What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-02 compared with 2022-08-03 · 143 added, 98 removed, 440 unchanged (35% of the section changed)

3 unchanged sentences

(in thousands – except share and per share data)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Investments in real estate

6 unchanged sentences

Net investments in properties 3,029,436 2,667,764

Properties held for sale, net 10,198 —

Net investments in real estate 3,039,634 2,667,764

Cash and cash equivalents 10,153 204,404

14 unchanged sentences

Common stock:

$ 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.

$ 0.01 par value, 400,000,000 shares authorized, and 75,640,135 and 75,068,575 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.

Additional paid-in capital

2,118,173 2,069,604

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

Common stock held in deferred compensation plan, 426,594 and 275,727 shares at September 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 June 30, For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2022 2021 2022 2021

24 unchanged sentences

(in thousands)

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2022 2021 2022 2021

7 unchanged sentences

(in thousands – except share data)

Six months ended June 30, 2022:

Nine months ended September 30, 2022:

Common Stock Additional

24 unchanged sentences

Balance as of June 30, 2022 75,108,342 $ 752 $ 2,087,682 426,594 $ ( 26,982 ) $ 68,133 $ — $ 2,129,585

Six months ended June 30, 2021:

Net income — — — — — 22,439 — 22,439

Issuance of common stock, net of issuance costs of $ 548

444,512 5 28,330 — — — — 28,335

Common shares acquired related to employee awards ( 8,367 ) — ( 518 ) — — — — ( 518 )

Issuance of restricted stock 95,648 — — — — — — —

Stock-based compensation — — 2,679 — — — — 2,679

Common stock dividends ($ 0.40 per share)

— — — — — ( 30,427 ) — ( 30,427 )

Balance as of September 30, 2022 75,640,135 $ 757 $ 2,118,173 426,594 $ ( 26,982 ) $ 60,145 $ — $ 2,152,093

Nine months ended September 30, 2021:

Common Stock Additional

25 unchanged sentences

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

Net income — — — — — 21,360 — 21,360

Issuance of common stock, net of issuance costs of $ 807

751,539 8 49,169 — — — — 49,177

Issuance of restricted stock 72,586 — — — — — — —

Stock-based compensation — — 2,360 — — — — 2,360

Common stock dividends ($ 0.34 per share)

— — — — — ( 24,239 ) — ( 24,239 )

Balance as of September 30, 2021 71,015,523 $ 712 $ 1,768,794 275,727 $ ( 15,197 ) $ ( 3,837 ) $ — $ 1,750,472

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

2 unchanged sentences

(in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

23 unchanged sentences

Payments on credit facility ( 152,000 ) ( 45,000 )

Borrowings on term loans payable 100,000 —

Borrowings on senior unsecured notes — 150,000

Payments on senior unsecured notes ( 50,000 ) —

Payments on mortgage loan payable — ( 11,271 )

1 unchanged sentence

Dividends paid to common stockholders ( 76,984 ) ( 60,389 )

Net cash (used in) provided by financing activities ( 38,638 ) 59,062

Net cash provided by financing activities 10,980 227,373

Net decrease in cash and cash equivalents and restricted cash ( 193,804 ) ( 34,134 )

16 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 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.

As of September 30, 2022, the Company owned 252 buildings (including two buildings held for sale) aggregating approximately 15.4 million square feet, 46 improved land parcels consisting of approximately 159.9 acres and two properties under redevelopment that, upon completion, will consist of 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.

36 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 or six months ended June 30, 2022 or 2021.

There were no impairment charges recorded to the carrying values of the Company’s properties during the three or nine months ended September 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 $ 3.5 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 total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of approximately $ 4.2 million and $ 2.0 million for the three months ended September 30, 2022 and 2021, respectively, and approximately $ 10.8 million and $ 5.1 million for the nine months ended September 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 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

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

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

September 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 Six Months Ended June 30,

For the Nine Months Ended September 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 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.

As of September 30, 2022 and December 31, 2021, approximately $ 44.1 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 September 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 $ 11.2 million and $ 10.6 million as of June 30, 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 $ 11.5 million and $ 10.6 million as of September 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 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.

As of September 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 September 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 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.

As of September 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 24.2 % of its annualized base rent.

Such annualized base rent percentages are based on contractual base rent from leases in effect as of September 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 June 30, 2022.

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

Investments in Real Estate

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.

During the three months ended September 30, 2022, the Company acquired four industrial properties with a total initial investment, including acquisition costs, of approximately $ 68.9 million, of which $ 62.1 million was recorded to land, $ 5.5 million to buildings and improvements, and $ 1.3 million to intangible assets.

Additionally, the Company assumed $ 1.1 million in liabilities.

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.

During the nine months ended September 30, 2022, the Company acquired 16 industrial properties with a total initial investment, including acquisition costs, of approximately $ 360.8 million, of which $ 261.6 million was recorded to land, $ 88.3 million to buildings and improvements, and $ 10.9 million to intangible assets.

Additionally, the Company assumed $ 16.1 million in liabilities.

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.

The Company recorded revenues and net income for the three months ended September 30, 2022 of approximately $ 4.1 million and $ 1.0 million, respectively, and recorded revenues and net income for the nine months ended September 30, 2022 of approximately $ 5.8 million and $ 1.7 million, respectively, related to the 2022 acquisitions.

During the three months ended September 30, 2021, the Company acquired ten industrial properties with a total initial investment, including acquisition costs, of approximately $ 176.8 million, of which $ 127.3 million was recorded to land, $ 42.1 million to buildings and improvements, and $ 7.4 million to intangible assets.

Additionally, the Company assumed $ 11.7 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.

During the nine months ended September 30, 2021, the Company acquired 20 industrial properties with a total initial investment, including acquisition costs, of approximately $ 344.5 million, of which $ 235.0 million was recorded to land, $ 93.7 million to buildings and improvements, and $ 15.8 million to intangible assets.

Additionally, the Company assumed $ 19.5 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 Company recorded revenues and net income for the three months ended September 30, 2021 of approximately $ 3.7 million and $ 1.3 million, respectively, and recorded revenues and net income for the nine months ended September 30, 2021 of approximately $ 6.2 million and $ 2.3 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 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.

As of September 30, 2022, the Company had two properties under redevelopment that, upon completion, will consist of two improved land parcels aggregating approximately 12.1 acres.

The following table summarizes certain information with respect to the properties under redevelopment as of September 30, 2022:

Property Name Location Total Expected

Investment (in

Estimated Post-Development Acreage

San Jose, CA $ 25,961 7.2

Paterson Plank III

Carlstadt, NJ 25,303 4.9

Total/Weighted Average $ 51,264 12.1

1 Total expected investment for the properties include the initial purchase price, buyer’s due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.

During 2022, the Company completed redevelopment of three properties aggregating approximately 0.6 million square feet.

The following table summarizes certain information with respect to the completed redevelopment properties as of September 30, 2022:

Property Name Location Total

Investment (in

Square Feet Completion Quarter

America's Gateway Miami, FL $ 7,500 128,844 Q1 2022

Countyline #29 & #30 Hialeah, FL 75,539 407,084 Q2/Q3 2022

73rd Street Miami, FL 20,200 51,800 Q3 2022

Total/Weighted Average $ 103,239 587,728

1 Total investment for the properties include the initial purchase price, buyer’s due diligence and closing costs, redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.

The Company capitalized interest associated with redevelopment and expansion activities of approximately $ 2.2 million and $ 0.3 million during the nine months ended September 30, 2022 and 2021, respectively.

Held for Sale/Disposed Assets

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).

As of September 30, 2022, the Company had entered into agreements with third-party purchasers to sell one property located in the Northern New Jersey/New York City market for a sales price of approximately $ 26.5 million (net book value of approximately $ 7.3 million) and one property located in the Seattle market for a sales price of approximately $ 8.7 million (net book value of approximately $ 2.9 million).

There is no assurance that the sales of these properties will be effected, as they are subject to various closing conditions.

During the nine months ended September 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.

During the nine months ended September 30, 2021, the Company sold one property located in the Seattle market for a sales price of approximately $ 10.3 million, resulting in a gain of approximately $ 3.2 million.

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

The Company has no secured debt:

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

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

Contractual Maturity Date

6 unchanged sentences

4.3 % 1/15/2027

$ 50 M 7 -Year Unsecured 3

5 -Year Term Loan

100,000 — 1.3 % 2

3.8 % 1/15/2028

$ 50 M 7 -Year Unsecured 3, 4

— 50,000 n/a 4.2 % 9/1/2022

14 unchanged sentences

Total Unsecured Debt 785,000 725,000

Total Unsecured Debt 737,000 725,000

Unamortized premium/discount and debt issuance costs ( 4,385 ) ( 4,330 )

Total $ 780,615 $ 720,670

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

1 Reflects the contractual interest rate under the terms of each loan as of September 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 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.

The SOFR margins will range from 1.10 % to 1.55 % ( 1.10 % as of September 30, 2022) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of September 30, 2022) for the term loans, 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”.

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.

4 On August 1, 2022, the Company prepaid the $ 50 million tranche of 7-year 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.

On September 2, 2022, the Company entered into the Second Amendment (the “Second Amendment”) to the Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) to add an additional $ 100.0 million term loan that matures in January 2028.

The Company drew the full amount available under the term loan upon entry into the Second Amendment.

The Amended Facility consists of a $ 400.0 million revolving credit facility that matures in August 2025, a $ 100.0 million term loan that matures in January 2027 and a $ 100.0 million term loan that matures in January 2028.

As of September 30, 2022 and December 31, 2021, there were $ 10.0 million and $ 0 , respectively, of borrowings outstanding on the revolving credit facility and $ 200.0 million and $ 100.0 million, respectively, of borrowings outstanding on the term loans.

The aggregate amount of the Amended Facility may be increased by up to an additional $ 500.0 million to a maximum amount not to exceed $ 1.1 billion, 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 $ 400.0 million revolving credit facility, the $ 100.0 million term loan maturing in January 2027 and the $ 100.0 million term loan maturing in January 2028, or (ii) 60.0 % of the value of the unencumbered properties.

Interest on the Amended Facility, including the term loans, 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, thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25 %, or 1.25 % per annum.

The applicable SOFR margin will range from 1.10 % to 1.55 % ( 1.10 % as of September 30, 2022) for the revolving credit facility and 1.25 % to 1.75 % ( 1.25 % as of September 30, 2022) for the term loans, 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.

2 unchanged sentences

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):

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

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

Facility Term Loan Senior

9 unchanged sentences

Weighted average interest rate 3.9 % 4.0 % 3.1 % 3.4 %

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 following is a schedule of minimum future cash rentals on tenant operating leases in effect as of September 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

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 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,

The Company had no interest rate caps as of September 30, 2022 or December 31, 2021.

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2022 2021 2022 2021

5 unchanged sentences

Financial Instruments Disclosed at Fair Value

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 June 30, 2022 and December 31, 2021 (dollars in thousands):

As of September 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 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 Amended 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 September 30, 2022 and December 31, 2021 (dollars in thousands):

Fair Value Measurement Using

5 unchanged sentences

(Level 3) Carrying Value

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

September 30, 2022 $ 611,685 $ — $ 611,685 $ — $ 780,615

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 ($ 219.4 million remaining as of June 30, 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 ($ 190.5 million remaining as of September 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 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.

During the three and nine months ended September 30, 2022, the Company issued an aggregate of 444,512 and 471,599 shares of common stock, respectively, at a weighted average offering price of $ 64.97 and $ 65.61 per share, respectively, under the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 28.5 million and $ 30.5 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 0.4 million and $ 0.4 million, respectively.

During the three and nine months ended

September 30, 2021, the Company issued an aggregate of 751,539 and 2,542,357 shares, respectively, of common stock at a weighted average offering price of $ 66.51 and $ 63.22 per share, respectively, under the Previous $300 Million ATM Program and the $ 300 Million ATM Program, resulting in net proceeds of approximately $ 49.3 million and $ 158.4 million, respectively, and paying total compensation to the applicable sales agents of approximately $ 0.7 million and $ 2.3 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, 2024.

2 unchanged sentences

The program may be suspended or discontinued at any time.

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

As of September 30, 2022, the Company had not repurchased any shares of common 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 10,746 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 $ 69.82 .

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 recognized approximately $ 0 and $ 0.8 million, respectively, in compensation costs for the three and nine months ended September 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.

2 unchanged sentences

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

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.

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 six months ended June 30, 2022:

During both the three months ended September 30, 2022 and 2021, no shares of common stock were deposited into the Deferred Compensation Plan and during the nine months ended September 30, 2022 and 2021, 150,867 and 136,503 shares of common stock, respectively, were deposited into the Deferred Compensation Plan.

As of September 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 735,392 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 September 30, 2022 ranged from $ 14.20 to $ 78.33 .

The fair value of the restricted stock that was granted during the nine months ended September 30, 2022 was approximately $ 9.1 million and the vesting period for the restricted stock is typically between one and five years .

As of September 30, 2022, the Company had approximately $ 14.5 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 3.4 years.

The Company recognized compensation costs of approximately $ 1.4 million and $ 1.0 million for the three months ended September 30, 2022 and 2021, respectively, and approximately $ 3.6 million and $ 2.4 million for the nine months ended September 30, 2022 and 2021, respectively, related to the restricted stock issuances.

Restricted Stock Activity:

5 unchanged sentences

Vested ( 39,622 ) 56.06

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 outstanding as of September 30, 2022 357,076 $ 59.58

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

Non-vested Shares Vesting Schedule Number of Shares

2022 (3 months) 444

Thereafter 83,616

Total Non-vested Shares 357,076

Long-Term Incentive Plan:

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

As of September 30, 2022, there were 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 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,

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 nine months ended September 30, 2022 (dollars in thousands):

Performance Share Period Fair Value on Date of Grant 1

Expense for the Three Months Ended September 30,

Expense for the Nine Months Ended September 30,

2022 2021 2022 2021

4 unchanged sentences

Total $ 20,320 $ 1,291 $ 1,322 $ 3,199 $ 3,967

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

1 Reflects the fair value on date of grant for all performance shares outstanding at September 30, 2022.

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

For the Three Months Ended Security Dividend per

2 unchanged sentences

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

September 30, 2022 Common stock $ 0.40 August 2, 2022 September 30, 2022 October 14, 2022

Net Income (Loss) Per Share

3 unchanged sentences

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 six months ended June 30, 2022 and 2021.

The Company had no antidilutive securities or dilutive restricted stock awards outstanding for the nine months ended September 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 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.

Under this method, allocations were made to 335,038 and 262,512 of weighted average unvested restricted shares outstanding for the three months ended September 30, 2022 and 2021, respectively, and 311,432 and 230,280 of weighted average unvested restricted shares outstanding for the nine months ended September 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 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.

Diluted shares related to the Performance Share awards were 93,518 and 86,624 for the three and nine months ended September 30, 2022, respectively, and 236,076 and 227,695 for the three and nine months ended September 30, 2021, respectively.

Commitments and Contingencies

Contractual Commitments.

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 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.

As of November 1, 2022, the Company had one outstanding contract with a third-party seller to acquire one industrial property for a total purchase price of approximately $ 15.6 million.

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

As of November 1, 2022, the Company had one non-binding letter of intent with a third-party seller to acquire one industrial property for a total anticipated purchase price of approximately $ 49.5 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.

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

As of November 1, 2022, the Company had one outstanding contract with a third-party purchaser to sell one industrial property for a sales price of approximately $ 26.5 million (net book value of approximately $ 7.3 million).

There is no assurance that the Company will sell the property under contract because the proposed disposition is subject to due diligence and various closing conditions.

Subsequent Events

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

On October 13, 2022, the Company sold one industrial property in Kent, WA, for a total sale price of approximately $ 8.7 million (net book value of approximately $ 2.9 million).

This property was classified as held for sale as of September 30, 2022.

On October 24, 2022, the Company acquired one industrial property in Miami, FL, for a total purchase price of approximately $ 4.7 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.

On November 1, 2022, the Company acquired one industrial property in Los Angeles, CA, for a total purchase price of approximately $ 17.0 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 November 1, 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 January 13, 2023 to the stockholders of record as of the close of business on December 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