||||||||||
Amortization of mortgage premiums and discounts on borrowings, net | (329) | (471) | (477) | (454) | ||||||||||||||||||||||
Total cash paid for interest | $ | 32,009 | $ | 30,444 | $ | 30,479 | $ | 28,474 |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Three Months Ended | ||||||||||||||||||||||||||
June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||
Funds from operations (FFO): | ||||||||||||||||||||||||||
Net loss attributable to common stockholders (in accordance with GAAP) | $ | (53,468) | $ | (18,757) | $ | (33,063) | $ | (56,466) | ||||||||||||||||||
Impairment of real estate investments | — | — | 2,323 | 30,046 | ||||||||||||||||||||||
Depreciation and amortization | 59,466 | 54,182 | 54,099 | 57,494 | ||||||||||||||||||||||
Gain on sale of real estate investments | (5,471) | (11,792) | 7,247 | (1,608) | ||||||||||||||||||||||
Proportionate share of adjustments for non-controlling interest to arrive at FFO | (69) | (55) | (82) | (115) | ||||||||||||||||||||||
FFO attributable to common stockholders [1] | 458 | 23,578 | 30,524 | 29,351 | ||||||||||||||||||||||
Merger, transaction and other costs [2] | 4,931 | 565 | 526 | 210 | ||||||||||||||||||||||
Settlement costs [3] | 8,800 | — | — | — | ||||||||||||||||||||||
Legal fees and expenses — COVID-19 lease disputes [4] | — | (12) | 55 | 7 | ||||||||||||||||||||||
Amortization of market lease and other intangibles, net | (1,780) | (2,476) | (1,042) | (574) | ||||||||||||||||||||||
Straight-line rent | 1,429 | (1,121) | (2,794) | (2,586) | ||||||||||||||||||||||
Straight-line rent (rent deferral agreements) [5] | (4) | (4) | (14) | (27) | ||||||||||||||||||||||
Amortization of mortgage (premiums) and discounts on borrowings, net | 329 | 471 | 477 | 454 | ||||||||||||||||||||||
Equity-based compensation [6] | 3,518 | 3,567 | 3,555 | 3,857 | ||||||||||||||||||||||
Amortization of deferred financing costs, net | 3,607 | 3,760 | 3,498 | 3,474 | ||||||||||||||||||||||
Gain on settlement of Prairie Towne liens [7] | (545) | — | — | — | ||||||||||||||||||||||
Expenses attributable to 2023 proxy contest and related litigation [8] | 7,205 | 2,181 | 788 | — | ||||||||||||||||||||||
Proportionate share of adjustments for non-controlling interest to arrive at AFFO | (25) | (8) | (13) | (6) | ||||||||||||||||||||||
AFFO attributable to common stockholders [1] | $ | 27,923 | $ | 30,501 | $ | 35,560 | $ | 34,160 | ||||||||||||||||||
Weighted-average common shares outstanding | 133,800 | 133,716 | 133,716 | 133,116 | ||||||||||||||||||||||
Net loss per share attributable to common stockholders — Basic and Diluted | $ | (0.40) | $ | (0.14) | $ | (0.25) | $ | (0.43) | ||||||||||||||||||
FFO per common share | $ | — | $ | 0.18 | $ | 0.23 | $ | 0.22 | ||||||||||||||||||
AFFO per common share | $ | 0.21 | $ | 0.23 | $ | 0.27 | $ | 0.26 | ||||||||||||||||||
Dividends declared on common stock | $ | 28,521 | $ | 28,523 | $ | 28,173 | $ | 28,331 |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Year of Maturity | Number of Encumbered Properties | Weighted-Average Debt Maturity (Years) [3] | Weighted-Average Interest Rate [3][4] | Total Outstanding Balance [5] | Percent | |||||||||||||||||||||||||||
Non-Recourse Debt | ||||||||||||||||||||||||||||||||
2023 (remainder) | 11 | 0.2 | 4.0 | % | $ | 96,498 | ||||||||||||||||||||||||||
2024 | 5 | 0.7 | 4.3 | % | 65,235 | |||||||||||||||||||||||||||
2025 | 363 | 2.1 | 3.8 | % | 706,777 | |||||||||||||||||||||||||||
2026 | 98 | 2.9 | 3.8 | % | 116,334 | |||||||||||||||||||||||||||
2027 | — | 4.2 | 3.8 | % | 611 | |||||||||||||||||||||||||||
Thereafter | 293 | 5.9 | 3.8 | % | 595,442 | |||||||||||||||||||||||||||
Total Non-Recourse Debt | 770 | 3.4 | 3.8 | % | 1,580,897 | 59 | % | |||||||||||||||||||||||||
Recourse Debt [1] | ||||||||||||||||||||||||||||||||
Credit Facility [2] | 3.8 | 7.2 | % | 604,000 | ||||||||||||||||||||||||||||
Senior Notes | 5.3 | 4.5 | % | 500,000 | ||||||||||||||||||||||||||||
Total Recourse Debt | 4.5 | 6.0 | % | 1,104,000 | 41 | % | ||||||||||||||||||||||||||
Total Debt | 3.9 | 4.7 | % | $ | 2,684,897 | 100 | % |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Future Minimum Base Rent Payments [1] | ||||||||
2023 (remainder) | $ | 171,304 | ||||||
2024 | 338,416 | |||||||
2025 | 313,653 | |||||||
2026 | 285,021 | |||||||
2027 | 246,173 | |||||||
2028 | 197,012 | |||||||
Thereafter | 1,045,985 | |||||||
Total | $ | 2,597,564 |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Tenant / Lease Guarantor | Property Type | Tenant Industry | Annualized SL Rent [1] | SL Rent Percent | Remaining Lease Term [2] | Investment Grade [3] | ||||||||||||||||||||||||||||||||
Imperial Reliance, LLC | Retail | Gas/Convenience | $ | 15,625 | 4 | % | 15.5 | Yes | ||||||||||||||||||||||||||||||
Fresenius | Retail | Healthcare | 14,658 | 4 | % | 6.2 | Yes | |||||||||||||||||||||||||||||||
Home Depot | Retail | Home Improvement | 12,987 | 4 | % | 6.6 | Yes | |||||||||||||||||||||||||||||||
AmeriCold | Distribution | Refrigerated Warehousing | 12,720 | 3 | % | 4.2 | Yes | |||||||||||||||||||||||||||||||
Truist Bank | Retail | Retail Banking | 12,001 | 3 | % | 6.0 | Yes | |||||||||||||||||||||||||||||||
Tenants 6 - 10 | Various | Various | 41,167 | 12 | % | 5.5 | 3 of 5 - Yes | |||||||||||||||||||||||||||||||
Subtotal | 109,158 | 30 | % | 7.0 | ||||||||||||||||||||||||||||||||||
Remaining portfolio | 257,021 | 70 | % | |||||||||||||||||||||||||||||||||||
Total Portfolio | $ | 366,179 | 100 | % |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Total Portfolio | ||||||||||||||||||||||||||
Property Type | Annualized SL Rent [1] | SL Rent Percent | Square Feet | Sq. ft. Percent | ||||||||||||||||||||||
Retail (including Power and Lifestyle Centers) | $ | 333,062 | 91 | % | 22,802 | 84 | % | |||||||||||||||||||
Distribution | 29,469 | 8 | % | 4,230 | 15 | % | ||||||||||||||||||||
Office | 3,648 | 1 | % | 306 | 1 | % | ||||||||||||||||||||
Total | $ | 366,179 | 100 | % | 27,338 | 100 | % |
Retail Properties | ||||||||||||||||||||||||||
Tenant Type | Annualized SL Rent [1] | SL Rent Percent | Square Feet [2] | Sq. ft. Percent | ||||||||||||||||||||||
Single-Tenant: | ||||||||||||||||||||||||||
Service-oriented [3] | $ | 108,406 | 33 | % | 3,602 | 17 | % | |||||||||||||||||||
Traditional retail [4] | 23,824 | 7 | % | 2,557 | 12 | % | ||||||||||||||||||||
Multi-Tenant: | ||||||||||||||||||||||||||
Experiential/e-commerce defensive [5] | 84,873 | 25 | % | 5,231 | 25 | % | ||||||||||||||||||||
Other traditional retail | 115,959 | 35 | % | 9,421 | 45 | % | ||||||||||||||||||||
Total | $ | 333,062 | 100 | % | 20,811 | 100 | % |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Total Portfolio | ||||||||||||||||||||||||||
Region | Annualized SL Rent [1] | SL Rent Percent | Square Feet | Sq. ft. Percent | ||||||||||||||||||||||
Alabama | $ | 20,577 | 5.6 | % | 1,917 | 7.0 | % | |||||||||||||||||||
Alaska | 409 | 0.1 | % | 9 | — | % | ||||||||||||||||||||
Arizona | 352 | 0.1 | % | 22 | 0.1 | % | ||||||||||||||||||||
Arkansas | 4,869 | 1.3 | % | 396 | 1.4 | % | ||||||||||||||||||||
California | 14,132 | 3.9 | % | 518 | 1.9 | % | ||||||||||||||||||||
Colorado | 792 | 0.2 | % | 52 | 0.2 | % | ||||||||||||||||||||
Connecticut | 1,801 | 0.5 | % | 98 | 0.4 | % | ||||||||||||||||||||
District of Columbia | 236 | 0.1 | % | 4 | — | % | ||||||||||||||||||||
Florida | 23,705 | 6.5 | % | 1,524 | 5.6 | % | ||||||||||||||||||||
Georgia | 37,628 | 10.3 | % | 2,589 | 9.5 | % | ||||||||||||||||||||
Idaho | 339 | 0.1 | % | 14 | 0.1 | % | ||||||||||||||||||||
Illinois | 19,472 | 5.3 | % | 1,597 | 5.8 | % | ||||||||||||||||||||
Indiana | 9,837 | 2.7 | % | 881 | 3.2 | % | ||||||||||||||||||||
Iowa | 2,698 | 0.7 | % | 166 | 0.6 | % | ||||||||||||||||||||
Kansas | 5,413 | 1.5 | % | 397 | 1.5 | % | ||||||||||||||||||||
Kentucky | 14,939 | 4.1 | % | 1,096 | 4.0 | % | ||||||||||||||||||||
Louisiana | 10,794 | 2.9 | % | 756 | 2.8 | % | ||||||||||||||||||||
Maine | 349 | 0.1 | % | 27 | 0.1 | % | ||||||||||||||||||||
Maryland | 4,548 | 1.2 | % | 299 | 1.1 | % | ||||||||||||||||||||
Massachusetts | 7,767 | 2.1 | % | 757 | 2.8 | % | ||||||||||||||||||||
Michigan | 9,723 | 2.7 | % | 604 | 2.2 | % | ||||||||||||||||||||
Minnesota | 3,441 | 0.9 | % | 379 | 1.4 | % | ||||||||||||||||||||
Mississippi | 6,455 | 1.8 | % | 351 | 1.3 | % | ||||||||||||||||||||
Missouri | 7,203 | 2.0 | % | 566 | 2.1 | % | ||||||||||||||||||||
Montana | 1,184 | 0.3 | % | 42 | 0.2 | % | ||||||||||||||||||||
Nebraska | 495 | 0.1 | % | 12 | — | % | ||||||||||||||||||||
Nevada | 7,142 | 2.0 | % | 408 | 1.5 | % | ||||||||||||||||||||
New Hampshire | 138 | — | % | 6 | — | % | ||||||||||||||||||||
New Jersey | 1,512 | 0.4 | % | 81 | 0.3 | % | ||||||||||||||||||||
New Mexico | 5,074 | 1.4 | % | 369 | 1.3 | % | ||||||||||||||||||||
New York | 3,590 | 1.0 | % | 313 | 1.1 | % | ||||||||||||||||||||
North Carolina | 27,917 | 7.6 | % | 2,354 | 8.6 | % | ||||||||||||||||||||
North Dakota | 923 | 0.3 | % | 146 | 0.5 | % | ||||||||||||||||||||
Ohio | 21,904 | 6.0 | % | 1,707 | 6.2 | % | ||||||||||||||||||||
Oklahoma | 13,263 | 3.6 | % | 1,079 | 3.9 | % | ||||||||||||||||||||
Pennsylvania | 13,424 | 3.7 | % | 879 | 3.2 | % | ||||||||||||||||||||
Rhode Island | 2,239 | 0.6 | % | 114 | 0.4 | % | ||||||||||||||||||||
South Carolina | 18,472 | 5.0 | % | 1,827 | 6.7 | % | ||||||||||||||||||||
South Dakota | 358 | 0.1 | % | 47 | 0.2 | % | ||||||||||||||||||||
Tennessee | 3,816 | 1.0 | % | 211 | 0.8 | % | ||||||||||||||||||||
Texas | 20,524 | 5.6 | % | 1,362 | 5.0 | % | ||||||||||||||||||||
Utah | 1,087 | 0.3 | % | 41 | 0.1 | % | ||||||||||||||||||||
Vermont | 102 | — | % | 22 | 0.1 | % | ||||||||||||||||||||
Virginia | 3,445 | 0.9 | % | 322 | 1.2 | % | ||||||||||||||||||||
West Virginia | 2,139 | 0.6 | % | 241 | 0.9 | % | ||||||||||||||||||||
Wisconsin | 8,633 | 2.4 | % | 664 | 2.4 | % | ||||||||||||||||||||
Wyoming | 1,319 | 0.4 | % | 72 | 0.3 | % | ||||||||||||||||||||
Total | $ | 366,179 | 100 | % | $ | 27,338 | 100 | % |
The Necessity Retail REIT, Inc. | ||||||||
Supplemental Information | ||||||||
Quarter ended June 30, 2023 (Unaudited) |
Year of Expiration | Number of Leases Expiring | Annualized SL Rent [1] | Annualized SL Rent Percent | Leased Square Feet | Percent of Leased Square Feet Expiring | |||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||
2023 (Remaining) | 73 | $ | 5,610 | 1.5 | % | 404 | 1.6 | % | ||||||||||||||||||||||||
2024 | 203 | 24,686 | 6.7 | % | 1,725 | 6.8 | % | |||||||||||||||||||||||||
2025 | 226 | 33,265 | 9.1 | % | 2,483 | 9.8 | % | |||||||||||||||||||||||||
2026 | 214 | 36,245 | 9.9 | % | 2,769 | 10.9 | % | |||||||||||||||||||||||||
2027 | 242 | 51,254 | 14.0 | % | 4,914 | 19.4 | % | |||||||||||||||||||||||||
2028 | 241 | 40,684 | 11.1 | % | 3,003 | 11.9 | % | |||||||||||||||||||||||||
2029 | 185 | 33,110 | 9.0 | % | 2,233 | 8.8 | % | |||||||||||||||||||||||||
2030 | 86 | 18,344 | 5.0 | % | 1,161 | 4.6 | % | |||||||||||||||||||||||||
2031 | 81 | 19,036 | 5.2 | % | 1,202 | 4.7 | % | |||||||||||||||||||||||||
2032 | 70 | 12,404 | 3.4 | % | 935 | 3.7 | % | |||||||||||||||||||||||||
2033 | 79 | 14,292 | 3.9 | % | 793 | 3.1 | % | |||||||||||||||||||||||||
2034 | 26 | 9,062 | 2.5 | % | 470 | 1.9 | % | |||||||||||||||||||||||||
2035 | 6 | 2,320 | 0.6 | % | 191 | 0.8 | % | |||||||||||||||||||||||||
2036 | 34 | 3,898 | 1.1 | % | 222 | 0.9 | % | |||||||||||||||||||||||||
2037 | 35 | 4,633 | 1.3 | % | 98 | 0.4 | % | |||||||||||||||||||||||||
2038 | 95 | 17,796 | 4.9 | % | 488 | 1.9 | % | |||||||||||||||||||||||||
Thereafter (>2038) | 187 | 39,540 | 10.8 | % | 2,242 | 8.8 | % | |||||||||||||||||||||||||
Total | 2,083 | $ | 366,179 | 100 | % | 25,333 | 100 | % |
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