VEREIT, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 22, 2013

Attached files

file filename
8-K - FORM 8-K - VEREIT, Inc.v347892_8k.htm
EX-99.3 - EXHIBIT 99.3 - VEREIT, Inc.v347892_ex99-3.htm
EX-99.2 - EXHIBIT 99.2 - VEREIT, Inc.v347892_ex99-2.htm

 

THE COMPANIES

 

American Realty Capital Properties, Inc., Safari Acquisition, LLC and Thunder Acquisition, LLC

 

American Realty Capital Properties, Inc., or ARCP, is a Maryland corporation incorporated in December 2010 that qualified as a real estate investment trust for U.S. federal income tax purposes, or REIT, commencing with its initial taxable year ended December 31, 2011. In July 2011, ARCP commenced an initial public offering on a “reasonable best efforts” basis, which closed on September 6, 2011. ARCP common stock began trading on the NASDAQ Capital Market under the symbol “ARCP” on September 7, 2011. On February 28, 2013, ARCP merged with American Realty Capital Trust III, Inc., a Maryland corporation, or ARCT III. Following its acquisition of ARCT III and commencing with trading on March 1, 2013, ARCP common stock began trading on the NASDAQ Global Select Market.

 

Substantially all of ARCP’s business is conducted through ARC Properties Operating Partnership, L.P., or the ARCP OP, of which ARCP is the sole general partner.

 

ARCP acquires, owns and operates single-tenant, freestanding commercial real estate properties. ARCP has acquired a combination of long-term and medium-term leases and intends to continue to acquire properties with approximately 70% long-term leases and 30% medium-term leases, with an average remaining lease term of 10 to 12 years. ARCP considers properties that are leased on a “medium-term” basis to mean properties originally leased long-term (ten years or longer) that currently have a primary remaining lease duration of generally three to eight years, on average. ARCP expects this investment strategy to develop growth potential from below market leases. Additionally, ARCP owns a portfolio that uniquely combines a portfolio of properties with stable income from high credit quality tenants, with properties that have substantial growth opportunities.

 

As of March 31, 2013, excluding one vacant property classified as held for sale, ARCP owned 701 properties consisting of 16.7 million square feet, 100% leased with a weighted average remaining lease term of 11.1 years. In constructing its portfolio, ARCP is committed to diversification (industry, tenant and geography). As of March 31, 2013, rental revenues derived from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 79% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). ARCP’s strategy encompasses receiving the majority of its revenue from investment grade tenants as ARCP further acquires properties and enters into (or assumes) medium-term and long-term lease arrangements.

 

ARCP’s principal executive offices are located at 405 Park Avenue, 15th Floor, New York, New York 10022, and its telephone number is (212) 415-6500.

 

The entity into which CapLease (as defined and described below) will merge, Safari Acquisition, LLC, or the CapLease Merger Sub, is a Delaware limited liability company and a direct wholly owned subsidiary of ARCP that was formed for the purpose of acquiring CapLease pursuant to the merger agreement with CapLease.

 

The entity into which ARCT IV (as defined and described below) will merge, Thunder Acquisition, LLC, or the ARCT IV Merger Sub, is a Delaware limited liability company and a direct wholly owned subsidiary of ARCP that was formed for the purpose of acquiring ARCT IV pursuant to the merger agreement with ARCT IV.

 

CapLease, Inc.

 

CapLease, Inc., or CapLease, is a REIT that primarily acquires, owns and manages a diversified portfolio of single tenant commercial real estate properties subject to long-term leases to high credit quality tenants. CapLease focuses on properties that are subject to a lease that requires the tenant to pay all or substantially all property operating expenses, such as utilities, real estate taxes, insurance and routine maintenance. CapLease has made an election to qualify, and believes it is operating so as to qualify, as a REIT commencing with its taxable year ended December 31, 2004. In addition to its portfolio of owned properties, CapLease has a modest portfolio of first mortgage loans and other debt investments on single tenant properties.

 

CapLease conducts its business through a variety of subsidiaries. CapLease owns most of its owned properties through its predecessor and operating partnership, Caplease, LP. CapLease is the indirect sole general partner of, and owns approximately 99.8% of the common equity of, CapLease, LP.

 

As of March 31, 2013, excluding one vacant property, CapLease owned 70 properties comprised of 12.0 million square feet, which were 96.6% leased with a weighted average remaining lease term of approximately 6.0 years.

 

CapLease’s principal executive offices are located at 1065 Avenue of the Americas, New York, New York 10018, and its telephone number is (212) 217-6300.

 

 
 

 

GE Capital Portfolio

 

On June 27, 2013 ARCP, through the ARCP OP, acquired the equity interests in the entities that own a real estate portfolio comprised of 447 net lease properties, or the GE Capital Portfolio, from certain affiliates of GE Capital Corp., or GE Capital. The 447 properties are subject to 400 property operating leases and 47 direct financing leases. The GE Capital Portfolio contains approximately 2.0 million rentable square feet and consists of 444 restaurants (including three other revenue generating assets) and three retail properties. The purchase price for the GE Capital Portfolio was approximately $774 million exclusive of closing costs.

 

American Realty Capital Trust IV, Inc.

 

American Realty Capital Trust IV, Inc., or ARCT IV, is a Maryland corporation incorporated in February 2012 that qualifies as a REIT for U.S. federal income tax proposes commencing with its initial taxable year ended December 31, 2012. ARCT IV is a non-traded REIT. ARCT IV was formed to acquire a diversified portfolio of commercial real estate, which consists primarily of freestanding single tenant properties net leased to investment grade and other credit worthy tenants. In June 2012, ARCT IV commenced an initial public offering on a ‘‘reasonable best efforts’’ basis to sell up to 60.0 million shares of common stock, excluding 10.0 million shares issuable pursuant to a distribution reinvestment plan, offered at a price of $25.00 per share, subject to certain volume and other discounts, which we refer to as the ARCT IV IPO. In September 2012, ARCT IV commenced real estate operations. As of July 2, 2013, ARCT IV had issued 70,219,528 million shares of ARCT IV common stock in connection with the ARCT IV IPO and had issued 885,216 million shares of ARCT IV common stock under its distribution reinvestment plan. As of July 2, 2013, ARCT IV had 71,112,745 shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to ARCT IV’s distribution reinvestment plan.

 

Substantially all of ARCT IV’s business is conducted through American Realty Capital Operating Partnership IV, L.P., a Delaware limited partnership and the operating partnership of ARCT IV, or the ARCT IV Operating Partnership, of which ARCT IV is the sole general partner.

 

As of June 30, 2013, ARCT IV owned 585 properties comprised of 6.6 million square feet, which were 100% leased with a weighted average remaining lease term of 11.7 years. Additionally, ARCT IV is party to a purchase and sale agreement with certain affiliates of GE Capital pursuant to which 578 properties remain to be acquired by ARCT IV thereunder. In constructing the portfolio, ARCT IV has been committed to diversification by industry, tenant and geography.

 

ARCT IV’s principal executive offices are located at 405 Park Avenue, 15th Floor, New York, New York 10022, and its telephone number is (212) 415-6500.

 

ARCT IV and ARCP each were sponsored directly by AR Capital, LLC, or ARC. American Realty Capital Advisors IV, LLC, or the ARCT IV Advisor, is a Delaware limited liability company indirectly wholly owned by ARC and is ARCT IV’s external advisor. ARC Properties Advisors, LLC, or the ARCP Manager, is a Delaware limited liability company wholly owned by ARC and is ARCP’s external manager. ARC and its affiliates, including the ARCT IV Advisor and ARCP Manager, provide investment, management and advisory services, as well as certain acquisition and debt capital services to ARCT IV and ARCP, as applicable. ARCT IV and ARCP pay management fees and certain other fees to, and reimburse certain expenses of, the ARCT IV Advisor and ARCP Manager, respectively. Affiliates of ARC also provide similar services for American Realty Capital New York Recovery REIT, Inc., Phillips Edison — ARC Shopping Center REIT Inc., American Realty Capital — Retail Centers of America, Inc., American Realty Capital Healthcare Trust, Inc., American Realty Capital Daily Net Asset Value Trust, Inc., ARC Realty Financial Trust, Inc., American Realty Capital Global Trust, Inc., American Realty Capital Healthcare Trust II, Inc. and American Realty Capital Trust V, Inc. Certain of these ARC-sponsored REITs have investment strategies substantially similar to those of ARCT IV, ARCP and the combined company.

 

 
 


Combination of ARCP, CapLease, the GE Capital Portfolio and ARCT IV

 

Combination of ARCP and CapLease

 

As of March 31, 2013, excluding one vacant property classified as held for sale, ARCP’s portfolio was comprised of 701 properties consisting of 16.7 million rentable square feet, 100% leased with a weighted average remaining lease term of 11.1 years. As of March 31, 2013, excluding one vacant property CapLease owned 70 properties comprised of 12.0 million square feet, which were 96.6% leased with a weighted average remaining lease term of approximately 6.0 years.

 

ARCP and CapLease are each focused on creating a portfolio of primarily net lease properties leased to high credit quality tenants. ARCP focuses on acquiring properties with both medium-term and long-term leases. CapLease’s portfolio, which has a weighted average remaining lease term on a portfolio basis as of March 31, 2013 of 6.0 years, fits within the medium-term lease component of ARCP’s strategy.

 

Following the CapLease Merger, the combined company will own a portfolio that combines CapLease’s portfolio of properties that are substantially net leased to investment grade tenants as determined by major credit rating agencies (including the attribution of such ratings to affiliates of CapLease’s tenants) which contain growth opportunities with ARCP’s portfolio, which retains a balance of growth opportunities and security and is also substantially leased to investment grade tenants as determined by major credit rating agencies (including the attribution of such ratings to affiliates of ARCP’s tenants). The combined portfolio will be diversified by geography, tenant and industry. The combination will reduce ARCP’s current top ten tenant concentration.

 

ARCP’s Acquisition of the GE Capital Portfolio

 

ARCP’s acquisition of the GE Capital Portfolio added 2.0 million rentable square feet to ARCP’s portfolio, which totaled 19.4 million rentable square feet including the GE Capital Portfolio, as of June 30, 2013. The GE Capital Portfolio is highly diversified by tenant and includes 123 distinct tenant groups. The GE Capital Portfolio is highly concentrated in the retail sector, adding to ARCP’s continued focus on building a single tenant net lease portfolio leased to commercial tenants. Annualized rental income as of June 30, 2013 for the GE Capital Portfolio separately, ARCP separately, and ARCP and the GE Capital Portfolio together are approximately $53.2 million, $174.6 million, and $227.8 million, respectively. The acquisition increased ARCP’s current industry diversification by expanding in the restaurant industry.

 

Combination of ARCP and ARCT IV

 

As of June 30, 2013, (excluding one vacant property classified as held for sale) ARCP owned 1,181 properties consisting of 19.4 million square feet, 100% leased with a weighted average remaining lease term of 9.9 years. As of June 30, 2013, ARCT IV owned 585 properties comprised of 6.6 million square feet, which were 100% leased with a weighted average remaining lease term of 11.7 years. Additionally, ARCT IV is party to a purchase and sale agreement with certain affiliates of GE Capital pursuant to which 578 properties remain to be acquired by ARCT IV thereunder. No assurance can be given that ARCT IV will acquire such properties. In constructing the portfolio, ARCT IV has been committed to diversification by industry, tenant and geography.

 

ARCP and ARCT IV are each focused on creating a portfolio of primarily net lease properties leased to high credit quality tenants. ARCP focuses on acquiring properties with both medium-term and long-term leases. ARCT IV’s portfolio, which has a weighted average remaining lease term on a portfolio basis as of June 30, 2013 of 11.7 years, fits within the long-term lease component of ARCP’s strategy.

 

Following the ARCT IV Merger, the combined company will own a portfolio that combines ARCT IV’s portfolio of properties that are substantially net leased to investment grade tenants as determined by major credit rating agencies (including the attribution of such ratings to affiliates of ARCT IV’s tenants) which are stable with ARCP’s portfolio, which retains a balance of growth opportunities and security and is also substantially leased to investment grade tenants as determined by major credit rating agencies (including the attribution of such ratings to affiliates of ARCP’s tenants). The combined portfolio will be diversified by geography, tenant and industry. The combination will reduce ARCP’s current top ten tenant concentration.

 

In connection with the ARCT IV Merger, ARCP entered into a letter agreement for proxy solicitation services with RCS Advisory Services, LLC, or RCS, RCS Capital Securities, LLC, or RC Securities, and American National Stock Transfer, LLC, or ANST, pursuant to which it will pay $640,000 for such services. Additionally, in connection with the ARCT IV Merger, ARCP entered into an agreement for financial advisory and strategic services with RC Securities, pursuant to which it will pay RC Securities an amount equal to 0.25% of the transaction value of the ARCT IV Merger. Each of RCS, RC Securities and ANST is an entity directly or indirectly under common control with ARC, the sponsor of ARCP and ARCT IV.

 

Combination of ARCP, CapLease, the GE Capital Portfolio and ARCT IV

 

As of June 30, 2013, the combined portfolio of ARCP, CapLease, the GE Capital Portfolio and ARCT IV (including the pending properties to be acquired from GE Capital) totals 2,414 properties containing 40.0 million rentable square feet with a pro forma weighted average lease term of 9.3 years, providing a balance between medium-term and long-term leases. Annualized rental revenues for the portfolios as of June 30, 2013 for ARCP, CapLease and the GE Capital Portfolio together total approximately $508.4 million.

 

 
 

 

TABLE OF CONTENTS

Property Portfolio Information

At June 30, 2013, ARCP, excluding properties owned by CapLease, owned a diversified portfolio:

• of 1,181 properties, excluding one vacant property classified as held for sale;
• with an occupancy rate of 100%;
• leased to 180 different retail and other commercial enterprises doing business in 21 separate industries;
• located in 48 states and Puerto Rico;
• with approximately 19.4 million square feet of leasable space; and
• with an average leasable space per property of approximately 16,400 square feet.

At June 30, 2013, ARCP, including properties owned by CapLease (assuming the CapLease Merger is consummated), on a pro forma basis, owned a diversified portfolio:

• of 1,251 properties, excluding two vacant properties, one of which is classified as held for sale;
• with an occupancy rate of 96%;
• leased to 220 different retail and other commercial enterprises doing business in 29 separate industries;
• located in 48 states and Puerto Rico;
• with approximately 31.4 million square feet of leasable space; and
• with an average leasable space per property of approximately 25,100 square feet.

At June 30, 2013, ARCT IV, excluding properties under contract to be acquired from affiliates of GE Capital, owned a diversified portfolio:

• of 585 properties;
• with an occupancy rate of 100%;
• leased to 172 different retail and other commercial enterprises doing business in five separate industries;
• located in 42 states;
• with approximately 6.6 million square feet of leasable space; and
• with an average leasable space per property of approximately 11,200 square feet.

At June 30, 2013, ARCT IV, including properties under contract to be acquired from GE Capital, on a pro forma basis, owned a diversified portfolio:

• of 1,163 properties;
• with an occupancy rate of 100%;
• leased to 287 different retail and other commercial enterprises doing business in 23 separate industries;
• located in 46 states and the District of Columbia;
• with approximately 8.6 million square feet of leasable space; and
• with an average leasable space per property of approximately 7,400 square feet.

 
 

TABLE OF CONTENTS

Combined Property Portfolio

As of June 30, 2013, ARCP (assuming the CapLease Merger is consummated) and ARCT IV, on a pro forma basis, owned a portfolio with the following characteristics:

• 1,836 properties, including 1,251 ARCP properties at June 30, 2013 and 585 ARCT IV properties at June 30, 2013;
• occupancy rate of 100%;
• leased to 355 different retail and other commercial enterprises doing business in 32 separate industries;
• located in 49 states and Puerto Rico;
• approximately 38.0 million square feet of leasable space; and
• an average leasable space per property of approximately 20,700 square feet.

As of June 30, 2013, ARCP and ARCT IV, including CapLease and properties under contract to be acquired from GE Capital, on a pro forma basis, owned a portfolio with the following characteristics:

• 2,414 properties, including 1,251 ARCP properties, 585 ARCT IV properties, 70 CapLease properties and 578 properties under contract with GE Capital at June 30, 2013;
• occupancy rate of 97%;
• leased to 454 different retail and other commercial enterprises doing business in 34 separate industries;
• located in 49 states, the District of Columbia and Puerto Rico;
• approximately 40.0 million square feet of leasable space; and
• an average leasable space per property of approximately 16,500 square feet.

There were no tenants whose annualized rental income on a straight-line basis represent greater than 10% of the total annualized rental income on a straight-line basis for the pro forma portfolio properties of ARCP and ARCT IV as of June 30, 2013.

All of the following property portfolio information is provided to illustrate the pro forma combined property portfolio of ARCP and ARCT IV post-merger. This information includes an illustration of the combined portfolio by industry, property type and geography, as well as a combined lease expiration schedule. The ARCP information represents quarterly information for the 1,251 properties owned, including properties owned by CapLease (which assumes the CapLease Merger is consummated), at June 30, 2013. The ARCT IV information represents quarterly information for the 585 properties owned at June 30, 2013. The ARCT IV (GE Capital) information represents 578 properties remaining to be acquired under ARCT IV’s purchase agreement with GE Capital at June 30, 2013.

 
 

TABLE OF CONTENTS

Industry Diversification

The following table sets forth certain information regarding the property portfolios classified according to the business of the respective tenants, expressed as a percentage of total rental revenue:

Percentage of Rental Revenue

         
Industry   ARCP(1)   ARCT IV(2)   CapLease(3)   ARCT IV
(GE Capital)(4)		   Combined Total
Advertising     0.00 %      —       —       0.01 %      0.00 % 
Aerospace     1.10 %      —       —       —       0.49 % 
Auto Manufacturing     —       7.36 %      —       —       1.19 % 
Auto Retail     2.45 %      0.40 %      2.71 %      —       1.89 % 
Auto Services     0.27 %      0.44 %      —       —       0.19 % 
Casual Dining     6.84 %      8.92 %      —       33.20 %      8.54 % 
Consulting     —       —       3.64 %      —       0.98 % 
Consumer Goods     0.28 %      9.87 %      —       —       1.72 % 
Consumer Products     10.99 %      3.13 %      8.31 %      —       7.66 % 
Discount Retail     10.90 %      5.81 %      4.50 %      —       7.03 % 
Diversified Industrial     —       —       8.25 %      —       2.22 % 
Family Dining     7.06 %      6.35 %      —       12.30 %      5.68 % 
Financial Services     0.56 %               7.51 %      0.10 %      2.28 % 
Freight     7.04 %      1.39 %      —       —       3.38 % 
Gas/Convenience     3.18 %      1.36 %      —       —       1.65 % 
Government Services     2.56 %      —       13.32 %      —       4.73 % 
Haircare Services     —       0.03 %      —       —       0.00 % 
Healthcare     5.74 %      3.18 %      4.04 %      0.10 %      4.18 % 
Home Maintenance     0.99 %      1.01 %      4.38 %      —       1.78 % 
Hotel     —       —       2.09 %      —       0.56 % 
Insurance     4.75 %      —       13.99 %      0.10 %      5.90 % 
Media     —       —       1.97 %      —       0.53 % 
Motor Cycle     —       —       —       1.40 %      0.17 % 
Oil & Gas     —       —       3.11 %      —       0.84 % 
Parking     —       —       —       0.10 %      0.01 % 
Pharmacy     8.78 %      1.09 %      0.81 %      —       4.33 % 
Publishing     —       —       1.16 %      —       0.31 % 
Quick Service Restaurant     12.10 %      26.48 %      —       52.69 %      16.12 % 
Retail Banking     9.11 %      15.12 %      1.56 %      —       6.94 % 
Specialty Retail     4.59 %      7.98 %      4.53 %      —       4.56 % 
Storage Facility     0.19 %      —       —       —       0.09 % 
Supermarket     0.52 %      —       4.84 %      —       1.54 % 
Telecommunications     —       0.08 %      5.23 %      —       1.42 % 
Various     —       —       4.05 %      —       1.09 % 
Total     100.0%       100.0%       100.0%       100.0%       100.0%  

(1) Includes annualized rental revenue for all properties owned by ARCP at June 30, 2013.
(2) Includes annualized rental revenue for all properties owned by ARCT IV at June 30, 2013.
(3) Includes annualized rental revenue for all properties owned by CapLease at June 30, 2013.
(4) Includes annualized rental revenue for all properties under contract to be acquired by ARCT IV from GE Capital at June 30, 2013.

 
 

TABLE OF CONTENTS

Property Type Diversification

The following table sets forth certain property type information regarding the property portfolios (dollars in thousands):

ARCP

       
Property Type   Number of Properties   Approximate Leasable Square Feet   Annualized Rental Revenue   Percentage of Rental Revenue
Retail     1,100       7,609,157       143,757       63.1 % 
Office     35       1,992,555       33,275       14.6 % 
Distribution     46       9,802,884       50,732       22.3 % 
Total     1,181       19,404,596       227,764       100%  

ARCT IV

       
Property Type   Number of Properties   Approximate Leasable Square Feet   Annualized Rental Revenue   Percentage of Rental Revenue
Retail     581       4,139,912       65,342       79.6 % 
Distribution     3       2,430,535       16,706       20.4 % 
Parking Lot     1       8,400       1       0.0 % 
Total     585       6,578,847       82,049       100%  

CAPLEASE

       
Property Type   Number of Properties   Approximate Leasable Square Feet   Annualized Rental Revenue   Percentage of Rental Revenue
Retail     16       1,172,481       13,720       10.0 % 
Office     44       6,206,297       101,017       73.9 % 
Distribution     10       4,621,011       22,045       16.1 % 
Total     70       11,999,789       136,782       100%  

ARCT IV (GE Capital)

       
Property Type   Number of Properties   Approximate Leasable Square Feet   Annualized Rental Revenue   Percentage of Rental Revenue
Retail     572       1,964,827       61,741       99.8 % 
Parking Lot     1       17,446       35       0.1 % 
Billboard     5       2,463       59       0.1 % 
Total     578       1,984,736       61,835       100%  

COMBINED

       
Property Type   Number of Properties   Approximate Leasable Square Feet   Annualized Rental Revenue   Percentage of Rental Revenue
Retail     2,269       14,886,377       284,559       56.0 % 
Office     79       8,198,852       134,292       26.4 % 
Distribution     59       16,854,430       89,483       17.6 % 
Parking Lot     2       25,846       36       0.0 % 
Billboard     5       2,463       59       0.0 % 
Total     2,414       39,967,968       508,430       100%  

 
 

TABLE OF CONTENTS

Geographic Diversification

The following table sets forth certain state-by-state information regarding the property portfolios (dollars in thousands):

ARCP

       
State   Number of Properties   Leasable Square Feet   Annualized
Rental Revenue(1)		   Percentage of Rental Revenue
Alabama     43       578,951       8,122       3.6 % 
Arizona     8       74,227       1,613       0.7 % 
Arkansas     18       250,618       3,652       1.6 % 
California     16       1,450,328       12,488       5.5 % 
Colorado     13       238,886       4,673       2.1 % 
Connecticut     10       37,126       1,184       0.5 % 
Delaware     4       12,369       286       0.1 % 
Florida     36       188,676       5,366       2.4 % 
Georgia     64       403,579       8,896       3.9 % 
Idaho     8       71,565       1,552       0.7 % 
Illinois     42       1,486,911       19,123       8.4 % 
Indiana     28       1,762,150       8,288       3.6 % 
Iowa     19       671,074       4,810       2.1 % 
Kansas     22       1,305,125       4,611       2.0 % 
Kentucky     27       263,260       4,629       2.0 % 
Louisiana     28       221,238       2,871       1.3 % 
Maine     2       146,430       2,819       1.2 % 
Maryland     2       11,205       366       0.2 % 
Massachusetts     18       435,195       6,157       2.7 % 
Michigan     78       677,709       12,674       5.6 % 
Minnesota     11       200,487       1,693       0.7 % 
Mississippi     36       1,380,764       8,327       3.7 % 
Missouri     86       942,859       11,019       4.8 % 
Montana     5       55,377       856       0.4 % 
Nebraska     3       25,355       409       0.2 % 
Nevada     12       100,660       2,414       1.1 % 
New Hampshire     10       65,328       1,349       0.6 % 
New Jersey     8       85,721       2,640       1.2 % 
New Mexico     10       54,475       870       0.4 % 
New York     25       326,461       7,522       3.3 % 
North Carolina     54       1,123,948       10,840       4.8 % 
North Dakota     4       31,318       572       0.3 % 
Ohio     63       1,197,640       10,754       4.7 % 
Oklahoma     22       370,185       2,882       1.3 % 
Oregon     6       25,143       652       0.3 % 
Pennsylvania     69       365,231       8,697       3.8 % 
Puerto Rico     2       31,050       1,105       0.5 % 
Rhode Island     5       23,488       636       0.3 % 
South Carolina     30       649,029       6,920       3.0 % 
South Dakota     2       49,641       415       0.2 % 
Tennessee     48       362,779       6,526       2.9 % 
Texas     127       983,549       15,322       6.7 % 
Utah     3       14,009       415       0.2%  

 
 

TABLE OF CONTENTS

       
State   Number of Properties   Leasable Square Feet   Annualized
Rental Revenue(1)		   Percentage of Rental Revenue
Vermont     4       15,432       335       0.1 % 
Virginia     25       150,269       3,395       1.5 % 
Washington     5       219,700       3,139       1.4 % 
West Virginia     9       57,079       1,434       0.6 % 
Wisconsin     7       187,439       1,869       0.8 % 
Wyoming     4       23,558       577       0.3 % 
Total     1,181       19,404,596       227,764       100.0%  

(1) 47 properties are accounted for as direct financing leases and therefore for accounting purposes, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amount reflected is the cash rent on these properties.

ARCT IV

       
State/Possession   Number of Properties   Leasable Square Feet   Annualized
Rental Revenue(1)		   Percentage of Rental Revenue
Alabama     28       102,760       3,513       2.4 % 
Alaska     1       2,805       — (2)      0.0 % 
Arizona     11       46,246       806       0.6 % 
Arkansas     29       99,978       741       0.5 % 
California     10       60,528       1,480       1.0 % 
Colorado     2       6,449       176       0.1 % 
Connecticut     2       4,718       — (2)      0.0 % 
Florida     56       1,452,488       15,246       10.6 % 
Georgia     35       153,206       4,017       2.8 % 
Idaho     2       9,586       171       0.1 % 
Illinois     33       155,271       3,502       2.4 % 
Indiana     15       461,317       7,557       5.3 % 
Iowa     5       104,910       821       0.6 % 
Kansas     5       39,392       646       0.4 % 
Kentucky     16       76,151       1,333       0.9 % 
Louisiana     11       33,683       1,238       0.9 % 
Maine     3       787,176       1,082       0.8 % 
Maryland     8       25,186       1,204       0.8 % 
Massachusetts     5       574,467       4,157       2.9 % 
Michigan     18       115,803       1,358       0.9 % 
Mississippi     5       14,260       598       0.4 % 
Missouri     12       73,082       1,170       0.8 % 
Nebraska     2       11,980       126       0.1 % 
New Hampshire     1       7,316       145       0.1 % 
New Jersey     2       4,800       193       0.1 % 
New Mexico     5       23,286       205       0.1 % 
New York     7       28,837       503       0.3 % 
North Carolina     42       219,588       5,340       3.7 % 
Ohio     29       915,662       4,634       3.2 % 
Oklahoma     3       24,482       382       0.3 % 
Pennsylvania     26       142,287       3,183       2.2 % 
Rhode Island     6       25,454       829       0.6 % 
South Carolina     7       46,847       697       0.5 % 
South Dakota     3       34,773       364       0.3%  

 
 

TABLE OF CONTENTS

       
State/Possession   Number of Properties   Leasable Square Feet   Annualized
Rental Revenue(1)		   Percentage of Rental Revenue
Tennessee     12       47,545       1,383       1.0 % 
Texas     78       445,273       8,166       5.7 % 
Utah     2       7,275       245       0.2 % 
Virginia     19       78,799       1,776       1.2 % 
Washington     4       16,581       538       0.4 % 
West Virginia     6       31,209       461       0.3 % 
Wisconsin     16       47,889       1,692       1.2 % 
Wyoming     3       19,502       371       0.3 % 
Total     585       6,578,847       82,049       57.0%  

(1) Six properties are accounted for as direct financing leases and therefore for accounting purposes, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amount reflected is the cash rent on these properties.
(2) Properties under master lease agreements and for which annualized rental revenue has not been allocated to individual properties; leases which only pay rent based on a percentage of sales or other measurement per the lease agreements; and leases that are currently on a month-to-month term, where the lease may be terminated at any time, do not have an annualized rental revenue amount reflected.

CAPLEASE

       
State/Possession   Number of Properties   Leasable Square Feet   Annualized Rental Revenue   Percentage of Rental Revenue
Alabama     2       131,894       4,097       3.0 % 
California     7       1,388,786       12,468       9.1 % 
Colorado     3       420,471       7,664       5.6 % 
Florida     1       307,275       2,121       1.6 % 
Georgia     4       264,165       2,027       1.5 % 
Illinois     2       543,750       8,635       6.3 % 
Indiana     3       932,542       3,729       2.7 % 
Kansas     3       266,644       4,521       3.3 % 
Kentucky     6       446,274       2,874       2.1 % 
Louisiana     1       133,841       2,314       1.7 % 
Maryland     4       430,967       9,584       7.0 % 
Massachusetts     1       88,420       758       0.6 % 
Nebraska     2       426,399       5,537       4.0 % 
New Jersey     2       517,215       9,056       6.6 % 
New York     1       98,184       1,312       1.0 % 
North Carolina     1       191,681       2,093       1.5 % 
Ohio     1       111,776       984       0.7 % 
Oklahoma     1       328,545       4,250       3.1 % 
Pennsylvania     4       2,153,381       12,986       9.5 % 
Puerto Rico     1       56,500       1,300       1.0 % 
Tennessee     3       193,983       2,454       1.8 % 
Texas     11       1,598,049       22,334       16.3 % 
Virginia     4       658,998       8,819       6.4 % 
Washington     1       155,200       2,834       2.1 % 
Wisconsin     1       154,849       2,031       1.5 % 
Total     70       11,999,789       136,782       100%  

 
 

TABLE OF CONTENTS

ARCT IV (GE Capital)

       
State/Possession   Number of Properties   Leasable Square Feet   Annualized Rental Revenue   Percentage of Rental Revenue
Alabama     23       83,311       3,716       6.0 % 
Arizona     9       31,973       839       1.4 % 
Arkansas     7       23,279       — (1)      0.0 % 
California     3       12,948       280       0.5 % 
Colorado     9       39,185       — (1)      0.0 % 
Connecticut     2       5,060       193       0.3 % 
District of Columbia     1       3,210       43       0.1 % 
Florida     50       184,504       7,977       12.8 % 
Georgia     29       133,800       2,036       3.3 % 
Idaho     4       16,296       1,617       2.6 % 
Illinois     20       69,021       2,531       4.1 % 
Indiana     23       74,501       2,728       4.4 % 
Iowa     5       18,554       576       0.9 % 
Kansas     3       10,038       359       0.6 % 
Kentucky     7       29,832       1,510       2.4 % 
Louisiana     15       45,468       1,540       2.5 % 
Maryland     1       5,867       292       0.5 % 
Massachusetts     1       6,237       143       0.2 % 
Michigan     24       97,962       2,388       3.9 % 
Minnesota     5       19,686       308       0.5 % 
Mississippi     10       28,350       1,113       1.8 % 
Missouri     11       31,792       864       1.4 % 
Montana     1       2,520       41       0.1 % 
Nebraska     5       16,052       409       0.7 % 
New Hampshire     1       6,003       112       0.2 % 
New Jersey     1       3,840       115       0.2 % 
New Mexico     7       23,124       1,973       3.2 % 
New York     21       85,279       2,490       4.0 % 
North Carolina     6       14,930       716       1.2 % 
North Dakota     1       3,536       480       0.8 % 
Ohio     51       171,139       4,500       7.2 % 
Oklahoma     9       28,911       824       1.3 % 
Oregon     6       26,807       — (1)      0.0 % 
Pennsylvania     9       37,619       931       1.5 % 
South Carolina     36       89,773       2,385       3.9 % 
Tennessee     29       74,906       1,951       3.2 % 
Texas     63       223,103       6,501       10.4 % 
Utah     1       3,300       30       0.0 % 
Virginia     19       51,622       1,395       2.3 % 
Washington     3       12,642       1,846       3.0 % 
West Virginia     15       45,907       1,445       2.3 % 
Wisconsin     32       92,849       2,638       4.3 % 
Total     578       1,984,736       61,835       100%  

(1) Properties under master lease agreements and for which annualized rental revenue has not been allocated to individual properties; leases which only pay rent based on a percentage of sales or other measurement per the lease agreements; and leases that are currently on a month-to-month term, where the lease may be terminated at any time, do not have an annualized rental revenue amount reflected.

 
 

TABLE OF CONTENTS

COMBINED

       
State/Possession   Number of Properties   Leasable Square Feet   Annualized
Rental Revenue(1)		   Percentage of Rental Revenue
Alabama     96       896,916       19,447       3.8 % 
Alaska     1       2,805       — (2)      0.0 % 
Arizona     28       152,446       3,258       0.6 % 
Arkansas     54       373,875       4,393       0.9 % 
California     36       2,912,590       26,716       5.3 % 
Colorado     27       704,991       12,513       2.5 % 
Connecticut     14       46,904       1,377       0.3 % 
Delaware     4       12,369       286       0.1 % 
District of Columbia     1       3,210       43       0.0 % 
Florida     143       2,132,943       30,710       5.9 % 
Georgia     132       954,750       16,976       3.3 % 
Idaho     14       97,447       3,341       0.7 % 
Illinois     97       2,254,953       33,791       6.6 % 
Indiana     69       3,230,510       22,301       4.4 % 
Iowa     29       794,538       6,207       1.2 % 
Kansas     33       1,621,199       10,137       2.0 % 
Kentucky     56       815,517       10,346       2.0 % 
Louisiana     55       434,230       7,963       1.6 % 
Maine     5       933,606       3,901       0.8 % 
Maryland     15       473,225       11,446       2.3 % 
Massachusetts     25       1,104,319       11,215       2.2 % 
Michigan     120       891,474       16,420       3.2 % 
Minnesota     16       220,173       2,001       0.4 % 
Mississippi     51       1,423,374       10,038       2.0 % 
Missouri     109       1,047,733       13,053       2.6 % 
Montana     6       57,897       897       0.2 % 
Nebraska     12       479,786       6,482       1.3 % 
Nevada     12       100,660       2,414       0.5 % 
New Hampshire     12       78,647       1,606       0.3 % 
New Jersey     13       611,576       12,003       2.4 % 
New Mexico     22       100,885       3,048       0.6 % 
New York     54       538,761       11,827       2.3 % 
North Carolina     103       1,550,147       18,990       3.7 % 
North Dakota     5       34,854       1,052       0.2 % 
Ohio     144       2,396,217       20,872       4.1 % 
Oklahoma     35       752,123       8,339       1.6 % 
Oregon     12       51,950       652       0.1 % 
Pennsylvania     108       2,698,518       25,797       5.1 % 
Puerto Rico     3       87,550       2,405       0.5 % 
Rhode Island     11       48,942       1,465       0.3 % 
South Carolina     73       785,649       10,002       2.0 % 
South Dakota     5       84,414       779       0.2 % 
Tennessee     92       679,213       12,315       2.4 % 
Texas     279       3,249,974       52,323       10.2 % 
Utah     6       24,584       690       0.1 % 
Vermont     4       15,432       335       0.1%  

 
 

TABLE OF CONTENTS

       
State/Possession   Number of Properties   Leasable Square Feet   Annualized
Rental Revenue(1)		   Percentage of Rental Revenue
Virginia     67       939,688       15,384       3.0 % 
Washington     13       404,123       8,356       1.6 % 
West Virginia     30       134,195       3,340       0.7 % 
Wisconsin     56       483,026       8,230       1.6 % 
Wyoming     7       43,060       948       0.2 % 
Total     2,414       39,967,968       508,430       100%  

(1) 59 properties are accounted for as direct financing leases and, therefore, for accounting purposes, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amount reflected is the cash rent on these properties.
(2) Properties under master lease agreements and for which annualized rental revenue has not been allocated to individual properties; leases which only pay rent based on a percentage of sales or other measurement per the lease agreements; and leases that are currently on a month-to-month term, where the lease may be terminated at any time, do not have an annualized rental revenue amount reflected.

 
 

TABLE OF CONTENTS

Lease Expirations

The following table sets forth certain information regarding the property portfolios and the timing of the lease term expirations (excluding rights to extend a lease at the option of the tenant) on net leased, single-tenant properties (for properties under direct financing leases, average annual rent amounts represent cash rent on these properties) (dollars in thousands):

ARCP

Total Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     7       605       0.27 %      34,936  
2014     34       4,358       1.92 %      200,243  
2015     46       5,009       2.20 %      278,769  
2016     54       6,157       2.71 %      256,987  
2017     100       13,117       5.77 %      914,069  
2018     121       19,626       8.63 %      1,328,382  
2019     71       10,435       4.59 %      461,073  
2020     58       7,377       3.24 %      300,376  
2021     63       13,635       6.00 %      920,691  
2022     124       24,138       10.62 %      4,073,687  
2023     70       25,437       11.19 %      2,690,873  
Total     748       129,894       57.13%       11,460,086  

Operating Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     7       605       0.27 %      34,936  
2014     33       4,286       1.93 %      197,780  
2015     44       4,835       2.17 %      272,071  
2016     54       6,157       2.77 %      256,987  
2017     93       12,010       5.40 %      883,811  
2018     112       18,825       8.47 %      1,298,505  
2019     63       9,674       4.35 %      437,626  
2020     58       7,377       3.32 %      300,376  
2021     62       13,513       6.08 %      917,696  
2022     121       23,862       10.73 %      4,061,776  
2023     62       24,605       11.06 %      2,653,211  
Total     709       125,749       56.55%       11,314,775  

Direct Financing Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     —       —       0.00 %      —  
2014     1       72       1.44 %      2,463  
2015     2       174       3.48 %      6,698  
2016     —       —       0.00 %      —  
2017     7       1,107       22.17 %      30,258  
2018     9       801       16.04 %      29,877  
2019     8       761       15.24 %      23,447  
2020     —       —       0.00 %      —  
2021     1       122       2.44 %      2,995  
2022     3       276       5.53 %      11,911  
2023     8       832       16.66 %      37,662  
Total     39       4,145       83.02%       145,311  

 
 

TABLE OF CONTENTS

ARCT IV

Total Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     16       593       0.72 %      60,643  
2014     14       1,376       1.67 %      63,830  
2015     41       1,180       1.43 %      128,737  
2016     29       1,622       1.97 %      102,960  
2017     87       10,216       12.40 %      431,693  
2018     30       2,293       2.78 %      121,094  
2019     17       1,603       1.95 %      65,166  
2020     17       2,006       2.43 %      70,194  
2021     10       573       0.70 %      39,591  
2022     24       10,910       13.24 %      1,401,216  
2023     23       3,195       3.88 %      209,250  
Total     308       35,567       43.16%       2,694,374  

Operating Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     15       486       0.60 %      57,093  
2014     12       1,121       1.38 %      58,433  
2015     40       1,057       1.30 %      125,529  
2016     29       1,622       1.99 %      102,960  
2017     87       10,216       12.56 %      431,693  
2018     30       2,293       2.82 %      121,094  
2019     15       1,347       1.66 %      56,834  
2020     17       2,006       2.47 %      70,194  
2021     10       573       0.70 %      39,591  
2022     24       10,910       13.42 %      1,401,216  
2023     23       3,195       3.93 %      209,250  
Total     302       34,826       42.83%       2,673,887  

Direct Financing Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     1       107       14.44 %      3,550  
2014     2       255       34.41 %      5,397  
2015     1       123       16.60 %      3,208  
2016     0       —       0.00 %      —  
2017     0       —       0.00 %      —  
2018     0       —       0.00 %      —  
2019     2       256       34.55 %      8,332  
2020     0       —       0.00 %      —  
2021     0       —       0.00 %      —  
2022     0       —       0.00 %      —  
2023     0       —       0.00 %      —  
Total     6       741       100.00%       20,487  

 
 

TABLE OF CONTENTS

CAPLEASE

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     1       6,723       4.94 %      207,055  
2014     3       2,861       2.10 %      223,912  
2015     5       10,999       8.08 %      865,703  
2016     10       17,527       12.88 %      1,312,058  
2017     8       22,569       16.58 %      2,856,984  
2018     3       4,305       3.16 %      227,672  
2019     4       9,374       6.89 %      422,210  
2020     8       16,952       12.46 %      1,049,555  
2021     18       22,036       16.19 %      3,097,715  
2022     1       3,672       2.70 %      181,160  
2023     2       4,091       3.01 %      134,979  
Total     63       121,109       89.00%       10,579,003  

 
 

TABLE OF CONTENTS

ARCT IV (GE CAPITAL)

Total Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     19       728       1.18 %      48,892  
2014     35       2,573       4.16 %      117,590  
2015     28       1,323       2.14 %      89,035  
2016     28       2,460       3.98 %      96,548  
2017     20       1,056       1.71 %      55,258  
2018     27       1,598       2.58 %      83,564  
2019     20       1,355       2.19 %      52,251  
2020     26       2,117       3.42 %      93,779  
2021     24       1,990       3.22 %      67,661  
2022     12       963       1.56 %      86,617  
2023     7       465       0.75 %      24,417  
Total     246       16,628       26.89%       815,612  

Operating Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     18       618       1.01 %      46,074  
2014     33       2,382       3.90 %      111,690  
2015     28       1,323       2.16 %      89,035  
2016     27       2,348       3.84 %      94,239  
2017     20       1,056       1.73 %      55,258  
2018     26       1,400       2.29 %      78,992  
2019     20       1,355       2.22 %      52,251  
2020     26       2,117       3.46 %      93,779  
2021     24       1,990       3.26 %      67,661  
2022     12       963       1.58 %      86,617  
2023     7       465       0.76 %      24,417  
Total     241       16,017       26.20%       800,013  

Direct Financing Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     1       110       15.74 %      2,818  
2014     2       191       27.32 %      5,900  
2015     0       —       0.00 %      —  
2016     1       112       16.02 %      2,309  
2017     0       —       0.00 %      —  
2018     1       198       28.33 %      4,572  
2019     0       —       0.00 %      —  
2020     0       —       0.00 %      —  
2021     0       —       0.00 %      —  
2022     0       —       0.00 %      —  
2023     0       —       0.00 %      —  
Total     5       611       87.41%       15,599  

 
 

TABLE OF CONTENTS

COMBINED

Total Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     43       8,649       1.70 %      351,526  
2014     86       11,168       2.20 %      605,575  
2015     120       18,511       3.65 %      1,362,244  
2016     121       27,766       5.47 %      1,768,553  
2017     215       46,958       9.25 %      4,258,004  
2018     181       27,822       5.48 %      1,760,712  
2019     112       22,767       4.48 %      1,000,700  
2020     109       28,452       5.60 %      1,513,904  
2021     115       38,234       7.53 %      4,125,658  
2022     161       39,683       7.82 %      5,742,680  
2023     102       33,188       6.54 %      3,059,519  
Total     1,365       303,198       59.72%       25,549,075  

Operating Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     41       8,432       1.68 %      345,158  
2014     81       10,650       2.13 %      591,815  
2015     117       18,214       3.64 %      1,352,338  
2016     120       27,654       5.52 %      1,766,244  
2017     208       45,851       9.15 %      4,227,746  
2018     171       26,823       5.35 %      1,726,263  
2019     102       21,750       4.34 %      968,921  
2020     109       28,452       5.68 %      1,513,904  
2021     114       38,112       7.61 %      4,122,663  
2022     158       39,407       7.87 %      5,730,769  
2023     94       32,356       6.46 %      3,021,857  
Total     1,315       297,701       59.43%       25,367,678  

Direct Financing Leases:

       
Year of Expiration   Number of Leases Expiring   Average Annual Rent   Percentage of Average Annual Rent   Leasable Square Feet
July 1, 2013 through December 31, 2013     2       217       3.37 %      6,368  
2014     5       518       8.05 %      13,760  
2015     3       297       4.62 %      9,906  
2016     1       112       1.74 %      2,309  
2017     7       1,107       17.21 %      30,258  
2018     10       999       15.53 %      34,449  
2019     10       1,017       15.81 %      31,779  
2020     0       —       0.00 %      —  
2021     1       122       1.90 %      2,995  
2022     3       276       4.29 %      11,911  
2023     8       832       12.93 %      37,662  
Total     50       5,497       85.45%       181,397  

 

 

 

VEREIT, Inc. Reports