What changed in this filing

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Item 1. Financial Statements

2021-05-10 compared with 2020-11-05 · 221 added, 308 removed, 416 unchanged (56% of the section changed)

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

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Real estate, at cost $ 1,143,960 $ 1,128,683

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Lease intangibles, net 114,057 117,379

Real estate and related assets held for sale, net 18,173 3,990

Real estate and related assets held for sale — 8,498

Cash and cash equivalents 9,871 11,016

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Accounts payable and accrued expenses 5,448 4,459

Liabilities related to assets held for sale, net 1,108 21

Due to Adviser and Administrator (1) 3,225 2,960

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$ 25 per share liquidation preference;

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)

12,760,000 shares authorized, and 6,571,003 and 6,571,003 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively (3)

$ 159,286 $ 159,286

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950,000 shares authorized;

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)

and 706,152 and 750,372 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively (3)

Common stock, par value $ 0.001 per share, 60,290,000 shares authorized and 36,224,499 and 35,331,970 shares issued and outstanding at March 31, 2021 and December 31, 2020, 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)

26,000,000 shares authorized and 118,174 and 116,674 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively (3)

Additional paid in capital 639,053 626,533

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

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

2020 2019 2020 2019

For the three months ended March 31,

Operating revenues

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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 656 878

Impairment charge 1,184 — 2,905 —

Total operating expenses $ 26,904 $ 24,092

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Interest expense $ ( 7,164 ) $ ( 7,252 )

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

Other income 204 139 209 291

Loss on sale of real estate, net ( 882 ) ( 12 )

Other income (expense) 311 ( 5 )

Total other expense, net $ ( 7,735 ) $ ( 7,269 )

Net income $ 38 $ 2,258

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

Net loss attributable to OP Units held by Non-controlling OP Unitholders 41 9

Net income attributable to the Company $ 79 $ 2,267

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

Distributions attributable to Series D, E, and F preferred stock ( 2,847 ) ( 2,678 )

Distributions attributable to senior common stock ( 187 ) ( 208 )

Net (loss) income (attributable) available to common stockholders $ ( 128 ) $ ( 631 ) $ ( 2,643 ) $ 543

(Loss) earnings per weighted average share of common stock - basic & diluted

(Loss) earnings (attributable) available to common shareholders $ ( 0.004 ) $ ( 0.02 ) $ ( 0.08 ) $ 0.02

Net loss attributable to common stockholders $ ( 2,955 ) $ ( 619 )

Loss per weighted average share of common stock - basic & diluted

Loss attributable to common shareholders $ ( 0.08 ) $ ( 0.02 )

Weighted average shares of common stock outstanding

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Change in unrealized gain (loss) related to interest rate hedging instruments, net $ 2,424 $ ( 2,528 )

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

Other Comprehensive gain (loss) 2,424 ( 2,528 )

Net income $ 38 $ 2,258

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

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

Total comprehensive income available to the Company $ 3,122 $ 1,583 $ 3,376 $ 6,720

Comprehensive income (loss) $ 2,462 $ ( 270 )

Comprehensive loss attributable to OP Units held by Non-controlling OP Unitholders 41 9

Total comprehensive income (loss) available to the Company $ 2,503 $ ( 261 )

(1) Refer to Note 2 “Related-Party Transactions”

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(Dollars in Thousands)

For the nine months ended September 30,

For the three months ended March 31,

Cash flows from operating activities:

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Depreciation and amortization 16,710 14,096

Impairment charge 2,905 —

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

Loss on sale of real estate, net 882 12

Amortization of deferred financing costs 394 374

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Operating changes in assets and liabilities

Decrease (increase) in other assets 2,397 ( 88 )

Decrease in other assets 224 1,412

Increase in deferred rent receivable ( 355 ) ( 214 )

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

Increase in other liabilities 660 398

Increase in accounts payable and accrued expenses 1,063 2,143

Increase in amount due to Adviser and Administrator 265 248

(Decrease) increase in other liabilities ( 446 ) 1,124

Leasing commissions paid ( 555 ) ( 715 )

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Payments to tenants from reserves ( 1,541 ) ( 429 )

Deposits on future acquisitions ( 1,575 ) ( 1,490 )

Deposits applied against acquisition of real estate investments 2,891 1,490

Net cash used in investing activities $ ( 6,526 ) $ ( 68,745 )

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Borrowings on term loan 50,000 37,700

Decrease in security deposits ( 1 ) ( 106 )

(Decrease) increase in security deposits ( 6 ) 12

Distributions paid for common, senior common, preferred stock and Non-controlling OP Unitholders ( 16,649 ) ( 15,738 )

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

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

Net cash (used in) provided by financing activities $ ( 11,824 ) $ 51,458

Net (decrease) increase in cash, cash equivalents, and restricted cash $ ( 1,471 ) $ 3,043

Cash, cash equivalents, and restricted cash at beginning of period $ 16,076 $ 11,488

Cash, cash equivalents, and restricted cash at end of period $ 14,605 $ 14,531

SUPPLEMENTAL NON-CASH INFORMATION

Tenant funded fixed asset improvements $ 1,972 $ 2,665

Unrealized loss related to interest rate hedging instruments, net $ ( 2,733 ) $ ( 2,335 )

Right-of-use asset from operating leases $ — $ 5,998

Operating lease liabilities $ — $ ( 5,998 )

SUPPLEMENTAL AND NON-CASH INFORMATION

Tenant funded fixed asset improvements included in deferred rent liability, net $ 1,102 $ 353

Acquisition of real estate and related intangible assets $ 300 $ 1,541

Unrealized gain (loss) related to interest rate hedging instruments, net $ 2,424 $ ( 2,528 )

Capital improvements and leasing commissions included in accounts payable and accrued expenses $ 788 $ 85

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 nine months ended September 30,

For the three months ended March 31,

Cash and cash equivalents $ 9,871 $ 9,853

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Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows $ 14,605 $ 14,531

Restricted cash consists of security deposits and receipts from tenants for reserves.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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We focus on acquiring, owning and managing primarily office and industrial properties.

On a selective basis, we may make long term industrial and office mortgage loans;

however, we do not have any mortgage loans currently outstanding.

Subject to certain restrictions and limitations, our business is managed by Gladstone Management Corporation, a Delaware corporation (the “Adviser”), and administrative services are provided by Gladstone Administration, LLC, a Delaware limited liability company (the “Administrator”), each pursuant to a contractual arrangement with us.

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Securities and Exchange Commission on February 16, 2021.

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.

The results of operations for the three months ended March 31, 2021 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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A summary of all of our significant accounting policies is provided in Note 1, “Organization, Basis of Presentation and Significant Accounting Policies,” to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.

On January 1, 2020, we completed the integration of the accounting records of certain of our triple net leased third-party asset managed properties into our accounting system and paid out of our operating bank accounts.

For periods prior to January 1, 2020, we recorded property operating expenses and offsetting lease revenues for these certain triple net leased properties on a net basis.

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 nine months ended September 30, 2020.

There were no material changes to our critical accounting policies during the three months ended March 31, 2021.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-13, “Financial Instruments - Credit Losses (Topic 326)” (“ASU 2016-13”).

The new standard requires more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair market value through net income.

The standard also requires that financial assets measured at amortized cost be presented at the net amounts anticipated to be collected, through an allowance for credit losses that is deducted from the amortized cost basis.

We are required to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets.

We adopted ASU 2016-13 beginning with the three months ended March 31, 2020.

Adopting ASU 2016-13 has not resulted in a material impact to our consolidated financial statements, as we do not have any loans receivable outstanding.

In March 2020, the FASB issued Accounting Standards Update 2020-04, “Reference Rate Reform (Topic 848)” (“ASU 2020-04”).

The main provisions of this update provide optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

ASU 2020-04 is effective for all entities as of March 12, 2020.

We adopted ASU 2020-04 beginning with the three months ended March 31, 2020.

Adopting ASU 2020-04 has not resulted in a material impact to our consolidated statements, as ASU 2020-04 allows for prospective application of any changes in the effective interest rate for our LIBOR based debt, and allows for practical expedients that will allow us to treat our derivative instruments designated as cash flow hedges consistent with how they are currently accounted for.

In April 2020, the FASB issued a staff question-and-answer document, Topic 842 and Topic 840:

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Existing lease guidance requires entities to determine if a lease concession was a result of a new arrangement reached with the tenant, which would be addressed under the lease modification accounting framework, or if a lease concession was under the enforceable rights and obligations within the existing lease agreement, which would not fall under the lease modification accounting framework.

The COVID-19 Q&A clarifies that entities may elect to not evaluate whether lease-related relief granted in light of the effects of COVID-19 is a lease modification, as long as the concession does not result in a substantial increase in rights of the lessor or obligations of the lessee.

The COVID-19 Q&A clarifies that entities may elect to not evaluate whether lease-related relief granted in light of the effects of COVID-19 is a lease

modification, as long as the concession does not result in a substantial increase in rights of the lessor or obligations of the lessee.

This election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than the total payments required by the original contract.

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 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.

Related-Party Transactions

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Our president, Mr.

Robert Cutlip, also serves as the executive vice president of commercial & industrial real estate of our Adviser.

Robert Cutlip, is the executive vice president of commercial and industrial real estate of our Adviser.

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 (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”).

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”).

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

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.

As of March 31, 2021 and December 31, 2020, $ 3.2 million and $ 3.0 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.

Our Board of Directors reviews and considers renewing the agreements with our Adviser and Administrator each July.

During their July 2020 meeting, our Board of Directors reviewed and renewed the Advisory Agreement and Administration Agreement for an additional year, through August 31, 2021.

During their July 2020 meeting, our Board of Directors amended and restated the Advisory Agreement and reviewed and renewed the Administration Agreement for an additional year, through August 31, 2021.

Base Management Fee

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.

Under the previous version of the Advisory Agreement (that which was in place prior to the most recent amendment on July 14, 2020), the calculation of the annual base management fee equaled 1.5 % of our Total Equity, which was 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.

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 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.

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 (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.

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 “Sixth Amended Advisory Agreement”), which replaced the previous calculation of the base management fee with a calculation based on Gross Tangible Real Estate.

The revised base management fee will be payable quarterly in arrears and 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 Sixth Amended Advisory 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 Advisory Agreement remain unchanged.

The revised base management fee calculation began with the fee calculations for the quarter ended September 30, 2020.

For the three months ended March 31, 2021 and 2020, we recorded a base management fee of $ 1.4 million and $ 1.4 million, respectively.

Incentive Fee

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However, in no event shall the incentive fee for a particular quarter exceed by 15.0 % (the cap) the average quarterly incentive fee paid by us for the previous four quarters (excluding quarters for which no incentive fee was paid).

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 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.

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 months ended March 31, 2021 and 2020, we recorded an incentive fee of $ 1.2 million and $ 1.1 million, respectively.

The Adviser did no t waive any portion of the incentive fee for the three months ended March 31, 2021 or 2020.

Capital Gain Fee

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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 nine months ended September 30, 2020 or 2019.

No capital gain fee was recognized during the three months ended March 31, 2021 or 2020.

Termination Fee

The Advisory Agreement includes a termination fee whereby, in the event of our termination of the agreement without cause (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to two times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination.

The Advisory Agreement includes a termination fee clause whereby, in the event of our termination of the agreement without cause (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to two times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination.

A termination fee is also payable if the Adviser terminates the Advisory Agreement after we have defaulted and applicable cure periods have expired.

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Administration Agreement

Under the terms of the Administration Agreement, we pay separately for our allocable portion of the Administrator’s overhead expenses in performing its obligations to us including, but not limited to, rent and our allocable portion of the salaries and benefits expenses of our Administrator’s employees, including, but not limited to, our chief financial officer, treasurer, chief compliance officer, general counsel and secretary, Michael LiCalsi (who also serves as our Administrator’s president, general counsel and secretary), and their respective staffs.

Under the terms of the Administration Agreement, we pay separately for our allocable portion of the Administrator’s overhead expenses in performing its obligations to us including, but not limited to, rent and our allocable portion of the salaries and benefits expenses of our Administrator’s employees, including, but not limited to, our interim chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel and secretary), and their respective staffs.

Our allocable portion of the Administrator’s expenses are generally derived by multiplying our Administrator’s total expenses by the approximate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under contractual agreements.

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

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.

We believe that the methodology of allocating the Administrator’s total expenses by approximate percentage of time services were performed among all companies serviced by our Administrator more closely approximates fees paid to actual services performed.

For the three months ended March 31, 2021 and 2020, we recorded an administration fee of $ 0.3 million and $ 0.4 million, respectively.

Gladstone Securities

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We pay Gladstone Securities a financing fee in connection with the services it provides to us for securing mortgage financing on any of our properties.

The amount of these financing fees, which are payable upon closing of the financing, are based on a percentage of the amount of the mortgage, generally ranging from 0.15 % to a maximum of 1.0 % of the mortgage obtained.

The amount of these financing fees, which are payable upon closing of the financing, are based on a percentage of the amount of the mortgage,

generally ranging from 0.15 % to a maximum of 1.00 % of the mortgage obtained.

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 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.

We paid financing fees to Gladstone Securities of $ 14,000 during the three months ended March 31, 2021, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.25 % of the mortgage principal secured.

We paid financing fees to Gladstone Securities of $ 89,637 during the three months ended March 31, 2020, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.25 % of the mortgage principal secured.

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

Dealer Manager Agreement

On February 20, 2020 we entered into a dealer manager agreement (the “Dealer Manager Agreement”), with Gladstone Securities (the “Dealer Manager”), whereby the Dealer Manager will serve as our exclusive dealer manager in connection with our offering (the “Offering”) of up to (i) 20,000,000 shares of 6.00 % Series F Cumulative Redeemable Preferred Stock of the Company, par value $ 0.001 per share (the “Series F Preferred Stock”), on a “reasonable best efforts” basis (the “Primary Offering”), and (ii) 6,000,000 shares of Series F Preferred Stock pursuant to our distribution reinvestment plan (the “DRIP”) to those holders of the Series F Preferred Stock who participate in such DRIP.

On February 20, 2020 we entered into a dealer manager agreement (the “Dealer Manager Agreement”), whereby Gladstone Securities will act as the exclusive dealer manager in connection with our offering (the “Offering”) of up to (i) 20,000,000 shares of 6.00 % Series F Cumulative Redeemable Preferred Stock of the Company, par value $ 0.001 per share (the “Series F Preferred Stock”), on a “reasonable best efforts” basis (the “Primary Offering”), and (ii) 6,000,000 shares of Series F Preferred Stock pursuant to our distribution reinvestment plan (the “DRIP”) to those holders of the Series F Preferred Stock who participate in such DRIP.

The Series F Preferred Stock is registered with the SEC pursuant to a registration statement on Form S-3 (File No.

333-236143), as the same may be amended and/or supplemented (the “Registration Statement”), under the Securities Act of 1933, as amended, and will be offered and sold pursuant to a prospectus supplement, dated February 20, 2020, and a base prospectus dated February 11, 2020 relating to the Registration Statement (the “Prospectus”).

Under the Dealer Manager Agreement, the Dealer Manager will provide certain sales, promotional and marketing services to the Company in connection with the Offering, and the Company will pay the Dealer Manager (i) selling commissions of 6.0 % of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Selling Commissions”), and (ii) a dealer manager fee of 3.0 % of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Dealer Manager Fee”).

Under the Dealer Manager Agreement, Gladstone Securities, as dealer manager, will provide certain sales, promotional and marketing services to the Company in connection with the Offering, and the Company will pay Gladstone Securities (i) selling commissions of 6.0 % of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Selling Commissions”), and (ii) a dealer manager fee of 3.0 % of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Dealer Manager Fee”).

No Selling Commissions or Dealer Manager Fee shall be paid with respect to Shares sold pursuant to the DRIP.

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 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 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:

Net (loss) income (attributable) available to common stockholders $ ( 128 ) $ ( 631 ) $ ( 2,643 ) $ 543

Gladstone Securities 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 $ 3,375 to Gladstone Securities during the three months ended March 31, 2021 in connection with the Offering.

Loss Per Share of Common Stock

The following tables set forth the computation of basic and diluted loss per share of common stock for the three months ended March 31, 2021 and 2020.

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 per share calculations, as there would be no effect on the amounts since the Non-controlling OP Unitholders’ share of loss would also be added back to net loss.

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

We computed basic loss per share for the three months ended March 31, 2021 and 2020 using the weighted average number of shares outstanding during the respective periods.

Diluted loss per share for the three months ended March 31, 2021 and 2020 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 attributable 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 March 31,

Calculation of basic loss per share of common stock:

Net loss attributable to common stockholders $ ( 2,955 ) $ ( 619 )

Denominator for basic weighted average shares of common stock (1) 35,714,107 33,634,946

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

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

Net (loss) income (attributable) available to common stockholders $ ( 128 ) $ ( 631 ) $ ( 2,643 ) $ 543

Net (loss) income (attributable) available to common stockholders plus assumed conversions (2) $ ( 128 ) $ ( 631 ) $ ( 2,643 ) $ 543

Basic loss per share of common stock $ ( 0.08 ) $ ( 0.02 )

Calculation of diluted loss per share of common stock:

Net loss attributable to common stockholders $ ( 2,955 ) $ ( 619 )

Net loss attributable to common stockholders plus assumed conversions (2) $ ( 2,955 ) $ ( 619 )

Denominator for basic weighted average shares of common stock (1) 35,714,107 33,634,946

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Denominator for diluted weighted average shares of common stock (2) 35,714,107 33,634,946

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

(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.

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

(1) The weighted average number of OP Units held by Non-controlling OP Unitholders was 500,299 and 501,233 for the three months ended March 31, 2021 and 2020, respectively.

(2) We excluded convertible shares of Senior Common Stock of 592,156 and 654,942 from the calculation of diluted loss per share for the three months ended March 31, 2021 and 2020, 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 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

The following table sets forth the components of our investments in real estate as of March 31, 2021 and December 31, 2020, excluding real estate held for sale as of December 31, 2020 (dollars in thousands):

March 31, 2021 December 31, 2020

Land (1) $ 143,559 $ 142,853

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(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 $ 9.0 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.

Real estate depreciation expense on building and tenant improvements was $ 10.7 million and $ 9.0 million for the three months ended March 31, 2021 and 2020, respectively.

We acquired one property during the three months ended March 31, 2021, and five properties during the three months ended March 31, 2020.

The acquisitions are summarized below (dollars in thousands):

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

Three Months Ended Aggregate Square Footage Weighted Average Lease Term Aggregate Purchase Price Aggregate Capitalized Acquisition Costs

March 31, 2021 (1) 180,152 14.2 years $ 11,146 $ 146 (3)

March 31, 2020 (2) 890,038 14.8 years $ 71,965 $ 255 (3)

(1) On January 22, 2021, we acquired a 180,152 square foot property in Findlay, Ohio for $ 11.1 million.

The property is fully leased to one tenant for 14.2 years.

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

The property is leased to three tenants with a weighted average lease term of 7.2 years with annualized GAAP rent of $ 0.5 million.

On January 27, 2020, we acquired a 320,838 square foot, three -property portfolio in Houston, Texas, Charlotte, North Carolina, and St.

The property is leased to three tenants, with a weighted average lease term of 7.2 years.

On January 27, 2020, we acquired a 320,838

square foot, three -property portfolio in Houston, Texas, Charlotte, North Carolina, and St.

Charles, Missouri for $ 34.7 million.

The portfolio has a weighted average lease term of 20.0 years, and an annualized GAAP rent of $ 2.6 million.

We issued $ 18.3 million of mortgage debt with a fixed interest rate of 3.625 % in connection with the acquisition.

On March 9, 2020, we acquired a 504,400 square foot property in Chatsworth, Georgia for $ 32.0 million.

We entered into an interest rate swap in connection with our $ 17.5 million of issued debt, resulting in a fixed interest rate of 2.8 %.

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.

The annualized GAAP rent on the 15.1 year lease is $ 0.2 million.

On February 28, 2019, we acquired a 34,800 square foot property in Indianapolis, Indiana for $ 3.6 million.

The annualized GAAP rent on the 10.0 year lease is $ 0.3 million.

On April 5, 2019, we acquired a 207,000 square foot property in Ocala, Florida, for $ 11.9 million.

The annualized GAAP rent on the 20.1 year lease is $ 0.8 million.

On April 5, 2019, we acquired a 176,000 square foot property in Ocala, Florida, for $ 7.3 million.

The annualized GAAP rent on the 20.1 year lease is $ 0.7 million.

On April 30, 2019, we acquired a 54,430 square foot property in Columbus, Ohio, for $ 3.2 million.

The annualized GAAP rent on the 7.0 year lease is $ 0.2 million.

On June 18, 2019, we acquired a 676,031 square foot property in Tifton, Georgia, for $ 17.9 million.

The annualized GAAP rent on the 8.5 year lease is $ 1.6 million.

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

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 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

The portfolio has a weighted average lease term of 20.0 years.

On March 9, 2020, we acquired a 504,400 square foot property in Crandall, Georgia, for $ 32.0 million.

This property is fully leased to one tenant for 10.5 years.

(3) During the three months ended March 31, 2021 and 2020, we capitalized $0.1 million and $0.3 million, respectively, of acquisition costs.

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the three months ended March 31, 2021 and 2020, respectively, as follows (dollars in thousands):

Three Months Ended March 31, 2021 Three Months Ended March 31, 2020

Acquired assets and liabilities Purchase price Purchase price

Land $ 258 $ 7,296 (1)

Building and improvements 61,930 48,898

Building 8,759 54,000

Tenant Improvements 88 1,285

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(3) This amount includes $ 62 of prepaid rent included in Other liabilities on the condensed consolidated balance sheets.

Significant Real Estate Activity on Existing Assets

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 three months ending December 31, 2020 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the nine months ending December 31, 2021 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

Nine Months Ending 2021 $ 84,350

Thereafter 261,017

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

A majority of our leases are subject to fixed rental increases, but a small subset of our lease portfolio has variable lease payments that are driven by the consumer price index.

Many of our tenants have renewal options in their respective leases, but we seldom include option periods in the determination of lease term, as we generally will not enter into leasing arrangements with bargain renewal options.

A small number of tenants have termination options.

Lease Revenue Reconciliation

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,

In accordance with the lease terms, substantially all operating expenses are required to be paid by the tenant directly, or reimbursed to us from the tenant;

however, we would be required to pay operating expenses on the respective properties in the event the tenants fail to pay them.

Lease Revenue Reconciliation

The table below sets forth the allocation of lease revenue between fixed contractual payments and variable lease payments for the three months ended March 31, 2021 and 2020, respectively (dollars in thousands):

For the three months ended March 31,

(Dollars in Thousands)

Lease revenue reconciliation 2021 2020 $ Change % Change

Fixed lease payments $ 30,757 $ 29,479 $ 1,278 4.3 %

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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 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

The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of March 31, 2021 and December 31, 2020, excluding real estate held for sale as of December 31, 2020 (dollars in thousands):

March 31, 2021 December 31, 2020

Lease Intangibles Accumulated Amortization Lease Intangibles Accumulated Amortization

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Below market leases and deferred revenue ( 39,421 ) 19,295 ( 38,319 ) 17,686

$ ( 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:

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $ 6.0 million and $ 5.1 million for the three months ended March 31, 2021 and 2020, 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 $ 0.2 million for the three months ended March 31, 2021 and 2020, 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 $ 1.6 million and $ 0.7 million for the three months ended March 31, 2021 and 2020, 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 and liabilities assumed during the three months ended March 31, 2021 and 2020, respectively, were as follows:

Intangible Assets & Liabilities 2021 2020

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Real Estate Dispositions

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.

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

During the three months ended March 31, 2021, we continued to execute our capital recycling program, whereby we sold properties outside of our core markets and redeployed 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.

During the three months ended March 31, 2021, we sold two non-core properties, located in Rancho Cordova, California and Champaign, Illinois, which are summarized in the table below (dollars in thousands):

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

81,758 $ 5,473 $ 367 $ ( 882 )

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.

Our dispositions during the three months ended March 31, 2021 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

The table below summarizes the components of operating income from the real estate and related assets disposed of during the three months ended March 31, 2021, and 2020 (dollars in thousands):

For the three months ended March 31,

Operating revenue $ 233 $ 227

Operating expense 113 188

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.

Other expense, net ( 1,622 ) (1) ( 59 )

Loss from real estate and related assets sold $ ( 1,502 ) $ ( 20 )

(1) Includes a $ 0.9 million loss on sale of real estate, net, on two property sales.

Real Estate Held for Sale

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 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 nine months ended September 30, 2020.

As of March 31, 2021, we did not have any properties classified as held for sale.

At December 31, 2020, we had three properties classified as held for sale, located in Boston Heights, Ohio, Rancho Cordova, California, and Champaign, Illinois.

Two of the properties were sold during the three months ended March 31, 2021.

Our Boston Heights, Ohio property is classified as held and used as of March 31, 2021, as this property no longer meets the held for sale criteria.

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):

September 30, 2020 December 31, 2019

December 31, 2020

Assets Held for Sale

Real estate, at cost $ 24,688 $ 7,411

accumulated depreciation 7,433 3,421

Total real estate held for sale, net 17,255 3,990

Total real estate held for sale $ 8,114

Lease intangibles, net 384

Deferred rent receivable, net 456 —

Total Assets Held for Sale $ 8,498

Liabilities Held for Sale

Deferred rent liability, net $ 1,108 $ —

Asset retirement obligation — 21

Total Liabilities Held for Sale $ 1,108 $ 21

Impairment Charges

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 evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the three months ended March 31, 2021 and did not recognize an impairment charge.

We did not recognize an impairment charge during the three months ended March 31, 2020 after we evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired.

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 September 30, 2020 and December 31, 2019 are summarized below (dollars in thousands):

Our $ 100.0 million unsecured revolving credit facility (“Revolver”), $ 160.0 million term loan facility (“Term Loan A”), and $ 65.0 million new term loan facility (“Term Loan B”), are collectively referred to herein as the Credit Facility.

Our mortgage notes payable and Credit Facility as of March 31, 2021 and December 31, 2020 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

March 31, 2021 March 31, 2021 December 31, 2020 March 31, 2021 March 31, 2021

Mortgage and other secured loans:

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Variable rate revolving credit facility 49 (6) $ — $ 53,900 LIBOR + 1.90 %

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 - (6) $ 160,000 $ 122,300 LIBOR + 1.60 %

Total revolver 49 $ — $ 53,900

Variable rate term loan facility A - (6) $ 160,000 $ 160,000 LIBOR + 1.85 %

Variable rate term loan facility B - (6) 50,000 — LIBOR + 2.00 %

Deferred financing costs, term loan facility - ( 1,210 ) ( 797 ) N/A N/A

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(3) Interest rates on our variable rate mortgage notes payable vary from one month LIBOR + 2.35 % to one month LIBOR + 2.75 %.

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.

As of March 31, 2021, one month LIBOR was approximately 0.11 %.

(4) The weighted average interest rate on the mortgage notes outstanding as of March 31, 2021 was approximately 4.22 %.

(5) The weighted average interest rate on all debt outstanding as of March 31, 2021 was approximately 3.52 %.

(6) The amount we may draw under our Credit Facility is based on a percentage of the fair value of a combined pool of 49 unencumbered properties as of March 31, 2021.

N/A - Not Applicable

Mortgage Notes Payable

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 .

As of March 31, 2021, we had 53 mortgage notes payable, collateralized by a total of 68 properties with a net book value of $ 685.4 million.

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

a borrower voluntarily filing for bankruptcy, improper conveyance of a property, fraud or material misrepresentation, misapplication or misappropriation of rents, security deposits, insurance proceeds or condemnation proceeds, or physical waste or damage to the property resulting from a borrower’s gross negligence or willful misconduct.

We have full recourse for $ 0.8 million of the mortgages notes payable, net, or 0.2 % of the outstanding balance.

As of March 31, 2021, we did not have any mortgages subject to recourse.

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 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

During the three months ended March 31, 2021, we repaid one mortgage, collateralized by one property, which is summarized in the table below (dollars in thousands):

Fixed Rate Debt Repaid Interest Rate on Fixed Rate Debt Repaid

$ 4,470 4.90 %

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

During the three months ended March 31, 2021, we issued one mortgage, collateralized by one property, which is summarized in the table below (dollars in thousands):

Fixed Rate Debt Issued Interest Rate on Fixed Rate Debt

$ 5,500 (1) 3.24 %

(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.

The interest rate is fixed at 3.625 %.

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 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):

(1) On January 22, 2021, we issued $ 5.5 million of floating rate debt swapped to fixed debt of 3.24 % in connection with one property acquisition.

We made payments of $ 0.6 million and $ 0.4 million for deferred financing costs during the three months ended March 31, 2021 and 2020, respectively.

Scheduled principal payments of mortgage notes payable for the nine months ending December 31, 2021, and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):

Year Scheduled Principal Payments

Three Months Ending December 31, 2020 $ 6,013

Nine Months Ending December 31, 2021 $ 20,134

Thereafter 133,036

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

At March 31, 2021 and December 31, 2020, 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 qualifies for hedge accounting, the change in the estimated fair value is recorded to accumulated other comprehensive income to the extent that it is effective, with any ineffective portion recorded to interest expense in our condensed consolidated statements of operations and comprehensive income.

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 September 30, 2020 and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

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 March 31, 2021 and December 31, 2020 (dollars in thousands):

March 31, 2021 December 31, 2020

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

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(1) We have entered into various interest rate cap agreements on variable rate debt with LIBOR caps ranging from 1.50 % to 2.75 %.

We have assumed or entered into interest rate swap agreements in connection with certain of our acquisitions or mortgage financings, whereby we will pay our counterparty a fixed rate interest rate on a monthly basis, and receive payments from our counterparty equivalent to the stipulated floating rate.

The fair values of our interest rate swap agreements are recorded in other assets or other liabilities on our accompanying condensed consolidated balance sheets.

We have assumed or entered into interest rate swap agreements in connection with certain of our mortgage financings, whereby we will pay our counterparty a fixed rate interest rate on a monthly basis, and receive payments from our counterparty equivalent to the stipulated floating rate.

The fair value of our interest rate swap agreements are recorded in other assets or other liabilities on our accompanying condensed consolidated balance sheets.

We have designated our interest rate swaps as cash flow hedges, and we record changes in the fair value of the interest rate swap agreement to accumulated other comprehensive income on the condensed consolidated balance sheets.

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 September 30, 2020 and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

The following table summarizes our interest rate swaps at March 31, 2021 and December 31, 2020 (dollars in thousands):

March 31, 2021 December 31, 2020

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

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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 September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Amount of gain (loss) recognized in Comprehensive Income

Three Months Ended March 31,

Derivatives in cash flow hedging relationships

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Asset (Liability) Derivatives Fair Value at

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

Derivatives Designated as Hedging Instruments Balance Sheet Location March 31, 2021 December 31, 2020

Interest rate caps Other assets $ 155 $ 9

Interest rate swaps Other assets 1,272 —

Interest rate swaps Other liabilities ( 1,959 ) ( 3,055 )

Total derivative liabilities, net $ ( 532 ) $ ( 3,046 )

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 of all mortgage notes payable outstanding as of March 31, 2021 was $ 466.0 million , as compared to the carrying value stated above of $ 454.4 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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Credit Facility

On July 2, 2019, we amended, extended and upsized our Credit Facility, expanding the Term Loan from $ 75.0 million to $ 160.0 million, and increasing the Revolver from $ 85.0 million to $ 100.0 million.

The Term Loan has a new five -year term, with a maturity date of July 2, 2024, and the Revolver has a new four -year term, with a maturity date of July 2, 2023.

The interest rate for the Credit Facility was reduced by 10 basis points at each of the leverage tiers.

We entered into multiple interest rate cap agreements on the amended Term Loan, which cap LIBOR ranging from 2.50 % to 2.75 %, to hedge our exposure to variable interest rates.

We used the net proceeds derived from the amended Credit Facility to repay all previously existing borrowings under the Revolver.

We incurred fees of approximately $ 1.3 million in connection with the Credit Facility amendment.

The bank syndicate is now comprised of KeyBank, Fifth Third Bank, U.S.

On July 2, 2019, we amended, extended and upsized our Credit Facility, expanding Term Loan A from $ 75.0 million to $ 160.0 million, and increasing our Revolver from $ 85.0 million to $ 100.0 million.

Term Loan A has a maturity date of July 2, 2024, and the Revolver has a maturity date of July 2, 2023.

The interest rate for the Credit Facility is equal to LIBOR plus a spread

ranging from 125 to 215 basis points, depending on our leverage.

We entered into multiple interest rate cap agreements on Term Loan A, which cap LIBOR ranging from 2.50 % to 2.75 %, to hedge our exposure to variable interest rates.

The bank syndicate is comprised of KeyBank, Fifth Third Bank, U.S.

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

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.

On February 11, 2021, we added a new $ 65.0 million Term Loan B, inclusive of a $ 15.0 million delayed funding component.

Term Loan B has a maturity date of February 11, 2026 and a LIBOR floor of 25 basis points, plus a spread ranging from 140 to 225 basis points, depending on our leverage.

We entered into multiple interest rate cap agreements on Term Loan B, which cap LIBOR at 1.50 %.

We incurred fees of approximately $ 0.5 million in connection with issuing Term Loan B.

As of March 31, 2021, there was $ 50.0 million outstanding under Term Loan B, and we used all net proceeds to repay all outstanding borrowings on the Revolver.

As of March 31, 2021, there was $ 210.0 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 2.00 %, and $ 18.8 million outstanding under letters of credit, at a weighted average interest rate of 1.90 %.

As of March 31, 2021, the maximum additional amount we could draw under the Credit Facility was $ 18.3 million.

We were in compliance with all covenants under the Credit Facility as of March 31, 2021.

The amount outstanding under the Credit Facility approximates fair value as of March 31, 2021.

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 September 30, 2020 are as follows (dollars in thousands):

Future minimum rental payments due under the terms of these leases for the nine months ending December 31, 2021 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Year Future Lease Payments Due Under Operating Leases

Three Months Ending December 31, 2020 $ 116

Nine Months Ending December 31, 2021 $ 360

Thereafter 6,807

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Present value of lease payments $ 5,646

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.

Rental expense incurred for properties with ground lease obligations during the three months ended March 31, 2021 and 2020 was $ 0.1 million and $ 0.1 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.

Our ground leases have a weighted average remaining lease term of 19.9 years and a weighted average discount rate of 5.32 %.

Letters of Credit

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

As of March 31, 2021, there was $ 18.8 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 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

Balance, beginning of period $ — $ 2 $ — $ 2

Issuance of Series A and B preferred stock, net — — — —

Balance, end of period $ — $ 2 $ — $ 2

The following table summarizes the changes in our equity for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended March 31,

Senior Common Stock

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Issuance of common stock and Series F Preferred Stock, net (1) 11,312 27,930

Redemption of OP Units 4,812 —

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership ( 3,604 ) 97

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Issuance of common stock and Series F Preferred Stock, net (1) 11,313 27,932

Redemption of OP Units 4,812 —

Distributions declared to common, senior common, and preferred stockholders ( 16,460 ) ( 15,548 )

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Issuance of Non-controlling OP Units as consideration in real estate acquisitions, net — 502

Redemptions of OP Units ( 4,812 ) —

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership 3,604 ( 97 )

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

Net loss attributable to OP units held by Non-controlling OP Unitholders ( 41 ) ( 9 )

Balance, end of period $ 1,416 $ 3,110

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Distributions

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

We paid the following distributions per share for the three months ended March 31, 2021 and 2020:

For the three months ended March 31,

Common Stock and Non-controlling OP Units $ 0.37545 $ 0.37545

Senior Common Stock 0.2625 0.2625

Series A Preferred Stock — (1) 0.4843749 — (1) 1.4531247

Series B Preferred Stock — (1) 0.46875 — (1) 1.4063

Series D Preferred Stock 0.4374999 0.4374999

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Series F Preferred Stock 0.375 — (1)

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

(1) 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.

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Common Stock ATM Program

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.

During the three months ended March 31, 2021, we sold 0.6 million shares of common stock, raising $ 11.3 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 September 30, 2020, we had remaining capacity to sell up to $ 204.6 million of common stock under the Common Stock ATM Program.

As of March 31, 2021, we had remaining capacity to sell up to $ 172.5 million of common stock under the Common Stock ATM Program.

Mezzanine Equity

Our 7.00 % Series D Cumulative Redeemable Preferred Stock (“Series D Preferred Stock”) and 6.625 % Series E Cumulative Redeemable Preferred Stock (“Series E Preferred Stock”) are classified as mezzanine equity on our condensed consolidated balance sheets because both are redeemable at the option of the shareholder upon a change of control of greater than 50% in accordance with ASC 480-10-S99 “Distinguishing Liabilities from Equity,” which requires mezzanine equity classification for preferred stock issuances with redemption features which are outside of the control of the issuer.

Both our 7.00 % Series D Cumulative Redeemable Preferred Stock (“Series D Preferred Stock”) and 6.625 % Series E Cumulative Redeemable Preferred Stock (“Series E Preferred Stock”) are classified as mezzanine equity in our condensed consolidated balance sheets because both are redeemable at the option of the shareholder upon a change of control of greater than 50% in accordance with ASC 480-10-S99 “Distinguishing Liabilities from Equity,” which requires mezzanine equity classification for preferred stock issuances with redemption features which are outside of the control of the issuer.

A change in control of our company, outside of our control, is only possible if a tender offer is accepted by over 90 % of our shareholders.

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We currently believe the likelihood of a change of control greater than 50%, or a delisting event, is remote.

We have an At-the-Market Equity Offering Sales Agreement with sales agents Baird, Goldman Sachs, Stifel, Fifth Third, and U.S.

We did not have an active At-the-Market program for our Series D Preferred Stock during the three months ended March 31, 2021.

Series E Preferred Stock ATM Program

We have an At-the-Market Equity Offering Sales Agreement (the “Series E Preferred Stock Sales Agreement”) with sales agents Baird, Goldman Sachs, Stifel, Fifth Third, and U.S.

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 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.

We did not sell any shares of our Series E Preferred Stock under the Series E Preferred Stock Sales Agreement during the three months ended March 31, 2021.

As of March 31, 2021, we had remaining capacity to sell up to $ 92.8 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 September 30, 2020, we had the ability to issue up to $ 399.5 million under the 2019 Universal Shelf.

As of March 31, 2021, we had the ability to issue up to $ 365.8 million of securities 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 September 30, 2020, we had the ability to issue up to $ 798.9 million of securities under the 2020 universal shelf.

As of March 31, 2021, we had the ability to issue up to $ 797.1 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.

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

In connection with the authorization of the Series F Preferred Stock in February of 2020, the Operating Partnership controlled by the Company through its ownership of GCLP Business Trust II, the general partner of the Operating Partnership, adopted the Second Amendment to its Second Amended and Restated Agreement of Limited Partnership, including Exhibit SFP thereto (collectively, the “Amendment”), as amended from time to time, establishing the rights, privileges and preferences of 6.00 % Series F Cumulative Redeemable Preferred Units, a newly-designated class of limited partnership interests (the “Series F Preferred Units”).

The Amendment provides for the Operating Partnership’s establishment and issuance of an equal number of Series F Preferred Units as are issued shares of Series F Preferred Stock by the Company in connection with the Offering upon the Company’s contribution to the Operating Partnership of the net proceeds of the Offering.

Generally, the Series F Preferred Units provided for under the Amendment have preferences, distribution rights and other provisions substantially equivalent to those of the Series F Preferred Stock.

We sold 1,500 shares of our Series F Preferred Stock, raising $ 0.03 million in net proceeds during the three months ended March 31, 2021.

As of March 31, 2021, we had remaining capacity to sell up to $ 633.6 million of Series F Preferred Stock.

Non-controlling Interest in Operating Partnership

As of March 31, 2021 and December 31, 2020, we owned approximately 99.3 % and 98.6 %, re spectively, of the outstanding OP Units.

On March 31, 2021 , we redeemed 246,039 OP Units for an equivalent amount of common stock.

The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP Units held by the Company being utilized to make distributions to the Company’s common stockholders.

As of March 31, 2021 and December 31, 2020, there were 256,994 and 503,033 outstanding OP Units held by Non-controlling OP Unitholders, respectively.

Subsequent Events

Distributions

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

On April 13, 2021, our Board of Directors declared the following monthly distributions for the months of April, May and June of 2021:

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

April 23, 2021 April 30, 2021 $ 0.12515 $ 0.1458333 $ 0.138021

May 19, 2021 May 28, 2021 0.12515 0.1458333 0.138021

June 18, 2021 June 30, 2021 0.12515 0.1458333 0.138021

$ 0.37545 $ 0.4374999 $ 0.414063

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Payment Date Distribution per Share

October November 5, 2020 $ 0.0875

November December 4, 2020 0.0875

December January 5, 2021 0.0875

April May 6, 2021 $ 0.0875

May June 4, 2021 0.0875

June July 6, 2021 0.0875

Series F Preferred Stock Distributions

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.

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.

We have received and may receive additional rent modification requests in future periods from our tenants, but we have not granted any additional rent deferrals at this time.

We are unable to quantify the economic impact of these potential requests at this time.

April 28, 2021 May 5, 2021 $ 0.125

May 26, 2021 June 4, 2021 0.125

June 28, 2021 July 6, 2021 0.125

Equity Activity

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 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 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 %.

Subsequent to March 31, 2021 and through May 10, 2021, we raised $ 2.9 million in net proceeds from the sale of 140,259 shares of common stock under our common stock ATM Program and $ 0.2 million in net proceeds from the sale of 6,701 shares of Series F Preferred Stock.

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