What changed in this filing

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Item 1. Financial Statements

2022-08-03 compared with 2022-05-04 · 141 added, 102 removed, 397 unchanged (38% of the section changed)

3 unchanged sentences

(in thousands – except share and per share data)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Investments in real estate

6 unchanged sentences

Net investments in properties 2,959,872 2,667,764

Properties held for sale, net 30,582 —

Net investments in real estate 2,753,788 2,667,764

Cash and cash equivalents 7,237 204,404

14 unchanged sentences

Common stock:

$ 0.01 par value, 400,000,000 shares authorized, and 75,102,276 and 75,068,575 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively.

$ 0.01 par value, 400,000,000 shares authorized, and 75,120,374 and 75,068,575 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively.

Additional paid-in capital

2,087,682 2,069,604

Common stock held in deferred compensation plan, 423,012 and 275,727 shares at March 31, 2022 and December 31, 2021, respectively.

Common stock held in deferred compensation plan, 426,594 and 275,727 shares at June 30, 2022 and December 31, 2021, respectively.

( 26,982 ) ( 15,197 )

6 unchanged sentences

(in thousands – except share and per share data)

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

2022 2021 2022 2021

Rental revenues and tenant expense reimbursements $ 65,369 $ 53,295 $ 129,404 $ 103,986

4 unchanged sentences

General and administrative 7,333 6,866 14,860 12,448

Acquisition costs 28 55

Acquisition costs and other 1,027 117 1,055 172

Total costs and expenses 39,452 32,122 78,865 62,647

2 unchanged sentences

Interest expense, including amortization ( 5,047 ) ( 4,016 ) ( 10,128 ) ( 8,161 )

Total other expense ( 4,960 ) ( 3,909 )

Gain on sales of real estate investments 76,048 — 76,048 —

Total other income (expense) 71,116 ( 3,795 ) 66,156 ( 7,704 )

Net income 97,033 17,378 116,695 33,635

10 unchanged sentences

(in thousands)

For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

2022 2021 2022 2021

Net income $ 97,033 $ 17,378 $ 116,695 $ 33,635

6 unchanged sentences

(in thousands – except share data)

Three months ended March 31, 2022:

Six months ended June 30, 2022:

Common Stock Additional

15 unchanged sentences

Balance as of March 31, 2022 75,102,276 $ 752 $ 2,083,475 423,012 $ ( 26,732 ) $ ( 3,214 ) $ — $ 2,054,281

Three months ended March 31, 2021:

Net income — — — — — 97,033 — 97,033

Issuance of common stock, net of issuance costs of $ 112

37,833 — 1,947 — — — — 1,947

Forfeiture of common stock related to employee awards ( 28,185 ) — — — — — — —

Stock-based compensation — — 2,010 — — — — 2,010

Common stock dividends ($ 0.34 per share)

— — — — — ( 25,686 ) — ( 25,686 )

Deposits to deferred compensation plan ( 3,582 ) — 250 3,582 ( 250 ) — — —

Balance as of June 30, 2022 75,120,374 $ 752 $ 2,087,682 426,594 $ ( 26,982 ) $ 68,133 $ — $ 2,129,585

Six months ended June 30, 2021:

Common Stock Additional

15 unchanged sentences

Balance as of March 31, 2021 69,102,008 $ 693 $ 1,645,876 270,546 $ ( 14,867 ) $ 2,092 $ ( 77 ) $ 1,633,717

Net income — — — — — 17,378 — 17,378

Issuance of common stock, net of issuance costs of $ 1,228

1,094,656 11 68,382 — — — — 68,393

Forfeiture of common stock related to employee awards ( 85 ) — — — — — — —

Stock-based compensation — — 2,677 — — — — 2,677

Common stock dividends ($ 0.29 per share)

— — — — — ( 20,428 ) — ( 20,428 )

Deposits to deferred compensation plan ( 5,181 ) — 330 5,181 ( 330 ) — — —

Other comprehensive income — — — — — — 77 77

Balance as of June 30, 2021 70,191,398 $ 704 $ 1,717,265 275,727 $ ( 15,197 ) $ ( 958 ) $ — $ 1,701,814

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

2 unchanged sentences

(in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Depreciation and amortization 30,270 23,344

Gain on sales of real estate investments ( 76,048 ) —

Deferred financing cost amortization 611 747

6 unchanged sentences

Cash paid for property acquisitions ( 276,975 ) ( 160,031 )

Proceeds from sales of real estate investments, net 106,835 —

Additions to construction in progress ( 18,571 ) ( 3,021 )

5 unchanged sentences

Repurchase of common stock related to employee awards ( 493 ) ( 582 )

Borrowings on credit facility 12,000 25,000

Payments on credit facility — ( 25,000 )

Payments on mortgage loan payable — ( 11,271 )

11 unchanged sentences

Lease liability arising from recognition of right-of-use asset — 424

Reconciliation of cash paid for property acquisitions

Acquisition of properties $ 291,873 $ 167,660

7 unchanged sentences

All square feet, acres, occupancy and number of properties disclosed in these condensed notes to the consolidated financial statements are unaudited.

As of March 31, 2022, the Company owned 256 buildings (including one property consisting of 18 buildings held for sale) aggregating approximately 15.1 million square feet, 37 improved land parcels consisting of approximately 128.3 acres and four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.5 million square feet and two improved land parcels aggregating approximately 12.1 acres.

As of June 30, 2022, the Company owned 249 buildings aggregating approximately 15.1 million square feet, 42 improved land parcels consisting of approximately 147.7 acres and four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.3 million square feet and two improved land parcels aggregating approximately 12.1 acres.

The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2010.

7 unchanged sentences

Use of Estimates.

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.

The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.

Actual results could differ from those estimates.

14 unchanged sentences

The intended use of an asset either held for sale or held for use can significantly impact how impairment is measured.

If an asset is intended to be held for the long-term, the

recoverability is based on the undiscounted future cash flows.

If the asset carrying value is not supported on an undiscounted future cash flow basis, then the asset carrying value is measured against the lower of cost or the present value of expected cash flows over the expected hold period.

If an asset is intended to be held for the long-term, the recoverability is based on the undiscounted future cash flows.

If the asset carrying value is not supported on an undiscounted

future cash flow basis, then the asset carrying value is measured against the lower of cost or the present value of expected cash flows over the expected hold period.

An impairment charge to earnings is recognized for the excess of the asset’s carrying value over the lower of cost or the present values of expected cash flows over the expected hold period.

7 unchanged sentences

The discount rates used in the fair value estimates represent a rate commensurate with the indicated holding period with a premium layered on for risk.

There were no impairment charges recorded to the carrying values of the Company’s properties during the three months ended March 31, 2022 or 2021.

There were no impairment charges recorded to the carrying values of the Company’s properties during the three or six months ended June 30, 2022 or 2021.

Property Acquisitions.

12 unchanged sentences

The above and below-market lease values are amortized to rental revenues over the remaining initial term plus the term of any below-market fixed rate renewal options that are considered bargain renewal options of the respective leases.

The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 3.1 million and $ 1.4 million for the three months ended March 31, 2022 and 2021, respectively.

The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 3.5 million and $ 1.6 million for the three months ended June 30, 2022 and 2021, respectively, and approximately $ 6.6 million and $ 3.1 million for the six months ended June 30, 2022 and 2021, respectively.

The origination value of in-place leases is based on costs to execute similar leases, including commissions and other related costs.

The origination value of in-place leases also includes real estate taxes, insurance and an estimate of lost rental revenue at market rates during the estimated time required to lease up the property from vacant to the occupancy level at the date of acquisition.

The remaining weighted average lease term related to these intangible assets and liabilities as of March 31, 2022 was 6.9 years.

As of March 31, 2022 and December 31, 2021, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands):

March 31, 2022 December 31, 2021

The remaining weighted average lease term related to these intangible assets and liabilities as of June 30, 2022 was 6.5 years.

As of June 30, 2022 and December 31, 2021, the Company’s intangible assets and liabilities, including properties held for sale (if any), consisted of the following (dollars in thousands):

June 30, 2022 December 31, 2021

Gross Accumulated

27 unchanged sentences

The following summarizes the reconciliation of cash and cash equivalents and restricted cash as presented in the accompanying consolidated statements of cash flows (dollars in thousands):

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash and cash equivalents at beginning of period $ 204,404 $ 107,180

13 unchanged sentences

Tenant expense reimbursement income includes payments and amounts due from tenants pursuant to their leases for real estate taxes, insurance and other recoverable property operating expenses and is recognized as revenues during the same period the related expenses are incurred.

As of March 31, 2022 and December 31, 2021, approximately $ 43.1 million and $ 39.7 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.4 million and $ 0.5 million as of March 31, 2022 and December 31, 2021, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

As of June 30, 2022 and December 31, 2021, approximately $ 42.7 million and $ 39.7 million, respectively, of straight-line rent and accounts receivable, net of allowances of approximately $ 0.7 million and $ 0.5 million as of June 30, 2022 and December 31, 2021, respectively, were included as a component of other assets in the accompanying consolidated balance sheets.

Deferred Financing Costs.

1 unchanged sentence

Deferred financing costs associated with the Company’s revolving credit facility are classified as an asset, as a component of other assets in the accompanying consolidated balance sheets, and deferred financing costs associated with debt liabilities are reported as a direct deduction from the carrying amount of the debt liability in the accompanying consolidated balance sheets.

Deferred financing costs related to the revolving credit facility and debt liabilities are carried at cost, net of accumulated amortization in the aggregate of approximately $ 10.9 million and $ 10.6 million as of March 31, 2022 and December 31, 2021, respectively.

Deferred financing costs related to the revolving credit facility and debt liabilities are carried at cost, net of accumulated amortization in the aggregate of approximately $ 11.2 million and $ 10.6 million as of June 30, 2022 and December 31, 2021, respectively.

Income Taxes.

8 unchanged sentences

Tax benefits of positions not deemed to meet the more-likely-than-not threshold are recorded as a tax expense in the current year.

As of March 31, 2022 and December 31, 2021, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months.

The Company’s tax returns are subject to examination by federal, state and local tax jurisdictions, which as of March 31, 2022, include years 2018 to 2021 for federal purposes.

As of June 30, 2022 and December 31, 2021, the Company did not have any unrecognized tax benefits and does not believe that there will be any material changes in unrecognized tax positions over the next 12 months.

The Company’s tax returns are subject to examination by federal, state and local tax jurisdictions, which as of June 30, 2022, include years 2018 to 2021 for federal purposes.

Stock-Based Compensation and Other Long-Term Incentive Compensation.

25 unchanged sentences

However, the Company’s management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

As of March 31, 2022, the Company owned 62 buildings aggregating approximately 3.4 million square feet and 10 improved land parcels consisting of approximately 54.2 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 27.4 % of its annualized base rent.

Such annualized base rent percentages are based on contractual base rent from leases in effect as of March 31, 2022, excluding any partial or full rent abatements.

As of June 30, 2022, the Company owned 44 buildings aggregating approximately 2.9 million square feet and 13 improved land parcels consisting of approximately 68.0 acres located in Northern New Jersey/New York City, which accounted for a combined percentage of approximately 24.9 % of its annualized base rent.

Such annualized base rent percentages are based on contractual base rent from leases in effect as of June 30, 2022, excluding any partial or full rent abatements.

Other real estate companies compete with the Company in its real estate markets.

1 unchanged sentence

The existence of competing properties could have a material impact on the Company’s ability to lease space and on the level of rent that can be achieved.

The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of March 31, 2022.

The Company had no tenant that accounted for greater than 10% of the Company's annualized base rent as of June 30, 2022.

Investments in Real Estate

During the three months ended March 31, 2022, the Company acquired two industrial properties with a total initial investment, including acquisition costs, of approximately $ 70.3 million, of which $ 30.0 million was recorded to land, $ 39.0 million to buildings and improvements, and $ 1.3 million to intangible assets.

During the three months ended June 30, 2022, the Company acquired ten industrial properties with a total initial investment, including acquisition costs, of approximately $ 221.6 million, of which $ 169.5 million was recorded to land, $ 43.7 million to buildings and improvements, and $ 8.4 million to intangible assets.

Additionally, the Company assumed $ 12.8 million in liabilities.

The Company recorded revenues and net income for the three months ended March 31, 2022, of approximately $ 0.1 million and $ 0.1 million, respectively, related to the 2022 acquisitions.

During the three months ended March 31, 2021, the Company acquired four industrial properties with a total initial investment, including acquisition costs, of approximately $ 109.9 million, of which $ 63.7 million was recorded to land, $ 41.8 million to buildings and improvements, and $ 4.4 million to intangible assets.

During the six months ended June 30, 2022, the Company acquired 12 industrial properties with a total initial investment, including acquisition costs, of approximately $ 291.9 million, of which $ 199.5 million was recorded to land, $ 82.8 million to buildings and improvements, and $ 9.6 million to intangible assets.

Additionally, the Company assumed $ 15.0 million in liabilities.

The Company recorded revenues and net income for the three months ended March 31, 2021 of approximately $ 0.5 million and $ 0.3 million, respectively, related to the 2021 acquisitions.

The Company recorded revenues and net income for the three months ended June 30, 2022 of approximately $ 1.7 million and $ 0.7 million, respectively, and recorded revenues and net income for the six months ended June 30, 2022 of approximately $ 1.7 million and $ 0.7 million, respectively, related to the 2022 acquisitions.

During the three months ended June 30, 2021, the Company acquired six industrial properties with a total initial investment, including acquisition costs, of approximately $ 57.8 million, of which $ 44.0 million was recorded to land, $ 9.8 million to buildings and improvements, and $ 4.0 million to intangible assets.

Additionally, the Company assumed $ 2.2 million in liabilities.

During the six months ended June 30, 2021, the Company acquired ten industrial properties with a total initial investment, including acquisition costs, of approximately $ 167.7 million, of which $ 107.7 million was recorded to land, $ 51.6 million to buildings and improvements, and $ 8.4 million to intangible assets.

Additionally, the Company assumed $ 7.8 million in liabilities.

The Company recorded revenues and net income for the three months ended June 30, 2021 of approximately $ 2.0 million and $ 0.7 million, respectively, and recorded revenues and net income for the six months ended June 30, 2021 of approximately $ 2.5 million and $ 1.0 million, respectively, related to the 2021 acquisitions.

The above assets and liabilities were recorded at fair value, which uses Level 3 inputs.

The properties were acquired from unrelated third parties using existing cash on hand, proceeds from property sales and the issuance of common stock and borrowings on the revolving credit facility.

As of March 31, 2022, the Company had four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.5 million square feet and two improved land parcels aggregating approximately 12.1 acres with a total expected investment of approximately $ 144.4 million, including redevelopment costs, capitalized interest and other costs.

During the first quarter of 2022, the Company completed redevelopment of its America's Gateway property in Miami, FL, an approximately 0.1 million square foot redevelopment property.

The total investment was approximately

$ 7.5 million.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 0.7 million and $ 0 during the three months ended March 31, 2022 and 2021, respectively.

As of June 30, 2022, the Company had four properties under redevelopment that, upon completion, will consist of two properties aggregating approximately 0.3 million square feet and two improved land parcels aggregating approximately 12.1 acres with a total expected investment of approximately $ 108.3 million, including redevelopment costs, capitalized interest and other costs.

During the second quarter of 2022, the Company completed redevelopment of its Countyline 29 property in Hialeah, FL consisting of approximately 0.2 million square feet.

The total investment was approximately $ 37.7 million.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 1.6 million and $ 0.1 million during the six months ended June 30, 2022 and 2021, respectively.

Held for Sale/Disposed Assets

As of March 31, 2022, the Company had entered into an agreement with a third-party purchaser to sell one property consisting of 18 buildings located in the Northern New Jersey/New York City market for a sales price of approximately $ 110.4 million (net book value of approximately $ 30.6 million).

The sale of the property is subject to various closing conditions.

There were no properties sold during the three months ended March 31, 2022 or 2021.

The following table summarizes the components of the Company’s indebtedness as of March 31, 2022 and December 31, 2021 (dollars in thousands).

The Company considers a property to be held for sale when it meets the criteria established under ASC 360, Property, Plant, and Equipment .

Properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale.

As of June 30, 2022, the Company did not have any properties held for sale.

During the six months ended June 30, 2022, the Company sold one property (consisting of 18 buildings) located in the Northern New Jersey/New York City market for a sales price of approximately $ 110.4 million, resulting in a gain of approximately $ 76.0 million.

The following table summarizes the components of the Company’s indebtedness as of June 30, 2022 and December 31, 2021 (dollars in thousands).

The Company has no secured debt:

March 31, 2022 December 31, 2021 Margin Above LIBOR Interest Rate 1

June 30, 2022 December 31, 2021 Margin Above SOFR Interest Rate 1

Contractual Maturity Date

2 unchanged sentences

Credit Facility $ 12,000 $ — 1.1 % 2

n/a 8/20/2025

2.3 % 8/20/2025

5-Year Term Loan

2 unchanged sentences

$ 50 M 7 -Year Unsecured 3

50,000 50,000 4

n/a 4.2 % 9/1/2022

17 unchanged sentences

Total $ 733,059 $ 720,670

1 Reflects the contractual interest rate under the terms of each loan as of March 31, 2022.

See footnote (3) below.

1 Reflects the contractual interest rate under the terms of each loan as of June 30, 2022.

Excludes the effects of unamortized debt issuance costs and unamortized fair market value premiums, if any.

2 The interest rates on these loans are comprised of LIBOR plus a LIBOR margin.

The LIBOR margins will range from 1.00 % to 1.45 % ( 1.00 % as of March 31, 2022) for the revolving credit facility and 1.15 % to 1.65 % ( 1.15 % as of March 31, 2022) for the $ 100.0 million term loan, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

2 The interest rates on these loans are comprised of the Secured Overnight Financing Rate (“SOFR”) plus a SOFR margin.

The SOFR margins will range from 1.10 % to 1.55 % ( 1.10 % as of June 30, 2022) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of June 30, 2022) for the $ 100.0 million term loan, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

3 Collectively, the “Senior Unsecured Notes”.

During 2021, a subsidiary of the Company entered into a Sixth Amended and Restated Senior Credit Agreement (the “Facility”) which consists of a $ 250.0 million revolving credit facility that matures in August 2025 and a $ 100.0 million term loan that matures in January 2027.

Among other things, the Facility extended the maturity date of the revolving credit facility and the $ 100.0 million term loan.

As of both March 31, 2022 and December 31, 2021, there were no borrowings outstanding on the revolving credit facility and $ 100.0 million of borrowings outstanding on the term loan.

The aggregate amount of the Facility may be increased to a total of up to $ 650.0 million, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts.

Outstanding borrowings under the Facility are limited to the lesser of (i) the sum of the $ 100.0 million term loan and the $ 250.0 million revolving credit facility, or (ii) 60.0 % of the value of the unencumbered properties.

Interest on the Facility, including the term loan, is generally to be paid based upon, at the Company’s option, either (i) LIBOR plus the applicable LIBOR margin or (ii) the applicable base

rate which is the greatest of the administrative agent’s prime rate, 0.50 % above the federal funds effective rate, or thirty-day LIBOR plus the applicable LIBOR margin for LIBOR rate loans under the Facility plus 1.25 %.

The applicable LIBOR margin will range from 1.00 % to 1.45 % ( 1.00 % as of March 31, 2022) for the revolving credit facility and 1.15 % to 1.65 % ( 1.15 % as of March 31, 2022) for the $ 100.0 million term loan, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

The Facility requires quarterly payments of an annual facility fee in an amount ranging from 0.15 % to 0.30 %, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

The Facility and the Senior Unsecured Notes are guaranteed by the Company and by substantially all of the current and to-be-formed subsidiaries of the Company that own an unencumbered property.

The Facility and the Senior Unsecured Notes are not secured by the Company’s properties or by interests in the subsidiaries that hold such properties.

The Facility and the Senior Unsecured Notes include a series of financial and other covenants with which the Company must comply.

The Company was in compliance with the covenants under the Facility and the Senior Unsecured Notes as of March 31, 2022 and December 31, 2021.

The scheduled principal payments of the Company’s debt as of March 31, 2022 were as follows (dollars in thousands):

4 On August 1, 2022, the Company prepaid a $ 50.0 million tranche of the Senior Unsecured Notes using borrowings from the Company’s revolving credit facility.

The notes bore interest at 4.23 % and had an original maturity date of September 1, 2022.

On June 29, 2022, the Company entered into the First Amendment to the Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) which (i) increased the borrowing capacity of the revolving credit facility by $ 150.0 million to $ 400.0 million, (ii) decreased the accordion feature by $ 150.0 million to $ 500.0 million, and (iii) provided for the calculation of interest, pricing and fees based on SOFR instead of LIBOR.

The Amended Facility consists of a $ 400.0 million revolving credit facility that matures in August 2025 and a $ 100.0 million term loan that matures in January 2027.

As of June 30, 2022 and December 31, 2021, there were $ 12.0 million and $ 0 , respectively, of borrowings outstanding on the revolving credit facility and $ 100.0 million of borrowings outstanding on the term loan.

The aggregate amount of the Amended Facility may be increased up to $ 500.0 million, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts.

Outstanding borrowings under the Amended Facility are limited to the lesser of (i) the sum of the $ 100.0 million term loan and the $ 400.0 million revolving credit facility, or (ii) 60.0 % of the value of the unencumbered properties.

Interest on the Amended Facility, including the term loan, is generally to be paid based upon, at the Company’s option, either (i) SOFR plus the applicable SOFR margin or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50 % above the federal funds effective rate, or thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25 %.

The applicable SOFR margin will range from 1.10 % to 1.55 % ( 1.10 % as of June 30, 2022) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of June 30, 2022) for the $ 100.0 million term loan, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

The Amended Facility requires quarterly payments of an annual facility fee in an amount ranging from 0.15 % to 0.30 %, depending on the ratio of the Company’s outstanding consolidated indebtedness to the value of the Company’s consolidated gross asset value.

The Amended Facility and the Senior Unsecured Notes are guaranteed by the Company and by substantially all of the current and to-be-formed subsidiaries of the Company that own an unencumbered property.

The Amended Facility and the Senior Unsecured Notes are not secured by the Company’s properties or by interests in the subsidiaries that hold such properties.

The Amended Facility and the Senior Unsecured Notes include a series of financial and other covenants with which the Company must comply.

The Company was in compliance with the covenants under the Amended Facility and the Senior Unsecured Notes as of June 30, 2022 and December 31, 2021.

The scheduled principal payments of the Company’s debt as of June 30, 2022 were as follows (dollars in thousands):

Facility Term Loan Senior

3 unchanged sentences

2025 12,000 — — 12,000

2026 — — 50,000 50,000

Thereafter — 100,000 425,000 525,000

2 unchanged sentences

Total debt, net $ 12,000 $ 99,545 $ 621,514 $ 733,059

Weighted average interest rate n/a 1.3 % 3.2 % 3.0 %

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of March 31, 2022.

Weighted average interest rate 2.3 % 2.8 % 3.2 % 3.1 %

1 On August 1, 2022, the Company prepaid a $ 50.0 million tranche of the Senior Unsecured Notes using borrowings from the Company’s revolving credit facility.

The notes bore interest at 4.23 % and had an original maturity date of September 1, 2022.

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of June 30, 2022.

The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property operating expense reimbursements (dollars in thousands):

3 unchanged sentences

Derivative Financial Instruments

As of March 31, 2021, the Company had one interest rate cap to hedge the variable cash flows associated with $ 50.0 million of its existing $ 100.0 million variable-rate term loan, that expired on May 4, 2021.

The Company had no interest rate caps as of June 30, 2022.

The Company had one interest rate cap to hedge the variable cash flows associated with $ 50.0 million of its existing $ 100.0 million variable-rate term loan, that expired on May 4, 2021.

The cap had a notional value of $ 50.0 million and effectively capped the annual interest rate payable at 4.0 % plus 1.20 % to 1.70 %, depending on leverage, with respect to $ 50.0 million for the period from December 1, 2014 (effective date) to May 4, 2021.

The following table presents the effect of the Company’s derivative financial instruments on its accompanying consolidated statements of operations for the three months ended March 31, 2022 and 2021 (dollars in thousands):

For the Three Months Ended March 31,

The following table presents the effect of the Company’s derivative financial instruments on its accompanying consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 (dollars in thousands):

For the Three Months Ended June 30, For the Six Months Ended June 30,

2022 2021 2022 2021

Interest rate caps in cash flow hedging relationships:

4 unchanged sentences

Financial Instruments Disclosed at Fair Value

As of March 31, 2022 and December 31, 2021, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these investments or liabilities based on Level 1 inputs.

As of June 30, 2022 and December 31, 2021, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximated their carrying values because of the short-term nature of these investments or liabilities based on Level 1 inputs.

The fair values of the Company’s mortgage loan payable and Senior Unsecured Notes were estimated by calculating the present value of principal and interest payments, based on borrowing rates available to the Company, which are Level 2 inputs, adjusted with a credit spread, as applicable, and assuming the loans are outstanding through maturity.

The fair value of the Company’s Facility approximated its carrying value because the variable interest rates approximate market borrowing rates available to the Company, which are Level 2 inputs.

The following table sets forth the carrying value and the estimated fair value of the Company’s debt as of March 31, 2022 and December 31, 2021 (dollars in thousands):

The following table sets forth the carrying value and the estimated fair value of the Company’s debt as of June 30, 2022 and December 31, 2021 (dollars in thousands):

Fair Value Measurement Using

5 unchanged sentences

(Level 3) Carrying Value

March 31, 2022 $ 698,264 $ — $ 698,264 $ — $ 720,864

June 30, 2022 $ 687,014 $ — $ 687,014 $ — $ 733,059

December 31, 2021 $ 743,592 $ — $ 743,592 $ — $ 720,670

1 unchanged sentence

The Company’s authorized capital stock consists of 400,000,000 shares of common stock, $ 0.01 par value per share, and 100,000,000 shares of preferred stock, $ 0.01 par value per share.

The Company has an at-the-market equity offering program (the “$ 300 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 300.0 million ($ 221.4 million remaining as of March 31, 2022) in amounts and at times to be determined by the Company from time to time.

The Company has an at-the-market equity offering program (the “$ 300 Million ATM Program”) pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 300.0 million ($ 219.4 million remaining as of June 30, 2022) in amounts and at times to be determined by the Company from time to time.

Prior to the implementation of the $ 300 Million ATM Program, the Company had a previous at-the-market equity offering program (the “Previous $300 Million ATM Program”), which was substantially utilized as of June 10, 2021 and is no longer active.

Actual sales under the $ 300 Million ATM Program, if any, will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock, determinations by the Company of the appropriate sources of funding for the Company and potential uses of funding available to the Company.

During the three months ended March 31, 2022, the Company did not issue any common stock under the $ 300 Million ATM Program.

During the three months ended March 31, 2021, the Company issued an aggregate of 706,524 shares of common stock at a weighted average offering price of $ 58.20 per share under the Previous $300 Million ATM Program, resulting in net proceeds of approximately $ 40.5 million, and paying total compensation to the applicable sales agents of approximately $ 0.6 million.

During both the three and six months ended June 30, 2022, the Company issued an aggregate of 27,087 shares of common stock at a weighted average offering price of $ 76.03 per share under the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 2.0 million and paying total compensation to the applicable sales agents of approximately $ 29,000 .

During the three and six months ended June 30, 2021, the Company issued an aggregate of 1,084,294 and 1,790,818 shares, respectively, of common stock at a weighted average offering price of $ 64.21 and $ 61.84 per share, respectively, under the Previous $300 Million ATM Program and the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 68.6 million and $ 109.1 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 1.0 million and $ 1.6 million, respectively.

The Company has a share repurchase program authorizing the Company to repurchase up to 3,000,000 shares of its outstanding common stock from time to time through December 31, 2022.

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The program may be suspended or discontinued at any time.

As of March 31, 2022, the Company had not repurchased any shares of stock pursuant to its share repurchase program.

As of June 30, 2022, the Company had not repurchased any shares of stock pursuant to its share repurchase program.

In connection with the Annual Meeting of Stockholders on May 3, 2022, the Company granted a total of 10,362 unrestricted shares of the Company's common stock to its independent directors under the 2019 Plan with a grant date fair value per share of $ 63.70 .

The grant date fair value of the common stock was determined using the closing price of the Company’s common stock on the date of the grant.

The Company recognized approximately $ 0.8 million in compensation costs for the three and six months ended June 30, 2022 related to this issuance.

The Company has a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) maintained for the benefit of select employees and members of the Company’s Board of Directors, in which certain of their cash and equity-based compensation may be deposited.

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Subsequent changes in the fair value of the shares are not recognized.

During the three months ended March 31, 2022 and 2021, 147,285 and 131,322 shares of common stock, respectively, were deposited into the Deferred Compensation Plan.

As of March 31, 2022, there were 1,898,961 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2019 Plan, of which 813,601 were remaining and available for issuance.

The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to March 31, 2022 ranged from $ 14.20 to $ 78.33 .

The fair value of the restricted stock that was granted during the three months ended March 31, 2022 was approximately $ 3.0 million and the vesting period for the restricted stock is typically between one and five years .

As of March 31, 2022, the Company had approximately $ 12.3 million of total unrecognized compensation costs related to restricted stock issuances, which is expected to be recognized over a remaining weighted average period of approximately 3.0 years.

The Company recognized compensation costs of approximately $ 1.4 and $ 0.6 million for the three months ended March 31, 2022 and 2021, respectively, related to the restricted stock issuances.

The following is a summary of the total restricted shares granted to the Company’s executive officers and employees with the related weighted average grant date fair value share prices for the three months ended March 31, 2022:

During the three months ended June 30, 2022 and 2021, 3,582 and 5,181 shares of common stock, respectively, and during the six months ended June 30, 2022 and 2021, 150,867 and 136,503 shares of common stock, respectively, were deposited into the Deferred Compensation Plan.

As of June 30, 2022, there were 1,898,961 shares of common stock authorized for issuance as restricted stock grants, unrestricted stock awards or Performance Share awards under the 2019 Plan, of which 819,008 were remaining and available for issuance.

The grant date fair value per share of restricted stock awards issued during the period from February 16, 2010 (commencement of operations) to June 30, 2022 ranged from $ 14.20 to $ 78.33 .

The fair value of the restricted stock that was granted during the six months ended June 30, 2022 was approximately $ 3.9 million and the vesting period for the restricted stock is typically between one and five years .

As of June 30, 2022, the Company had approximately $ 10.7 million of total unrecognized compensation costs related to restricted stock issuances, which is expected to be recognized over a remaining weighted average period of approximately 2.8 years.

The Company recognized compensation costs of approximately $ 0.8 and $ 0.7 million for the three months ended June 30, 2022 and 2021, respectively, and approximately $ 2.2 million and $ 1.3 million for the six months ended June 30, 2022 and 2021, respectively, related to the restricted stock issuances.

Restricted Stock Activity:

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Vested ( 20,558 ) 50.64

Non-vested shares outstanding as of March 31, 2022 308,677 $ 58.37

The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of March 31, 2022:

Non-vested shares outstanding as of June 30, 2022 292,524 $ 58.98

The following is a vesting schedule of the total non-vested shares of restricted stock outstanding as of June 30, 2022:

Non-vested Shares Vesting Schedule Number of Shares

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Long-Term Incentive Plan:

As of March 31, 2022, there are three open performance measurement periods for the Performance Share awards:

As of June 30, 2022, there are three open performance measurement periods for the Performance Share awards:

January 1, 2020 to December 31, 2022, January 1, 2021 to December 31, 2023, and January 1, 2022 to December 31, 2024.

The following table summarizes certain information with respect to the Performance Share awards granted on or after January 1, 2019 (dollars in thousands):

Performance Share Period Fair Value on Date of Grant Expense for the Three Months Ended March 31,

The following table summarizes certain information with respect to the Performance Share awards granted on or after January 1, 2019 and includes the forfeiture of certain of the Performance Share awards during the three and six months ended June 30, 2022 (dollars in thousands):

Performance Share Period Fair Value on Date of Grant Expense for the Three Months Ended June 30,

Expense for the Six Months Ended June 30,

2022 2021 2022 2021

January 1, 2019 - December 31, 2021 $ 4,829 $ — $ 403 $ — $ 805

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Total $ 20,320 $ 444 $ 1,323 $ 1,908 $ 2,645

The following table sets forth the cash dividends paid or payable per share during the three months ended March 31, 2022:

The following table sets forth the cash dividends paid or payable per share during the six months ended June 30, 2022:

For the Three Months Ended Security Dividend per

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March 31, 2022 Common stock $ 0.34 February 8, 2022 March 25, 2022 April 8, 2022

June 30, 2022 Common stock $ 0.34 May 3, 2022 June 30, 2022 July 14, 2022

Net Income (Loss) Per Share

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The Company’s non-vested shares of restricted stock are considered participating securities since these share-based awards contain non-forfeitable rights to dividends irrespective of whether the awards ultimately vest or expire.

The Company had no antidilutive securities or dilutive restricted stock awards outstanding for the three months ended March 31, 2022 and 2021.

The Company had no antidilutive securities or dilutive restricted stock awards outstanding for the six months ended June 30, 2022 and 2021.

In accordance with the Company’s policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the net income (loss) per common share is adjusted for earnings distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method.

Under this method, allocations were made to 303,666 and 211,746 of weighted average restricted shares outstanding for the three months ended March 31, 2022 and 2021, respectively.

Under this method, allocations were made to 295,247 and 216,025 of weighted average unvested restricted shares outstanding for the three months ended June 30, 2022 and 2021, respectively, and 299,433 and 213,897 of weighted average unvested restricted shares outstanding for the six months ended June 30, 2022 and 2021, respectively.

Performance Share awards which may be payable in shares of the Company’s common stock after the conclusion of each pre-established performance measurement period are included as contingently issuable shares in the calculation of diluted weighted average common shares of stock outstanding assuming the reporting period is the end of the measurement period, and the effect is dilutive.

Diluted shares related to the Performance Share awards were 84,969 and 259,854 for the three months ended March 31, 2022 and 2021, respectively.

Diluted shares related to the Performance Share awards were 90,217 and 85,110 for the three and six months ended June 30, 2022, respectively, and 228,177 and 223,047 for the three and six months ended June 30, 2021, respectively.

Commitments and Contingencies

Contractual Commitments.

As of May 3, 2022, the Company had ten outstanding contracts with third-party sellers to acquire ten industrial properties for a total purchase price of approximately $ 177.7 million.

As of August 2, 2022, the Company had three outstanding contracts with third-party sellers to acquire three industrial properties for a total purchase price of approximately $ 51.3 million.

There is no assurance that the Company will acquire the properties under contract because the proposed acquisitions are subject to due diligence and various closing conditions.

As of May 3, 2022, the Company had three non-binding letters of intent with third-party sellers to acquire three industrial properties for a total anticipated purchase price of approximately $ 108.4 million.

In the normal course of its business, the Company enters into non-binding letters of intent to purchase properties from third parties that may obligate the Company to

make payments or perform other obligations upon the occurrence of certain events, including the execution of a purchase and sale agreement and satisfactory completion of various due diligence matters.

As of August 2, 2022, the Company had three non-binding letters of intent with third-party sellers to acquire three industrial properties for a total anticipated purchase price of approximately $ 78.5 million.

In the normal course of its business, the Company enters into non-binding letters of intent to purchase properties from third parties that may obligate the Company to make payments or perform other obligations upon the occurrence of certain events, including the execution of a purchase and sale agreement and satisfactory completion of various due diligence matters.

There can be no assurance that the Company will enter into purchase and sale agreements with respect to these properties or otherwise complete any such prospective purchases on the terms described or at all.

Subsequent Events

On April 8, 2022, the Company acquired one industrial property in Redmond, Washington, for a total purchase price of approximately $ 9.8 million.

The property was acquired from an unrelated third party using existing cash on hand.

On April 18, 2022, the Company acquired one industrial property in Newark, New Jersey, for a total purchase price of approximately $ 17.3 million.

The property was acquired from an unrelated third party using existing cash on hand.

On May 2, 2022, the Company sold one industrial property consisting of 18 buildings in Bound Brook, New Jersey, for a total sales price of $ 110.4 million (net book value of approximately $ 30.6 million).

On May 3, 2022, the Company’s board of directors declared a cash dividend in the amount of $ 0.34 per share of its common stock payable on July 14, 2022 to the stockholders of record as of the close of business on June 30, 2022.

On July 5, 2022, the Company acquired one industrial property in Medley, FL, for a total purchase price of approximately $ 20.0 million.

The property was acquired from an unrelated third party using existing cash on hand and borrowings from the Company’s revolving credit facility.

On August 2, 2022, the Company acquired one industrial property in Hawthorne, CA, for a total purchase price of approximately $ 6.5 million.

The property was acquired from an unrelated third party using borrowings from the Company’s revolving credit facility.

On August 1, 2022, the Company prepaid a $ 50.0 million tranche of the Senior Unsecured Notes using borrowings from the Company’s revolving credit facility.

The notes bore interest at 4.23 % and had an original maturity date of September 1, 2022.

On August 2, 2022, the Company’s board of directors declared a cash dividend in the amount of $ 0.40 per share of its common stock payable on October 14, 2022 to the stockholders of record as of the close of business on September 30, 2022.

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