What changed in this filing

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Item 1. Financial Statements

2020-11-05 compared with 2020-07-27 · 225 added, 243 removed, 499 unchanged (48% of the section changed)

3 unchanged sentences

(Dollars in Thousands, Except Share and Per Share Data)

June 30, 2020

December 31, 2019

September 30, 2020 December 31, 2019

Real estate, at cost $ 1,094,854 $ 1,056,978

8 unchanged sentences

Deferred rent receivable, net 35,661 37,177

Other assets 4,921 8,913

TOTAL ASSETS $ 1,075,836 $ 1,039,508

LIABILITIES, MEZZANINE EQUITY AND EQUITY

14 unchanged sentences

$ 25 per share liquidation preference;

12,760,000 shares authorized;

and 6,356,119 and 6,269,555 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively (3)

12,760,000 shares authorized, and 6,508,954 and 6,269,555 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively (3)

$ 157,751 $ 152,153

TOTAL MEZZANINE EQUITY $ 157,751 $ 152,153

1 unchanged sentence

950,000 shares authorized;

and 776,647 and 806,435 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively (3)

Common stock, par value $0.001 per share, 60,290,000 and 86,290,000 shares authorized and 33,960,707 and 32,593,651 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively (3)

and 766,492 and 806,435 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively (3)

Common stock, par value $ 0.001 per share, 60,290,000 and 86,290,000 shares authorized and 34,183,869 and 32,593,651 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively (3)

Series F redeemable preferred stock, par value $ 0.001 per share;

$ 25 per share liquidation preference;

26,000,000 and 0 shares authorized and 45,102 and 0 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively (3)

Additional paid in capital 604,707 571,205

3 unchanged sentences

OP Units held by Non-controlling OP Unitholders (3) $ 2,762 $ 2,903

TOTAL EQUITY $ 200,811 $ 211,037

TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY $ 1,075,836 $ 1,039,508

6 unchanged sentences

(Dollars in Thousands, Except Share and Per Share Data)

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30, For the nine months ended September 30,

2020 2019 2020 2019

Operating revenues

5 unchanged sentences

Base management fee (1)

1,418 1,292 4,219 3,852

Incentive fee (1)

1,128 965 3,301 2,720

Administration fee (1)

361 411 1,194 1,222

General and administrative 775 596 2,406 2,035

3 unchanged sentences

Interest expense ( 6,444 ) ( 7,170 ) ( 20,411 ) ( 21,406 )

(Loss) gain on sale of real estate, net

Gain on sale of real estate, net 1,196 — 1,184 2,952

Other income 204 139 209 291

Total other expense, net ( 5,044 ) ( 7,031 ) ( 19,018 ) ( 18,163 )

Net income 2,844 2,191 6,070 9,068

Net loss (income) attributable (available) to OP Units held by Non-controlling OP Unitholders 2 16 39 ( 13 )

Net income attributable to the Company $ 2,846 $ 2,207 $ 6,109 $ 9,055

Distributions attributable to Series A, B, D, and E preferred stock

Distributions attributable to Series A, B, D, E, and F preferred stock ( 2,771 ) ( 2,612 ) ( 8,137 ) ( 7,837 )

Distributions attributable to senior common stock ( 203 ) ( 226 ) ( 615 ) ( 675 )

7 unchanged sentences

Comprehensive income

Change in unrealized loss related to interest rate hedging instruments, net

Other Comprehensive loss

Change in unrealized gain (loss) related to interest rate hedging instruments, net $ 276 $ ( 624 ) $ ( 2,733 ) $ ( 2,335 )

Other Comprehensive income (loss) 276 ( 624 ) ( 2,733 ) ( 2,335 )

Net income $ 2,844 $ 2,191 $ 6,070 $ 9,068

Comprehensive income $ 3,120 $ 1,567 $ 3,337 $ 6,733

6 unchanged sentences

(Dollars in Thousands)

For the six months ended June 30,

For the nine months ended September 30,

Cash flows from operating activities:

Net income $ 6,070 $ 9,068

Adjustments to reconcile net income to net cash provided by operating activities:

1 unchanged sentence

Impairment charge 2,905 —

Loss (gain) on sale of real estate, net

Gain on sale of real estate, net ( 1,184 ) ( 2,952 )

Amortization of deferred financing costs 1,156 1,268

6 unchanged sentences

Increase in deferred rent receivable ( 1,042 ) ( 1,448 )

Increase in accounts payable, accrued expenses, and amount due to Adviser and Administrator

Increase (decrease) in accounts payable, accrued expenses, and amount due to Adviser and Administrator 2,028 ( 13 )

Increase in other liabilities 660 398

21 unchanged sentences

Borrowings on term loan 37,700 47,300

Increase (decrease) in security deposits

Decrease in security deposits ( 1 ) ( 106 )

Distributions paid for common, senior common, preferred stock and Non-controlling OP Unitholders ( 47,532 ) ( 43,510 )

Net cash provided by financing activities $ 24,398 $ 20,444

Net increase in cash, cash equivalents, and restricted cash

Net increase (decrease) in cash, cash equivalents, and restricted cash $ 3,774 $ ( 129 )

Cash, cash equivalents, and restricted cash at beginning of period $ 11,488 $ 9,082

6 unchanged sentences

Capital improvements and leasing commissions included in accounts payable and accrued expenses $ 670 $ 371

Increase in asset retirement obligation assumed in acquisition $ — $ 164

Non-controlling OP Units issued in connection with acquisition $ 502 $ —

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows (dollars in thousands):

For the six months ended June 30,

For the nine months ended September 30,

Cash and cash equivalents $ 10,370 $ 6,175

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Securities and Exchange Commission on February 12, 2020.

The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

Use of Estimates

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Beginning January 1, 2020, we are recording the property operating expenses and offsetting lease revenues for these triple net leased properties on a gross basis, as we have amended our process whereby we are paying operating expenses on behalf of our tenants and receiving reimbursement, whereas, previously these tenants were paying these expenses directly with limited insight provided to us.

There were no other material changes to our critical accounting policies during the three and six months ended June 30, 2020 .

There were no other material changes to our critical accounting policies during the three and nine months ended September 30, 2020.

Recently Issued Accounting Pronouncements

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At this time, we have granted rent deferrals to three tenants representing approximately 2 % of total portfolio rents.

The agreements with these tenants include current partial payment in exchange for rent deferrals of varying terms with deferred amounts to be paid by the respective tenant back to us, for the period starting in July 2020 and ending through March 2021.

The agreements with these tenants include current partial payments in exchange for rent deferrals of varying terms with deferred amounts to be paid by the respective tenant back to us, for the period starting in July 2020 and ending in March 2021.

We have elected to not evaluate these leases under the lease modification accounting framework.

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Michael LiCalsi, our general counsel and secretary, also serves as our Administrator’s president, general counsel and secretary, as well as executive vice president of administration of our Adviser.

We have entered into an advisory agreement with our Adviser, as amended from time to time (the “Advisory Agreement”), and an administration agreement with our Administrator (the “Administration Agreement”).

We have entered into an advisory agreement with our Adviser, as amended from time to time (including the Sixth Amended and Restated Investment Advisory Agreement dated July 14, 2020, the “Advisory Agreement”), and an administration agreement with our Administrator (the “Administration Agreement”).

The services and fees under the Advisory Agreement and Administration Agreement are described below.

As of June 30, 2020 and December 31, 2019 , $ 3.3 million and $ 2.9 million , respectively, were collectively due to our Adviser and Administrator.

As of September 30, 2020 and December 31, 2019, $ 3.0 million and $ 2.9 million, respectively, were collectively due to our Adviser and Administrator.

Our entrance into the Advisory Agreement and each amendment thereto has been approved unanimously by our Board of Directors.

2 unchanged sentences

Base Management Fee

Under the Advisory Agreement, the calculation of the annual base management fee equaled 1.5 % of our Total Equity prior to the July 14, 2020 amendment, which is our total stockholders’ equity plus total mezzanine equity (before giving effect to the base management fee and incentive fee), adjusted to exclude the effect of any unrealized gains or losses that do not affect realized net income (including impairment charges), adjusted for any one-time events and certain non-cash items (the later to occur for a given quarter only upon the approval of our Compensation Committee), and adjusted to include operating partnership units in the Operating Partnership (“OP Units”) held by holders who do not control the Operating Partnership (“Non-controlling OP Unitholders”).

The fee was calculated and accrued quarterly as 0.375 % per quarter of such Total Equity figure.

Under the Advisory Agreement, prior to the July 14, 2020 amendment and restatement, the calculation of the annual base management fee equaled 1.5 % of our Total Equity, which is our total stockholders’ equity plus total mezzanine equity (before giving effect to the base management fee and incentive fee), adjusted to exclude the effect of any unrealized gains or losses that do not affect realized net income (including impairment charges), adjusted for any one-time events and certain non-cash items (the later to occur for a given quarter only upon the approval of our Compensation Committee), and adjusted to include operating partnership units in the Operating Partnership (“OP Units”) held by holders who do not control the Operating Partnership (“Non-controlling OP Unitholders”).

The fee was calculated and accrued quarterly as 0.375 % per quarter of such Total Equity amount.

Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties, as is common in other externally managed REITs;

however, our Adviser may earn fee income from our borrowers, tenants or other sources.

For the three and six months ended June 30, 2020 , we recorded a base management fee of $ 1.4 million and $ 2.8 million , respectively.

For the three and six months ended June 30, 2019 , we recorded a base management fee of $ 1.3 million and $ 2.6 million , respectively.

For the three and nine months ended September 30, 2020, we recorded a base management fee of $ 1.4 million and $ 4.2 million, respectively.

For the three and nine months ended September 30, 2019, we recorded a base management fee of $ 1.3 million and $ 3.9 million, respectively.

On July 14, 2020, the Company amended and restated the Advisory Agreement by entering into the Sixth Amended and Restated Investment Advisory Agreement between the Company and the Adviser (the “Amended Agreement”).

The Company’s entrance into the Amended Agreement was approved by its Board of Directors, including, specifically, unanimously by its independent directors.

The Amended Agreement revised and replaced the previous calculation of the Base Management Fee, which was based on Total Equity, with a calculation based on Gross Tangible Real Estate.

The Amended Agreement revised and replaced the previous calculation of the Base Management Fee (as defined therein), which was based on Total Equity (as defined therein), with a calculation based on Gross Tangible Real Estate.

The revised Base Management Fee will be payable quarterly in arrears and shall be calculated at an annual rate of 0.425 % ( 0.10625 % per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined in the Amended Agreement as the current gross value of the Company’s property portfolio (meaning the aggregate of each property’s original acquisition price plus the cost of any subsequent capital improvements thereon).

The calculation of the other fees in the Amended Agreement remain unchanged.

The revised Base Management Fee calculation will begin with the fee calculations for the quarter ending September 30, 2020 .

The revised Base Management Fee calculation began with the fee calculations for the quarter ended September 30, 2020.

Incentive Fee

4 unchanged sentences

Core FFO (as defined in the Advisory Agreement) is GAAP net income (loss) available to common stockholders, excluding the incentive fee, depreciation and amortization, any realized and unrealized gains, losses or other non-cash items recorded in net income (loss) available to common stockholders for the period, and one-time events pursuant to changes in GAAP.

For the three and six months ended June 30, 2020 , we recorded an incentive fee of $ 1.1 million and $ 2.2 million , respectively.

For the three and six months ended June 30, 2019 , we recorded an incentive fee of $ 0.9 million and $ 1.8 million , respectively.

The Adviser did no t waive any portion of the incentive fee for the three and six months ended June 30, 2020 or 2019 , respectively.

For the three and nine months ended September 30, 2020, we recorded an incentive fee of $ 1.1 million and $ 3.3 million, respectively.

For the three and nine months ended September 30, 2019, we recorded an incentive fee of $ 1.0 million and $ 2.7 million, respectively.

The Adviser did no t waive any portion of the incentive fee for the three and nine months ended September 30, 2020 or 2019, respectively.

Capital Gain Fee

3 unchanged sentences

At the end of the fiscal year, if this number is positive, then the capital gain fee payable for such time period shall equal 15.0 % of such amount.

No capital gain fee was recognized during the three and six months ended June 30, 2020 or 2019 .

No capital gain fee was recognized during the three and nine months ended September 30, 2020 or 2019.

Termination Fee

7 unchanged sentences

We believe this approach helps approximate fees paid by us to actual services performed by the Administrator for us.

For the three and six months ended June 30, 2020 , we recorded an administration fee of $ 0.4 million and $ 0.8 million , respectively.

For the three and six months ended June 30, 2019 , we recorded an administration fee of $ 0.4 million and $ 0.8 million , respectively.

For the three and nine months ended September 30, 2020, we recorded an administration fee of $ 0.4 million and $ 1.2 million, respectively.

For the three and nine months ended September 30, 2019, we recorded an administration fee of $ 0.4 million and $ 1.2 million, respectively.

Gladstone Securities

8 unchanged sentences

The amount of the financing fees may be reduced or eliminated, as determined by us and Gladstone Securities, after taking into consideration various factors, including, but not limited to, the involvement of any third-party brokers and market conditions.

We did not pay financing fees to Gladstone Securities during the three months ended June 30, 2020 , but we paid financing fees to Gladstone Securities of $ 0.09 million during the six months ended June 30, 2020 , which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.25 % , of the mortgage principal secured and/or extended.

We paid financing fess to Gladstone Securities of $ 0.08 million and $ 0.10 million during the three and six months ended June 30, 2019 , respectively, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.21 % and 0.20 % , respectively, of the mortgage principal secured and/or extended.

We did not pay financing fees to Gladstone Securities during the three months ended September 30, 2020, but we paid financing fees to Gladstone Securities of $ 89,637 during the nine months ended September 30, 2020, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.25 %, of the mortgage principal secured and/or extended.

We paid financing fess to Gladstone Securities of $ 3,000 and $ 0.10 million during the three and nine months ended September 30, 2019, respectively, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.08 % and 0.19 %, respectively, of the mortgage principal secured and/or extended.

Our Board of Directors renewed the agreement for an additional year, through August 31, 2021, at its July 2020 meeting.

6 unchanged sentences

The Dealer Manager may, in its sole discretion, reallow a portion of the Dealer Manager Fee to participating broker-dealers in support of the Offering.

We paid fees of $ 0.1 million to the Dealer Manager during the three and nine months ended September 30, 2020.

(Loss) Earnings Per Share of Common Stock

The following tables set forth the computation of basic and diluted (loss) earnings per share of common stock for the three and six months ended June 30, 2020 and 2019 .

The following tables set forth the computation of basic and diluted (loss) earnings per share of common stock for the three and nine months ended September 30, 2020 and 2019.

The OP Units held by Non-controlling OP Unitholders (which may be redeemed for shares of common stock) have been excluded from the diluted (loss) earnings per share calculations, as there would be no effect on the amounts since the Non-controlling OP Unitholders’ share of (loss) income would also be added back to net (loss) income.

Net (loss) income figures are presented net of such non-controlling interests in the (loss) earnings per share calculation.

We computed basic (loss) earnings per share for the three and six months ended June 30, 2020 and 2019 using the weighted average number of shares outstanding during the respective periods.

Diluted (loss) earnings per share for the three and six months ended June 30, 2020 and 2019 reflects additional shares of common stock related to our convertible senior common stock (the “Senior Common Stock”), if the effect would be dilutive, that would have been outstanding if dilutive potential shares of common stock had been issued, as well as an adjustment to net (loss) income (attributable) available to common stockholders as applicable to common stockholders that would result from their assumed issuance (dollars in thousands, except per share amounts).

For the three months ended June 30,

For the six months ended June 30,

We computed basic (loss) earnings per share for the three and nine months ended September 30, 2020 and 2019 using the weighted average number of shares outstanding during the respective periods.

Diluted (loss) earnings per share for the three and nine months ended September 30, 2020 and 2019 reflects additional shares of common stock related to our convertible senior common stock (the “Senior Common Stock”), if the effect would be dilutive, that would have been outstanding if dilutive potential shares of common stock had been issued, as well as an adjustment to net (loss) income (attributable) available to common stockholders as applicable to common stockholders that would result from their assumed issuance (dollars in thousands, except per share amounts).

For the three months ended September 30, For the nine months ended September 30,

2020 2019 2020 2019

Calculation of basic (loss) earnings per share of common stock:

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Diluted (loss) earnings per share of common stock $ ( 0.004 ) $ ( 0.02 ) $ ( 0.08 ) $ 0.02

The weighted average number of OP Units held by Non-controlling OP Unitholders was 503,033 and 502,133 for the three and six months ended June 30, 2020 , respectively, and 742,937 for both the three and six months ended June 30, 2019 .

We excluded convertible shares of Senior Common Stock of 650,055 and 718,770 from the calculation of diluted (loss) earnings per share for the three and six months ended June 30, 2020 and 2019 , respectively, because they were anti-dilutive.

(1) The weighted average number of OP Units held by Non-controlling OP Unitholders was 503,033 and 502,435 for the three and nine months ended September 30, 2020, respectively, and 742,937 for both the three and nine months ended September 30, 2019.

(2) We excluded convertible shares of Senior Common Stock of 641,430 and 709,906 from the calculation of diluted (loss) earnings per share for the three and nine months ended September 30, 2020 and 2019, respectively, because they were anti-dilutive.

Real Estate and Intangible Assets

The following table sets forth the components of our investments in real estate as of June 30, 2020 and December 31, 2019 , excluding real estate held for sale as of June 30, 2020 and December 31, 2019 , respectively (dollars in thousands):

June 30, 2020

December 31, 2019

The following table sets forth the components of our investments in real estate as of September 30, 2020 and December 31, 2019, excluding real estate held for sale as of September 30, 2020 and December 31, 2019, respectively (dollars in thousands):

September 30, 2020 December 31, 2019

Land (1) $ 140,465 $ 137,532

Building and improvements 886,138 851,245

3 unchanged sentences

(1) This amount includes $ 4,436 of land value subject to land lease agreements which we may purchase at our option for a nominal fee.

Real estate depreciation expense on building and tenant improvements was $ 9.2 million and $ 18.2 million for the three and six months ended June 30, 2020 , respectively.

Real estate depreciation expense on building and tenant improvements was $ 8.1 million and $ 16.1 million for the three and six months ended June 30, 2019 , respectively.

We acquired five properties during the six months ended June 30, 2020 , and six properties during the six months ended June 30, 2019 .

Real estate depreciation expense on building and tenant improvements was $ 9.0 million and $ 27.2 million for the three and nine months ended September 30, 2020, respectively.

Real estate depreciation expense on building and tenant improvements was $ 8.3 million and $ 24.4 million for the three and nine months ended September 30, 2019, respectively.

We acquired six properties during the nine months ended September 30, 2020, and nine properties during the nine months ended September 30, 2019.

The acquisitions are summarized below (dollars in thousands):

Six Months Ended

Aggregate Square Footage

Weighted Average Lease Term

Aggregate Purchase Price

Capitalized Acquisition Expenses

Aggregate Annualized GAAP Fixed Lease Payments

Aggregate Debt Issued or Assumed

June 30, 2020

June 30, 2019

Nine Months Ended Aggregate Square Footage Weighted Average Lease Term Aggregate Purchase Price Capitalized Acquisition Expenses Aggregate Annualized GAAP Fixed Lease Payments Aggregate Debt Issued or Assumed

September 30, 2020 (1) 1,043,638 14.2 years $ 82,599 $ 339 (3) $ 6,146 $ 35,855

September 30, 2019 (2) 1,463,763 14.8 years 67,272 621 (3) 5,437 8,900

(1) On January 8, 2020, we acquired a 64,800 square foot property in Indianapolis, Indiana for $ 5.3 million.

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The annualized GAAP rent on the 10.5 year lease is $ 2.2 million.

On September 1, 2020, we acquired a 153,600 square foot property in Indianapolis, Indiana for $ 10.6 million.

The annualized GAAP rent on the 9.7 year lease is $ 0.8 million.

(2) On February 8, 2019, we acquired a 26,050 square foot property in a suburb of Philadelphia, Pennsylvania, for $ 2.7 million.

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We issued $ 8.9 million of mortgage debt with a fixed interest rate of 4.35 % in connection with this acquisition.

We treated our acquisitions during the six months ended June 30, 2020 and 2019 as asset acquisitions rather than business combinations.

On July 30, 2019, we acquired a 78,452 square foot property in Denton, Texas, for $ 6.6 million.

The annualized GAAP rent on the 11.9 year lease is $ 0.5 million.

On September 26, 2019, we acquired a 211,000 square foot two property portfolio in Temple, Texas, for $ 14.1 million.

The annualized GAAP rent on the 20.0 year lease is $ 1.2 million.

(3) We treated our acquisitions during the nine months ended September 30, 2020 and 2019 as asset acquisitions rather than business combinations.

As a result of this treatment, we capitalized $0.3 million and $0.6 million, respectively, of acquisition costs that would otherwise have been expensed under business combination treatment.

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the six months ended June 30, 2020 and 2019 as follows (dollars in thousands):

Six Months Ended June 30, 2020

Six Months Ended June 30, 2019

Acquired assets and liabilities

Purchase price

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the nine months ended September 30, 2020 and 2019 as follows (dollars in thousands):

Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019

Acquired assets and liabilities Purchase price Purchase price

Land (1) $ 7,798 $ 5,046

Building and improvements 61,930 48,898

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Total Purchase Price $ 82,599 $ 67,272

This amount includes $ 2,711 of land value subject to a land lease agreement.

(1) This amount includes $ 2,711 of land value subject to a land lease agreement, which we may purchase for a nominal fee.

(2) This amount includes $ 53 of loans receivable included in Other assets on the condensed consolidated balance sheets.

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Significant Real Estate Activity on Existing Assets

During the six months ended June 30, 2020 and 2019 , we executed eight and five leases, respectively, which are summarized below (dollars in thousands):

Six Months Ended

Aggregate Square Footage

Weighted Average Remaining Lease Term

Aggregate Annualized GAAP Fixed Lease Payments

Aggregate Tenant Improvement

Aggregate Leasing Commissions

June 30, 2020

June 30, 2019

During the nine months ended September 30, 2020 and 2019, we executed 13 and five leases, respectively, which are summarized below (dollars in thousands):

Nine Months Ended Aggregate Square Footage Weighted Average Remaining Lease Term Aggregate Annualized GAAP Fixed Lease Payments Aggregate Tenant Improvement Aggregate Leasing Commissions

September 30, 2020 987,902 7.9 years $ 8,340 $ 2,903 $ 1,285

September 30, 2019 230,264 8.8 years 3,366 785 910

During the nine months ended September 30, 2020 and 2019, we had one lease termination each, which are summarized below (dollars in thousands):

Nine Months Ended Aggregate Square Footage Reduced Aggregate Termination Fee Aggregate Deferred Rent Write Off

September 30, 2020 61,358 $ 1,119 $ 225

September 30, 2019 16,566 61 —

Future Lease Payments

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the six months ending December 31, 2020 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Tenant Lease Payments

Six Months Ending 2020

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the three months ending December 31, 2020 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Year Tenant Lease Payments

Three Months Ending 2020 $ 27,401

Thereafter 305,402

We account for all of our real estate leasing arrangements as operating leases.

2 unchanged sentences

A small number of tenants have termination options.

Future minimum lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses as of December 31, 2019 , for each of the five succeeding fiscal years and thereafter, is as follows (dollars in thousands):

Tenant Lease Payments

Lease Revenue Reconciliation

The table below sets forth the allocation of lease revenue between fixed contractual payments and variable lease payments for the six months ended June 30, 2020 and 2019 , respectively (dollars in thousands):

For the three months ended June 30,

For the six months ended June 30,

The table below sets forth the allocation of lease revenue between fixed contractual payments and variable lease payments for the nine months ended September 30, 2020 and 2019, respectively (dollars in thousands):

For the three months ended September 30, For the nine months ended September 30,

Lease revenue reconciliation 2020 2019 2020 2019

1 unchanged sentence

Variable lease payments 4,026 1,007 12,001 2,925

$ 33,142 $ 28,667 $ 100,287 $ 85,001

Intangible Assets

The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of June 30, 2020 and December 31, 2019 , excluding real estate held for sale as of June 30, 2020 and December 31, 2019 , respectively (dollars in thousands):

June 30, 2020

December 31, 2019

Lease Intangibles

Accumulated Amortization

Lease Intangibles

Accumulated Amortization

The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of September 30, 2020 and December 31, 2019, excluding real estate held for sale as of September 30, 2020 and December 31, 2019, respectively (dollars in thousands):

September 30, 2020 December 31, 2019

Lease Intangibles Accumulated Amortization Lease Intangibles Accumulated Amortization

In-place leases $ 96,058 $ ( 52,589 ) $ 92,906 $ ( 48,468 )

1 unchanged sentence

Customer relationships 66,276 ( 31,187 ) 65,363 ( 28,887 )

Deferred Rent Receivable/(Liability)

Accumulated (Amortization)/Accretion

Deferred Rent Receivable/(Liability)

Accumulated (Amortization)/Accretion

$ 234,938 $ ( 120,696 ) $ 226,525 $ ( 111,060 )

Deferred Rent Receivable/(Liability) Accumulated (Amortization)/Accretion Deferred Rent Receivable/(Liability) Accumulated (Amortization)/Accretion

Above market leases $ 14,857 $ ( 10,462 ) $ 16,502 $ ( 10,005 )

Below market leases and deferred revenue ( 36,793 ) 17,020 ( 34,322 ) 15,000

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $ 5.0 million and $ 10.1 million for the three and six months ended June 30, 2020 , respectively, and $ 4.5 million and $ 9.5 million for the three and six months ended June 30, 2019 , respectively, and is included in depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to above-market lease values was $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2020 , respectively, and $ 0.2 million and $ 0.5 million for the three and six months ended June 30, 2019 , respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to below-market lease values was $ 0.7 million and $ 1.4 million for the three and six months ended June 30, 2020 , respectively, and $ 0.6 million and $ 1.2 million for the three and six months ended June 30, 2019 , respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

The weighted average amortization periods in years for the intangible assets acquired during the six months ended June 30, 2020 and 2019 were as follows:

$ ( 21,936 ) $ 6,558 $ ( 17,820 ) $ 4,995

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $ 4.8 million and $ 14.9 million for the three and nine months ended September 30, 2020, respectively, and $ 4.7 million and $ 14.2 million for the three and nine months ended September 30, 2019, respectively, and is included in depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to above-market lease values was $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2020, respectively, and $ 0.3 million and $ 0.8 million for the three and nine months ended September 30, 2019, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to below-market lease values was $ 0.7 million and $ 2.1 million for the three and nine months ended September 30, 2020, respectively, and $ 0.7 million and $ 1.8 million for the three and nine months ended September 30, 2019, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

The weighted average amortization periods in years for the intangible assets acquired during the nine months ended September 30, 2020 and 2019 were as follows:

Intangible Assets & Liabilities 2020 2019

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Real Estate Dispositions

During the six months ended June 30, 2020 , we continued to execute our capital recycling program, whereby we sell properties outside of our core markets and redeploy proceeds to either fund property acquisitions in our target secondary growth markets, or repay outstanding debt.

During the nine months ended September 30, 2020, we continued to execute our capital recycling program, whereby we sell properties outside of our core markets and redeploy proceeds to either fund property acquisitions in our target secondary growth markets, or repay outstanding debt.

We expect to continue to execute our capital recycling plan and sell non-core properties as reasonable disposition opportunities become available.

On February 20, 2020 , we sold one non-core property, located in Charlotte, North Carolina, which is detailed in the table below (dollars in thousands):

Square Footage Sold

Loss on Sale of Real Estate, net

Our disposition during the six months ended June 30, 2020 was not classified as a discontinued operation because it did not represent a strategic shift in operations, nor will it have a major effect on our operations and financial results.

Accordingly, the operating results of this property is included within continuing operations for all periods reported.

The table below summarizes the components of operating income from the real estate and related assets disposed of during the three and six months ended June 30, 2020 , and 2019 (dollars in thousands):

For the three months ended June 30,

For the six months ended June 30,

During the nine months ended September 30, 2020, we sold two non-core properties, located in Charlotte, North Carolina and Maple Heights, Ohio, which are detailed in the table below (dollars in thousands):

Aggregate Square Footage Sold Sales Price Sales Costs Gain on Sale of Real Estate, net

411,948 $ 15,501 $ 1,138 $ 1,184

Our dispositions during the nine months ended September 30, 2020 were not classified as discontinued operations because they did not represent a strategic shift in operations, nor will such dispositions have a major effect on our operations and financial results.

Accordingly, the operating results of these properties are included within continuing operations for all periods reported.

The table below summarizes the components of operating income from the real estate and related assets disposed of during the three and nine months ended September 30, 2020, and 2019 (dollars in thousands):

For the three months ended September 30, For the nine months ended September 30,

2020 2019 2020 2019

Operating revenue $ — $ 167 $ 400 $ 1,136

Operating expense 83 296 438 838

Other expense, net

(Expense) income from real estate and related assets sold

Includes a $ 0.01 million loss on sale of real estate, net on one property.

Other income (expense), net 1,368 (1) ( 50 ) 1,272 (2) ( 191 )

Income (expense) from real estate and related assets sold $ 1,285 $ ( 179 ) $ 1,234 $ 107

(1) Includes $ 1.2 million gain on sale of real estate, net on one property sale.

(2) Includes $ 1.2 million gain on sale of real estate, net on two property sales.

Real Estate Held for Sale

As of June 30, 2020 , we had two properties classified as held for sale, located in Maple Heights, Ohio and Boston Heights, Ohio.

As of September 30, 2020, we had five properties classified as held for sale, one located in Boston Heights, Ohio, three located in Champaign, Illinois, and one located in Austin, Texas.

We consider these assets to be non-core to our long term strategy.

As of June 30, 2020 , our Maple Heights, Ohio property was under contract to sell, and we had an executed letter of intent for our Boston Heights, Ohio property.

As of September 30, 2020, all five properties were under contract to sell.

At December 31, 2019, we had one property classified as held for sale, located in Charlotte, North Carolina.

This property was sold during the six months ended June 30, 2020 .

This property was sold during the nine months ended September 30, 2020.

The table below summarizes the components of the assets and liabilities held for sale reflected on the accompanying condensed consolidated balance sheets (dollars in thousands):

June 30, 2020

December 31, 2019

September 30, 2020 December 31, 2019

Assets Held for Sale

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Liabilities Held for Sale

Deferred rent liability, net $ 1,108 $ —

Asset retirement obligation — 21

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Impairment Charges

We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the six months ended June 30, 2020 and identified one held and used asset, located in Blaine, Minnesota, which was impaired by $ 1.7 million .

In performing our impairment testing, the undiscounted cash flows for this asset were below the carrying value, so we impaired the asset and wrote it down to its fair value, which we determined using third party purchase offers.

We did not recognize an impairment charge during the six months ended June 30, 2019 .

We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the nine months ended September 30, 2020 and identified three held and used assets, located in Blaine, Minnesota, Champaign, Illinois, and Rancho Cordova, California, which were impaired by an aggregate of $ 2.9 million.

In performing our impairment testing, the undiscounted cash flows for these assets were below the carrying value.

As the undiscounted cash flows for these assets were below the carrying value, we evaluated the fair value of the assets using third-party broker opinions of value and internal discount cash flow analyses, which resulted in us recognizing an impairment charge.

We recorded an impairment charge to our Blaine, Minnesota property by $ 1.7 million during the three months ended June 30, 2020, and we recorded an impairment charge to our Champaign, Illinois property by $ 1.0 million and an impairment charge to our Rancho Cordova, California property by $ 0.2 million during the three months ended September 30, 2020.

We did not recognize an impairment charge during the nine months ended September 30, 2019.

We continue to evaluate our properties on a quarterly basis for changes that could create the need to record impairment.

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Mortgage Notes Payable and Credit Facility

Our mortgage notes payable and Credit Facility as of June 30, 2020 and December 31, 2019 are summarized below (dollars in thousands):

Encumbered properties at

Carrying Value at

Stated Interest Rates at

Scheduled Maturity Dates at

June 30, 2020

December 31, 2019

June 30, 2020

Our mortgage notes payable and Credit Facility as of September 30, 2020 and December 31, 2019 are summarized below (dollars in thousands):

Encumbered properties at Carrying Value at Stated Interest Rates at Scheduled Maturity Dates at

September 30, 2020 September 30, 2020 December 31, 2019 September 30, 2020 September 30, 2020

Mortgage and other secured loans:

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Variable rate mortgage loans 8 28,270 45,151 (3) (2)

Premiums and discounts, net

Deferred financing costs, mortgage loans, net

Premiums and discounts, net - ( 196 ) ( 239 ) N/A N/A

Deferred financing costs, mortgage loans, net - ( 3,550 ) ( 3,944 ) N/A N/A

Total mortgage notes payable, net 69 $ 458,364 $ 453,739 (4)

Variable rate revolving credit facility

LIBOR + 1.65%

Deferred financing costs, revolving credit facility

Variable rate revolving credit facility 51 (6) $ 43,800 $ 52,400 LIBOR + 1.65 %

Deferred financing costs, revolving credit facility - ( 651 ) ( 821 ) N/A N/A

Total revolver, net 51 $ 43,149 $ 51,579

Variable rate term loan facility

LIBOR + 1.60%

Deferred financing costs, term loan facility

Total term loan, net

Variable rate term loan facility - (6) $ 160,000 $ 122,300 LIBOR + 1.60 %

Deferred financing costs, term loan facility - ( 854 ) ( 1,024 ) N/A N/A

Total term loan, net N/A $ 159,146 $ 121,276

Total mortgage notes payable and credit facility 120 $ 660,659 $ 626,594 (5)

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(3) Interest rates on our variable rate mortgage notes payable vary from one month LIBOR + 2.25 % to one month LIBOR + 2.75 %.

As of June 30, 2020 , one month LIBOR was approximately 0.16 % .

The weighted average interest rate on the mortgage notes outstanding as of June 30, 2020 was approximately 4.27 % .

The weighted average interest rate on all debt outstanding as of June 30, 2020 was approximately 3.52 % .

The amount we may draw under our Credit Facility is based on a percentage of the fair value of a combined pool of 51 unencumbered properties as of June 30, 2020 .

As of September 30, 2020, one month LIBOR was approximately 0.15 %.

(4) The weighted average interest rate on the mortgage notes outstanding as of September 30, 2020 was approximately 4.28 %.

(5) The weighted average interest rate on all debt outstanding as of September 30, 2020 was approximately 3.51 %.

(6) The amount we may draw under our Credit Facility is based on a percentage of the fair value of a combined pool of 51 unencumbered properties as of September 30, 2020.

N/A - Not Applicable

Mortgage Notes Payable

As of June 30, 2020 , we had 55 mortgage notes payable, collateralized by a total of 70 properties with a net book value of $ 710.3 million .

As of September 30, 2020, we had 54 mortgage notes payable, collateralized by a total of 69 properties with a net book value of $ 680.9 million .

We have limited recourse liabilities that could result from any one or more of the following circumstances:

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We will also indemnify lenders against claims resulting from the presence of hazardous substances or activity involving hazardous substances in violation of environmental laws on a property.

During the six months ended June 30, 2020 , we repaid three mortgages, collateralized by four properties, which are summarized in the table below (dollars in thousands):

Aggregate Fixed Rate Debt Repaid

Interest Rate on Fixed Rate Debt Repaid

Aggregate Variable Rate Debt Repaid

Weighted Average Interest Rate on Variable Rate Debt Repaid

During the six months ended June 30, 2020 , we issued four mortgages, collateralized by four properties, which are summarized in the table below (dollars in thousands):

Aggregate Fixed Rate Debt Issued

Weighted Average Interest Rate on Fixed Rate Debt

During the nine months ended September 30, 2020, we repaid four mortgages, collateralized by five properties, which are summarized in the table below (dollars in thousands):

Aggregate Fixed Rate Debt Repaid Interest Rate on Fixed Rate Debt Repaid

$ 5,918 6.00 %

Aggregate Variable Rate Debt Repaid Weighted Average Interest Rate on Variable Rate Debt Repaid

$ 16,107 LIBOR + 2.19 %

During the nine months ended September 30, 2020, we issued four mortgages, collateralized by four properties, which are summarized in the table below (dollars in thousands):

Aggregate Fixed Rate Debt Issued Weighted Average Interest Rate on Fixed Rate Debt

$ 35,855 (1) 3.22 %

(1) We issued $ 18.3 million of fixed rate debt in connection with the three -property portfolio acquired on January 27, 2020 with a maturity date of February 1, 2030.

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On March 9, 2020, we issued $ 17.5 million of floating rate debt swapped to fixed rate debt of 2.8 % in connection with the one property acquisition.

We did no t make any payments for deferred financing costs during the three months ended June 30, 2020 and made payments of $ 0.4 million for deferred financing costs during the six months ended June 30, 2020 , and $ 0.4 million and $ 0.7 million for deferred financing costs during the three and six months ended June 30, 2019 , respectively.

Scheduled principal payments of mortgage notes payable for the six months ending December 31, 2020 , and each of the five succeeding years and thereafter are as follows (dollars in thousands):

Scheduled Principal Payments

Six Months Ending December 31, 2020

We made payments of $ 0.03 million and $ 0.4 million for deferred financing costs during the three and nine months ended September 30, 2020, respectively, and $ 1.4 million and $ 2.1 million for deferred financing costs during the three and nine months ended September 30, 2019, respectively.

Scheduled principal payments of mortgage notes payable for the three months ending December 31, 2020, and each of the five succeeding years and thereafter are as follows (dollars in thousands):

Year Scheduled Principal Payments

Three Months Ending December 31, 2020 $ 6,013

Thereafter 156,464

Total $ 462,110 (1)

(1) This figure does not include $ 0.2 million of premiums and discounts, net, and $ 3.5 million of deferred financing costs, which are reflected in mortgage notes payable, net on the condensed consolidated balance sheets.

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Generally, we will estimate the fair value of our interest rate caps and interest rate swaps, in the absence of observable market data, using estimates of value including estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of similar securities as of the measurement date.

At June 30, 2020 and December 31, 2019 , our interest rate cap agreements and interest rate swaps were valued using Level 2 inputs.

At September 30, 2020 and December 31, 2019, our interest rate cap agreements and interest rate swaps were valued using Level 2 inputs.

The fair value of the interest rate cap agreements is recorded in other assets on our accompanying condensed consolidated balance sheets.

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If the interest rate cap does not qualify for hedge accounting, or if it is determined the hedge is ineffective, any change in the fair value is recognized in interest expense in our consolidated statements of operations and comprehensive income.

The following table summarizes the interest rate caps at June 30, 2020 and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

Aggregate Cost

Aggregate Notional Amount

Aggregate Fair Value

Aggregate Notional Amount

Aggregate Fair Value

The following table summarizes the interest rate caps at September 30, 2020 and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Aggregate Cost Aggregate Notional Amount Aggregate Fair Value Aggregate Notional Amount Aggregate Fair Value

$ 1,537 (1) $ 187,490 $ 17 $ 166,728 $ 250

(1) We have entered into various interest rate cap agreements on variable rate debt with LIBOR caps ranging from 1.50 % to 3.00 %.

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We record changes in fair value on a quarterly basis, using current market valuations at quarter end.

The following table summarizes our interest rate swaps at June 30, 2020 and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

Aggregate Notional Amount

Aggregate Fair Value Asset

Aggregate Fair Value Liability

Aggregate Notional Amount

Aggregate Fair Value Asset

Aggregate Fair Value Liability

The following table summarizes our interest rate swaps at September 30, 2020 and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability

$ 62,696 $ — $ ( 3,575 ) $ 45,777 $ — $ ( 1,173 )

The following tables present the impact of our derivative instruments in the condensed consolidated financial statements (dollars in thousands):

Amount of loss recognized in Comprehensive Income

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Derivatives in cash flow hedging relationships

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Interest rate swaps 301 ( 437 ) ( 2,401 ) ( 1,664 )

Total $ 276 $ ( 624 ) $ ( 2,733 ) $ ( 2,335 )

The following table sets forth certain information regarding our derivative instruments (dollars in thousands):

Asset (Liability) Derivatives Fair Value at

Derivatives Designated as Hedging Instruments

Balance Sheet Location

June 30, 2020

December 31, 2019

Interest rate caps

Interest rate swaps

Other liabilities

Derivatives Designated as Hedging Instruments Balance Sheet Location September 30, 2020 December 31, 2019

Interest rate caps Other assets $ 17 $ 250

Interest rate swaps Other liabilities ( 3,575 ) ( 1,173 )

Total derivative liabilities, net $ ( 3,558 ) $ ( 923 )

The fair value of all mortgage notes payable outstanding as of June 30, 2020 was $ 481.2 million , as compared to the carrying value stated above of $ 469.4 million .

The fair value of all mortgage notes payable outstanding as of September 30, 2020 was $ 473.4 million , as compared to the carrying value stated above of $ 458.4 million.

The fair value is calculated based on a discounted cash flow analysis, using management’s estimate of market interest rates on long-term debt with comparable terms and loan to value ratios.

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Bank National Association, The Huntington National Bank, Goldman Sachs Bank USA, and Wells Fargo Bank, National Association.

As of June 30, 2020 , there was $ 203.1 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 1.77 % , and $ 13.5 million outstanding under letters of credit, at a weighted average interest rate of 1.65 % .

As of June 30, 2020 , the maximum additional amount we could draw under the Credit Facility was $ 19.5 million .

We were in compliance with all covenants under the Credit Facility as of June 30, 2020 .

The amount outstanding under the Credit Facility approximates fair value as of June 30, 2020 .

As of September 30, 2020, there was $ 203.8 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 1.76 % , and $ 13.7 million outstanding under letters of credit, at a weighted average interest rate of 1.65 % .

As of September 30, 2020, the maximum additional amount we could draw under the Credit Facility was $ 27.8 million.

We were in compliance with all covenants under the Credit Facility as of September 30, 2020.

The amount outstanding under the Credit Facility approximates fair value as of September 30, 2020.

Commitments and Contingencies

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We are obligated as lessee under four ground leases.

Future lease payments due under the terms of these leases as of June 30, 2020 are as follows (dollars in thousands):

Future Lease Payments Due Under Operating Leases

Six Months Ending December 31, 2020

Future lease payments due under the terms of these leases as of September 30, 2020 are as follows (dollars in thousands):

Year Future Lease Payments Due Under Operating Leases

Three Months Ending December 31, 2020 $ 116

Thereafter 7,305

Total anticipated lease payments $ 9,866

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Present value of lease payments $ 5,728

Rental expense incurred for properties with ground lease obligations during the three and six months ended June 30, 2020 was $ 0.1 million and $ 0.3 million , respectively, and during the three and six months ended June 30, 2019 was $ 0.1 million and $ 0.3 million , respectively.

Rental expense incurred for properties with ground lease obligations during the three and nine months ended September 30, 2020 was $ 0.1 million and $ 0.4 million, respectively, and during the three and nine months ended September 30, 2019 was $ 0.1 million and $ 0.4 million, respectively.

Our ground leases are treated as operating leases and rental expenses are reflected in property operating expenses on the condensed consolidated statements of operations and comprehensive income.

Letters of Credit

As of June 30, 2020 , there was $ 13.5 million outstanding under letters of credit.

As of September 30, 2020, there was $ 13.7 million outstanding under letters of credit.

These letters of credit are not reflected on our condensed consolidated balance sheets.

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Stockholders’ Equity

The following table summarizes the changes in our equity for the three and six months ended June 30, 2020 and 2019 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes the changes in our equity for the three and nine months ended September 30, 2020 and 2019 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

Series A and B Preferred Stock 2020 2019 2020 2019

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Balance, end of period $ 34 $ 31 $ 34 $ 31

Series F Preferred Stock (1)

Balance, beginning of period $ — $ — $ — $ —

Issuance of Series F preferred stock, net — — — —

Balance, end of period $ — $ — $ — $ —

Additional Paid in Capital

Balance, beginning of period $ 599,741 $ 592,706 $ 571,205 $ 559,977

Issuance of common stock, net

Issuance of common stock and Series F preferred stock, net (1) 5,027 7,362 33,465 40,608

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership ( 61 ) ( 112 ) 37 ( 629 )

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Balance, beginning of period $ 205,741 $ 259,420 $ 208,134 $ 249,744

Issuance of common stock, net

Issuance of common stock and Series F preferred stock, net (1) 5,027 7,362 33,467 40,610

Distributions declared to common, senior common, and preferred stockholders ( 15,780 ) ( 14,482 ) ( 46,965 ) ( 42,674 )

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Balance, end of period $ 2,762 $ 4,482 $ 2,762 $ 4,482

Total Equity $ 200,811 $ 258,253 $ 200,811 $ 258,253

(1) No shares of Series F Preferred Stock were outstanding prior to July 1, 2020

Distributions

We paid the following distributions per share for the three and six months ended June 30, 2020 and 2019 :

For the three months ended June 30,

For the six months ended June 30,

We paid the following distributions per share for the three and nine months ended September 30, 2020 and 2019:

For the three months ended September 30, For the nine months ended September 30,

2020 2019 2020 2019

Common Stock and Non-controlling OP Units $ 0.37545 $ 0.37500 $ 1.12635 $ 1.12500

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(1) We fully redeemed all outstanding shares of both Series A Preferred Stock and Series B Preferred Stock on October 28, 2019.

Series F Preferred Stock distributions were declared, but not paid, as there were no Series F Preferred Stock shares outstanding on the applicable dividend record dates.

(2) Prior to July 1, 2020, Series F Preferred Stock distributions were declared, but not paid, as there were no Series F Preferred Stock shares outstanding on the applicable dividend record dates.

Recent Activity

Common Stock ATM Program

During the six months ended June 30, 2020 , we sold 1.3 million shares of common stock, raising $ 28.4 million in net proceeds under our At-the-Market Equity Offering Sales Agreements with sales agents Robert W.

During the nine months ended September 30, 2020, we sold 1.6 million shares of common stock, raising $ 32.4 million in net proceeds under our At-the-Market Equity Offering Sales Agreements with sales agents Robert W.

Incorporated (“Baird”), Goldman Sachs & Co.

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(“Fifth Third”), pursuant to which we may sell shares of our common stock in an aggregate offering price of up to $ 250.0 million (the “Common Stock ATM Program”).

As of June 30, 2020 , we had remaining capacity to sell up to $ 208.7 million of common stock under the Common Stock ATM Program.

As of September 30, 2020, we had remaining capacity to sell up to $ 204.6 million of common stock under the Common Stock ATM Program.

Mezzanine Equity

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Bancorp Investments, Inc., pursuant to which we may, from time to time, offer to sell shares of our Series E Preferred Stock in an aggregate offering price of up to $ 100.0 million.

We sold 86,564 shares of our Series E Preferred Stock, raising $ 1.9 million in net proceeds under the agreement during the six months ended June 30, 2020 .

As of June 30, 2020 , we had remaining capacity to sell up to $ 98.0 million of Series E Preferred Stock under the Series E Preferred Stock Sales Agreement.

We do not have an active At-the-Market program for our Series D Preferred Stock.

We sold 239,399 shares of our Series E Preferred Stock, raising $ 5.6 million in net proceeds under the Series E Preferred Stock Sales Agreement during the nine months ended September 30, 2020.

As of September 30, 2020, we had remaining capacity to sell up to $ 94.4 million of Series E Preferred Stock under the Series E Preferred Stock Sales Agreement.

Universal Shelf Registration Statements

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The 2019 Universal Shelf allows us to issue up to $ 500.0 million of securities.

As of June 30, 2020 , we had the ability to issue up to $ 407.2 million under the 2019 Universal Shelf.

As of September 30, 2020, we had the ability to issue up to $ 399.5 million under the 2019 Universal Shelf.

On January 29, 2020, we filed an additional universal registration statement on Form S-3, File No.

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Of the $ 800.0 million of available capacity under our 2020 Universal Shelf, approximately $ 636.5 million is reserved for the sale of our Series F Preferred Stock.

As of June 30, 2020 , we had the ability to issue up to $ 800.0 million of securities under the 2020 universal shelf, as we have not sold any securities under the 2020 Universal Shelf.

As of September 30, 2020, we had the ability to issue up to $ 798.9 million of securities under the 2020 universal shelf.

Series F Preferred Stock

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The reclassification decreased the number of shares classified as common stock from 86,290,000 shares immediately prior to the reclassification to 60,290,000 shares immediately after the reclassification.

Currently, there are no shares of the Series F Preferred Stock outstanding.

We sold 45,102 shares of our Series F Preferred Stock, raising $ 1.0 million in net proceeds during the nine months ended September 30, 2020.

As of September 30, 2020, we had remaining capacity to sell up to $ 635.4 million of Series F Preferred Stock.

Amendment to Operating Partnership Agreement

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Distributions

On July 14, 2020 , our Board of Directors declared the following monthly distributions for the months of July , August and September of 2020 :

Common Stock and Non-controlling OP Unit Distributions per Share

Series D Preferred Distributions per Share

Series E Preferred Distributions per Share

July 24, 2020

July 31, 2020

August 24, 2020

August 31, 2020

September 23, 2020

September 30, 2020

On October 13, 2020 , our Board of Directors declared the following monthly distributions for the months of October, November and December of 2020:

Record Date Payment Date Common Stock and Non-controlling OP Unit Distributions per Share Series D Preferred Distributions per Share Series E Preferred Distributions per Share

October 23, 2020 October 30, 2020 $ 0.12515 $ 0.1458333 $ 0.138021

November 20, 2020 November 30, 2020 0.12515 0.1458333 0.138021

December 23, 2020 December 31, 2020 0.12515 0.1458333 0.138021

$ 0.37545 $ 0.4374999 $ 0.414063

Senior Common Stock Distributions

Payable to the Holders of Record During the Month of:

Distribution per Share

August 5, 2020

September 4, 2020

October 5, 2020

Payment Date Distribution per Share

October November 5, 2020 $ 0.0875

November December 4, 2020 0.0875

December January 5, 2021 0.0875

Series F Preferred Stock Distributions

Distribution per Share

July 29, 2020

August 5, 2020

August 26, 2020

September 4, 2020

September 30, 2020

October 7, 2020

As of July 27, 2020 , we have collected approximately 99 % of all outstanding July cash base rent obligations.

Record Date Payment Date Distribution per Share

October 27, 2020 November 5, 2020 $ 0.125

November 25, 2020 December 4, 2020 0.125

December 24, 2020 January 5, 2021 0.125

As of November 5, 2020, we have collected 100 % of all outstanding October cash base rent obligations and approximately 99 % of third quarter 2020 cash base rent obligations.

In April 2020, we granted rent deferrals to three tenants representing approximately 2 % of total portfolio rents.

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Equity Activity

Subsequent to June 30, 2020 and through July 27, 2020 , we raised $ 1.6 million in net proceeds from the sale of 85,000 shares of Common Stock under our Common Stock ATM Program and $ 1.5 million in net proceeds from the sale of 67,249 shares of Series E Preferred Stock under our Series E Preferred ATM Program.

Leasing activity

On July 8, 2020 , the tenant in our Richmond, Virginia property renewed their lease for an additional six years , with a new maturity date of September 30, 2026 .

Subsequent to September 30, 2020 and through November 5, 2020, we raised $ 1.4 million in net proceeds from the sale of 82,407 shares of Common Stock under our Common Stock ATM Program, $ 1.2 million in net proceeds from the sale of 50,033 shares of Series E Preferred Stock under our Series E Preferred ATM Program and $ 0.4 million in net proceeds from the sale of 18,459 shares of Series F Preferred Stock.

Sale activity

On July 1, 2020 , we sold our Maple Heights, Ohio property for $ 11.4 million .

We recognized a gain on sale, net, of $ 1.2 million .

On October 21, 2020, we sold three of our Champaign, Illinois properties for $ 13.4 million, resulting in a gain on sale, net, of $ 4.1 million.

Acquisition Activity

On October 14, 2020, we purchased a 240,714 square foot industrial facility in Montgomery, Alabama, for $ 14.3 million.

This property is fully leased to one tenant on a triple net basis with a remaining lease term of seven years .

Financing Activity

On July 1, 2020 , we repaid the $ 4.0 million variable rate debt on our Maple Heights, Ohio property.

On July 14, 2020 , the Company amended and restated the Advisory Agreement by entering into the Sixth Amended and Restated Investment Advisory Agreement between the Company and the Adviser (the “Amended Agreement”).

The Company’s entrance into the Amended Agreement was approved by its board of directors, including, specifically, unanimously by its independent directors.

The Amended Agreement revised and replaced the previous calculation of the Base Management Fee, which was based on Total Equity, with a calculation based on Gross Tangible Real Estate.

The calculation of the other fees in the Amended Agreement remain unchanged.

The revised Base Management Fee calculation will begin with the fee calculations for the quarter ending September 30, 2020 .

On October 14, 2020, we repaid $ 12.2 million of fixed rate debt, collateralized by two properties, at a weighted average interest rate of 4.79 % and repaid $ 3.2 million of variable rate debt, collateralized by one property, at an interest rate of LIBOR + 2.25 %.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements